G.R. No. L-15430 September 30, 1963 The petition for certiorari in Ipekdjian Merchandising Co., Inc. v.
he petition for certiorari in Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, L-14791,
IPEKDJIAN MERCHANDISING CO., INC., petitioner, vs.COURT OF TAX APPEALS and
COMMISSIONER OF INTERNAL REVENUE, respondents.MAKALINTAL, J.:
Petition to review the resolution of the Court of Tax Appeals dismissing the petition for review
in C.T.A. Case No. 374.
On January 11, 1951 respondent Commissioner of Internal Revenue (then Collector of Internal
Revenue) assessed and demanded from Ipekdjian Merchandising Co., Inc., the amount of
P97,502.25, as compensating tax and surcharge on gold chains imported by it, which were later
melted and converted into gold bullion and sold as such, plus the amount of P200.00 as
compromise penalty, for violation of Sec. 190 of the Tax Code. In accordance with the
provisions of Executive Order No. 401-A, series of 1951, Petitioner appealed from the
Commissioner's decision to the Board of Tax Appeals, which after hearing on the merits,
rendered judgment affirming the Commissioner judgment (B.T.A. case No. 10). Petitioner
appealed, but this Court "following the decision in the case of University of Santo Tomas v.
Board of Tax Appeals, G.R. No. L-570 June 23, 1953 "dismissed the appeal, without prejudice (L-
5772, March 30, 1954). The dismissal having become final and executory petitioner sought to
reinstate its appeal in this Court but its petition for reinstatement of appeal was denied on
March 21, 1955.
On March 30, 1955 petitioner sought to reopen the case in the Court of Tax Appeals by filing a
"petition for review" docketed as C.T.A. Case No. 107. On July 26, 195 the Court of Tax Appeals
dismissed the appeal for lack of jurisdiction, petitioner having failed to maintain the necessary
action in the Court of First Instance of Manila in accordance with Section 306, Tax Code, or with
the Court of Tax Appeals within 30 days from its creation (on June 16, 1954) pursuant to Section
11, R.A. 1125. Petitioner's motion for reconsideration of the dismissal was denied. .
On November 3, 1955 petitioner made a partial payment of P5,000.00 on its tax liability, but
four days later filed with respondent Commissioner a written claim for refund of the same,
requesting at the same time cancellation of the balance of the assessment. This was denied by
the Commissioner on the ground that the decision of the Board of Tax Appeals was already final
and executory.
On May 10, 1957 petitioner filed a Petition for review in the Court of Tax Appeals (C.T.A. Case
No. 374) of the decision of respondent Commissioner denying its request for refund and
cancellation of the balance of the assessment. On June 14, 1957 respondent Commissioner filed
his answer to the petition, raising therein as affirmative defense the fact that the decision in
B.T.A. Case NO. 10 operates as res judicata to petitioner's appeal.
On February 26, 1958 respondent Commissioner filed a motion for execution of judgment in
B.T.A. Case No. 10, which was granted by respondent court in its resolution of July 16, 1958.
Reconsideration of that resolution being unavailing petitioner filed with this Court a petition for
certiorari, L-14791, praying for annulment of the order of execution of the judgment in B.T.A.
case No. 10.
On December 29, 1958 respondent Court dismissed C.T.A. Case No. 374 on the ground of res
judicata. Respondent court having refunded to reconsider the dismissal, petitioner now seeks
review thereof.
was disclosed by this Court on May 30, 1963.
The question presented by appellant is whether or not the decision of the Board of Tax Appeals
in B.T.A. Case No. 10 operates to bar C.T.A. Case No. 374. Appellant argues that the doctrine of
res judicata, being a doctrine of expediency, is applicable only to judgments rendered by a court
or judge and does not extend to decisions of administrative agencies, like the Board of Tax
Appeals, which are devoid of judicial functions.
The essential requisites for the existence of res judicata are: (1) the former judgment must be
final; (2) it must have been rendered by a court having jurisdiction of the subject matter and
the parties; (3) it must be a judgment on the merits; and (4) there must be, between the first
and second actions (a) identity of parties (b) identity of subject matter and (e) identity of cause
of action (Navarro v. Director of Lands, L-18814, July 31, 1962; Aring v. Original, L-18464, Dec.
29, 1962).
To say that the doctrine applies exclusively to decisions rendered by what are usually
understood as courts would be to unreasonably circumscribe the scope thereof. The more
equitable attitude is to allow extension of the defense to decisions of bodies upon whom
judicial powers have been conferred.1
Since the Board of Tax Appeals was certainly not a court, the pertinent question is whether the
same had been granted judicial powers. In Ipekdjian Merchandising Co., Inc. v. Court of Tax
Appeals, supra, wherein we refused to annul respondent court's resolution granting execution
of judgment in B.T.A. Case No. 10, we ruled:.
"It is true that in the case of U.S.T. v. BTA, (supra) an administrative body and it was held that
the BTA was an administrative body and its proceedings and decisions were administrative in
Character. But the petitioner did not take into consideration the fact that subsequently on June
16, 1954, all cases heretofore decided by the said Board of Tax Appeals and thence appealed to
the Supreme Court, pursuant to Executive Order Number Four Hundred One-A, shall be decided
by the Supreme Court on the merits to all intents and purposes as if said Executive Order had
been duly enacted by Congress' and 'that all cases now pending in said Board of Tax Appeals,
shall be transferred to the Court of Appeals and shall be heard and decided by the latter to all
intents and purposes as they had been originally filed therein' (section 21, supra). We can thus
see, that Rep. Act No. 1125 had conferred judicial character on the proceedings and decisions
of the BTA. It, therefore, results that the decisions of the BTA, in cases not subsequently
brought before the Court of First Instance, in accordance with the decision in the case of U.S.T.
v. BTA (supra), or before the CTA, under the provisions of Rep. Act No. 1125, within the 30-day
period prescribed in section 11 thereof, counted from the creation or organization of the CTA
(Lim Tio, et al. v. CTA, et al., G.R. No. L-10681, March 29, 1958; Sta. Clara Lumber Co v. CTA, G.R.
No. L-9833, Dee. 21, 1957), received judicial confirmation under said R.A. No. 1125 and the
same should be considered final and executory and enforceable by execution, just like any
other decision of a court of justice. (Emphasis supplied).1awphîl.nèt
Thus, under the above pronouncement, while the decisions of the B.T.A. were administrative in
character, those that were not brought before the Court of First Instance. following U.S.T. v.
B.T.A. supra, or before the Court of Tax Appeals, pursuant to Section 11, R.A. No. 1125, were
considered as having been judicially confirmed by virtue of R.A. No. 1125. The decisions
covered by the pronouncement assumed the character of decisions of regular courts.
Consequently, appellant's principal argument falls.
It next maintains that the cause of action in B.T.A. Case No. 10 is different from that in C.T.A.
Case No. 374.
From appellant's petition in B.T.A. Case No. 10 and the decision of the Board it may be gathered
that what appellant sought therein was the review of the decision of the Collector of Internal
Revenue holding it liable for P97,502.25 as compensating tax, etc., with the purpose in mind of
having the same reversed. In its petition for review in C.T.A. Case No. 374, after alleging the
same facts embodied in the B.T.A. decision, with the addition of the circumstance of payment,
it prayed that it be held not subject to the aforementioned compensating tax that the Collector
be made to refund the P5,000.00 it had paid; and that the respondent Collector's demand or
assessment for the balance of the compensating tax be cancelled. It is clear that the alleged
cause of action in both cases is the same: appellant's claim to non-liability for compensating
taxes. The only appreciable difference is that while in the B.T.A. case is assailed the Collector's
decision assessing the sum of P97,502.25 as compensating tax, etc., and holding him
responsible therefore, in the C.T.A. case, he ostensibly tried a different tack, by assailing the
Collector's denial of the claim for refund and request for cancellation of the balance of the
assessment. Nonetheless, in both cases, the issue is the same: whether or not appellant is liable
for the compensating tax prescribed in Section 190 of the Tax Code. Appellant cannot, by
merely superficially changing the form of his action, plead the non-application of the rule of bar
by prior judgment.2
All the requisites for the defense of res judicata being present, respondent court properly
dismissed the petition in C.T.A. Case No. 374.The resolution of the Court of Tax Appeals
dismissing the petition is hereby affirmed, with costs against herein petitioner.\
G.R. No. 54424 August 31, 1989NASIPIT LUMBER COMPANY, INC., petitioner vs.NATIONAL
LABOR RELATIONS COMMISSION, EXECUTIVE LABOR ARBITER ILDEFONSO G. AGBUYA and
JUANITO COLLADO, respondents.
Petitioner Nasipit Lumber Company, Inc. (NALCO for brevity) is a domestic corporation
organized and existing under the laws of the Philippines. It is engaged in the business of logging,
lumber manufacturing and wood processing with field offices at Nasipit, Agusan del Norte.
Private respondent Juanita Collado was employed by petitioner as a security guard on
September 9, 1970. He was assigned as lst Sergeant of the NALCO Security Force at Nasipit. In
the course of Collado's employment or on August 20, 1976, four (4) crates of lawanit boards
containing 1,000 panels were stolen from petitioner's premises, particularly the crating section
of the Philippine Wallboard Corporation, a NALCO affiliate.
Collado was implicated in the theft and was thereafter placed under preventive suspension. On
September 8, 1976, NALCO filed a petition (application) for clearance to dismiss Collado with
the Regional Office No. X of the Department of Labor in Cagayan de Oro City. 1 On September
15, 1976, Collado filed an opposition to said application for clearance to dismiss. The case was
set for hearing the following day, September 16, but Collado, despite notice, failed to appear.
Hence, NALCO was allowed to present evidence ex-parte.
On October 12, 1976, the application for clearance to dismiss was approved in an order issued
by Regional Office No. X Officer-in-Charge Roy V. Seneres. 2 The order was based on the
investigation report of the head of the Agusan Provincial Labor Office. Collado filed a motion for
the reconsideration of said order on the ground that he was not given an opportunity to rebut
the false findings or adduce evidence in his favor. He further denied participation in the theft. 3
On December 7, 1976, the said Officer-in-Charge, through a subordinate, certified the case to
the Executive Labor Arbiter for compulsory arbitration. 4 Notice and summons were
issued.NALCO and Collado were then required to submit their respective position papers under
pain of a default judgment. 5 After a perusal of the records, Executive Labor Arbiter Ildefonso
G. Agbuya returned the case to the Regional Director of Regional Office No. X in Cagayan de Oro
City for whatever appropriate action he may deem fit. A portion of the order dated February
25, 1977 of said Executive Labor Arbiter reads:
From all indications, we find that the Motion for Reconsideration should be treated as an
appeal to (sic) the Order of Roy V. Seneres, dated 12 October 1976, and as such it should be
elevated to the Secretary of Labor. Besides, we also fear that if we take cognizance of this case,
perhaps, we might reverse the order of the Regional Director which, to our thinking, would only
create a disturbance to the harmonious relation existing between our two offices. . . . 6
Consequently, the case was elevated to the Secretary of Labor. On June 7, 1978, Acting
Secretary of Labor Amado G. Inciong issued an order affirming the order of Officer-in-Charge
Roy V. Seneres thereby granting petitioner's application for clearance to dismiss Collado. 7
Instead of resorting to this Court on a petition for certiorari, 8 on October 9, 1978, Collado filed
a complaint before the Butuan District Labor Office, Butuan City, for unjust dismiss and
reinstatement with backwages and benefits. 9 Without going to specifics, Collado averred
therein that his termination from employment "was unfounded, unjust and illegal, based as it
was on uncorroborated and malicious suspicion, insinuation and hearsay, and characterized by
harassment."
NALCO flied a motion to dismiss the complaint. It alleged that in view of Acting Secretary
Inciong's aforesaid order, Collado did not have any sufficient cause of action and therefore his
complaint was a nuisance. 10 In its position paper, NALCO added that because Acting Secretary
Inciong's order had become final and executory, the issue of illegal dismissal had also become
res judicata. 11
The case having been certified for compulsory arbitration, on January 29, 1979, Executive Labor
Arbiter Ildefonso G. Agbuya rendered a decision ordering NALCO to reinstate Collado to his
former position without backwages and without loss of seniority rights "provided he has the
necessary papers required of the service as security guard. 12
In his decision, the said labor arbiter stated that while NALCO complied with the requirements
of law when it obtained a clearance to terminate, he could not discount the possibility that
NALCO "knew or at least suspected that there was something wrong with the manner in which
the investigation was conducted" by the head of the Butuan District Labor Office whose report
was the basis of the approval of the clearance application. 13 He conceded that NALCO acted in
good faith in terminating Collado's employment and that it was NALCOs prerogative to
terminate such employment to protect its business interests. However, he was constrained to
arrive at said conclusion ordering the reinstatement of Collado because of the order of the
Nasipit municipal judge in Criminal Case No. 2236 finding that there was nothing in the
testimony of the prosecution witness to establish the probable guilt of Collado who should
therefore be dropped from the complain for qualified theft. He also took into consideration the
certification of the Agusan del Norte provincial fiscal showing that Collado had also been
dropped from the complaint in Criminal Case No. 1127.
Both parties appealed to the National Labor Relations Commission (NLRC).lâwphî1.ñèt NALCO
asked for the reversal and revocation of the decision of the Executive Labor Arbiter, while
Collado prayed for a modification of the appealed decision to include backwages and benefits in
addition to reinstatement.
On May 30, 1980, the NLRC First Division 14 rendered a decision modifying the Executive Labor
Arbiter's decision by ordering Collado's reinstatement to his former position with two (2) years
backwages without qualification and loss of seniority rights. 15 It agreed with the findings and
conclusions of the Executive Labor Arbiter with respect to the dropping of Collado from the
criminal cases but it ruled that the rights of Collado to backwages were not precluded by the
findings that his termination was effected in good faith. On the issue of res judicata, the NLRC
said:
We cannot subscribe to the arguments of the respondent-appellant that the order of the OIC of
Region X which was subsequently approved by then Acting Secretary Amado G. Inciong has
become the law of the case. Res judicata cannot be validly invoked in this case because the
granting of the application for clearance which although admittedly was secured with all the
formalities required by law, did not resolve the case on its merits. Records show that on
September 16, 1976 the application to terminate was scheduled for investigation before the
Provincial Labor Office. Petitioner Collado who was then the respondent in this case failed to
appear although he was properly notified of the scheduled investigation. On September 22,
1976, the Head of the Agusan Provincial Office submitted its investigation report
recommending the approval of the application to terminate Juanito Collado without affording
him another chance to be heard and defend his side. It is very clear that the investigation
conducted by the Provincial Labor Office was hastily done and vitiated with infirmities. What it
should have done is to give the respondent Collado another chance to defend his case
considering the gravity of the offense imputed against him which if proved would cause him his
only means of livelihood. 16
NALCO filed the instant petition for certiorari and prohibition with prayer for the issuance of a
writ of preliminary injunction and/or a restraining order, seeking to annul the NLRC decision
and to prohibit its execution. It imputed to the NLRC lack or excess of jurisdiction and grave and
patent abuse of discretion amounting to lack of jurisdiction in overturning the final decision of
the Acting Secretary of Labor thereby denigrating the time-honored doctrine of bar by former
judgment or res judicata. It assailed Collado's reinstatement as improper inasmuch as the
employer-employee relations of the parties had been legally severed by the approval of the
clearance to dismiss.
This Court dismissed the petition for lack of merit. 17 Upon receipt of the dismissal resolution,
NALCO filed an urgent motion for reconsideration based on the following grounds: (a) it has a
valid and meritorious cause of action due to the NLRC's violation of the principle of res judicata;
(b) the occurrence of a supervening event consisting of the remand of the records of the
approved clearance to dismiss for execution and/or appropriate action, 49 days after the
promulgation of the herein questioned NLRC decision; (c) the NLRC not only disregarded the
final and executory decision of the Acting Secretary of Labor but also the pronouncements of
this Court on the curative effects of appeals in labor cases wherein the issue of denial of
procedural due process had been raised; and (d) should the NLRC decision become final, a
confusing situation of two diametrically opposed decisions on the same issue of dismissal,
would arise.
Understandably, Collado opposed the motion for reconsideration. On the other hand, the
Solicitor General, appearing for public respondents, filed a manifestation and motion
recommending that the urgent motion for reconsideration be granted. He stated therein that
the NLRC gravely abused its discretion because: (a) all the elements of res judicata are present
in this case: (b) the merits of Collado's dismissal had been litigated in the first case and Collado
was therefore estopped from attacking the final decision of the Acting Secretary of Labor either
in the original action or in a new and subsequent action; (c) not only the "formal aspect" in the
application for clearance to terminate was involved in the first case as the merits thereof were
fully taken into consideration; and (d) to allow a distinction between the two cases would result
in splitting a cause of action which would ultimately breed multiplicity of suits.
On the strength of the Solicitor General's manifestation and motion, the Court reconsidered the
dismissal resolution and gave due course to the instant petition for certiorari and prohibition.
The two principal issues presented to this Court for adjudication are the applicability of the
principle of res judicata and the legality of Collado's reinstatement with backwages and without
loss of seniority rights.
On the first issue, we hold that this is one of the cases wherein the pronouncement of this
Court thru Justice Vicente Abad Santos in Razon vs. Inciong 19 applies. The Court stated therein
that the principle of res judicata may not be invoked in labor relations proceedings considering
that Section 5, Rule XIII, Book V of the Rules and Regulations Implementing the Labor Code
provides that such proceedings are "non-litigious and summary in nature without regard to
legal technicalities obtaining in courts of law." Said pronouncement is in consonance with the
jurisprudential dictum that the doctrine of res judicata applies only to judicial or quasi-judicial
proceedings and not to the exercise of administrative powers. 20
The requirement of a clearance to terminate employment was a creation of the Department of
Labor to carry out the Labor Code provisions on security of tenure and termination of
employment. The proceeding subsequent to the filing of an application for clearance to
terminate employment was outlined in Book V, Rule XIV of the Rules and Regulations
Implementing the Labor Code. The fact that said rule allowed a procedure for the approval of
the clearance with or without the opposition of the employee concerned (Secs. 7 & 8),
demonstrates the non-litigious and summary nature of the proceeding. The clearance
requirement was therefore necessary only as an expeditious shield against arbitrary dismissals
without the knowledge and supervision of the Department of Labor. Hence, a duly approved
clearance implied that the dismissal was legal or for cause (Sec. 2).
But even while said clearance was a requirement, employees who faced dismissal still
contested said applications not only through oppositions thereto but by filing separate
complaints for illegal dismissal. Usually, the investigation on the application and the hearing on
the complaint for illegal dismissal were conducted simultaneously. What makes the present
case unusual is that the employee filed the complaint for illegal dismissal only after the Acting
Secretary of Labor had affirmed the approval of the application to terminate his employment.
Nonetheless, we are unprepared to rule that such action of the Acting Secretary of Labor
barred Collado from filing the complaint for illegal dismissal. If ever, the most that can be
attributed against Collado is laches for his failure to question seasonably the Acting Secretary of
Labor's affirmance of the approval of the clearance to terminate. However, to count such laches
against Collado would be prejudicial to his rights as a laborer.
Be that as it may, the possibility that there would be two conflicting decisions on the issue of
Collado's dismissal may now be considered academic. The requirement of a written clearance
from the Department prior to termination was abolished by the enactment of Batas Pambansa
Blg. 130 in 1981. Dismissal proceedings are now confined within the establishments. The NLRC
or the labor arbiter steps in only if the said decision is contested by the employee. 21
On the legality of Collado's dismissal, we hold that the NLRC abused its discretion in directing
his reinstatement with two (2) years backwages. The relation between petitioner and Collado is
now strained by the latter's violation of the trust and confidence reposed on him as a member
of the security force, a position impressed with a high degree of trust. 22 Proof beyond
reasonable doubt of an employee's misconduct is not required when loss of confidence is the
ground for dismissal. It is sufficient if the employer has "some basis" to lose confidence or that
the employer has reasonable ground to believe or to entertain the moral conviction that the
employee concerned is responsible for the misconduct and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confidence demanded by his
position. 23
In this case, petitioner supported its application for clearance to terminate Collado's
employment with sworn statements implicating him in the theft. 24 Such sworn statements are
sufficient to warrant the dismissal. On the other hand, the dropping of the qualified theft
charges against Collado is not binding upon a labor tribunal. 25 The sensitivity of Collado's job
as a security guard vis-a-vis the cause of his dismissal cost him his right to be rehired to the
same position. Reinstatement is not proper where termination of employment was due to
breach of trust and confidence. 26
We are aware of Collado's almost six years of service to the petitioner as well as the hardships
resulting from the loss of his job. Compassion dictates us to grant him separation pay as
financial assistance but we are bound by the ruling of the Court en banc in Philippine Long
Distance Telephone Company v. NLRC 27 that henceforth separation pay shall be allowed as a
measure of social justice only in those instances where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his moral character.
WHEREFORE, the decision of the NLRC is hereby reversed and set aside. Juanita Collado's
dismissal from employment is hereby declared valid. No costs.SO ORDERED.
G.R. No. 48766 February 9, 1993GODELIVA S. DULAY, petitioner, vs.
THE HONORABLE MINISTER OF NATURAL RESOURCES, as a formal party and in his Official
Capacity, THE DIRECTOR OF THE BUREAU OF FISHERIES & AQUATIC RESOURCES, in his Official
Capacity, and ANGELES DICO, in her Private Capacity, respondents.NOCON, J.:
Petitioner Godeliva S. Dulay comes to this Court and asks Us to confine public respondent
Director of the Bureau of Fisheries and Aquatic Resources within his jurisdiction and to uphold
the principle of res judicata in administrative proceedings by nullifying (1) his February 24, 1978
order giving due course to the letter-petition of private respondent Angeles D. Dico requesting
for the reopening of Fishpond Conflict case of Mrs. Angeles Dico against Juan Quibete, Petronilo
Retirado and petitioner Mrs. Godeliva S. Dulay and the "Cancellation of Fishpond Lease
Agreement No. 2165 of Mrs. Godeliva S. Dulay" and (2) his telegrams dated August 14, 1978
stating that petitioner's motion for reconsideration of said February 24, 1978 interlocutory
order "cannot be entertained" and advising petitioner of the continuation of the formal
investigation of the private respondent's letter-petition scheduled for September 4 to 9, 1978.
This present conflict stems from two earlier cases decided by the Office of the President, both
of which have attained finality. As condensed by the Office of the Solicitor General, these are as
follows:
1. Re: DANR Case No. 2898
entitled "Angeles Dico
v. Juan Quibete"
Annex ("A")1
The salient antecedent facts stated in the decision of the Office of the President dated
November 14, 1969, are as follows:
That by a barter agreement entered into between Juan Quibete and Jose Padios sometime in
1932, the former exchanged his parcel of land situated at Sitio Palaypay, municipality of San
Dionisio, province of Iloilo, for the latter's fishpond area of about 24 hectares located at sitio
Talaba-an, municipality of Cadiz (now Cadiz City), province of Negros Occidental;
That Juan Quibete, also in 1932, applied for a Fish and Game Special Permit over the area
(F.P.L.A. No. 1709). The application was disapproved because the area covered thereby was not
yet declared available for fishpond purposes. The records of that application were lost during
World War II so much so that Juan Quibete had to renew his application in 1945 (Fp. A. No.
716). His application was approved on February 10, 1949 and Fishpond Permit No. F-738-E was
issued;
That on February 6, 1958, private respondent (Angeles Dico) filed her fishpond application (Fp.
A. No. 18206) to occupy the area covered by petitioner's fishpond lease agreement;
That her application was disapproved on the ground that the area she applied had already been
awarded to Juan Quibete, predecessor-in-interest of the petitioner, under Fishpond Permit
No. F-738-E, and that a motion for reconsideration thereon was denied;
That on February 29, 1964, Juan Quibete meanwhile sold and/or transferred his rights and
interests over the area under Fishpond Permit No. F-738-E to one Petronilo Retirado;
That on April 28, 1964, private respondent Angeles Dico filed a protest with the Philippine
Fisheries Commission alleging that Juan Quibete was occupying and improving lot (Lot No. 489-
C) which was not the area covered by his fishpond permit and that he transferred his rights and
interests over the said area without the approval of the Secretary of Agriculture and Natural
Resources;
That the Philippine Fisheries Commissioner dismissed the protest on October 16, 1964 and
declared that Lot No. 489-C was the same area granted to Juan Quibete under his fishpond
permit and not any other lot;
That from the decision private respondent Angeles Dico brought her case to the Secretary of
Agriculture and Natural Resources who dismissed her appeal on December 7, 1965;
That after denial of a motion for reconsideration, she appealed to the Office of the President.
Her appeal was in turn dismissed in the decision of November 14, 1969.
2. Re: DANR Case No. 3447
entitled "F.P.A. No.
V-3-3852, Angeles Dico,
Applicant-Appellant v.
Juan Quibete, Claimant-
Appellee" (Annex "F")2
The facts of the case are as follows:
That on November 13, 1965, while DANR Case No. 2898, supra, was still pending decision by
the Secretary of Agriculture and Natural Resources, private respondent Angeles Dico filed with
the Director of Lands a free patent application (No. V-3-3852) for a 4-hectare dry portion of Lot
489-C covered by Fishpond Permit
No. F-738-E of Juan Quibete;
That Juan Quibete, claiming preferential right over the area applied for, protested to the
application;
That the Director of Lands, in a decision dated May 30, 1967, rejected the application of private
respondent Dico and directed Juan Quibete to file the appropriate public land application, if
qualified, for the 4-hectare dry portion;
That a motion for reconsideration having been denied, private respondent Dico appealed to the
Secretary of Agriculture and Natural Resources;
That under the same set of facts found in DANR Case
No. 2898 aforesaid, the Secretary affirmed on July 9, 1970 the decision of the Director of Lands
(Annex "F"), stating that the 4-hectare area subject of the appeal covered a portion of the same
tract of land which was the subject matter of DANR Case No. 2898;
That private respondent Dico moved to reconsider the Secretary's decision, Annex "F", but her
motion was denied on January 26, 1971. A second motion for reconsideration was likewise
denied per Order dated May 5, 1971.
3. As already stated, Petronilo Retirado became the successor-in-interest of Juan
Quibete by virtue of a deed of transfer of rights and improvements executed by Juan Quibete in
favor of Petronilo Retirado on February 29, 1964 over the area covered by Fishpond Permit No.
F-738-E of Juan Quibete (Annex "A").
4. Ultimately, petitioner (Godeliva S. Dulay) succeeded to the rights and interests over
the area in question. On May 21, 1973, the heirs of Petronilo Retirado executed a "Deed of Sale
of Fishpond Improvements and Transfer of Rights" (Annex "J") transferring their rights and
interests in favor of the petitioner over a portion of Lot No. 489-Cconsisting of 19.15 hectares,
more or less, and covered by their Fishpond Permit No. 158-2.
5. On October 22, 1974, after application with the Department of Agriculture and
Natural Resources, petitioner was issued a fishpond lease agreement (No. 2169) [Annex "K"]
over a portion of Lot 489-C consisting of 18.3675 hectares, expiring on December 31, 1998.
6. On October 28, 1977, private respondent (Angeles Dico) submitted a letter-petition to
the respondent officials (Annex "L") requesting for a "reopening of fishpond conflict of Angeles
Dico vs. Juan Quibete, Petronilo Retirado and Mrs. Godeliva S. Dulay based on newly discovered
evidence". It was there alleged that Fishpond Permit No. F-738-E of Juan Quibete did not cover
the area in question (Lot No. 489-C) located in Sitio Talaba-an, Municipality of Cadiz (now Cadiz
City) but Lot No. 487 located in Barrio Luna, Cadiz City. She prayed that petitioner's Fishpond
Lease Agreement No. 2169 be cancelled and, in lieu thereof, a new one be issued in her name.
7. Petitioner moved to dismiss the letter-petition on the ground of res judicata (Annex
"M"). She argued that the two administrative decisions in DANR Case No. 2898 and DANR Case
No. 3447 (Annexes "A" and "F"), involving the same parties, subject matter and cause of action,
have already become final and settled the matter once and for all.
8. Claiming that res judicata is not applicable, private respondent opposed the motion
to dismiss (Annex "P"). This was the subject of a rejoinder (Annex "Q") which was again
excepted to by private respondent on the argument that res judicata does not apply in cases
where the government has to exercise its inherent power to regulate (Annex "R").
Respondent Director held resolution of the motion to dismiss in abeyance. In an "Interlocutory
Order" dated February 24, 1978, he reserved to resolve the motion "until after termination of
the investigation" brought about by private respondent's letter-petition.3
By reason of the denial not only of her Motion to Dismiss the letter-petition of respondent
Angeles Dico dated October 28, 1977 but also the
denial4 of her motion for reconsideration5 and the insistence of respondent Director in
conducting his investigation on September 4 to 9, 1978 at the Bacolod City Fisheries Office,6
the situation had become urgent for petitioner. Thus, she filed the instant petition praying for
the issuance of a writ of preliminary injunction or restraining order claiming that unless one is
immediately issued, respondent will proceed with the investigation as scheduled, and if
petitioner refuses or fails to appear in said investigation by reason of this petition, the
respondents will proceed with the investigation and reception of evidence ex-parte as clearly
threatened by the respondent Director in his telegrams to the petitioner and his counsel,
marked as Annexes "I", "U", "W" and "W-1" herein.
As prayed for, We issued a temporary restraining order in the Resolution of September 7,
1978.7
Private respondent Angeles Dico's request for the reopening of the case of "Dico vs. Quibete, et
al." and the cancellation of the Fishpond Lease Agreement of petitioner Godeliva S. Dulay on
the ground of fraud committed by Juan Quibete and Petronila Retirado is anchored, allegedly,
on the following pieces of newly-discovered evidence, to wit:
(1) Order of then Philippine Fisheries Commissioner Arsenio N. Rolden, dated May 12,
1964, recognizing the fishpond application (No. 18206) of private respondent, dated Feb. 6,
1958, over the area in question located at Barrio Daga, Talaba-an, Diotay, Cadiz City;
(2) The Plan of the Bureau of Lands for the entire area of Lot 489 of which the subject
area is a portion;
(3) The Fishpond Application (No. 18950) of Juan Quibete (herein petitioner's successor-
in-interest) for 5 hectares covered by Lot 489-B (25 hectares), situated at Barrio Daga, Talaba-
an, Diotay, Cadiz City, was denied by Hon. Jose R. Montilla Assistant Director of Fisheries on
May 19, 1960 because Juan Quibete was already a holder of a previously approved fishpond
application under Permit No. 738-E under Lot 487 covering a 20-hectare area situated at Barrio
Luna, Cadiz City;
(4) The Plan of the aforesaid Lot 487;
(5) Affidavits of three (3) persons who attest to the fact that Juan Quibete's fishpond
area (Lot 487) is located at Barrio Luna, Cadiz City. The witnesses are Mansueto D. Alarcon, then
Municipal Secretary of the Municipality of Cadiz, Negros Occidental dated January 6, 1965;
Patrolman Eligio O. Javier, member of the police force of Cadiz, Negros Occidental, dated
October 22, 1963 and Melecio Quibete, son of Juan, executed in May 1964.8
After an exhaustive review of the records of the case, We grant the petition and make
permanent the temporary restraining order issued earlier on September 7, 1978.
Private respondent's letter-petition,9 filed October 28, 1977, states clearly that it is a "Request
for Reopening of Fishpond Conflict of Mrs. Angeles Dico vs. Juan Quibete, Petronilo Retirado
and Mrs. Godeliva S. Dulay based on New Discovered Evidence . . . ."
It is already well-settled in our jurisprudence that the decisions and orders of administrative
agencies rendered pursuant to their quasi-judicial authority, have, upon their finality, the force
and binding effect of a final judgment within the purview of the doctrine of res judicata. The
rule of res judicata which forbids the reopening of a matter once judicially determined by
competent authority applies as well to the judicial and quasi-judicial acts of public, executive or
administrative officers and boards acting within their jurisdiction. 10
DANR Case No. 2898, entitled "Angeles Dico vs. Juan Quibete" was decided by the Office of the
President on November 14, 1969. 11 Since the same was not brought to the courts for judicial
review, the same has long become final and executory.
DANR Case No. 3447, entitled "Angeles Dico vs. Juan Quibete" involved Free Patent Application
No. V-3-385 of private respondent Dico. The Director of Lands in a decision dated May 30, 1967
rejected her application. The Secretary of Agriculture and Natural Resources affirmed the same
on July 9, 1970. 12 The findings of fact in said DANR case, which were found by the Secretary to
be the same facts in DANR Case No. 2898, are deemed conclusive by operation of law. 13 Said
DANR case, not having been brought likewise to the courts for judicial review has also become
final and executory. 14
Private respondent points out that the Director of Lands, Ramon N. Casanova, treated her
motion for reconsideration as a petition for relief from judgment. That may be so but Director
Casanova's action was not in accord with the administrative rules on appeal. Actually, the next
step that private respondent should have taken from the July 9, 1970 Decision of the Secretary
of Agriculture and Natural Resources was to appeal the same to the Office of the President
within 30 days from receipt of said Decision. 15 Private respondent received the Decision on
September 21, 1970, 16 and should have been appealed the same by October 24, 1970, the last
day of filing. Instead she filed a motion for reconsideration only on November 3, 1970. Clearly,
the July 9, 1970 decision of the Secretary of Agriculture and Natural Resources in DANR Case
No. 3447 had become final and executory.
On the assumption, however, that private respondent's November 3, 1970 motion for
reconsideration was properly treated as a petition for relief from judgment, thereby also
assuming that E.O. 19 (1966) was not applicable to private respondent's case, a careful review
of her alleged "newly discovered evidence" does not support the charge of fraud.
Private respondent's allegation is that petitioner's predecessor-in-interest, Juan Quibete, was
given Lot 487 under Fishpond Permit No. F-738-E while Lot 489-C, which she applied for under
Fp. A. No. 18206, was what Juan Quibete actually improved. He sold his rights over this Lot 489-
C to Retirado, who in turn sold his rights to petitioner.
Actually, private respondent filed on February 6, 1958 with the Bureau of Fisheries Fishpond
Application, Fp. A. No. 18206, to occupy Lot No. 489-C after having allegedly verified from the
records of the Bureau of Forestry that there was no prior lessee. 17 Her application was initially
denied on the ground that said Lot 489-C, mistakenly written as Lot 487 in Quibete's original
sketch, had already been granted to Quibete under Fishpond Permit No. F-738-E as early as
February 10, 1949. 18
In fact, it appears that what private respondent applied for was the very area of her husband,
Celso Dico. This was confirmed by the Assistant Director of Forestry in his letter dated October
15, 1963 to the Commissioner of the Philippine Fisheries Commission. 19
Private respondent protested on April 18, 1964 the denial of her application. To allow for
further verification of her claim, the November 6, 1963 order denying her application was set
aside by the order of May 12,
1964 20 — the first alleged newly-discovered evidence of private respondent — and another
verification made on May 23, 1964 by one of the Commission's investigators, Mr. Cesar Alelis.
21 It was established that it was Quibete's Lot 489-C which private respondent was claiming,
although erroneously labelled as Lot 487 by Quibete himself in the handwritten sketch he
submitted to the Bureau of Fisheries on December 5, 1946. 22 Consequently, private
respondent's Fishpond Application No. 18206 was denied with finality by the Philippine
Fisheries Commission on October 16, 1964. 23
Again, acting on the motion for reconsideration of his Office's denial of private respondent's
appeal of said October 16, 1964 Order, the Secretary of Agriculture and Natural Resources
ordered on March 6, 1968, one of the lawyers in his Office's Legal Division, Atty. Guillermo B.
Bautista, to conduct another investigation and ocular inspection of the fishpond in dispute. 24
The results were the same. It was Lot 489-C that was improved by Juan Quibete and not Lot
487. A surprise that cropped up in this latest investigation was the withdrawal by Melecio
Quibete, son of Juan Quibete, of his statements in favor of private respondent which he said he
made during the initial investigation regarding private respondent's Fishpond Application No.
18206 only because he was promised money to do so. 25 It turned out that private respondent
welched on her promise. Since private respondent's claim to the land is anchored on her
purchase of said land, together with improvements, from Melecio Quibete, 26 the withdrawal
by the latter of his statements renders private respondent Dico's claim fallacious.
To sum up, the matter of which lot Juan Quibete improved as a fishpond and which rights he
sold to Retirado was investigated TWICE after the Philippine Fisheries Commission reinstated
private respondent's Fishpond Application No. 18206 in its Order of May 12, 1964. Both
investigations — more than three years apart with investigators from different offices —
showed that Juan Quibete occupied and improved Lot 489-C although in the different
documents, including maps, which make up this case, it was designated as Lot 487. Thus, no
merit can be given to private respondent's alleged pieces of evidence, number 2 and 5(page 7-
8, supra) as all these HAD already been studied thoroughly by both Investigator Alelis and Atty.
Bautista in these separate investigations.
The matter having become final as of August or September 1970, 27 it was grave abuse of
discretion on the part of public respondent Director of the Bureau of Fisheries and Aquatic
Resources to give due course to private-respondent's letter-petition of October 28, 1977
requesting for a re-opening of the fishpond conflict involved herein.
WHEREFORE, premises considered, the petition is hereby GRANTED. Ordered ANNULLED and
SET ASIDE are the (1) February 20, 1978 Order of the public respondent giving due course to the
letter-petition of private respondent and the (2) two August 14, 1978 telegrams issued by
public respondent setting private respondent's letter-complaint for formal investigation. The
temporary restraining order issued last September 7, 1978 is hereby made PERMANENT. Costs
against private respondent.IT IS SO ORDERED.
G.R. No. 101426 May 17, 1993
PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY, INC., petitioner,
vs.
COURT OF APPEALS and TRANSPACIFIC TOWAGE, INC., respondents.
Linsangan Law Office for petitioner.
Misa, Castro & Associates for private respondent.
PADILLA, J.:
In this petition for review on certiorari, Philippine American General Insurance Company,
Incorporated assails the decision * of the Court of Appeals, dated 31 July 1991, rendered in CA-
G.R. CV. No. 21252, which reversed and set aside the decision of the Regional Trial Court of
Manila, Branch 161 and entered a new one dismissing the petitioner's complaint which sought
to collect the sum of P1,511,210.00 from the private respondent.
The facts of the case, as found by the Court of Appeals,2 are as follows:
On September 4, 1985 the Davao Union Marketing Corporation of Davao City shipped on board
the vessel M/V "Crazy Horse" operated by the Transpacific Towage, Inc. cargo consisting of
9,750 sheets of union brand GI sheets with a declared value of P1,086,750.00 and 86,860 bags
of union Pozzolan and union Portland Cement with a declared value of P4,300,000.00. The
cargo was consigned to the Bicol Union Center of Pasacao, Camarines Sur, with a certain Pedro
Olivan as the "Notify-Party."
The cargo was insured by the Philippine American General Insurance Co., Inc., under Marine
Note No. 023408 covering 86,000, of Union Pozzolan and POrtland cement for the amount of
P3,440,000.00.
The vessel M/V "Crazy Horse" arrived on September 7, 1985 as scheduled as the port of
Pasacao, Camarines Sur. Upon arrival the shipmaster notified the consignee's "Notify-Party"
that the vessel was already (sic) to discharge the cargo. The discharging could not be affected
immediately and continuously because of certain reasons. First, the buoys were installed only
on September 11, 1985; second, the dischrage permit was secured by the consignee only on
September 13, 1985; third a wooden catwalk had to be installed and extension of the wharf had
to be made, which was completed only on September 26, 1985; fourth, the discharging was not
continuous because there were intermittent rains and the stevedores supplied by the
consignee did not work during the town fiesta. (Emphasis supplied ours)
On October 16, 1985, a super typhoon code named "Saling" entered the Philippine area of
responsibility and was felt in the eastern coast of the country on October 17, 1985. It had a
strength of 240 KPH and Pasacao was placed under Storm Signal No. 3. The discharging of the
cargo had to be suspended at 11:40 A.M. on October 17, 1985 due to the heavy downpour,
strong winds, and turbulent sea. To prevent damage to the cargo all hatches of the vessel were
closed and secured. (Emphasis supplied ours)
At the time the discharging of the cargo was suspended, a total of 59,625 bags of cement and
26 crates of GI sheets had already been discharged.
In further preparation for the typhoon the vessel was loaded with 22 tons of fresh water and
3,000 liters of fuel. The shipmaster ordered the vessel to be moved about 300 meters seaward
in order that it would not hit the cat walk or the wooden bridge or the wharf, or the rocks. The
vessel was ready for any maneuver that may have to be made.
According to the shipmaster who was plotting the typhoon's path in a chart, the radius was so
wide that there was no way the typhoon could be evaded. From 8:00 P.M. of October 17, 1985
to 8:00 P.M. of October 18, 1985 the typhoon raged in the area. It was at about 5:20 A.M. of
October 18, 1985 when the shipmaster ordered the maneuvering of the vessel but it could not
be steered on account of the strong winds and rough seas. The vessel's lines snapped, causing
her to be dragged against the rocks, and the anchor chain stopper gave way. The vessel
sustained holes in the engine room and there was a power failure in the vessel. Water started
to fill the engine room and at about 6:15 A.M. the engine broke down.
The shipmaster had no choice but to order the ship to be abandoned. He told the crew to
secure the vessel while he went to the Municipal Mayor of Pasacao to request for police
assistance to prevent pilferage of the vessel and its cargo. He was, however, unable to get any
assistance. When he returned to the vessel he found that it was being continuously pounded by
the strong sea waves against the rocks. This caused the vessel to break into two (2) parts and to
sink partially. The shipmaster reported the incident to the Philippine Coast Guard but inspite
the presence of three (3) coast guards, nothing could be done about the pilferage done on the
vessel and its cargo. Almost the whole barrio and because there were so many of them the
crew and the guards were helpless to stop the pilferage and looting. As a result of the incident
the cargo of cement was damaged while the GI sheets were looted and nothing was left of the
undischarged pieces.
The total number of cement bags damaged and/or lost was 26,424 costing P1,056,960.00 while
there were 4,000 pieces of the GI sheets unrecovered, the cost of which was P454,250.00.
Because the cargo was insured by it the Philippine American General Insurance Co., Inc. paid
the shipper Davao Union Marketing Corporation the sum of P1,511,210.00. Thereafter, the said
insurer made demands upon the Transpacific Towage, Inc. for the payment of said amount as
subrogee of the insured, claiming that the loss of the cargo was directly and exclusively brought
about by the fault and negligence of the shipmaster and the crew of M/V "Crazy Horse".
Because the latter refused to pay the amount of P1,511,210.00 demanded, the Philippine
American General Insurance Co., Inc. filed the present complaint.
The lower court found that although the immediate cause of the loss may have been due to an
act of God, the defendant carrier had exposed the property to the accident. The court also
found plaintiff guilty of contributory negligence and mitigated the plaintiff's claim to three-
fourths (3/4) of its value. Thus the lower court, in its Decision, ordered the defendant:
1) To pay plaintiff the mitigated amount of P1,133,408.00 plus 12% legal interest per annum
computed from the date of the filing of herein complaint on May 15, 1986, until duly paid;
2) To pay P8,000.00 as attorney's fees; and
3) To pay costs of suit.
SO ORDERED.
In its now assailed decision, respondent Court of Appeals reversed the decision of the trial court
and ruled instead that private respondent, as a common carrier, is not responsible for the loss
of the insured cargo involved in the case at bar, as said loss was due solely to a fortituous event.
Petitioner in the present petition contends that respondent appellate court erred in not holding
private respondent liable for the loss of the said insured cargo.
We affirm the decision of the Court of Appeals.
It is not disputed that private respondent is a common carrier as defined in Article 1732 of the
Civil Code.3 The following facts are also not contested: (1) that the cargo-carrying vessel was
wrecked and partially sank on 18 October 1985 due to typhoon "Saling"; (2) that typhoon
"Saling" was a fortuitous event; and (3) that at the time said vessel sank, the remaining
undischarged cargo, consisting of 26,424 cement bags and 4,000 pieces of G.I. sheets, were still
on board the vessel.
However, the Court notes the fact that as of 17 October 1985, the time when the Pasacao area
was placed under storm signal No. 3 due to "Saling", the unloading of the cargo from the vessel
was still unfinished, notwithstanding the lapse of forty (40) days from the time the vessel
arrived in Pasacao on 7 September 1985, or the lapse of thirty-four (34) days from the time
actual discharge of the cargo commenceds on 13 September 1985.
In the opinion of the trial court, this lapse of thirty four (34) days with private respondent not
having completed the unloading of the goods, is tantamount to unreasonable delay, which
delay exposed the unloaded cargo to accident. The trial court held private respondent liable for
the loss of goods under Article 1740 of the Civil Code which provides that if the common carrier
negligently incurs in delay in transporting the goods, a natural disaster shall not free the carrier
from responsibility.
On the other hand, the appellate court ruled out any negligence committed by private
respondent and held that the delay in fully unloading the cargo from the vessel "was
occasioned by causes that may not be attributed solely to human factors, among which were
the natural conditions of the port where the M/V "Crazy Horse" had docked, the customs of the
place and the weather conditions.4
The appellate court in exempting private respondent from liability applied Article 1739 of the
Civil Code which provides as follows:
In order that the common carrier may be exempted from responsibility, the natural disaster
must have been the proximate and only cause of the loss. However, the common carrier must
exercise due diligence to prevent or minimize loss before, during and after the occurrence of
flood, storm, or other natural disaster in order that the common carrier may be exempted from
liability for the loss, destruction, or deterioration of the goods.
The appellate court ruled that the los of cargo in the present case was due solely to typhoon
"Saling" and that private respondent had shown that it had observed due diligence before,
during and after the occurrence of "Saling"; hence, it should not be liable under Article 1739.
Considering the disputed fact that there really was delay in completing the unloading of the
goods from the vessel, the Court believes that the real issue at bar centers on the application of
Article 1740 of the Civil Code. In short, the principal question, in determining which of the
parties in the present case should bear the loss of the goods, is whether the delay involved in
the unloading of the goods is deemed negligently incurred in, so as not to free private
respondent from liability, notwithstanding the fact that the ultimate cause of the loss of the
goods was the sinking of the vessel brought about by typhoon "Saling."
Indeed, from the time the vessel arrived at port Pasacao on 7 September 1985 up to 17 October
1985 when the Pasacao area was placed under storm signal No. 3 due to typhoon "Saling", forty
(40) days had passed. Under normal conditions, a period of forty (40) days is undoubtedly more
than enough time within which the unloading of the cargo (given its nature) from the vessel
could be completed. Hence, the question boils down further to which party should be faulted
for this delay.
Private respondent argues that its duty to unload ceased on 7 September 1985 when the
shipmaster notified the consignee's "Notify-Party" that the vessel was ready to discharge the
cargo. On the other hand, petitioner contends that the duty to unload the cargo from the vessel
continued to remain with private respondent. Respondent appellate court, however, ruled that
the question as to which party had the task to discharge the cargo is actually immaterial under
the circumstances, as the delay could not be attributed to any of the parties, but to several
causes such as the natural conditions of the Pasacao port, the customs of the place and the
weather conditions obtaining at the time. The appellate court made the following observations:
xxx xxx xxx
To our mind whichever of the parties had the obligation to unload the cargo is not material.
For, analyzing the causes for the delay in such unloading, we find that such delay was not due
to the negligence of any party but was occasioned by causes that may not be attributed solely
to human factors, among which were the natural conditions of the port where the M/V "Crazy
Horse" had docked, the customs of the place, and the weather conditions.
The wharf where the vessel had to dock was shallow and rocky, hence it had to drop anchor
some distance away in a private port. Buoys had to be constructed in order that the vessel may
properly moored. After the buoys were installed a wooden stage had to be constructed so that
the stevedores could reach the vessel. For this they needed a floating crane which was not
immediately available. The barges that were to load the cargo from the vessel could not go near
the wharf because of the shallow and rocky condition. A catwalk had to be installed between
the barge and the wharf. This necessitated the dismantling of the wooden stage previously
installed.
Apart from these preparations and constructions that had to be made, the weather was not
cooperative. Even before the typhoon struck there were intermittent rains, hence the
unloading was not continuous. The actual unloading started on September 13, 1985 and could
have been finished in 4 or 5 days but because of the rains it was delayed. Another factor that
caused further delay was the fact that the fiesta of the Virgin of Penafrancia was celebrated and
for the length of time that the celebrations were held, the stevedores who were from the place
refused to work.
xxx xxx xxx
The Court of Appeals summarized the reasons which adversely affected the completion of the
unloading of the cargo from the time the vessel arrived at the Pasacao area on 7 September
1985, namely: first, the buoys were installed only on 11 September 1985; second, the consignee
secured the discharge permit only on 13 September 1985; third, a wooden catwalk had to be
installed and the extension of the wharf had to be made, which was completed only on 16
September 1985; fourth, there were intermittent rains and the stevedores supplied by the
consignee did not work during the town fiesta of the Virgin of Penafrancia, hence, the
unloading was not continuous.
We respect the above-mentioned factual findings of the appellate court as to the natural
conditions of the port of Pasacao were the vessel was docked, and several other factors which
harshly affected the completion of the discharge of the cargo, as these findings of fact are
substantially supported by evidence.6
While it is true that there was indeed delay in discharging the cargo from the vessel, we agree
with the Court of Appeals that neither of the parties herein could be faulted for such delay, for
the same (delay) was due not to negligence, but to several factors earlier discussed. The cargo
having been lost due to typhoon "Saling", and the delay incurred in its unloading not being due
to negligence, private respondent is exempt from liability for the loss of the cargo, pursuant to
Article 1740 of the Civil Code.
The records also show that before, during and after the occurrence of typhoon "Saling", private
respondent through its shipmaster exercised due negligence to prevent or minimize the loss of
the cargo, as shown by the following facts: (1) at 5:20 a.m. of 18 October 1985, as typhoon
"Saling" continued to batter the Pasacao area, the shipmaster tried to maneuver the vesel
amidst strong winds and rough seas; (2) when water started to enter the engine room and later
the engine broke down, the shipmaster ordered ths ship to be abandoned, but he sought police
assistance to prevent pilferage of the vessel and its cargo; (3) after the vessel broke into two (2)
parts and sank partially, the shipmaster reported th eincident to the Philippine Coast Guard, but
unfortunately, despite the presence of three (3) coast guards, nothing could be done to stop
the pilferage as almost the entire barrio folk came to loot the vessel and its cargo, including the
G.I. sheets.
The diligennced exercised by the shipmaster further supports the exemption of private
respondent from liability for the loss of the cargo, in accordance with Article 1739 of the Civil
Code.
Although we find private respondent free from liability for the loss of the cargo, we disagree
with its contention that the doctrine of res judicata applies in the case at bar, because the
Board of Marine Inquiry rendered a decision dated 11 April 1988 (acting on the marine protest
filed on 19 October 1985 by the shipmaster of M/V "Crazy Horse") holding that said shipmaster
was not guilty of "negligence as the proximate cause of the grounding and subsequent
wreckage of M/S "Crazy Horse", hence, recommending that the captain, his officers and crew
be absolved from any administrative liability arising out of the subject incident."7
The resolution of the present case is not barred by the judgment of the Board of Marine
Inquiry. One of the requisites of the principle of res judicata is that there must be, among other
things, identity of subject matters and causes of action between a first and second case in order
that the judgment in the prior case may bar that in the subsequent case.8
The cause of action in the marine protest was to enforce the administrative liability of the
shipmaster/captain of M/V "Crazy Horse", its officers and crew for the wreckage and sinking of
the subject vessel. On the other hand, the cause of action at bar is to enforce the civil liability of
private respondent, a common carrier, for its failure to unload the subject cargo within a period
of time considered unreasonably long by the petitioner. While it may be true that the Court is
bound to accord great weight to factual findings of the Board,9 we hold that the protest filed
before it and the present case assert different causes of action and seek different reliefs.
All told, we find private respondent not legally liable for the loss of the insured cargo involved
in the present case.
WHEREFORE, the petition is DENIED. The appealed decision of the Court of Appeals, dated 31
July 1991, rendered in CA-G.R. CV No. 21252, is hereby AFFIRMED.SO ORDERED.
[G.R. No. 101783. January 23, 2002]MANILA ELECTRIC COMPANY, petitioner, vs. PHILIPPINE
CONSUMERS FOUNDATION, INC., EDGARDO S. ISIP, HON. JUDGE MANUEL M. CALANOG, JR.,
and HON. JUDGE TIRSO D'C. VELASCO, respondents.SANDOVAL-GUTIERREZ, J.:
Interest republicae ut sit finis litium[1] - it is to the interest of the public that there should be an
end to litigation by the same parties and their privies over a subject fully and fairly adjudicated.
From this overwhelming concern springs the doctrine of res judicata an obvious rule of reason
according stability to judgments.
Challenged in this petition for review on certiorari are the a) Decision in Civil Case No. Q-89-
3659 dated January 16, 1991 of the Regional Trial Court, Branch 76, Quezon City; [2] and b) its
Order dated September 10, 1991[3] denying the motion for reconsideration of the said
Decision.
The pertinent facts are:
On September 11, 1974, former President Ferdinand E. Marcos, with the objective of enabling
the grantees of electric franchises to reduce their rates "within the reach of consumers",[4]
promulgated Presidential Decree No. 551[5] providing for the reduction from 5% to 2% of the
franchise tax paid by electric companies, thus:
SECTION 1. Any provision of law or local ordinance to the contrary notwithstanding, the
franchise tax payable by all grantees of franchises to generate, distribute and sell electric
current for light, heat and power shall be two (2%) of their gross receipts received from the sale
of electric current and from transactions incident to the generation, distribution and sale of
electric current.
On February 5, 1982, the Philippine Consumers Foundation, Inc., (PCFI) filed with the Board of
Energy (BOE) a "Petition for Specific Performance, Damages and Violation of P. D. No. 551"[6]
against the Manila Electric Company (Meralco), docketed as BOE Case No. 82-198. PCFI sought
for the immediate refund by Meralco to its customers of all the savings it realized under P.D.
No. 551, through the reduction of its franchise tax from 5% to 2%, with interest at the legal
rate; and for the payment of damages and a fine in the amount of P50, 000.00 for violating P.D.
551. It moored its petition on Section 4 of P.D. No. 551 which provides:
Sec. 4. All the savings realized by electric franchise holders from the reduction of the franchise
tax under Section 1 and tariff reductions and tax credits under Sections 2 and 3, shall be passed
on to the ultimate consumer. The Secretary of Finance shall promulgate rules and regulations
and devise a reporting systems to carry out the provisions of this Decree.
In its answer to the petition, Meralco alleged that it was duly authorized by the BOE in its Order
dated March 10, 1980 in BOE Case No. 79-692 to retain the disputed savings; and that the said
Order had long become final.
On November 25, 1982, the BOE issued its Decision dismissing PCFI's petition, declaring that
Meralco was indeed authorized by the BOE, in BOE Case No. 79-692, to retain the disputed
savings under P.D. 551, thus:
It is at once evident from the foregoing controlling facts and circumstances, particularly the
Order of this Board dated March 10, 1980, as confirmed by the reply-letter dated March 3,
1981, that Meralco has been duly authorized to retain the savings realized under the provisions
of P.D. 551. The authority granted in the said Order and letter is so clear and unequivocal as to
leave any room for contradictory interpretation. This Board, therefore, holds as untenable
petitioners claim that respondent Meralco was never authorized under the said Order and
letter to hold on to the savings realized under the said decree.
"The Board likewise finds to be devoid of merit petitioners contention that pursuant to Opinion
No. 140, Series of 1979, of the Minister of Justice, it is absolutely mandatory on the part of
respondent Meralco to pass on to its customers the savings under consideration. It must be
pointed out that the Order of March 10, 1980 was issued by this Board on the basis of the
recommendation contained in the Memorandum dated November 30, 1979 of the Minister of
Finance, which was approved by the President of the Philippines in his directive to this Board
dated December 11, 1979 issued thru Presidential Executive Assistant Jacobo Clave. This Board
believes and so holds that the approval by the President of the Philippines of the aforesaid
Finance Ministrys recommendation had the effects of (a) reversing or modifying the
aforementioned Opinion of the Minister of Justice; and (b) confirming the promulgation by the
Ministry of Finance, conformably with the specific authority granted it under P.D. No. 551, of an
additional rule or regulation for the implementation of the said decree for the guidance of this
Board. In issuing the Order of March 10, 1980, therefore, the Board has done no more than
follow and be guided by the said additional rule or regulation.
"It is noteworthy to mention also that the registered oppositors in BOE Case No. 79-692
(formerly BPW Case No. 72-2146), where the respondent herein originally filed its motion
requesting for authority to defer the passing on to its customers of the franchise tax reduction
benefits under P.D. No. 551, have done nothing to seek relief from or to appeal to the
appropriate forum, the said Order of March 10, 1980. As a consequence, the disposition
contained therein have long become final.x x x x x x
"That Meralco has been authorized to retain the savings resulting from the reduction of the
franchise tax under P.D. No. 551 is, therefore beyond question."[7] (Emphasis supplied)
PCFI filed a motion for reconsideration but was denied by the BOE. Hence, PCFI filed a Petition
for Certiorari with this Court, docketed as G.R. No. 63018. In a Resolution dated October 22,
1985, this Court dismissed the petition for lack of merit, holding that:
We see no grave abuse of discretion warranting the setting aside of the BOE order.
"P.D. No. 551 ordered the Minister of Finance to issue implementing rules and regulations. The
Minister authorized all grantees of electric franchises, not Meralco alone, whose rates of return
on their rate bases were below the legal allowable level to either ask for increased rates or to
defer the passing on of benefits under the decree to consumers until just and reasonable
returns could be had. Lengthy investigations, audits, hearings, and determinations over
practically an eight year period preceded the questioned decision. The petitioners failed both
below and in this petition to successfully refute the facts ascertained in the audits and
examinations. The BOE approved option formed the basis of subsequent determinations of
Meralco rates and the adopted formula became the basis of computations. When this petition
was filed on January 27, 1983, the November 25, 1982 ruling was already final and executory.
Moreover, the March 10, 1980 judgment rendered in BOE Case No. 79-692, where Meralco had
filed a motion for authority to defer passing on to customers the savings from the reduction of
franchise taxes, was not appealed or questioned by the petitioners. Instead, they filed BOE Case
No. 82-198 on February 5, 1982 or almost two years later, raising the same issues against the
same parties. BOEs questioned decision in Case No. 82-198 used the facts in BOE Case No. 79-
692 for its conclusions. Not only had the March 10, 1980 decision confirmed the findings of the
Minister of Finance on Meralcos accounts and finances but in filing the second case, the
petitioners were asking for a readjudication of the same issues in another challenge to these
same findings .x x x.[8] (Emphasis supplied)
Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents herein, filed with
respondent Regional Trial Court, Branch 76, Quezon City, a petition for declaratory relief,
docketed as Civil Case No. Q-89-3659. Private respondents prayed for a ruling on who should be
entitled to the savings realized by Meralco under P.D. No. 551. Once again, they insisted that
pursuant to Section 4 of P.D. No. 551, the savings belong to the ultimate consumers.
Meralco, in its answer, prayed for the dismissal of the petition on the ground of res judicata,
citing this Court's Resolution in G.R. No. 63018 which affirmed the BOE's Decision in BOE Case
No. 82-198.
On January 16, 1991, respondent RTC rendered the assailed Decision declaring null and void the
Resolution of this Court in G.R. No. 63018 and on the basis of the Dissenting Opinion of the late
Justice Claudio Teehankee, held that the disputed savings belong to the consumers, thus:
Respondent Meralcos theory is devoid of merit. As correctly stated in the dissenting opinion of
the late Chief Justice Claudio Teehankee in the October 22, 1985 resolution of the Supreme
Court in SC G.R. No. 63018, the decision of the Board of Energy is ultra vires, hence, null and
void. x x x.
"It is a well-settled rule in statutory construction that when the law is clear, it leaves no room
for interpretation. The memorandum issued by the Minister of Finance which was made the
basis of the decision of the Board of Energy has no legal effect because Sec. 4 of P.D. No. 551 is
clear and unequivocal.x x x x x x
"Since the law is clear, what is left to be done by the administrative body or agency concerned
is to enforce the law. There is no room for an administrative interpretation of the law. In the
instant case, the Board interpreted PD 551 and chose not only to enforce it but to amend and
modify the law on the basis of a Memorandum and the authority issued by the Minister of
Finance to all grantees of electric-franchises, not Meralco alone, whose rates of return on their
rate basis were below the legal allowable level, to either ask for an increased rates or to defer
the passing on of benefits under the decree to consumers, until just and reasonable return
could be had. This is beyond the authority granted by PD 551 to the Minister of Finance. PD 551
merely ordered the Minister of Finance to issue implementing rules and regulations. He cannot
amend or modify the clear mandate of the law. The act therefore of the Minister of Finance
was ultra vires, hence, null and void. Considering that said act became the basis of the Board of
Energys decision, it follows that said decision is likewise null and void and the Supreme Court
resolution affirming said decision is also null and void having proceeded from a void judgment,
hence, cannot be considered as valid judgment that will be a bar to the present action."[9]
(Emphasis supplied)
Meralco moved for a reconsideration of the above Decision but was denied by respondent
court in its Order of September 10, 1991.
Hence, Meralco's petition for review on certiorari anchored on the following grounds:
"IRESPONDENT JUDGES ERRED IN HOLDING THAT CIVIL CASE NO. 89-3659 IS NOT BARRED BY
PRIOR JUDGMENT.
IIRESPONDENT JUDGES ERRED IN DECLARING NULL AND VOID A RESOLUTION OF THIS
HONORABLE SUPREME COURT.
IIIRESPONDENT JUDGES ERRED IN HOLDING THAT THE REMEDY OF DECLARATORY RELIEF WAS
STILL AVAILABLE TO PRIVATE RESPONDENTS.
IVRESPONDENT JUDGES ERRED IN NOT DISMISSING THE PETITION FOR DECLARATORY
RELIEF."[10]
Meralco contends that Civil Case No. Q -89-3659 is already barred by prior judgments, referring
to a) this Courts Resolution in G.R. No. 63018 sustaining the BOE's Decision in BOE Case No. 82-
198; and b) the Order dated March 10, 1980 of the same Board in BOE Case No. 79-692, both
holding that Meralco is authorized to retain its savings realized under P.D. 551. Meralco
likewise argues that respondent RTC cannot annul the Resolution of this Court in G.R. No.
63018 considering that trial courts cannot set aside decisions of a superior court. And lastly,
Meralco maintains that private respondents can no longer avail of the remedy of an action for
declaratory relief in view of the rule that such action should be filed before a violation of the
statute occurred.[11]
In their comment,[12] private respondents argue that this Court's Resolution in G.R. No. 63018
cannot be a bar to Civil Case No. Q-89-3659 for declaratory relief considering that it did not
delve on the essential issue raised in the latter case, i.e., who is entitled to the savings. Further,
they claim that public interest would be defeated by the application of res judicata.
The petition is meritorious.
The issue - whether or not Meralco is duly authorized to retain the savings resulting from the
reduction of the franchise tax under P.D. No. 551 as long as its rate of return falls below the 12
% allowable rate recognized in this jurisdiction has long been settled. Thus, the relitigation of
the same issue in Civil Case No. Q-89-3659 cannot be sanctioned under the principle of res
judicata.
Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or
matter settled by judgment.[13] In res judicata, the judgment in the first action is considered
conclusive as to every matter offered and received therein, as to any other admissible matter
which might have been offered for that purpose, and all other matters that could have been
adjudged therein.[14] For a claim of res judicata to prosper, the following requisites must
concur: 1) there must be a final judgment or order; 2) the court rendering it must have
jurisdiction over the subject matter and the parties; 3) it must be a judgment or order on the
merits; and 4) there must be, between the two cases identity of parties, subject matter and
causes of action.[15]
All the above requisites are extant in the records and thus, beyond dispute.
Re: FIRST REQUISITE - there must be a final judgment:
It is beyond question that this Courts Resolution dated October 22, 1985 in G.R. No. 63018,
sustaining the BOEs Decision dated November 25, 1982 in BOE Case No. 82-198 which
dismissed PCFI's petition, attained finality on December 4, 1985. As a matter of fact, this Court
had long ago issued an Entry of Judgment stating that the said Resolution "became final and
executory and is x x x recorded in the Book of Entries of Judgements." Prior thereto, or on
March 10, 1980, the BOE's Order in BOE Case No. 79-672 became final when the oppositors
therein did not appeal.
Re: SECOND REQUISITE - the court which rendered the final judgment must have jurisdiction
over the subject matter and the parties:
There is no question that the BOE has jurisdiction over the subject matter and the parties
herein. Under P.D. No. 1206,[16] The BOE is the agency authorized to "regulate and fix the
power rates to be charged by electric companies."[17] As such, it has jurisdiction over Meralco,
an electric company, and over the savings it realized under P.D. No. 551. It bears stressing that
P.D. No. 551 was passed precisely to enable the grantees of electric franchises to reduce their
rates within the reach of consumers. Clearly, the matter on how the disputed savings should be
disposed of in order to realize a reduction of rates is within the competence of the BOE.
Re: THIRD REQUISITE - it must be a judgment or order on the merits:
The BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A judgment is on the
merits when it determines the rights and liabilities of the parties based on the disclosed facts,
irrespective of formal, technical or dilatory objections. After according both parties the
opportunities to be heard, the BOE disposed of the controversy by resolving the rights of the
parties under P.D. No. 551. In its Decision, the BOE declared in clear and unequivocal manner
that Meralco "has been duly authorized to retain the savings realized under the provisions of
P.D. No. 551" and that private respondent PCFIs argument to the contrary is "untenable." The
BOE's Decision was upheld by this Court in G.R. No. 63018.
Re: FOURTH REQUISITE - there must be between the two cases identity of parties, subject
matter and causes of action:
There is identity of parties between the two cases. BOE Case No. 82-198 was a contest between
private respondent PCFI, as petitioner, and Meralco, as respondent. Civil Case No. Q-89-3659
involves the same contenders, except that respondent Edgardo Isip joined PCFI as a plaintiff.
But his inclusion as such plaintiff is inconsequential. A party by bringing forward, in a second
case, additional parties cannot escape the effects of the principle of res judicata when the facts
remain the same. Res judicata is not defeated by a minor difference of parties, as it does not
require absolute but only substantial identity of parties.[18]
The subject matters of BOE Case No. 82-198 and Civil Case No. Q-89-3659 are likewise identical
since both refer to the savings realized by Meralco from the reduction of the franchise tax
under P.D. No. 551. The subject matter of an action refers to the thing, wrongful act, contract
or property which is directly involved in the action, concerning which the wrong has been done
and with respect to which the controversy has arisen.[19] In both cases, the controversy is how
the disputed savings shall be disposed of - whether they shall be retained by Meralco or be
passed on to the consumers.
With respect to identity of causes of action, this requisite is likewise present. In both cases, the
act alleged to be in violation of the legal right of private respondents is Meralco's retention of
the savings it realized under P.D. No. 551. While it is true that BOE Case No. 82-198 is one for
specific performance, while Civil Case No. Q-89-3659 is for declaratory relief - in the ultimate -
both are directed towards only one relief, i.e., the refund of the disputed savings to the
consumers. To seek a court's declaration on who should benefit from the disputed savings
(whether Meralco or the consumers) will result in the relitigation of an issue fairly and fully
adjudicated in BOE Case No. 82-198.
Clearly, the test of identity of causes of action lies not in the form of an action. The difference
of actions in the aforesaid cases is of no moment. The doctrine of res judicata still applies
considering that the parties were litigating for the same thing and more importantly, the same
contentions.[20] As can be gleaned from the records, private respondents arguments in Civil
Case No. Q-89-3659 bear extreme resemblance with those raised in BOE Case No. 82-198.
Respondent RTC's Decision granting PCFI and Isip's petition for declaratory relief is in direct
derogation of the principle of res judicata. Twice, it has been settled that Meralco is duly
authorized to retain the savings it realized under P.D. No. 551 as long as its rate of return falls
below the 12% allowable rate. The pronouncement of the BOE in BOE Case No. 82-198 finding
such fact to be "beyond question" is clear and not susceptible of equivocation. This
pronouncement was sustained by this Court in G.R. No. 63018. In finding no grave abuse of
discretion on the part of the BOE, this Court saw the wisdom of its assailed Decision. Thus, this
Court held: "[I]n dismissing the petition for specific performance, the BOE authorized Meralco,
in lieu of increasing its rates to get a more reasonable return on investments while at the same
time refunding to consumers the benefit of P.D. No. 551, to instead defer the passing on of
benefits but without the planned increases. Instead of giving back money to consumers and
then taking back the same in terms of increased rates, Meralco was allowed by the BOE to
follow the more simplified and rational procedure."[21]
Private respondents now argue that G.R. No. 63018 merely decreed the postponement of the
passing of Meralco's savings to the consumers until it could increase its rate charges. On this
point, this Court categorically ruled:
"X x x. And finally, as stated by the Solicitor General, if only to put the issue to final rest, BOEs
decision authorizing Meralco to retain the savings resulting from the reduction of franchise tax
as long as its rate of return falls below the 12% allowable rate is supported by P.D. No. 551, the
rules and administrative orders of the Ministry of Finance which had been duly authorized by
the decree itself and by directives of the President to carry out the provisions of the decree,
and most of all by equitable economic considerations without which the decree would lose its
purpose and viability."[22]
Corollarily, let it not be overlooked that the purpose of an action for declaratory relief is to
secure an authoritative statement of the rights and obligations of the parties under a statute,
deed, contract etc. for their guidance in the enforcement thereof, or compliance therewith, and
not to settle issues arising from an alleged breach thereof. It may be entertained only before
the breach or violation of the statute, deed, contract etc., to which it refers.[23] The petition
gives a practical remedy in ending controversies which have not reached the stage where other
relief is immediately available. It supplies the need for a form of action that will set
controversies at rest before they lead to repudiation of obligations, invasion of rights, and the
commission of wrongs.[24] Here, private respondents brought the petition for declaratory relief
long after the alleged violation of P.D. No. 551.
Lastly, we are dismayed by respondent RTC's adherence to the Dissenting Opinion, instead of
the Majority Opinion, of the members of this Court in G.R. No. 63018, as well as its temerity to
declare a Resolution of this Court "null and void" and "cannot be considered as valid judgment
that will be a bar to the present action."
A lower court cannot reverse or set aside decisions or orders of a superior court, especially of
this Court, for to do so will negate the principle of hierarchy of courts and nullify the essence of
review. A final judgment, albeit erroneous, is binding on the whole world. Thus, it is the duty of
the lower courts to obey the Decisions of this Court and render obeisance to its status as the
apex of the hierarchy of courts. "A becoming modesty of inferior courts demands conscious
realization of the position that they occupy in the interrelation and operation of the integrated
judicial system of the nation."[25] "There is only one Supreme Court from whose decisions all
other courts should take their bearings," as eloquently declared by Justice J. B. L. Reyes.[26]
Respondent RTC, and for this matter, all lower courts, ought to be reminded that a final and
executory decision or order can no longer be disturbed or reopened no matter how erroneous
it may be. Although judicial determinations are not infallible, judicial error should be corrected
through appeals, not through repeated suits on the same claim.[27] In setting aside the
Resolution and Entry of Judgment of this Court in G.R. No. 63018, respondent court grossly
violated basic rules of civil procedure.
In fine, we stress that the rights of Meralco under P.D. No. 551, as determined by the BOE and
sustained by this Court, have acquired the character of res judicata and can no longer be
challenged.
WHEREFORE, the petition is hereby GRANTED. The assailed RTC Decision dated January 16,
1991 and Order dated September 10, 1991 in Civil Case No. Q-89-3659 are REVERSED and SET
ASIDE.SO ORDERED.
G.R. No. 166495 February 16, 2011
ROQUE C. FACURA and EDUARDO F. TUASON, Petitioners,
vs.COURT OF APPEALS, RODOLFO S. DE JESUS and EDELWINA DG. PARUNGAO, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 184129RODOLFO S. DE JESUS, Petitioner,
vs.OFFICE OF THE OMBUDSMAN, EDUARDO F. TUASON, LOCAL WATER UTILITIES
ADMINISTRATION (LWUA), represented by its new Administrator Orlando C. Hondrade,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 184263OFFICE OF THE OMBUDSMAN, Petitioner,
vs.
EDELWINA DG. PARUNGAO, and the HONORABLE COURT OF APPEALS (Former 7th Division),
Respondents.D E C I S I O NMENDOZA, J.:
For resolution before this Court are the following:
G.R. No. 166495 is a petition for certiorari filed by Roque Facura (Facura) and Eduardo Tuason
(Tuason) assailing the Resolutions1 dated September 22, 2004 and January 4, 2005 of the Court
of Appeals (CA) in CA-G.R. SP No. 84902, which granted the applications for preliminary
mandatory injunction filed by Atty. Rodolfo De Jesus (De Jesus) and Atty. Edelwina Parungao
(Parungao) by ordering their reinstatement to their former positions despite the standing order
of dismissal issued by the Office of the Ombudsman (Ombudsman) against them.
G.R. No. 184129 is an appeal, by way of Petition for Review on Certiorari under Rule 45 of the
Rules of Court, filed by De Jesus, from the Decision2 dated May 26, 2005 and Resolution3 dated
August 6, 2008 of the CA, in CA-G.R. SP No. 84902, which affirmed the Review and
Recommendation4 dated January 26, 2004 and Order5 dated April 20, 2004 issued by the
Ombudsman in OMB-C-A-02-0496-J, which dismissed De Jesus from the government service
with prejudice to re-entry thereto.
G.R. 184263 is another appeal, by way of Petition for Review on Certiorari under Rule 45 of the
Rules of Court, filed by the Ombudsman, from the Decision dated May 26, 2005 and Resolution
dated August 6, 2008 of the CA, in CA-G.R. SP No. 84902, for ordering the reinstatement of
Parungao as Manager of the Human Resources Management Department (HRMD) of the Local
Water Utilities Administration (LWUA), thereby modifying the Review and Recommendation6
dated January 26, 2004 and Order7 dated April 20, 2004, issued by the Ombudsman in OMB-C-
A-02-0496-J, which dismissed Parungao from the government service with prejudice to re-entry
thereto.
These consolidated cases arose from a Joint Complaint-Affidavit filed with the Ombudsman by
Facura and Tuason against De Jesus and Parungao for violation of Republic Act (R.A.) No. 3019
(the Anti-Graft and Corrupt Practices Act), dishonesty, gross neglect of duty, grave misconduct,
falsification of official documents, being notoriously undesirable, and conduct prejudicial to the
best interest of the service.
The Facts
The LWUA is a government-owned and controlled corporation chartered under Presidential
Decree (P.D) No. 198, as amended. De Jesus was the Deputy Administrator for Administrative
Services of LWUA, while Parungao was its HRMD Manager for Administrative Services.
De Jesus was dismissed from the service per LWUA Board Resolution No. 0618 dated March 28,
2001. Through Board Resolution No. 069 dated April 17, 2001, the Board denied his motion for
reconsideration and prohibited De Jesus from acting on any matter as head of Administrative
Services. On April 18, 2001, De Jesus appealed to the Civil Service Commission (CSC) to nullify
Board Resolution Nos. 061 and 069.
On August 20, 2001, pending resolution of his petition with the CSC, De Jesus filed a petition for
reinstatement with a newly-reconstituted LWUA Board, which granted it on September 4, 2001
through Board Resolution No. 172.9 De Jesus then withdrew his petition with the CSC on
September 5, 2001.
Under the CSC Accreditation Program, particularly under CSC Resolution No. 96770110 dated
December 3, 1996, LWUA has been granted the authority to take final action on appointment
papers effective January 1, 1997. Under LWUA Officer Order No. 205.0111 dated September 25,
2001, LWUA Administrator Lorenzo Jamora (Administrator Jamora) granted De Jesus the
authority to sign/approve and issue appointment papers of appointees to vacant plantilla
positions in LWUA which have been previously cleared or approved in writing by the
Administrator or the Board of Trustees.
Prior to the grant of authority to De Jesus to sign appointment papers, in a letter12 dated
August 27, 2001 signed by Administrator Jamora, LWUA requested the Department of Budget
and Management (DBM) for authority to hire confidential staff for the LWUA Board of Trustees.
The request was to seek exemption for LWUA from Administrative Order No. 5 which
prohibited the hiring of new personnel in order to generate savings.
While awaiting the reply of DBM on his request, Jamora, in an inter-office memorandum13
dated October 23, 2001, directed the Office of Administrative Services (OAS), headed by De
Jesus, and the Investment and Financial Services, to process the payment of the salaries and
allowances of his two (2) newly appointed confidential staff who reported to him effective
October 10, 2001. Upon receipt of the said inter-office memorandum, the OAS forwarded it to
the HRMD headed by Parungao for appropriate action.
On December 11, 2001, LWUA received a reply letter14 from DBM granting the request to fill
positions for the LWUA Board’s confidential staff. On the same day, on the strength of said
letter of approval, LWUA board members issued their respective inter-office memoranda15 and
letter16 containing the retroactive appointments of their confidential staff, as follows: Board
Chairman Francisco Dumpit appointed Michael M. Raval and Ma. Geraldine Rose D. Buenaflor
effective August 20, 2001; Trustee Bayani Dato, Sr. appointed Albino G. Valenciano, Jr. effective
August 20, 2001; and Trustee Solomon Badoy appointed Kristina Joy T. Badoy and Noelle
Stephanie R. Badoy effective June 19, 2001. On December 18, 2001, Trustee Normando Toledo
also issued an inter-office memorandum17 appointing, effective August 20, 2001, Marc
Anthony S. Verzosa and Ma. Lourdes M. Manaloto. These inter-office memoranda and letter
directed De Jesus to prepare their appointment papers. They bore the written concurrence of
Administrator Jamora as agency head and mandated appointing authority of LWUA employees
under the LWUA charter. Upon his receipt of the aforesaid inter-office memoranda and letter,
De Jesus forwarded them to the HRMD for the preparation and processing of the corresponding
appointment papers.
As HRMD head, Parungao forwarded the said documents to the Personnel Division to have
them transformed into formal appointment papers, otherwise known as CSC Standard Form
No. 33. The encoded standard forms indicated the names and positions of the confidential staff
and the dates of signing and issuance of the appointments, which were the retroactive
effectivity dates appearing in the inter-office memoranda and letter issued by the Board
member. The concerned HRMD staff and Parungao affixed their initials below the printed name
of De Jesus who, in turn, signed the formal appointment papers as respresentative of the
appointing authority. The nine (9) appointment papers18 bore Serial Nos. 168207, 168210,
168213, 168214, 168215, 168216, 168217, 168287, and 168288.
In Office Order No. 286.01 dated December 13, 2001 and Office Order No. 001.02 dated
December 20, 2001 issued by De Jesus and Parungao, it was stated therein that the following
nine (9) personnel were appointed retroactively to the dates indicated below:
Ma. Geraldine Rose D. Buenaflor - August 20, 2001
Michael M. Raval - August 20, 2001
Albino G. Valenciano, Jr. - August 20, 2001
Noelle Stephanie R. Badoy - June 19, 2001
Kristina Joy T. Badoy - June 19, 2001
Jesusito R. Toren - October 15, 2001
Ma. Susan G. Facto - October 10, 2001
Ma. Lourdes M. Manaloto - August 20, 2001
Marc Anthony S. Versoza - August 20, 2001
On December 20, 2001, Administrator Jamora issued an inter-office memorandum19 to the
accounting department on the matter of payment of back salaries of the said confidential staff,
stating therein that as approved by the DBM in its letter, the hiring of such personnel was
authorized retroactive to their employment date, thus, ordering the immediate payment of
their back salaries and other remunerations. On the same day, a LWUA disbursement
voucher20 was prepared and processed by the Accounting Department, and Administrator
Jamora thereafter approved the release of a Land Bank check amounting to ₱624,570.00 as
part of the cash advance amounting to ₱692,657.31, for the payment of the back salaries.
The appointments of the subject confidential staff were reflected in the Supplemental
Quarterly Report on Accession for June and August 2001 and Quarterly Report on Accession
and Separation for October to December 2001 which were submitted to the CSC on January 8,
2002.
On January 25, 2002, HRMD and OAS issued a Memorandum21 for Administrator Jamora on
the subject of the appointment papers of the nine (9) confidential staff of the Board. De Jesus
and Parungao called his attention to the requirements under CSC Resolution No. 96770122 of
the submission to the CSC of two (2) copies of the Report on Personnel Actions (ROPA) within
the first fifteen (15) days of the ensuing month together with the certified true copies of the
appointments acted on, and appointments not submitted within the prescribed period would
be made effective thirty (30) days prior to the date of submission to the CSC. It was explained
that the appointment papers with retroactive effectivity dates violated the provisions of CSC
Res. No. 967701 and Rule 7, Section 11 of the CSC Omnibus Rules on Appointments. For said
reason, LWUA accreditation could be cancelled and the Administrator be held personally liable
for the invalidated appointments. It was suggested instead that the appointments be re-issued
effective December 12, 2001, the ROPA be dated January 15, 2002, and the earlier retroactive
appointments be cancelled, as advised by a CSC Field Director in a previous informal
consultation. It was also proposed that the salaries and benefits already paid be made on
quantum meruit basis, based on actual services rendered as certified by the Board members.
Therefore, for the purpose of meeting the monitoring and reportorial requirements of the CSC
in relation to the accreditation given to LWUA to take final action on its appointments, De Jesus
and Parungao, with the prior approval of Administrator Jamora, re-issued the appointments of
the Board’s nine (9) confidential staff. The appointment papers23 were now all dated
December 12, 2001, with Serial Nos. 168292, 168293, 168294, 168295, 168297, 168298,
168299, 168301, and 168304 and were transmitted to the CSC.
On February 28, 2002, Administrator Jamora again wrote a letter24 to the DBM clarifying
whether its December 11, 2001 letter, approving the hiring of the confidential staff of the
LWUA Board, had retroactive effect. It was explained that the said confidential staff had started
rendering services as early as August 20, 2001, when the Board assumed office because their
services were urgently needed by the trustees.
Meanwhile, the LWUA Accounting Department, in a Brief to the Legal Department dated March
2, 2002, sought its legal opinion on the subject of the first payment of salary of the confidential
staff. The Legal Department replied that a letter had been sent to the DBM seeking clarification
on whether the previous DBM approval retroacted to the actual service of the confidential
staff.
Thereafter, the Internal Control Office (ICO) of LWUA issued a memorandum dated May 10,
2002, questioning the issuance of the retroactive appointment papers. It pointed out that since
the appointment papers submitted to the CSC indicated December 12, 2001 as effective date,
the appointment of the involved personnel to the government service should be considered
effective only on said date, with their salaries and other compensation computed only from
December 12, 2001. Thus, there was an overpayment made as follows:
Ma. Geraldine Rose D. Buenaflor - ₱107,730.09
Michael M. Raval - ₱111,303.16
Albino G. Valenciano, Jr. - ₱107, 730.09
Noelle Stephanie R. Badoy - ₱157, 210.34
Kristina Joy T. Badoy - ₱163, 130.69
It was further recommended that the Legal Department conduct an investigation to identify the
person liable to refund to LWUA the overpayments made to the subject personnel and that the
Accounting Department take appropriate actions to recover the overpayment.
On June 5, 2002, LWUA received DBM’s reply letter25 on June 5, 2002, informing Administrator
Jamora that the previously granted authority on the hiring of the confidential staff to the LWUA
Board may be implemented retroactive to the date of actual service rendered by the employees
involved.
In a Brief to Administrator Jamora dated July 26, 2002, signed by De Jesus and initialed by
Parungao, the issues raised by ICO in its Memorandum on the retroactive appointments of the
concerned confidential staff and overpayments were deemed clarified with the reply letter of
the DBM on the retroactive implementation of the authority granted to LWUA in the previous
letter of approval.
Meanwhile, on November 20, 2001, in relation to the earlier appeal of De Jesus (which he
withdrew upon his reinstatement by the newly reconstituted LWUA Board), the CSC issued
Resolution No. 011811,26 which remanded the case to LWUA for the conduct of an
investigation regarding De Jesus’ dismissal, to be finished within three (3) calendar months,
failure of which would result in the dismissal of the case against De Jesus.
On August 15, 2002, the CSC issued Resolution No. 02109027 ruling that CSC Resolution No.
011811 had not been rendered moot and academic by the reinstatement of De Jesus by the
LWUA Board. It further declared the reinstatement as illegal, null and void. The Board was
directed to recall the reinstatement of De Jesus, and LWUA was ordered to continue the
conduct of the investigation on De Jesus as earlier directed, within three (3) calendar months
from receipt of the resolution. For failure of LWUA to conduct an investigation within the
required period, CSC Resolution No. 03050428 was issued dated May 5, 2003 considering the
dismissal case closed and terminated.
Complaint of Facura and Tuason
On October 18, 2002, Facura and Tuason filed a Joint Affidavit-Complaint29 before the
Evaluation and Preliminary Investigation Bureau of the Ombudsman against De Jesus and
Parungao charging them with: 1) violation of Section 3(e) of R.A. No. 3019; and 2) dishonesty,
gross neglect of duty, grave misconduct, falsification of official documents, being notoriously
undesirable, and conduct prejudicial to the best interest of the service, for the fabrication of
fraudulent appointments of nine (9) coterminous employees of LWUA.
Facura and Tuason alleged that the retroactive appointment papers were fabricated and
fraudulent as they were made to appear to have been signed/approved on the dates stated,
and not on the date of their actual issuance. They further alleged that with malice and bad
faith, De Jesus and Parungao willfully and feloniously conspired not to submit the fraudulent
appointment papers to the CSC, and to submit instead the valid set of appointment papers
bearing the December 12, 2001 issuance date.
They questioned the issuance of the fraudulent appointments in favor of the nine (9)
confidential staff, to the prejudice of the government in the amount of ₱692,657.31, as these
were used as basis for the payment of their back salaries. They also alleged that De Jesus’
reinstatement was illegal and that he had lost authority to sign any LWUA documents effective
upon the issuance of LWUA Board Resolution Nos. 061 and 069. Thus, the actions undertaken
by him in signing the fraudulent appointments were all misrepresented and, therefore,
unlawful. They further alleged that contrary to law, De Jesus continued to receive his salary and
benefits as Deputy Administrator of LWUA despite having already been dismissed. They cited
the string of criminal and administrative cases against De Jesus before the trial courts and the
Ombudsman.
In their Joint Counter-Affidavit,30 De Jesus and Parungao alleged that they were mere rank-
and-file employees who had no knowledge of or participation in personnel matters; that their
actions in issuing the two sets of appointments were all documented and above-board; that as
subordinate employees, they had no discretion on the matter of the retroactive appointments
of the nine confidential staff specifically requested by the Board members; and that the re-
issuance of the second set of appointments effective December 12, 2001 was duly approved by
Administrator Jamora. They denied any financial damage on the part of LWUA since the
retroactive payment of salaries was justified under the DBM letter approving the hiring of
personnel retroactive to the date of actual services rendered by them.
The Ruling of the Ombudsman
The complaint was originally referred to the Ombudsman’s Preliminary Investigation and
Administrative Adjudication Bureau – B, and assigned to Graft Investigation and Prosecution
Officer I Vivian Magsino-Gonzales (Pros. Magsino-Gonzales). After evaluating the documents on
file, Pros. Magsino-Gonzales dispensed with the preliminary conference and preliminary
investigation of the case. In her Decision dated September 30, 2003, she recommended the
outright dismissal of the case, ratiocinating that the Ombudsman did not have the jurisdiction
to resolve the issues of fraudulent appointments of the nine confidential staff and their alleged
overpayment to the damage of LWUA and the government and to decide on the status of De
Jesus as a dismissed employee which, in her view, belonged to the primary jurisdiction and
technical expertise of the CSC.
Said recommendation was disapproved by the Ombudsman and the case was referred for
review to Special Prosecution Officer Roberto Agagon (Special Pros. Agagon) of the Preliminary
Investigation and Administrative Adjudication Bureau – A. Without conducting a preliminary
conference or investigation, Special Pros. Agagon came up with the assailed Review and
Recommendation finding De Jesus and Parungao guilty of grave misconduct, dishonesty, gross
neglect of duty, and falsification, the dispositive portion of which reads:
WHEREFORE, respondents Rodolfo S. De Jesus and Edelwina DG. Parungao are meted out the
penalty of Dismissal from the service with prejudice to re-entry into the government service.
On March 24, 2004, Facura and Tuason filed their Motion for Reconsideration but the same was
denied in the assailed Order dated April 20, 2004.
The Ombudsman found that during De Jesus’ dismissal from the service at the LWUA, and
despite the advice of the CSC to await the final resolution of his appeal, De Jesus illegally issued
appointments to several co-terminous employees in June and August 2001. The appointments
were found to have been prepared and issued by De Jesus and Parungao after the former had
been terminated from LWUA, therefore, without authority to sign/act on any official LWUA
document/official matter, which fact he was fully aware of, thereby making the solemnity of
the documents questionable. All said appointments were, thus, found to be fraudulent, illegal,
and of no legal force and effect. Since these were also prepared and initialed by Parungao, a
conspiracy to commit falsification through dishonesty was found to have been present.
It was also found that the DBM approved the LWUA request on retroactivity of payment of back
salaries because not all facts attendant to the illegal appointments had been disclosed to said
office. The deliberate concealment of the illegal appointment papers was dishonest. The
attachment of the illegal appointments to the LWUA Disbursement Voucher for payment of
backsalaries, to the prejudice and damage of the government, was also cited as another
deliberate concealment and distortion with false narration of facts.
The Ombudsman also viewed the second set of appointment papers as to have been issued for
no apparent reason and designed to legalize the illegal appointments issued in June and August
2001. Thus, dishonesty on the part of De Jesus was found to be present for acting against a
series of orders issued by the CSC and for the falsification of the illegal appointment papers.
The Ruling of the Court of Appeals
Aggrieved, De Jesus and Parungao filed a petition for review with the CA on July 5, 2004 which
was docketed as CA-G.R. SP No. 84902, praying, among others, for the issuance of a Temporary
Restraining Order (TRO) and/or preliminary prohibitory injunction to enjoin the implementation
of the order of dismissal against them. The CA, in its Resolution dated July 20, 2004, deferred
action on the application for TRO and gave Facura and Tuason time to comment.
After the petition to the CA was filed, LWUA implemented the order of dismissal against De
Jesus and Parungao. Administrator Jamora issued Office Order No. 151204 notifying De Jesus
and Parungao of their dismissal from the LWUA effective at the close of office hours on July 23,
2004.
On August 12, 2004, the CA granted the application for TRO so as not to render the issues
raised in the petition moot and academic. On August 24, 2004, Facura and Tuason filed their
Manifestation with Extremely Urgent Motion for Dissolution of the issued TRO because the act
to be enjoined, the implementation of the dismissal order, was fait accompli.
On September 22, 2004, the CA issued the assailed Resolution denying Facura and Tuason’s
motion to dissolve the TRO, and granting the issuance of a writ of preliminary mandatory
injunction in favor of De Jesus and Parungao, which reads as follows:
WHEREFORE, the foregoing considered, the Motion to Dissolve TRO filed by respondents is
hereby DENIED. Accordingly, let writ of preliminary mandatory injunction issue enjoining LWUA
and the Office of the Ombudsman from enforcing the assailed Order and are thereby directed
to maintain and/or restore the status quo existing at the time of the filing of the present
petition by reinstating petitioners to their former positions pending the resolution of this case
upon the filing of petitioner’s bond in the amount of P40,000.00 each, which will answer for
whatever damages respondents may sustain in the event that the petition is not granted.
The CA found that the right to appeal from decisions of the Ombudsman imposing a penalty
other than public censure or reprimand, or a penalty of suspension of more than one month or
a fine equivalent to more than one month’s salary, granted to parties by Section 27 of R.A. No.
6770 (the Ombudsman Act) should generally carry with it the stay of these decisions pending
appeal citing Lopez v. Court of Appeals.31 The right to a writ of preliminary mandatory
injunction was deemed to be in order because De Jesus’ and Parungao’s right to be protected
under R.A. No. 6770 was found to exist prima facie, and the acts sought to be enjoined are
violative of such right.
On October 4, 2004, Facura, Tuason and LWUA moved for the reconsideration of the
September 22, 2004 Resolution, which motion was opposed by De Jesus and Parungao. Their
Motions for Reconsideration were denied by the CA on January 4, 2005, as follows:
WHEREFORE, the foregoing considered, the respondents’ respective Motions for
Reconsideration of the Resolution dated 22 September 2004 are hereby DENIED. Petitioner De
Jesus’ Most Urgent Motion to Deputize the Philippine National Police to Implement the
Injunctive Writ dated 29 September 2004 is GRANTED and accordingly the said entity is hereby
deputized to implement the injunctive relief issued by this Court.
Facura and Tuason then filed the present Petition for Certiorari with this Court questioning the
above-mentioned Resolutions of the CA, docketed as G.R. No. 166495. Pending resolution of
the said Petition, the CA rendered its decision in CA-G.R. SP No. 84902, dated May 26, 2005, the
dispositive portion of which reads:
WHEREFORE, the foregoing considered, the petition is GRANTED and the assailed Review and
Recommendation and Order are MODIFIED hereby ordering the reinstatement of petitioner
Parungao as Manager of the Human Resource Management Department of LWUA with back
pay and without loss of seniority. The dismissal of petitioner De Jesus from the government
service with prejudice to re-entry thereto is AFFIRMED.
Facura, Tuazon and the Ombudsman filed their respective Motions for Partial Reconsideration,
while De Jesus filed his Motion for Reconsideration. These were denied by the CA in its
Resolution dated August 6, 2008.
The CA believed that at the time De Jesus signed the two sets of appointment papers, the CSC
had not divested itself of jurisdiction and authority over his dismissal case. Thus, he
misrepresented his authority to do so as his dismissal was still in effect and for resolution by the
CSC. The CA agreed with De Jesus that it was his ministerial duty to comply with the request of
the Board members. However, he failed to perform his ministerial duty, for if he had in fact
done so, the second set of appointments would not have been issued as the first set of
appointments with retroactive effectivity dates would have already been submitted to the CSC.
The CA further found the request for approval to the DBM to apply the earlier granted authority
to hire retroactively as a disingenuous attempt to provide a semblance of legality to the
intended retroactive appointments. It held that the approval or disapproval of appointment to
the government was the sole office of the CSC, and not the DBM, as the LWUA authority to take
final action on its appointments was by virtue of CSC’s accreditation program. De Jesus’ failure
to submit the retroactive appointment papers as prescribed under the CSC accreditation was
viewed by the CA as a concealment of such retroactivity and, thus, dishonesty. To its mind, the
CSC was deliberately made unaware of what the DBM was doing, and vice versa.
Parungao was exonerated by the CA after having been found that she took steps to clarify the
matter with the CSC, informed her superiors about her misgivings and the legal effects of the
retroactive appointments, and published such retroactive appointments in the LWUA Quarterly
Reports on Accession, thus, demonstrating her good faith.
In its Resolution denying the motions for reconsideration filed by Facura, Tuazon and De Jesus,
the CA ruled, among others, that the case of De Jesus v. Sandiganbayan32 could not be used as
basis to absolve administrative liability, as the present case was not limited solely to
falsification and preparation of the two sets of appointment papers. The CA found that De Jesus
failed to comply with CSC rules due to his failure to submit the first set of appointment papers
to the CSC. Dishonesty was found present when De Jesus submitted the first set of appointment
papers to the DBM and the second set to CSC to comply with reportorial requirements,
ensuring that the DBM was unaware of what the CSC was doing and vice versa. The CSC
resolutions dismissing the complaint against De Jesus were found to have no bearing as the
dismissal case was already before the CSC for resolution when De Jesus affixed his signature.
Thus, De Jesus had no authority to sign the appointment papers and by doing so, he defied the
CSC directive recalling his reinstatement. Violation of CSC rules on appointment was found to
be distinct from misrepresentation of authority to sign appointment papers.
Hence, the present Petitions for Review on Certiorari separately filed by De Jesus and the
Ombudsman, docketed as G.R. Nos. 185129 and 184263, respectively.
THE ISSUES
The issues presented for resolution by Facura (now deceased) and Tuason in G.R. No. 166495
are as follows:
a. Whether or not an appeal of the Ombudsman’s decision in administrative cases carries with
it the suspension of the imposed penalty;
b. Whether or not petitioners were heard before the issuance of the writ of preliminary
mandatory injunction; and
c. Whether or not private respondents are entitled to the writ of preliminary mandatory
injunction.
The assignment of errors presented by De Jesus in G.R. No. 184129, are as follows:
I THE COURT OF APPEALS GROSSLY ERRED IN NOT APPLYING THE DOCTRINE OF
CONCLUSIVENESS OF JUDGMENT AND/OR RES JUDICATA ARISING FROM SC DECISION DATED
OCTOBER 17, 2007 IN G.R. NOS. 164166 & 164173-80 AND CSC RES. NOS. 03-0504, 07-0146 &
07-0633.
II THE COURT OF APPEALS GROSSLY ERRED IN NOT FINDING PETITIONER TO HAVE ACTED IN
GOOD FAITH WHEN HE OBEYED THE PATENTLY LAWFUL ORDERS OF HIS SUPERIORS.
III THE COURT OF APPEALS GROSSLY ERRED IN STILL RELYING ON CSC RES. NO. 01-1811 AND
RES. NO. 02-1090 AFTER HAVING BEEN RENDERED MOOT AND ACADEMIC BY CSC RES. NO. 03-
0405.
IV THE COURT OF APPEALS GROSSLY ERRED IN FINDING PETITIONER TO HAVE COMMITTED AN
ACT OF DISHONESTY IN RELATION TO THE CSC ACCREDITATION PROGRAM.
V PUBLIC RESPONDENT OFFICE OF THE OMBUDSMAN AND THE COURT OF APPEALS DO NOT
HAVE JURISDICTION TO COLLATERALLY RULE AGAINST PETITIONER’S TITLE AS DEPUTY
ADMINISTRATOR OF LWUA.
VI THE COURT OF APPEALS GROSSLY ERRED IN FAILING TO APPRECIATE AS MITIGATING
CIRCUMSTANCES THE EDUCATION AND LENGTH OF SERVICE OF PETITIONER IN THE
IMPOSITION OF SUPREME PENALTY OF DISMISSAL.
VII THE COURT OF APPEALS GROSSLY ERRED IN STILL FINDING PETITIONER GUILTY OF
MISREPRESENTATION OF AUTHORITY AFTER EXONERATING ATTY. EDELWINA DG. PARUNGAO.
The issue presented for resolution by the Ombudsman in G.R. No. 184263 is as follows:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT NO SUBSTANTIAL
EVIDENCE EXISTS AGAINST RESPONDENT PARUNGAO FOR THE ADMINISTRATIVE OFFENSE OF
DISHONESTY WHICH WARRANTS HER DISMISSAL FROM THE SERVICE .
THE RULING OF THE COURT
G.R. No. 166495
The issue of whether or not an appeal of the Ombudsman decision in an administrative case
carries with it the immediate suspension of the imposed penalty has been laid to rest in the
recent resolution of the case of Ombudsman v. Samaniego,33 where this Court held that the
decision of the Ombudsman is immediately executory pending appeal and may not be stayed
by the filing of an appeal or the issuance of an injunctive writ, to wit:
Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman,34 as amended by
Administrative Order No. 17 dated September 15, 2003, provides:
SEC. 7. Finality and execution of decision. – Where the respondent is absolved of the charge,
and in case of conviction where the penalty imposed is public censure or reprimand, suspension
of not more than one month, or a fine equivalent to one month salary, the decision shall be
final, executory and unappealable. In all other cases, the decision may be appealed to the Court
of Appeals on a verified petition for review under the requirements and conditions set forth in
Rule 43 of the Rules of Court, within fifteen (15) days from receipt of the written Notice of the
Decision or Order denying the motion for reconsideration.
An appeal shall not stop the decision from being executory. In case the penalty is suspension or
removal and the respondent wins such appeal, he shall be considered as having been under
preventive suspension and shall be paid the salary and such other emoluments that he did not
receive by reason of the suspension or removal.
A decision of the Office of the Ombudsman in administrative cases shall be executed as a
matter of course. The Office of the Ombudsman shall ensure that the decision shall be strictly
enforced and properly implemented. The refusal or failure by any officer without just cause to
comply with an order of the Office of the Ombudsman to remove, suspend, demote, fine, or
censure shall be a ground for disciplinary action against such officer. [Emphases supplied]
The Ombudsman’s decision imposing the penalty of suspension for one year is immediately
executory pending appeal.35 It cannot be stayed by the mere filing of an appeal to the CA. This
rule is similar to that provided under Section 47 of the Uniform Rules on Administrative Cases in
the Civil Service.
In the case of In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong,
Secretary of the DPWH,36 we held:
The Rules of Procedure of the Office of the Ombudsman are clearly procedural and no vested
right of the petitioner is violated as he is considered preventively suspended while his case is on
appeal. Moreover, in the event he wins on appeal, he shall be paid the salary and such other
emoluments that he did not receive by reason of the suspension or removal. Besides, there is
no such thing as a vested interest in an office, or even an absolute right to hold office. Excepting
constitutional offices which provide for special immunity as regards salary and tenure, no one
can be said to have any vested right in an office.
Following the ruling in the above cited case, this Court, in Buencamino v. Court of Appeals,37
upheld the resolution of the CA denying Buencamino’s application for preliminary injunction
against the immediate implementation of the suspension order against him. The Court stated
therein that the CA did not commit grave abuse of discretion in denying petitioner’s application
for injunctive relief because Section 7, Rule III of the Rules of Procedure of the Office of the
Ombudsman was amended by Administrative Order No. 17 dated September 15, 2003.
Respondent cannot successfully rely on Section 12, Rule 43 of the Rules of Court which
provides:
SEC. 12. Effect of appeal ― The appeal shall not stay the award, judgment, final order or
resolution sought to be reviewed unless the Court of Appeals shall direct otherwise upon such
terms as it may deem just.
In the first place, the Rules of Court may apply to cases in the Office of the Ombudsman
suppletorily only when the procedural matter is not governed by any specific provision in the
Rules of Procedure of the Office of the Ombudsman.38 Here, Section 7, Rule III of the Rules of
Procedure of the Office of the Ombudsman, as amended, is categorical, an appeal shall not stop
the decision from being executory.
Moreover, Section 13 (8), Article XI of the Constitution authorizes the Office of the Ombudsman
to promulgate its own rules of procedure. In this connection, Sections 18 and 27 of the
Ombudsman Act of 198939 also provide that the Office of the Ombudsman has the power to
"promulgate its rules of procedure for the effective exercise or performance of its powers,
functions and duties" and to amend or modify its rules as the interest of justice may require.
For the CA to issue a preliminary injunction that will stay the penalty imposed by the
Ombudsman in an administrative case would be to encroach on the rule-making powers of the
Office of the Ombudsman under the Constitution and RA 6770 as the injunctive writ will render
nugatory the provisions of Section 7, Rule III of the Rules of Procedure of the Office of the
Ombudsman.
Clearly, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman supersedes
the discretion given to the CA in Section 12,40 Rule 43 of the Rules of Court when a decision of
the Ombudsman in an administrative case is appealed to the CA. The provision in the Rules of
Procedure of the Office of the Ombudsman that a decision is immediately executory is a special
rule that prevails over the provisions of the Rules of Court. Specialis derogat generali. When
two rules apply to a particular case, that which was specially designed for the said case must
prevail over the other.41 [Emphases supplied]
Thus, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman, as amended
by Administrative Order (A.O.) No. 17, is categorical in providing that an appeal shall not stop
an Ombudsman decision from being executory. This rule applies to the appealable decisions of
the Ombudsman, namely, those where the penalty imposed is other than public censure or
reprimand, or a penalty of suspension of more than one month, or a fine equivalent to more
than one month’s salary. Hence, the dismissal of De Jesus and Parungao from the government
service is immediately executory pending appeal.
The aforementioned Section 7 is also clear in providing that in case the penalty is removal and
the respondent wins his appeal, he shall be considered as having been under preventive
suspension and shall be paid the salary and such other emoluments that he did not receive by
reason of the removal. As explained above, there is no such thing as a vested interest in an
office, or an absolute right to hold office, except constitutional offices with special provisions on
salary and tenure. The Rules of Procedure of the Ombudsman being procedural, no vested right
of De Jesus and Parungao would be violated as they would be considered under preventive
suspension, and entitled to the salary and emoluments they did not receive in the event that
they would win their appeal.
The ratiocination above also clarifies the application of Rule 43 of the Rules of Court in relation
to Section 7 of the Rules of Procedure of the Office of the Ombudsman. The CA, even on terms
it may deem just, has no discretion to stay a decision of the Ombudsman, as such procedural
matter is governed specifically by the Rules of Procedure of the Office of the Ombudsman.
The CA’s issuance of a preliminary mandatory injunction, staying the penalty of dismissal
imposed by the Ombudsman in this administrative case, is thus an encroachment on the rule-
making powers of the Ombudsman under Section 13 (8), Article XI of the Constitution, and
Sections 18 and 27 of R.A. No. 6770, which grants the Office of the Ombudsman the authority
to promulgate its own rules of procedure. The issuance of an injunctive writ renders nugatory
the provisions of Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman.
The CA, however, cannot be blamed for so ruling because at that time the Court’s rulings were
not definite and, thus, nebulous. There were no clear-cut guidelines yet. Even the initial ruling
in Samaniego on September 11, 2008, stated in effect that the mere filing by a respondent of an
appeal sufficed to stay the execution of the joint decision against him. The Samaniego initial
ruling merely followed that in the case of Office of the Ombudsman v. Laja,42 where it was
stated:
[O]nly orders, directives or decisions of the Office of the Ombudsman in administrative cases
imposing the penalty of public censure, reprimand, or suspension of not more than one month,
or a fine not equivalent to one month salary shall be final and unappealable hence, immediately
executory. In all other disciplinary cases where the penalty imposed is other than public
censure, reprimand, or suspension of not more than one month, or a fine not equivalent to one
month salary, the law gives the respondent the right to appeal. In these cases, the order,
directive or decision becomes final and executory only after the lapse of the period to appeal if
no appeal is perfected, or after the denial of the appeal from the said order, directive or
decision. It is only then that execution shall perforce issue as a matter of right. The fact that the
Ombudsman Act gives parties the right to appeal from its decisions should generally carry with
it the stay of these decisions pending appeal. Otherwise, the essential nature of these
judgments as being appealable would be rendered nugatory. [Emphasis in the original].
Having ruled that the decisions of the Ombudsman are immediately executory pending appeal,
The Court finds it unncessary to determine whether or not Facura and Tuason were heard
before the issuance of the writ of preliminary mandatory injunction.
G.R. Nos. 184129 & 184263
The Court now looks into the issue of whether De Jesus was rightfully dismissed from the
government service, and whether Parungao was righfully exonerated by the CA.
Conclusiveness of Judgment
De Jesus contends that under the doctrine of conclusiveness of judgment and/or res judicata,
the present case is bound by the decision of this Court in De Jesus v. Sandiganbayan.43
The original complaint filed with the Ombudsman by Facura and Tuason spawned two cases, an
administrative proceeding docketed as OMB-C-A-0496-J, which is the subject of this present
case, and a proceeding for the determination of probable cause for the filing of criminal charges
docketed as OMB-C-C-02-0712-J.
As to the criminal charges, probable cause was found to be present by the Ombudsman, and
nine (9) informations for falsification of public documents were separately filed against De Jesus
and Parungao with the Sandiganbayan docketed as Criminal Case Nos. 27894-27902. After his
Motion to Quash was denied, De Jesus filed a petition for certiorari with this Court docketed as
G.R. Nos. 164166 & 164173-80, entitled De Jesus v. Sandiganbayan.44 This petition was
resolved on October 17, 2007 in favor of De Jesus with the finding that the evidence could not
sustain a prima facie case. His Motion to Quash was granted for lack of probable cause to form
a sufficient belief as to the guilt of the accused. The Court stated that there was no reasonable
ground to believe that the requisite criminal intent or mens rea was present, finding that
nothing in the two sets of appointment papers constituted an absolutely false narration of
facts.
As a result, the criminal cases filed with the Sandiganbayan were consequently dismissed on
March 14, 2008.45 Copies of the decisions of this Court and the Sandiganbayan were submitted
to the CA through a Manifestation with Most Urgent Ex-Parte Motion on April 24, 2008.
De Jesus cited the case of Borlongan v. Buenaventura46 to support his argument that this
administrative case should be bound by the decision in De Jesus v. Sandiganbayan.47 In
Borlongan, similar to the situation prevailing in this case, the complaint-affidavit filed with the
Ombudsman also spawned two cases – a proceeding for the determination of probable cause
for the filing of criminal charges, and an administrative case subject of the petition. In said case,
this Court found that its factual findings regarding the proceeding for the determination of
probable cause bound the disposition of the factual issues in the administrative case under the
principle of conclusiveness of judgment, as both the probable cause proceeding and the
administrative case require the same quantum of evidence, that is, substantial evidence.
Furthermore, the factual backdrop in the proceeding for the determination of probable cause,
which this Court declared as insufficient to hold respondents for trial, was the same set of facts
which confronted this Court in the administrative case.
On the other hand, the Ombudsman, Tuason and LWUA raised the jurisprudential principle that
the dismissal of a criminal case involving the same set of facts does not automatically result in
the dismissal of the administrative charges due to the distinct and independent nature of one
proceeding from the other. They further countered that the only issue resolved in De Jesus was
the absence of mens rea, which was not a mandatory requirement for a finding of falsification
of official documents as an administrative offense;48 and although it was found that there was
no absolutely false narration of facts in the two sets of appointment papers, the issue in this
administrative case was not limited solely to falsification of official documents. It was further
contended that the evidence and admissions in the administrative case were different from the
evidence in the criminal case, thus, the findings in the criminal case could not bind the
administrative case. Finally, they argued that the doctrine of res judicata would only apply to
judicial or quasi-judicial proceedings and not to administrative matters.49
The Court agrees with De Jesus insofar as the finding regarding the falsification of official
documents is concerned.
The doctrine of res judicata is set forth in Section 47 of Rule 39 of the Rules of Court, as follows:
Sec. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered
by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may
be as follows:
xxx
(b)In other cases, the judgment or final order is, with respect to the matter directly adjudged or
as to any other matter that could have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the commencement of the action
or special proceeding, litigating for the same thing and under the same title and in the same
capacity; and
(c)In any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment or final order which appears upon its face
to have been so adjudged, or which actually and necessarily included therein or necessary
thereto.
The principle of res judicata lays down two main rules: (1) the judgment or decree of a court of
competent jurisdiction on the merits concludes the litigation between the parties and their
privies and constitutes a bar to a new action or suit involving the same cause of action either
before the same or any other tribunal; and (2) any right, fact, or matter in issue directly
adjudicated or necessarily involved in the determination of an action before a competent court
in which a judgment or decree is rendered on the merits is conclusively settled by the judgment
therein and cannot again be litigated between the parties and their privies whether or not the
claims or demands, purposes, or subject matters of the two suits are the same.50 The first rule
which corresponds to paragraph (b) of Section 47 above, is referred to as "bar by former
judgment"; while the second rule, which is embodied in paragraph (c), is known as
"conclusiveness of judgment."51
As what is involved in this case is a proceeding for the determination of probable cause and an
administrative case, necessarily involving different causes of action, the applicable principle is
conclusiveness of judgment. The Court in Calalang v. Register of Deeds of Quezon City52
explained such, to wit:
The second concept - conclusiveness of judgment- states that a fact or question which was in
issue in a former suit and was there judicially passed upon and determined by a court of
competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to
that action and persons in privity with them are concerned and cannot be again litigated in any
future action between such parties or their privies, in the same court or any other court of
concurrent jurisdiction on either the same or different cause of action, while the judgment
remains unreversed by proper authority. It has been held that in order that a judgment in one
action can be conclusive as to a particular matter in another action between the same parties
or their privies, it is essential that the issue be identical. If a particular point or question is in
issue in the second action, and the judgment will depend on the determination of that
particular point or question, a former judgment between the same parties or their privies will
be final and conclusive in the second if that same point or question was in issue and
adjudicated in the first suit (Nabus v. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause
of action is not required but merely identity of issue.
Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v. Court of Appeals (197 SCRA 201, 210
[1991]), reiterated Lopez v. Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar
by former judgment which bars the prosecution of a second action upon the same claim,
demand, or cause of action, and conclusiveness of judgment which bars the relitigation of
particular facts or issues in another litigation between the same parties on a different claim or
cause of action.
The general rule precluding the relitigation of material facts or questions which were in issue
and adjudicated in former action are commonly applied to all matters essentially connected
with the subject matter of the litigation. Thus, it extends to questions necessarily implied in the
final judgment, although no specific finding may have been made in reference thereto and
although such matters were directly referred to in the pleadings and were not actually or
formally presented. Under this rule, if the record of the former trial shows that the judgment
could not have been rendered without deciding the particular matter, it will be considered as
having settled that matter as to all future actions between the parties and if a judgment
necessarily presupposes certain premises, they are as conclusive as the judgment itself.
Under the principle of conclusiveness of judgment, when a right or fact has been judicially tried
and determined by a court of competent jurisdiction, or when an opportunity for such trial has
been given, the judgment of the court, as long as it remains unreversed, should be conclusive
upon the parties and those in privity with them. Simply put, conclusiveness of judgment bars
the relitigation of particular facts or issues in another litigation between the same parties on a
different claim or cause of action.53
Although involving different causes of action, this administrative case and the proceeding for
probable cause are grounded on the same set of facts, involve the same issue of falsification of
official documents, and require the same quantum of evidence54– substantial evidence, as was
similarly found in Borlongan, and correctly relied upon by De Jesus.
It was ruled in De Jesus that there was no reasonable ground to believe that the requisite
criminal intent or mens rea was present. Although the presence of mens rea is indeed
unnecessary for a finding of guilt in an administrative case for falsification of official
documents,55 it was expressly found by this Court in De Jesus that there was no absolutely
false narration of facts in the two sets of appointment papers. The pertinent portion is quoted
hereunder as follows:
Criminal intent must be shown in felonies committed by means of dolo, such as falsification. In
this case, there is no reasonable ground to believe that the requisite criminal intent or mens rea
was present. The Ombudsman assails the first set of documents with dates of appointment
earlier than December 12, 2001. Clearly, the first set of CSC Form No. 33 was prepared earlier
as shown by the serial numbers. The first set has serial numbers 168207, 168210, 168213,
168214, 168215, 168216, 168217, 168287 and 168288; while the second set has serial numbers
168292, 168293, 168294, 168295, 168297, 168298, 168299, 168301 and 168304. The
Ombudsman also admits this fact. Indeed, petitioner admits having signed two sets of
appointment papers but nothing in said documents constitutes an absolutely false narration of
facts. The first set was prepared and signed on the basis of the inter-office memoranda issued
by the members of the Board appointing their respective confidential staff conformably with
the DBM approval. There was no untruthful statement made on said appointment papers as
the concerned personnel were in fact appointed earlier than December 12, 2001. In fact, the
DBM also clarified that the authority to hire confidential personnel may be implemented
retroactive to the date of actual service of the employee concerned. In any case, Jamora
authorized the issuance of the second set of appointment papers. Following the CSC Rules, the
second set of appointment papers should mean that the first set was ineffective and that the
appointing authority, in this case, the members of the Board, shall be liable for the salaries of
the appointee whose appointment became ineffective. There was nothing willful or felonious in
petitioner's act warranting his prosecution for falsification. The evidence is insufficient to
sustain a prima facie case and it is evident that no probable cause exists to form a sufficient
belief as to the petitioner's guilt.56 [Emphasis supplied]
Hence, the finding that nothing in the two sets of appointment papers constitutes an absolutely
false narration of facts is binding on this case, but only insofar as the issue of falsification of
public documents is concerned, and not on the other issues involved herein, namely, the other
acts of De Jesus and Parungao which may amount to dishonesty, gross neglect of duty, grave
misconduct, being notoriously undesirable, and conduct prejudicial to the best interest of the
service, as charged in the complaint.
Contrary to Tuason and LWUA’s contentions, the factual finding of this Court in De Jesus as to
the absence of falsification is based on the same evidence as in this administrative case. There
are, however, other evidence and admissions present in this case as cited by Tuason and LWUA
which pertain to other issues and not to the issue of falsification.
Meanwhile the doctrine in Montemayor v. Bundalian57 that res judicata applies only to judicial
or quasi-judicial proceedings, and not to the exercise of administrative powers, has been
abandoned in subsequent cases58 which have since applied the principle of res judicata to
administrative cases. Hence, res judicata can likewise be made applicable to the case at bench.
Thus, given all the foregoing, the factual finding in De Jesus that there was no false statement
of facts in both sets of appointment papers, is binding in this case.
Even granting that the principle of conclusiveness of judgment is inapplicable to the case at
bench, this Court finds no cogent reason to deviate from the factual findings in De Jesus based
on a careful review of the evidence on record. The existence of malice or criminal intent is not a
mandatory requirement for a finding of falsification of official documents as an administrative
offense. What is simply required is a showing that De Jesus and Parungao prepared and signed
the appointment papers knowing fully well that they were false.59
The Court, however, believes that in this case, at the time each set of appointment papers were
made, De Jesus and Parungao believed they were making true statements. They prepared and
signed the first set on the basis of the inter-office memoranda issued by the Board members
appointing their respective confidential staff conformably with DBM approval. The second set
was prepared to correct the retroactive appointments to conform to the CSC reportorial
requirements, and the same was also approved by Administrator Jamora. There was no reason
for De Jesus and Parungao to believe such to be false. Irregular it is perhaps, not being in
conformity with the CSC rules on accreditation, but not false. Therefore, this Court finds that no
falsification of official documents occured.
Legality of Reinstatement and Authority to Sign
The CA held that, as evinced from CSC Resolution No. 011811, which ordered LWUA to conduct
an investigation, the CSC had not divested itself of jurisdiction and authority over De Jesus’
dismissal case at the time he issued and signed both sets of appointment papers. The CA ruled
that in doing so, he defied the CSC directive recalling his reinstatement.
De Jesus argues that, his title is not open to indirect challenge and can only be assailed in a
proceeding for quo warranto; and that absent any judicial declaration, he remained to be a de
jure officer, and even if he were only a de facto officer, his acts were done under color of
authority and, thus, valid and binding. De Jesus further argues that the pendency of his appeal
to the CSC did not render his reinstatement illegal, as he had no choice but to rely on the
regularity of the LWUA board resolution which reinstated him, and this reinstatement should
have rendered superfluous the CSC resolution ordering investigation. He further contends that
it was wrong for the CA to rely on the CSC resolutions which were interlocutory. Since CSC
Resolution No. 030504 ultimately dismissed the case against him and in effect nullified his prior
dismissal from LWUA, he should be considered as never having left his office. Said CSC
resolution should have also rendered the previous CSC resolutions moot and academic.
De Jesus also cites CSC Resolution Nos. 07-0633 and 07-0146, which relate to other complaints
filed against him, and which recognize the legality of his reinstatement and affirm CSC
Resolution No. 030504 as res judicata. He argues that this case should be bound by the three
aforementioned CSC resolutions under the principle of res judicata.
A brief review of the relevant facts is necessary to resolve the issue at hand. LWUA dismissed
De Jesus on March 28, 2001. He appealed to the CSC on April 18, 2001. He was reinstated on
September 4, 2001 and so withdrew his appeal with the CSC the next day. Notwithstanding, in
connection with his appeal, the CSC issued Resolution No. 011811 on November 20, 2001
ordering LWUA to investigate. The two sets of appointment papers were signed by De Jesus in
December 2001. It was only on August 15, 2002 that the CSC issued Resolution No. 021090,
which recalled De Jesus’ reinstatement and declared it illegal and void. However, De Jesus title
was conclusively established on May 5, 2003 by CSC Resolution No. 030504, which finally
dismissed the case against him.
Thus, prior to the CSC resolution recalling his reinstatement and declaring it illegal and void, De
Jesus cannot be faulted for relying on the LWUA board resolution reinstating him as Deputy
Administrator. Furthermore, the CSC resolution recalling his reinstatement and declaring it
illegal and void was issued only after the appointment papers were prepared and signed. Thus,
there was no misrepresentation of authority on the part of De Jesus when he signed the
appointment papers because he did so after he was reinstated by the LWUA Board and before
such reinstatement was declared illegal and void by the CSC.
More important, the dismissal case against him was ultimately dismissed, thereby conclusively
establishing his right to his title and position as Deputy Administrator of LWUA.
Duties under the CSC Accreditation Program
The CA also found that De Jesus failed to comply with the CSC rules under the Accreditation
Program due to his failure to submit the first set of retroactive appointment papers to the CSC.
Such failure was said to constitute a concealment of the retroactivity from the CSC and, thus,
dishonesty on his part. Parungao, on the other hand, was reinstated by the CA after having
been found that she took steps to clarify the matter with the CSC; that she informed her
superiors about her misgivings and the legal effects of the retroactive appointments; and that
she published such retroactive appointments in the LWUA Quarterly Reports on Accession,
thus, demonstrating her good faith.
De Jesus argues that, as Deputy Administrator, it was not his responsibility to comply with the
CSC rules under the Accreditation Program. He contends that the CA itself recognized this fact
when it stated that it was the responsibility of the LWUA Administrator to know and implement
the terms and conditions of accreditation. The CA even further stated that it was the Human
Resources Management Officer who had the responsibility of preparing and submitting the
appointment papers with the ROPA.
On the other hand, Tuason and LWUA argue that under Executive Order (E.O.) No. 286, the
Office of the Deputy Administrator has direct supervision over the HRMD, and so De Jesus
should be held liable for failure to submit the first set of appointment papers in accordance
with the CSC rules.
Under CSC Resolution No. 96770160 granting LWUA authority to take final action on its
appointments under the CSC Accreditation Program, the following was said to have been
violated:
6. That for purposes of immediate monitoring and records keeping, the LWUA shall submit
within the first fifteen calendar days of each ensuing month to the CSFO two copies of the
monthly Report on Personnel Actions (ROPA) together with certified true copies of
appointments acted upon;
7. That failure to submit the ROPAs within the prescribed period shall render all appointments
listed therein lapsed and ineffective;
8. That appointments issued within the month but not listed in the ROPA for the said month
shall become ineffective 30 days from issuance;x x x
As culled from the CSC letter61 dated November 11, 1996, addressed to then LWUA
Admistrator De Vera, which accompanied CSC Resolution No. 967701, the following
responsibilities under the CSC Accreditation Program were reiterated thus:
The LWUA Administrator/appointing authority shall:
- Take final action on all appointments that he issues/signs;
- Exercise delegated authority to take final action on appointments following the terms and
conditions stipulated in the Resolution and within the limits and restrictions of Civil Service Law,
rules, policies and standards;
- Assume personal liability for the payment of salaries for actual services rendered by
employees whose appointments have been invalidated by the CSNCRO.
On the other hand, the Human Resources Management Officer shall:
- Ensure that all procedures, requirements, and supporting papers to appointments specified in
MC No. 38, s. 1997 and MC Nos. 11 and 12, s. 1996 have been complied with and found to be in
order before the appointment is signed by the appointing authority;x x x
- Prepare and submit within the first fifteen calendar days of each ensuing month to the CSFO
concerned two copies of the monthly ROPA together with certified true copies of appointments
issued and finally acted upon; andx x x
[Emphases supplied]
Under LWUA Office Order No. 205.01,62 Administrator Jamora authorized De Jesus to sign
appointment papers of appointees to vacant plantilla positions in LWUA which were previously
approved by the Administrator or the Board of Trustees. Thus:
In the exigency of the service and to facilitate/expedite administrative works, the Deputy
Administrator, Administrative Services, is hereby authorized under delegated authority to act
on and sign for and in behalf of the Administrator, documents such as Office Orders,
Appointment Papers, Inter-Office Memoranda and other administrative documents including
communications to CSC and/or DBM relating to filling up of vacant positions, either by
promotion or recruitment, as well as transfer of personnel, which have been previously
cleared/approved in writing by the Administrator, or by the Board of Trustees, as the case may
be. Also delegated is the authority to act and sign for and in behalf of the Administrator, the
Notice(s) of Salary Adjustment (NOSA) and Notice(s) of Salary Increment (NOSI). [Emphases
supplied]
It is clear from the above that the responsibility to submit within the first fifteen (15) calendar
days of each ensuing month to the CSFO two copies of the monthly ROPA together with
certified true copies of appointments acted upon lies with the Human Resources Management
Officer (HRMO), namely, Parungao. Even granting that De Jesus, as Deputy Administrator, has
direct supervision over the Human Resources and Management Department, it is the HRMO
who is expressly tasked with the duty to submit to the CSC the ROPA with true copies of
appointments finally acted upon. Therefore, De Jesus, as Deputy Administrator, cannot be held
liable for such failure to submit the first set of appointment papers with the ROPA as prescribed
under the CSC accreditation rules.
The authority to exercise the delegated authority to take final action on appointment papers is
lodged in the LWUA Administrator. The only duty of De Jesus is to sign appointment papers
previously approved by the Administrator or Board. Thus, De Jesus’ duty to sign appointment
papers is only ministerial in nature, while the discretionary power to take final action on
appointments remains lodged in the LWUA Administrator. De Jesus is, thus, bound only to sign
appointment papers previously approved by the LWUA Administrator or Board, in accordance
with LWUA Office Order No. 205.01, having no power to exercise any discretion on the matter.
In exercising his ministerial duty of signing the appointment papers, De Jesus obeyed the
patently lawful order of his superior. CSC Resolution No. 967701 does not charge De Jesus with
the duty to know and comply with the rules of the Accreditation Program, that being the
province of the LWUA Administrator and HRMO, as expressly provided for in the CSC letter.
Therefore, so long as the appointment papers were approved by the Administrator or Board,
the order to sign them is patently lawful. Hence, De Jesus cannot be faulted for obeying the
patently lawful orders of his superior. Furthermore, there is no evidence on record to indicate
that he acted in bad faith, as what he did was in conformity with the authority granted to him
by LWUA Office Order No. 205.01.
The same, however, cannot be said of Parungao. As HRMO, she was expressly charged with the
duty to prepare and submit within the first fifteen calendar days of each ensuing month to the
CSFO concerned two copies of the monthly ROPA together with certified true copies of
appointments issued and finally acted upon. Thus, she must necessarily be aware that failure to
submit the ROPAs within the prescribed period shall render all appointments listed therein
lapsed and ineffective, and that appointments issued within the month but not listed in the
ROPA for the said month shall become ineffective 30 days from issuance. Knowing this, she
should never have given her approval by initialing the first set of retroactive appointments as
she should have known that they would be ineffective under the CSC accreditation rules.
No Dishonesty, Mere Confusion
With the finding that the request for approval of the DBM to apply the earlier granted authority
retroactively was a disingenuous attempt to provide a semblance of legality to the intended
retroactive appointments, the CA held that the approval or disapproval of appointment to the
government was the sole office of the CSC, and not the DBM. Furthermore, dishonesty was
found present when De Jesus submitted the first set of appointment papers to the DBM and
the second set to the CSC, apparently to ensure that the DBM was unaware of what the CSC
was doing and vice versa.
A careful perusal of the records will show that the request for approval to the DBM,
characterized by the CA as an attempt to provide a semblance of legality, was the act of
Administrator Jamora and not of De Jesus or Parungao. The request letter63 to the DBM was
signed by Jamora. Therefore, neither De Jesus nor Parungao can be held liable for the act. The
Court also failed to find any evidence on record that De Jesus deliberately ensured that DBM
was unaware of what the CSC was doing and vice versa. It has already been discussed that De
Jesus’ only duty was to sign the appointment papers in accordance with the LWUA office order
granting him authority to do so. All responsibilities relating to the reportorial requirements
pertain to Parungao as the HRMO.
Furthermore, the appointment papers provided to the DBM were referenced by Administrator
Jamora in his request letter, and not by De Jesus or Parungao. The first set of appointment
papers was never submitted to the CSC not because the retroactivity of the appointments was
being concealed, but precisely because it was realized that such did not comply with the
reportorial requirements. Given the foregoing, there could have been no dishonesty on the part
of De Jesus and Parungao.
Instead, it appears that the root of the dilemma in the case at bench lies in confusion rather
than dishonesty.1awphi1 This confusion pertains to the misunderstanding of the roles of the
CSC and the DBM vis-a-vis the issuance of appointment papers. Such confusion can be gleaned
from the brief to Administrator Jamora signed by De Jesus and initialed by Parungao, stating
that the issues on the retroactive appointments and overpayments were deemed settled with
the reply letter of the DBM on the retroactive implementation of the authority previously
granted.
The CA correctly stated that the approval or disapproval of appointment to the government is
the sole office of the CSC, and not the DBM, as the very authority given to LWUA to take final
action on its appointments is by virtue of CSC’s accreditation program.64 Thus, the DBM
approval to retroact its previously granted authority to hire the LWUA confidential staff is
subject to an appointment validly issued in accordance with CSC rules. In other words, the DBM
approval for retroactivity presupposed valid appointments. DBM’s approval was mistakenly
understood to pertain to both the back salaries and the validity of the staff’s appointments
when, in fact, DBM’s approval related only to LWUA’s authority to hire and not to the validity of
the appointments of the hired personnel. Therefore, back salaries should only have been due
upon the effectivity of valid appointments, which is within the authority of the CSC to approve,
and not of the DBM.
Dishonesty refers to a person’s "disposition to lie, cheat, deceive, or defraud;
untrustworthiness; lack of integrity; lack of honesty, probity or integrity in principle; lack of
fairness and straightforwardness; disposition to defraud, deceive or betray."65 The absence of
dishonesty on the part of De Jesus and Parungao is supported by their good faith in complying
with the orders of Administrator Jamora. Their good faith is manifested in several
circumstances. First, their brief to Administrator Jamora, stating that the issues on the
retroactive appointments and overpayments were deemed settled with the reply letter of the
DBM, demonstrates that they actually and honestly believed that the letter had in fact resolved
the issue. Second, their memorandum66 to Administrator Jamora explained that the
appointment papers with retroactive effectivity dates would be violative of the provisions of
CSC Res. No. 967701 and CSC Omnibus Rules on Appointments Rule 7, Section 11. Third, an
informal consultation67 was held with the CSC Field Director to seek advice regarding the
retroactive appointments, wherein it was suggested that the appointments be re-issued
effective December 12, 2001, hence, the issuance of the second set of appointment papers.
Finally, such retroactive appointments were published in the LWUA Quarterly Reports on
Accession. The foregoing circumstances are apparently contrary to any intention to defraud or
deceive.
Parungao - Guilty
Of Simple Neglect of Duty
Simple neglect of duty is defined as the failure to give proper attention to a task expected from
an employee resulting from either carelessness or indifference.68 In this regard, the Court finds
Parungao, as HRMO, guilty of simple neglect of duty. Given her duties under the CSC
Accreditation Program, she should have been aware of the reportorial requirements, and of the
fact that it is the CSC which has authority over appointments, and not the DBM. Had she given
the proper attention to her responsibility as HRMO, the first set of appointment papers would
never have been issued, thereby avoiding the present predicament altogether.
When a public officer takes an oath of office, he or she binds himself or herself to faithfully
perform the duties of the office and use reasonable skill and diligence, and to act primarily for
the benefit of the public. Thus, in the discharge of duties, a public officer is to use that
prudence, caution and attention which careful persons use in the management of their
affairs.69 Parungao failed to exercise such prudence, caution and attention.
Simple neglect of duty is classified under the Uniform Rules on Administrative Cases in the Civil
Service as a less grave offense punishable by suspension without pay for one month and one
day to six months. Finding no circumstance to warrant the imposition of the maximum penalty
of six months, and considering her demonstrated good faith, the Court finds the imposition of
suspension without pay for one month and one day as justified.
WHEREFORE,
(1) in G.R. No. 166495, the petition is GRANTED. The assailed September 22, 2004 and January
4, 2005 Resolutions of the Court of Appeals are hereby REVERSED and SET ASIDE. The writ of
preliminary mandatory injunction issued in CA-G.R. SP No. 84902 is ordered DISSOLVED.
(2) in G.R. No. 184129, the petition is GRANTED, and in G.R. No. 184263, the petition is
PARTIALLY GRANTED. The assailed May 26, 2005 Decision and August 6, 2008 Resolution of the
Court of Appeals in CA-G.R. SP No. 84902, are hereby REVERSED and SET ASIDE, and a new one
entered
a. ordering the reinstatement of Rodolfo S. De Jesus as Deputy Administrator of the LWUA with
full back salaries and such other emoluments that he did not receive by reason of his removal;
and
b. finding Human Resources Management Officer Edelwina DG. Parungao GUILTY of Simple
Neglect of Duty and hereby imposing the penalty of suspension from office for one (1) month
and one (1) day without pay.SO ORDERED.
G.R. No. 157717 April 13, 2011
Heirs of MAXIMINO DERLA, namely: ZELDA, JUNA, GERALDINE, AIDA, ALMA, all surnamed
DERLA; and SABINA Vda. de DERLA, all represented by their Attorney-in-Fact, ZELDA DERLA,
Petitioners,
vs.Heirs of CATALINA DERLA Vda. de HIPOLITO, MAE D. HIPOLITO, ROGER ZAGALES, FRANCISCO
DERLA, SR., JOVITO DERLA, exaltacion pond, and VINA U. CASAWAY, in her capacity as the
REGISTER OF DEEDS OF TAGUM, DAVAO DEL NORTE, Respondents.LEONARDO-DE CASTRO, J.:
This Petition for Review on Certiorari1 seeks to modify the August 30, 2002 Decision2 and
March 17, 2003 Resolution3 of the Court of Appeals in CA-G.R. CV No. 63666, which affirmed
the November 17, 1998 Order4 of the Regional Trial Court (RTC) of Panabo, Davao, Branch 4, in
Civil Case No. 97-15.
The facts, as culled from the records of the case and the November 11, 1991 Decision5 of the
Office of the President in O.P. Case No. 4732, as cited by both the petitioners and respondents,
are set forth below:
The petitioners are the surviving heirs of the late Maximino Derla (Derla). With his first wife, the
late Leonora Padernal, Derla had two children, Zelda and Juna. His children by his second wife
and surviving widow Sabina Perlas were Geraldine, Aida, and Alma. Zelda acts as the
petitioners’ attorney-in-fact.
Respondent Catalina Vda. de Hipolito (Catalina) is Derla’s cousin who was married to the late
Ricardo Hipolito (Hipolito), having one daughter, Mae Hipolito. Except for Vina U. Casaway, the
respondents, by virtue of individual sales (fishpond) patents issued by the Department of
Agriculture and Natural Resources (DANR), are the registered owners of a 23.9-hectare
fishpond area (the subject fishpond area) in Sitio Biyawa, Barrio Panabo, Municipality of Tagum,
Davao under Original Certificates of Title (OCT) Nos. P-29095, 29096, 29098, 29099, 29100,
29101, 29102, and 29103.6 Vina U. Casaway, being the Registrar of the Register of Deeds of
Tagum, Davao Del Norte, was impleaded as a mere nominal party.
Twenty and five tenths (20.5) hectares of the subject fishpond area were originally maintained
by Derla under Ordinary Fishpond Permit No. F-1080-F issued on March 2, 1950.7 On May 8,
1950, Derla executed a Special Power of Attorney8 in favor of Hipolito to represent him in all
matters related to this fishpond area.9 On the same date, Derla and Hipolito also executed a
"Contract"10 wherein Derla acknowledged Hipolito’s rights in the 20.5-hectare fishpond area.
In the "Contract," Derla stated that Hipolito owned one-half of the fishpond area, and that it
was only for convenience that the permit was issued in Derla’s name. The "Contract" also
stated that Hipolito had been bearing all the expenses in relation to the fishpond area, subject
to reimbursement once it became productive. Derla and Hipolito also stipulated therein that
they could not alienate or transfer their rights to the fishpond area without the consent of the
other.11 On October 8, 1953, Derla executed a document captioned as "Transfer of Rights in
Fishpond Permit" wherein he transferred all his rights in the fishpond area to Hipolito for Ten
Thousand Pesos (₱10,000.00).12 Executed together with this document was Hipolito’s own
affidavit/promissory note wherein he stated that he agreed to buy his co-owner Derla’s one-
half undivided share for the initial amount of Four Thousand Five Hundred Pesos (₱4,500.00)
plus Five Hundred Pesos (₱500.00) as rental for the year 1952. Hipolito also promised to pay
another Four Thousand Five Hundred Pesos (₱4,500.00) once the conflict13 regarding the
subject fishpond area has been settled and arranged.14
On January 19, 1954, Hipolito filed Fishpond Application No. 11071 over the 20.5-hectare
fishpond area (later reduced to 16.4 hectares due to the construction of the Biyawa Road at
Panabo del Norte)15 covered by Derla’s permit. This was approved on August 10, 1956 under
Ordinary Fishpond Permit (Transfer) No. F-3054-L (Hipolito’s fishpond area).
On October 15, 1960, Derla filed his own Fishpond Application No. 21335 over a 7.5-hectare
fishpond area adjoining Hipolito’s fishpond area. On November 21, 1960, Hipolito charged Derla
with Qualified Theft before the then Justice of the Peace Court of Panabo for gathering and
carrying away fish from Hipolito’s fishpond. Derla, in his defense, claimed that he was still part-
owner of the fishpond when he harvested the fish.16 On the strength of the "Transfer of Rights
in Fishpond Permit" and Hipolito’s Affidavit that he and Derla are co-owners of the fishpond
and that he promised to pay Derla after the settlement of the fishpond boundary conflict, the
court acquitted Derla on November 29, 1960.17
On March 8, 1962, the Director of Fisheries approved Derla’s fishpond application. On
November 6, 1967, the Secretary of Agriculture and Natural Resources (SANR), upon Hipolito’s
appeal, set aside the Director of Fisheries’ order and declared that the 7.5-hectare fishpond
area Derla applied for was included in the the area covered by Hipolito’s Fishpond Permit No. F-
3054-L.18
On December 5, 1967, Derla filed a complaint for "Declaration of Nullity of Transfer of Right in a
Fishpond Permit" against Hipolito before the Court of First Instance (CFI), Branch II, Davao
City.19 This was docketed as Civil Case No. 5826 and was dismissed on December 8, 1969 on
the ground of prescription and estoppel.20 The CFI held that the prescriptive period to bring an
action to annul a contract based on fraud, mistake or want of consideration should be counted
from the date of discovery, and in case of public documents, the date of discovery is the date
the public document was executed. The CFI held that since the Transfer of Rights in Fishpond
Permit was executed in 1953, the action to annul has prescribed. As Derla claimed that he only
found out about the fraudulent transfer in 1960 when Hipolito instituted a criminal case against
him, the CFI maintained that even if the date of discovery were to be counted from 1960, his
complaint was still filed beyond what the prescriptive period allowed. Furthermore, the CFI said
that Derla could not be permitted to assail the very document he relied on to obtain his
acquittal in the criminal case filed against him.21 Derla elevated his cause to the Court of
Appeals and this was docketed as CA-G.R. No. 47070-R.
Meanwhile, on October 27, 1969, the Office of the President affirmed in toto the SANR’s
November 6, 1967 decision. On April 20, 1970, the Commissioner of Fisheries issued Hipolito an
Amended Fishpond Permit to cover a total fishpond area of 23.9 hectares, including the 7.5
hectares applied for by Derla.
On August 20, 1970, Hipolito, pursuant to Republic Act No. 5743,22 filed Sales (Fishpond)
Application No. (VIII-2) 9 with the Bureau of Lands over the subject fishpond area covered by
his Fishpond Permit No. F-3054-L. The Municipality of Panabo opposed Hipolito’s application on
the ground that it will disrupt the development of Panabo. The SANR however, recommended
the denial of this opposition as the authorities concerned had certified that the area applied for
was not needed by the government for any future public improvement and that it was suitable
for fishpond purposes. On February 11, 1972, the Office of the President, through then Acting
Assistant Executive Secretary Ronaldo B. Zamora agreed with the SANR’s position that Hipolito
had already acquired a vested right over his fishpond area and the enactment of Republic Act
No. 5743 could not ipso facto divest him of such right; hence, the Municipality of Panabo’s
opposition was dismissed and Hipolito’s Fishpond Sales Application was given due course. The
Municipality of Panabo filed two motions for reconsideration but both were denied by the
Office of the President on November 2, 1972 and January 24, 1973.23
On September 26, 1973, the Court of Appeals also dismissed Derla’s appeal of the CFI’s
December 8, 1969 ruling in Civil Case No. 5826. The Court of Appeals, which affirmed in toto
the CFI’s decision, charged Derla with double costs as the appeal appeared to have been
prosecuted solely for dilatory purposes.24 Derla’s petition for review on certiorari, docketed as
G.R. No. L-38230, was likewise denied by this Court in a Resolution dated February 22, 1974,
and this became final and executory on March 27, 1974 as certified in an Entry of Judgment
dated April 18, 1974.25
Meanwhile, the Municipality of Panabo filed with the CFI of Tagum, Davao del Norte, Civil Case
No. 45 for Certiorari with Preliminary Injunction against Hipolito, Assistant Secretary Zamora,
the Acting Director of Lands and the District Lands Officer. During the pendency of the case, a
Municipal Judge of Panabo, Francisco Consolacion, wrote to a certain Antonio Floirendo about
Hipolito’s fishpond sales application.26 On January 27, 1974, then President Ferdinand E.
Marcos wrote the following marginal note on Judge Consolacion’s letter:
Sec. Tangco
Asst. Sec. Zamora:
If the land applied for by Hipolito is sold to him, it will prejudice the national interest as the land
is in the middle of the national projects - a pier and warehouses.
So his sales application should be rejected subject to reimbursement of Hipolito’s expenses and
the land transferred to the Municipality of Panabo.
Sgd.
F.E. Marcos27
Consequently, the Office of the President revoked its February 11, 1972 ruling on Hipolito’s
application in a Letter Decision28 dated February 5, 1974. The Office of the President ordered
the transfer of the subject fishpond area to the Municipality of Panabo upon payment of the
expenses incurred by Hipolito. 29 Hipolito’s motion to reconsider this decision was denied on
July 23, 1974.30
On August 19, 1974, Hipolito filed a Petition for Certiorari with the CFI of Davao, praying for the
declaration of nullity of the February 5, 1974 and July 23, 1974 Decisions of the Office of the
President and the reinstatement of the February 11, 1972 Decision. On March 9, 1975, the CFI
issued a writ of preliminary injunction to maintain the status quo and restrain the Municipality
of Panabo from performing any act in connection with the subject fishpond area.
Despite this injunction, the Municipality of Panabo, on September 12, 1985, passed Resolution
No. 176 and leased 3.5 hectares each to Zelda Derla, Melencio Panes, and Lovigildo Dolor for a
rental equivalent to twenty percent (20%) of the gross sales of all the produce of their leased
areas.31
On November 3, 1975, the CFI of Davao dismissed Hipolito’s petition on the belief that former
President Marcos’ directive was an instruction or an act promulgated, issued or done by the
president which has the force and effect of law.32 The Court of Appeals likewise dismissed
Hipolito’s appeal docketed as CA-G.R. No. SP-0524133 on July 26, 1977. An Entry of Judgment
having been made, this Decision became final and executory on August 26, 1977.34
Sometime after the EDSA Revolution, Catalina filed a petition with the Office of the President
for the Revival of the Fishpond Sales Application No. (VIII-2) 9 of her late husband Hipolito. This
was docketed as O.P. Case No. 4732 and in support of her petition, Catalina alleged that she
was a victim of the Marcos Regime and her fishpond was taken away from her despite a final
and executory decision in her favor; that contrary to the allegations of the then mayor of
Panabo, the approval of their fishpond sales application will not disrupt the municipality’s
development plan; that the Office of the President had already categorically ruled that Republic
Act No. 5743 cannot divest Hipolito of his vested rights over the fishpond area; that the
February 11 and November 2, 1972 Decisions have already lapsed into finality; and that the
supposed conversion of the fishpond area into a fishery school was but a mere subterfuge to
unjustly deprive the Hipolitos of their right over the fishpond area.35
Catalina’s petition was referred to the then Ministry of Agriculture and Food (now Department
of Agriculture) for an updated comment and recommendation. On April 18, 1988, the Ministry,
in its return communication36 to the Office of the President, commented that the subject
fishpond area could not be fully utilized and were in excess of the Municipality of Panabo’s
needs as certain portions were leased out; that the amount of One Hundred Thousand Pesos
(₱100,000.00) paid as reimbursement to Hipolito was insufficient considering that Hipolito
invested a total of Two Hundred Fifty-Eight and Six Hundred Pesos (₱258,600.00) in the
development and improvement of the subject fishpond area; that Catalina had not been
deprived of her right to renew her late husband’s fishpond permit or her right to apply for a
fishpond lease contract, and that in fact, under Section 23 of Presidential Decree No. 704,
public lands suitable for fishpond purposes shall be sold to applicants whose applications have
been processed and approved on or before November 6, 1972. The Ministry found that based
on the records, the Hipolitos were not accorded due process when they were deprived of the
subject fishpond area in favor of the Municipality of Panabo, thus recommended that Catalina’s
petition be given due course, subject to her refund of the One Hundred Thousand Pesos
(₱100,000.00) she had received as reimbursement from the Municipality of Panabo.37
On the basis of the above findings and recommendation, the Office of the President, through
then Executive Secretary Franklin M. Drilon, granted Catalina’s petition in a Resolution38 dated
November 11, 1991, with the following dispositive portion:
IN VIEW OF THE FOREGOING, and in the interest of more enlightened, impartial and substantive
justice, the instant petition is hereby GRANTED. Accordingly, the Bureau of Fisheries and
Aquatic Resources is hereby directed to process and approve Sales (Fishpond) Application No.
(VIII-2)9 of the late Ricardo Hipolito covering 23.9 hectares situated at San Vicente, Biyawa,
Panabo, Davao del Norte, and thereafter issue the corresponding sales patent or certificate of
title, excluding, however, therefrom a strip of one hundred (100) meters from the shoreline at
high tide. It is further hereby directed that petitioner Catalina D. Hipolito refund to the
Municipality of Panabo, Davao del Norte, the sum of ₱100,000.00 she received therefrom in
consideration of the entire fishpond area.39
Deciding in Catalina’s favor, the Office of the President held that the late Hipolito, having
complied with all the terms and conditions for an award of the subject fishpond area, had
already acquired a vested right therein.40 The Office of the President also applied the doctrine
of res judicata as its February 5, 1974 decision rejecting Hipolito’s fishpond sales application
was based on then President Marcos’ marginal note, which it found to be legally and
constitutionally suspect for having been issued after the February 11 and November 2, 1972
decisions had become final and executory. The Office of the President also ruled on the
prohibition under Presidential Decree No. 43, saying that the SANR at that time directed the
continuance of the processing of the pending fishpond sales application subject to a final
inspection and verification.
On January 28, 1992, the petitioners filed a Motion for Reconsideration of the November 11,
1991 Resolution of the Office of the President.41 Mesdames Profitresa Dolor (Dolor) and
Amelita Panes (Panes), as lessees of portions of the subject fishpond area, also filed their
Protest with Motion for Reconsideration on March 11, 1992.
On August 2, 1992, the Office of the President denied the petitioners’ motion due to the fact
that not only was it filed beyond the reglementary period, but also because of petitioners’
failure to timely assert their claims considering that the subject fishpond area had been a
subject of a long controversy between the Hipolitos and the Municipality of Panabo. Dolor and
Panes’ protest with motion for reconsideration was likewise dismissed on the ground that their
claims to the subject fishpond area were anchored on lease contracts which were legally
questionable for having been executed by the Municipality of Panabo at a time when it was
judicially restrained from allowing private persons to enter, occupy or make any kind of
construction on the subject fishpond area.42
On September 30, 1992, the petitioners filed an unsigned "Second Motion for Reconsideration"
which was denied by the Office of the President in an Order43 dated February 26, 1993 as the
November 11, 1991 Resolution sought to be reconsidered had already become final. The Order
also required the records of the case to be remanded to the Bureau of Fisheries and Aquatic
Resources for immediate execution/implementation of the November 11, 1991 Resolution.
Upon the Department of Environment and Natural Resources’ (DENR) request, the Office of the
President declared its November 11, 1991 Resolution final and executory in an Order dated
April 27, 1995.44

On May 22, 1995, the petitioners wrote then Executive Secretary Ruben Torres, praying for the
suspension of the implementation of the November 11, 1991 Resolution in O.P. Case No.
4723.45 However, this petition was subsequently withdrawn in another letter dated June 27,
1995.46
On February 26, 1997, the petitioners filed a complaint for the Annulment and Cancellation of
Original Certificates of Title (OCT) Nos. P-29095, 29096, 29098, 29099, 29100, 29101, 29102,
and 29103 and Damages against the respondents before the RTC of Panabo, Davao. This was
docketed as Civil Case No. 97-15.47
In an Order48 dated November 17, 1998, the RTC dismissed the complaint on the following
grounds:
WHEREFORE, on the ground of prior judgment, statute of limitations, waiver, abandonment
and/or estoppel pursuant to pars. (e) and (f), Sect. 1, Rule 16 of the 1997 Rules of Civil
Procedure, the complaint is hereby DISMISSED, and the motion to cite the plaintiffs in
contempt of court for alleged violation of the non-forum shopping circulars of the Supreme
Court is DENIED.49
The petitioners asked the Court of Appeals to reverse and set aside the RTC Order in their
appeal docketed as CA-G.R. CV No. 63666. On August 30, 2002, the Court of Appeals dismissed
the appeal on the basis of res judicata and affirmed in toto the assailed RTC decision. The
petitioners’ Motion for Reconsideration was likewise denied for lack of merit on March 17,
2003.50
On May 15, 2003, the petitioners filed before this Court a Petition for Review on Certiorari
seeking the reversal of the August 30, 2002 Decision and the March 17, 2003 Resolution of the
Court of Appeals on the strength of the following arguments:
I their petition and chose to resolve this decades-long controversy once and for all.53
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT RES JUDICATA LIES IN THIS
CASE, RELYING ON THE RESOLUTION OF THE OFFICE OF THE PRESIDENT IN O.P. CASE NO. 4732
DATED NOVEMBER 11, 1991, DISREGARDING THE EARLIER AND FINAL AND EXECUTORY ORDERS
OF THE SAME OFFICE OF THE PRESIDENT DATED FEBRUARY 5, 1974 AND JULY 23, 1974, AS
WELL AS THE COURT OF APPEALS’ DECISION DATED JULY 26, 1977.
II
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT RES JUDICATA APPLIES TO
BOTH JUDICIAL AND QUASI-JUDICIAL PROCEEDINGS, OVERLOOKING THE FACT THAT THE
DOCTRINE CANNOT APPLY IN ADMINISTRATIVE PROCEEDINGS, AS IN THE INSTANT CASE.
III
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE ISSUE AS TO THE
AUTHENTICITY AND GENUINENESS OF THE DOCUMENTS CONSISTING OF A SPECIAL POWER OF
ATTORNEY, A CONTRACT DATED MAY 8, 1[9]50, TRANSFER OF RIGHTS IN FISHPOND PERMIT
AND PROMISSORY NOTE WHICH WERE ALLEGED BY PETITIONERS AS HAVING BEEN
FRAUDULENTLY EXECUTED, HAD BEEN LAID TO REST IN CIVIL CASE NO. 5826 (FOR
DECLARATION OF NULLITY OF A TRANSFER OF RIGHT IN A FISHPOND PERMIT FILED BY
MAXIMINO DERLA AGAINST RICARDO HIPOLITO BEFORE THE CFI OF DAVAO, BRANCH II,
WH[I]CH WAS DISMISSED BY SAID COURT, AND AFFIRMED BY THE COURT OF APPEALS AND THE
SUPREME COURT[)].
IV
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE MATERIAL FACTS
PRESENTED BY PETITIONERS IN THEIR COMPLAINT BELOW, DOCKETED AS CIVIL CASE NO. 97-15,
FOR ANNULMENT AND CANCELLATION OF ORIGINAL CERTIFICATES OF TITLES AND FOR
DAMAGES WERE THE SAME MATERIAL FACTS DETERMINED AND RESOLVED LONG BEFORE IN
O.P. CASE NO. 4732 THROUGH THE RESOLUTION DATED NOVEMBER 11, 1991, HENCE, THE
PRINCIPLE OF RES JUDICATA OBTAINED IN THE CASE AT BAR.
V
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONERS’ CLAIM THAT THE
ISSUE OF DENIAL OF THE MOTION FOR RECONSIDERATION FILED BY RICARDO HIPOLITO
THROUGH THE RESOLUTION OF THE OFFICE OF THE PRESIDENT DATED JULY 23, 1974
CONSTITUTE RES JUDICATA AGAINST THE GRANTING OF THE SALES (FISHPOND) APPLICATION
OF HIPOLITO, HENCE THE ISSUANCE OF ORIGINAL CERTIFICATES OF TITLES OVER THE FISHPOND
AREA IN QUESTION, WAS A REPETITIVE PROTEST BY PETITIONERS WHICH HAD ALREADY BEEN
EXPLAINED IN THE RESOLUTION OF NOVEMBER 11, 1991.
VI
THE DOCUMENTS ATTACHED TO PRIVATE RESPONDENTS’ MOTION TO DISMISS THE
COMPLAINT AT BAR CANNOT AFFECT THE SUBSTANTIAL RIGHTS OF PETITIONER OVER THE
SUBJECT PROPERTY.51
This petition had already been denied by this Court in a resolution dated August 23, 2004 for
petitioners’ failure to sufficiently show that the Court of Appeals committed any reversible
error to warrant the exercise of this Court of its discretionary appellate jurisdiction.52 However,
due to petitioners’ insistence that their petition be given reconsideration, this Court reinstated
Both the RTC and Court of Appeals denied the petitioners’ claims on the ground of res judicata.
The lower courts have similarly held that the annulment of the titles, as sought by the
petitioners, relied on the same facts and evidence that were already presented and passed
upon in the earlier O.P. Case No. 4732; thus, barred by the doctrine of res judicata.
To resolve this issue, it would be instructive to revisit the concept of res judicata. Literally, res
judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter
settled by judgment."54 It lays the rule that an existing final judgment or decree rendered on
the merits, without fraud or collusion, by a court of competent jurisdiction, upon any matter
within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other
actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points
and matters in issue in the first suit.55
In Villanueva v. Court of Appeals,56 we enumerated the elements of res judicata as follows:
a) The former judgment or order must be final;
b) It must be a judgment or order on the merits, that is, it was rendered after a consideration of
the evidence or stipulations submitted by the parties at the trial of the case;
c) It must have been rendered by a court having jurisdiction over the subject matter and the
parties; and
d) There must be, between the first and second actions, identity of parties, of subject matter
and of cause of action. This requisite is satisfied if the two (2) actions are substantially between
the same parties.57
The petitioners assert that there can be no res judicata as the November 11, 1991 decision in
O.P. Case No. 4732 is null and void for having overturned an earlier final and executory decision
and for not giving them an opportunity to be heard. Instead of explaining to this Court why the
elements of res judicata are not present in this case, the petitioners decided to once again
reiterate their worn-out arguments, discussed above, on why the November 11, 1991 decision
should not be accorded validity.
We are not convinced.
The November 11, 1991 Decision in O.P. Case No. 4732 has attained finality twenty (20) years
ago. It is valid and binding. In fact, on April 27, 1995, the Office of the President issued an
Order58 for the sole purpose of declaring its November 11, 1991 decision final and executory.
This Court has held time and again that a final and executory judgment, no matter how
erroneous, cannot be changed even by this Court:
Nothing is more settled in law than that once a judgment attains finality it thereby becomes
immutable and unalterable. It may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law,
and regardless of whether the modification is attempted to be made by the court rendering it
or by the highest court of the land. x x x.59
There can be no mistake as to the presence of all the elements of res judicata in this case. The
parties, although later substituted by their respective successors-in-interest, have been the
same from the very beginning and in all the proceedings affecting the subject fishpond area.
The concerned agencies and the lower courts have validly ruled on the rights to the subject
fishpond area, the validity of the documents covering it, and even the actions associated and
related to it. The subject fishpond area is undoubtedly the same subject matter involved in O.P.
Case No. 4732 and the petition now before us. With regard to the identity of the causes of
action, this Court, in Mendiola v. Court of Appeals60 held that:
The test of identity of causes of action lies not in the form of an action but on whether the
same evidence would support and establish the former and the present causes of action. The
difference of actions in the aforesaid cases is of no moment. x x x.61
The similarity between the two causes of action cannot be impugned. The facts and evidence
which supported Catalina’s petition for revival of Hipolito’s fishpond sales application in O.P.
Case No. 4732 are the same facts and evidence now before us; hence, the difference of actions
in the two cases is of no moment. In O.P. Case No. 4732, the action was to revive Hipolito’s
fishpond sales application, which, when granted, gave the respondents the right to the subject
fishpond area, eventually leading to their ownership over the same. The action in Civil Case No.
97-15, the case that was elevated to become this petition, is for the nullification of the
respondents’ respective titles to the subject fishpond area on the ground that the respondents
have no right thereto. If we allow the nullification of these titles on the ground presented by
the petitioners, then we would also be nullifying the decision in O.P. Case No. 4732, because it
is the decision in that case which gave the respondents the right to the subject fishpond area.
Notwithstanding the difference in the forms of the two actions, the doctrine of res judicata still
applies considering that the parties were litigating over the same subject fishpond area. More
importantly, the same contentions and evidence as advanced by the petitioners in this case
were already used to support their arguments in the previous cause of action.
The petitioners argue that res judicata cannot apply to this case because O.P. Case No. 4732 is
an administrative case.
While it is true that this Court has declared that the doctrine of res judicata applies only to
judicial or quasi-judicial proceedings, and not to the exercise of administrative powers,62 we
have also limited the latter to proceedings purely administrative in nature.63 Therefore, when
the administrative proceedings take on an adversary character, the doctrine of res judicata
certainly applies.64 As this Court held in Fortich v. Corona65:
The rule of res judicata which forbids the reopening of a matter once judicially determined by
competent authority applies as well to the judicial and quasi-judicial acts of public, executive or
administrative officers and boards acting within their jurisdiction as to the judgments of courts
having general judicial powers.66 (Emphasis ours.)
The petitioners cannot deny the fact that though initially, they were not able to participate in
O.P. Case No. 4732, the fact that they were able to file a motion for reconsideration not once,
but twice, and these motions were resolved by the Office of the President, meant that they
were given ample opportunity to be heard. Moreover, a careful reading of the November 11,
1991 Resolution in O.P. Case No. 4732 itself will show that in resolving Catalina’s petition to
revive her late husband’s fishpond sales application, the Office of the President, through then
Executive Secretary Franklin M. Drilon, had carefully studied the antecedent facts of the case,
and passed upon the rights of all the parties involved, including those of the petitioners, even
before they participated in the said case.
The petitioners’ complaint in Civil Case No. 97-15, the very same case subject of this petition, is
one for declaration of nullity and cancellation of the original certificates of title of the
respondents to the very same fishpond area subject of the respondents’ petition in O.P. Case
No. 4732. To grant petitioners’ prayer now would be to nullify the final and executory decision
of the Office of the President in O.P. Case No. 4732.lawphi1
The petitioners also argue that if res judicata is to be applied in this case, then it should be
applied to bar O.P. Case No. 4732 as it overturned the final and executory decisions of the same
office dated February 5 and July 23, 1974. The petitioners are forgetting the fact that before
these 1974 decisions were made, the February 11, 1972 decision of the same Office of the
President had already become final and executory and the rights conferred to Hipolito by virtue
of that final and executory decision had already become vested in him. To follow the
petitioners’ line of argument therefore, would lead us to the conclusion that if there is any one
decision that should be retained, then it should be the first decision that had attained finality.
This reasoning finds support in Collantes v. Court of Appeals,67 where we held that when faced
with two conflicting final and executory decisions, one of the options the Court can take is to
determine which judgment came first. The first judgment to become final and executory is the
February 11, 1972 decision of the Office of the President, which is still in favor of Hipolito and
the respondents, as Hipolito’s successors-in-interest.
To nullify however the November 11, 1991 decision to give way to the reinstatement of the
February 11, 1972 decision, would not in any way help in resolving this tedious and protracted
debate. The almost 20-year old November 11, 1991 decision in O.P. Case No. 4732 is a well-
written decision filled with details and factual antecedents that clearly spell out each of the
parties’ respective rights in the subject fishpond area. Moreover, it also explained its rationale
for revoking or overturning its own decisions rendered on February 5 and July 23, 1974. Lastly,
it is essentially a repeat of the 1972 decision as it confers the same rights and privileges to
Hipolito. Thus, the most prudent thing to do is to retain the more exhaustive and factually
updated version of the decision of the Office of the President, which is the November 11, 1991
Decision in O.P. Case No. 4732.
Assuming arguendo that the finality of O.P. Case No. 4732 will not trigger the application of the
doctrine of res judicata to bar the petition now before us, the petitioners’ cause must still fail
because the petitioners hinge their claim on the alleged fraudulent transfer to Hipolito of their
father Derla’s right to the Fishpond Permit No. F-1080-F. It must be remembered that this has
also been the subject of a separate complaint in Civil Case No. 5826, wherein the RTC ruled that
aside from the action being filed beyond the prescriptive period, Derla was estopped from
disputing the authenticity of the transfer as he used the very same document to defend himself
in the criminal case filed against him by Hipolito. In fact, the RTC acquitted him on the basis of
that same document he had disputed and which his heirs are now disputing. The RTC’s denial of
Derla’s petition to nullify the transfer of fishpond rights was affirmed by the Court of Appeals in
CA-G.R. No. 47070-R and then by this Court in G.R. No. L-38230 in a Resolution dated February
22, 1974. The ruling in that case thus became final on March 27, 1974.68
The controversy over the subject fishpond area has long been debated in many actions and in
various forums. The Court puts all the issues in this case to rest, with finality, in this Decision.
WHEREFORE, the instant petition is DENIED. The August 30, 2002 Decision and March 17, 2003
Resolution of the Court of Appeals in CA-G.R. CV No. 63666 are AFFIRMED.SO ORDERED.
G.R. No. L-23832 September 28, 1968PROCESO APOLEGA, petitioner, vs.PERSEVERANDA
HIZON, LUCIANO ALCANTARA and MARIANO PRIMICIAS, PRUDENCIO D. DEQUINA, AMADO M.
ENRIQUEZ, HON. CESARIO PEREZ and PROVINCIAL SHERIFF 0F BIÑAN, LAGUNA, respondents.
On May 26, 1961 Melanio Hizon filed a notice of claim for compensation with Regional Office
No. 5, Department of Labor, San Pablo City, for injury sustained by him on January 5, 1961,
while under the employ of Proceso Apolega, now petitioner. On June 16 following, petitioner
received a letter from the Chief, Administrative Section of Regional Office No. 5, together with
Form No. 3 (Employer's Report of Sickness and Accident) and Form No. 5 (Employer's
Supplementary Report of Sickness and Accident), for him to fill out in connection with the
claim. He failed to do so, however, although he now alleges that he went to the aforesaid office
and verbally informed the officers concerned that the claimant was not his employee.
On July 21, 1961 Regional Administrator Luciano Alcantara issued an award requiring petitioner
to pay the claimant the sums of P158.90 for medical expenses, P3,744.00 as compensation
benefits and P38.00 as fee.
On November 30, 1962 Melanio Hizon died from complication resulting from the injury suffered
in the aforesaid accident and on January 22 the following year his widow, Perseveranda Hizon,
in her own behalf and as guardian ad litem of their minor children, filed a death compensation
claim with the same office, a copy of which was received by petitioner on January 28. The claim
was again uncontroverted, and on February 22, 1963, an award was issued in favor of the wife
and children of the deceased Melanio Hizon in the following amounts: (1) P328.90 for medical
expenses; (2) P200.00 as burial expenses; (3) P3,744.00 as compensation benefits; and (4)
P38.00 as fee. This award was renewed on July 8, 1963 by hearing officer Amado A. Enriquez of
the same Regional Office, requiring petitioner to pay claimants the same amount of
compensation. Copy of the renewed award was received by petitioner on July 19 following.
On August 8, 1963, petitioner through counsel filed a motion for extension of time to file a
"Motion to Vacate the Award and Motion to Dismiss the Case." An extention of ten (10) days
from August 12 was granted by the hearing officer. Petitioner failed to file the pleading
contemplated, and so the hearing officer, on September 9, 1963, issued an order declaring the
award as final and executory and elevated the record of the case to the Workmen's
Compensation Commission for review. In an order dated July 24, 1964 the Commission, thru
Associate Commissioner Cesario Perez, declared the award of February 22, 1963 final and
executory and remanded the case to the Regional Office a quo for appropriate action. 1 The
Regional Office, thru Prudencio D. Dequina, issued a writ of execution against the properties of
the petitioner, pursuant to Section 51 of the Workmen's Compensation Act as amended by
Section 17 of Republic Act 4119.
On November 17, 1964 petitioner elevated the case to this Court in a petition for certiorari and
prohibition with preliminary injunction. In a resolution dated November 20, 1964, we directed
the issuance of the writ of preliminary injunction prayed for upon petitioner's posting a bond of
P3,000.00.1awphîl.nèt
Petitioner avers (1) that respondent's claim was time-barred; (2) that the hearing officer's
failure to set the case for hearing and to give notice to petitioner amounted to grave abuse of
discretion or excess of jurisdiction; and (3) that Section 17 of Republic Act 4119 is
unconstitutional and therefore the Commission or the duly deputized officials in the Regional
Offices of the Department of Labor have no authority to issue a writ of execution.
Petitioner denies the fact that the deceased Melanio Hizon was his employee at the time of the
accident and maintains that in any case the claim for compensation was filed beyond the
reglementary two-month period prescribed in Section 24 of the Workmen's Compensation Act.
He further contends that he was never given a chance to present evidence as he was not
advised of any hearing and therefore the proceedings taken were null and void.
The allegation of lack of notice and hearing cannot be sustained. Petitioner failed to controvert
both claims (injury and death) for compensation, as required by Section 45 of the Workmen's
Compensation Act. By reason of such failure petitioner waived his right to present evidence
concerning the claims 2 and therefore cannot complain that he was not duly heard. 3 Under the
circumstances the hearing officer could make the award without the necessity of a formal
hearing, treating the claim as uncontested and thus dispensing with the reception of
evidence. 4 As to the failure of the claimant to file the claim within the time prescribed in
Section 24 of the Act, the same was non-jurisdictional 5 and did not constitute a bar to the
proceeding, considering that the employer did not suffer by such delay or failure (Rio y Cia. vs.
WCC, et al., supra). Indeed, petitioner was given the chance to be heard when he was granted
time within which to file a motion to vacate the award and to dismiss the case, but which he
failed to do.
Besides, it appears that in respondent's claim for death benefits there is a notation that
petitioner had paid the total amount of P530.00 — P480.00 when Melanio Hizon was still alive
and P50.00 after his death. Under Section 24 of the Workmen's Compensation Act, as amended
by Republic Act No. 4119, such partial payment of benefits renders it unnecessary to file the
claim within the time limit.
On the last issue petitioner contends that the Commission or the duly deputized officials in the
Regional Offices of the Department of Labor have no authority to issue writs of execution, and
questions the constitutionality of Section 17, Republic Act 4119, which amended Section 51 of
the Workmen's Compensation Act and vests such authority in the Commission and its duly
deputized officials.
Originally the power to enforce a final award made under the Workmen's Compensation Act
was vested "in any court of record in the jurisdiction of which the accident occurred" (Section
51, Act 3428). Subsequently, pursuant to Republic Act 997 as amended by Republic Act 1241,
and as effected by Reorganization Plan 20-A adopted in 1956, the authority to enforce awards
was transferred from the courts of justice to the Regional Administrator and the Workmen's
Compensation Commission. This Court, in a number of cases (Everlasting Pictures, Inc., et al. vs.
Fuentes, et al., L-16512, November 29, 1961; Divinagracia vs. CFI Manila, et al., L-17680,
December 2, 1961; Community Sawmill Co. vs. WCC, L-17937, December 28, 1961; A.V.H. & Co.
vs. WCC, et al., L-17502, May 30, 1962; Chung Quiao vs. Abaday, et al., L-20315, June 30, 1964,
and cases cited therein), nullified writs of execution issued by the Regional Offices and by the
Commission on the ground that Reorganization Plan 20-A, insofar as it purported to grant such
power, was without legislative authority or sanction.
As the law now stands, however, the power to enforce awards under the Workmen's
Compensation Act is expressly vested in the Commission or the duly deputized officials in the
Regional Offices of the Department of Labor (R.A. 4119). This grant of power does not
contravene the Constitution. Execution is a necessary step in the enforcement of the award,
and while it is procedural in nature and therefore essentially falls within the rule-making power
of this Court, it may be legislated upon by Congress under its constitutional authority to
"repeal, alter or supplement the rules concerning pleading, practice and procedure ..." (Section
13, Article VIII, Constitution of the Philippines). In the law under consideration the legislative
intent to vest in the Commission the power to enforce its awards is clear, in contrast of
Republic Act 997, which did not authorize the Reorganization Commission to transfer such
judicial power from the courts of justice to the officials appointed or offices created under
Reorganization Plan 20- A. In one case (Lo Chi, et al. vs. De Leon, et al., L-18584, January 30,
1967), where the Regional Administrator issued a writ of execution to enforce a compensation
award, we held that "inasmuch as the writ of execution was issued by Regional Administrator
De Leon on December 2, 1960, before the effectivity of Republic Act 4119, the said writ is
therefore null and void," thus impliedly upholding the constitutionality of Republic Act 4119.
The writ of execution issued by respondent Prudencio D. Dequina is valid.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the petition is dismissed and the writ of
preliminary injunction dissolved, with costs against petitioner.
G.R. No. 96938 October 15, 1991
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,
vs.CIVIL SERVICE COMMISSION, HEIRS OF ELIZAR NAMUCO, and HEIRS OF EUSEBIO MANUEL,
respondents.NARVASA, J.:
In May, 1981, the Government Service Insurance System (GSIS) dismissed six (6) employees as
being "notoriously undersirable," they having allegedly been found to be connected with
irregularities in the canvass of supplies and materials. The dismissal was based on Article IX,
Presidential Decree No. 807 (Civil Service Law) 1 in relation to LOI 14-A and/or LOI No. 72. The
employees' Motion for Reconsideration was subsequently denied.
Five of these six dismissed employees appealed to the Merit Systems Board. The Board found
the dismissals to be illegal because effected without formal charges having been filed or an
opportunity given to the employees to answer, and ordered the remand of the cases to the
GSIS for appropriate disciplinary proceedings.
The GSIS appealed tothe Civil Service Commission. By Resolution dated October 21, 1987, the
Commission ruled that the dismissal of all five was indeed illegal and disposed as follows:
WHEREFORE, it being obvious that respondents' separation from the service is illegal, the GSIS
is directed to reinstate them with payment of back salaries and benefits due them not later
than ten (10) days from receipt of a copy hereof, without prejudice to the right of the GSIS to
pursue proper disciplinary action against them. It is also directed that the services of their
replacement be terminated effective upon reinstatement of herein respondents.
xxx xxx xxx
Still unconvinced, the GSIS appealed to the Supreme Court (G.R. Nos. 80321-22). Once more, it
was rebuffed. On July 4, 1988 this Court's Second Division promulgated a Resolution which:
a) denied its petition for failing to show any grave abuse of discretion on the part of the
Civl Service Commission, the dismissals of the employees having in truth been made without
formal charge and hearin, and
b) declared that reinstatement of said five employees was proper, "without prejudice to
the right of the GSIS to pursue proper disciplinary action against them;"
c) MODIFIED, however, the challenged CSC Resolution of October 21, 1987 "by
elminating the payment of back salaries to private respondents (employees) until the outcome
of the disciplinary proceedings is known, considering the gravity of the offenses imputed to
them ..., 2
d) ordered reinstateement only of three employees, namely: Domingo Canero, Renato
Navarro and Belen Guerrero, "it appearing tht respondents Elizar Namuco and Eusebio Manuel
have since passed away." 3
On January 8, 1990, the aforesaid Resolution of July 4, 1988 having become final, the heirs of
Namuco and Manuel filed a motion for execution of the Civil Service Commission Resolution of
October 21, 1987, supra. The GSIS opposed the motion. It argued that the CSC Resolution of
October 21, 1987 — directing reinstatement of the employees and payment to them of back
salaries and benefits — had been superseded by the Second Division's Resolution of July 4,
1988 — precisely eliminating the payment of back salaries.
The Civil Service Commission granted the motion for execution in an Order dated June 20,
1990. It accordingly directed the GSIS "to pay the compulsory heirs of deceased Elizar Namuco
and Eusebio Manuel for the period from the date of their illegal separation up to the date of
their demise." The GSIS filed a motion for reconsideration. It was denied by Order of the CSC
dated November 22, 1990.
Once again the GSIS has come to this Court, this time praying that certiorari issue to nullify the
Orders of June 20, 1990 and November 22, 1990. Here it contends that the Civil Service
Commission has no pwer to execute its judgments and final orders or resolutions, and even
conceding the contrary, the writ of execution issued on June 20, 1990 is void because it varies
this Court's Resolution of July 4, 1988.
The Civil Service Commission, like the Commission on Elections and the Commission on Audit, is
a consitutional commission invested by the Constitution and relevant laws not only with
authority to administer the civil service, 4 but also with quasi-judicial powers. 5 It has the
authority to hear and decide administrative disciplinary cases instituted directly with it or
brought to it on appeal. 6 The Commission shall decide by a majority vote of all its Members
any case or matter brought before it within sixty days from the date of its submission for
decision it within sixty days from the date of its submission for on certiorari by any aggrieved
party within thirty days from receipt of a copy thereof. 7 It has the power, too, sitting en banc,
to promulgate its own rules concerning pleadings and practice before it or before any of its
offices, which rules should not however diminish, increase, or modify substantive rights. 8
On October 9, 1989, the Civil Service Commission promulgated Resolution No. 89-779 adopting,
approving and putting into effect simplified rules of procedure on administrative disciplinary
and protest cases, pursuant tothe authority granted by the constitutional and statutory
provisions above cited, as well as Republic Act No. 6713. 9 Those rules provide, among other
things, 10 that decision in "administrative disciplinary cases" shall be immediately executory
unless a motion for reconsideration is seasonably filed. If the decision of the Commission is
brought to the Supreme Court on certiorari, the same shall still be executory unless a
restraining order or preliminary injunction is issued by the High Court." 11 This is similar to a
provision in the former Civil Service Rules authorizing the Commissioner, "if public interest so
warrants, ... (to) order his decision executed pending appeal to the Civil Service Board of
Appeals." 12 The provisions are analogous and entirely consistent with the duty or
responsibility reposed in the Chairman by PD 807, subject to policies and resolutions adopted
by the Commission, "to enforce decision on administrative discipline involving officials of the
Commission," 13 as well as with Section 37 of the same decree declaring that an appeal to the
Commission 14 "shall not stop the decision from being executory, and in case the penalty is
suspension or removal, the respondent shall be considered as having been under preventive
suspension during the pendency of the appeal in the event he wins an appeal."
In light of all the foregoing consitutional and statutory provisions, it would appear absurd to
deny to the Civil Service Commission the power or authority or order execution of its decisions,
resolutions or orders which, it should be stressed, it has been exercising through the years. It
would seem quite obvious that the authority to decide cases is inutile unless accompanied by
the authority to see taht what has been decided is carried out. Hence, the grant to a tribunal or
agency of adjudicatory power, or the authority to hear and adjudge cases, should normally and
logically be deemed to include the grant of authority to enforce or execute the judgments it
thus renders, unless the law otherwise provides.
In any event, the Commission's exercise of that power of execution has been sanctioned by this
Court in several cases.
In Cucharo v. Subido, 15 for instance, this Court sustained the challenged directive of the Civil
Service Commissioner, that his decision "be executed immediately 'but not beyond ten days
from receipt thereof ...". The Court said:
As a major premise, it has been the repeated pronouncement of this Supreme Tribunal that the
Civil Service Commissioner has the discretion toorder the immediate execution in the public
interst of his decision separating petitioner-appellant from the service, always sbuject however
to the rule that, in the event the Civil Service Board of Appeals or the proper court determines
that his dismissal is illegal, he should be paid the salary corresponding to the period of his
separation from the service unitl his reinstatement.
Petitioner GSIS concedes that the heirs of Namuco and Manuel "are entitled tothe
retirement/death and other benefits due them as government employees" since, at the time of
their death, they "can be considered not to have been separated from the separated from the
service." 16
It contend, however, that since Namuco and Manuel had not been "completely exonerated of
the administrative charge filed against them — as the filing of the proper disciplinary action was
yet to have been taken had death not claimed them" — no back salaries may be paid to them,
although they "may charge the period of (their) suspension against (their) leave credits, if any,
and may commute such leave credits to money
value;" 17 this, on the authority of this Court's decision in Clemente v. Commission on Audit. 18
It is in line with these considerations, it argues, that the final and executory Resolution of this
Court's Second Division of July 4, 1988 should be construed; 19 and since the Commission's
Order of July 20, 1990 maikes a contrary disposition, the latter order obviously cannot prevail
and must be deemed void and ineffectual.
This Court's Resolution of July 4, 1988, as already stated, modified the Civil Service
Commission's Resolution of October 21, 1987 — inter alia granting back salaries tothe five
dismissed employees, including Namuco and Manuel — and pertinently reads as follows:
We modify the said Order, however, by eliminating the payment of back salaries to private
respondents until the outcome of the disciplinary proceedings is known, considering the gravity
of the offense imputed to them in connection with the irregularities in the canvass of supplies
and materials at the GSIS.
The reinstatement order shall apply only to respondents Domingo Canero, Renato Navarro and
Belen Guerrero, it appearing that respondents Elizar Namuco and Eusebio Manuel have since
passed away. ....
On the other hand, as also already stated, the Commission's Order of June 20, 1990 directed
the GSIS "to pay the compulsory heirs of deceased Elizar Namuco and Eusebio Manuel for the
period from the date of their illegal separation up to the date of their demise."
The Commission asserted that in promulgating its disparate ruling, it was acting "in the interest
of justice and for other humanitarian reasons," since the question of whether or not Namuco
and Manuel should receive back salaries was "dependent on the result of the disciplinary
proceedings against their co-respondents in the administrative case before the GSIS," and since
at the tiem of their death, "no formal charge ... (had) as yet been made, nor any finding of their
personal culpability ... and ... they are no longer in a position to refute the charge."
The Court agrees that the challenged orders of the Civil Service Commission should be upheld,
and not merely upon compassionate grounds, but simply because there is no fair and feasible
alternative in the circumstances. To be sure, if the deceased employees were still alive, it would
at least be arguable, positing the primacy of this Court's final dispositions, that the issue of
payment of their back salaries should properly await the outcome of the disciplinary
proceedings referred to in the Second Division's Resolution of July 4, 1988.
Death, however, has already sealed that outcome, foreclosing the initiation of disciplinary
administrative proceedings, or the continuation of any then pending, against the deceased
employees. Whatever may be said of the binding force of the Resolution of July 4, 1988 so far
as, to all intents and pursposes, it makes exoneration in the adminstrative proceedings a
condition precedent to payment of back salaries, it cannot exact an impossible performance or
decree a useless exercise. Even in the case of crimes, the death of the offender exteinguishes
criminal liability, not only as to the personal, but also as to the pecuniary, penalties if it occurs
before final judgment. 20 In this context, the subsequent disciplinary proceedings, even if not
assailable on grounds of due process, would be an inutile, empty procedure in so far as the
deceased employees are concerned; they could not possibly be bound by any substatiation in
said proceedings of the original charges: irrigularities in the canvass of supplies and materials.
The questioned order of the Civil Service Commission merely recognized the impossibility of
complying with the Resolution of July 4, 1988 and the legal futility of attempting a post-mortem
investigation of the character contemplated.WHEREFORE, the petition is DISMISSED, without
pronouncement as to costs.SO ORDERED.
G.R. No. 143781 February 27, 2002
JOSE CLAVANO, INC., petitioner vs.HOUSING AND LAND USE REGULATORY BOARD and SPS.
ENRIQUE and VENUS TENAZAS, respondentsD E C I S I O NBELLOSILLO, J.:
"The tendency of the law," observes Justice Oliver Wendell Holmes, "must always be to narrow
the field of uncertainty." And so was the judicial process conceived to bring about the just
termination of legal disputes. The mechanisms for this objective are manifold but the essential
precept underlying them is the immutability of final and executory judgments.
This fundamental principle in part affirms our recognition of instances when disputes are
inadequately presented before the courts and addresses situations when parties fail to unravel
what they truly desire and thus fail to set forth all the claims which they want the courts to
resolve. It is only when judgments have become final and executory, or even when already
deemed satisfied, that our negligent litigants belatedly come forth to pray for more relief. The
distilled wisdom and genius of the ages would tell us to reject their pleas, for the loss to
litigants in particular and to society in general would in the long run be greater than the gain if
courts and judges were clothed with power to revise their final decisions at will. We find this
basic rule decisive of the instant controversy.
On 8 April 1994 petitioner Jose Clavano, Inc., sold under a contract to sell a house and lot in
Cebu City to private respondents, the spouses Enrique and Venus Tenazas. The spouses paid
fifty percent (50%) of the purchase price but encountered problems in paying the balance and
some additional charges. Alleging default on the part of the spouses, petitioner refused to
accept their subsequent payments and sued them instead for rescission of their contract to sell
and the forfeiture of all prior payments made thereon. The suit was however dismissed in due
course and petitioner took no further action thereon.
Subsequently, private respondents filed a complaint for specific performance with the Housing
and Land Use Regulatory Board (HLURB) Regional Office in Cebu City against petitioner to
compel it to honor their contract to sell.1 The spouses alleged that they had tendered enough
money to pay for the balance and all charges for the house and lot which petitioner
unreasonably refused to accept. They asked for judgment compelling Jose Clavano, Inc. to
accept their payment and to execute in their favor the necessary deed of absolute sale for the
disputed house and lot as well as to compensate them for damages they had incurred.
Petitioner denied the allegations in the complaint and insisted that the spouses had already
defaulted in their obligation to settle the balance of the purchase price and other accounts.2
On 14 November 1995 the HLURB Regional Office found the spouses’ complaint meritorious
and ordered petitioner to -
1. Accept from the complainants [herein private respondents] the amount of ₱1,958,000.00
covered and contained in the Manager’s Check duly tendered to it. The complainants are
accordingly directed to redeliver and again tender to the respondent [herein petitioner] the
payment previously refused; 2. Immediately thereafter, execute a Deed of Absolute Sale in
favor of the complainants and deliver the corresponding Transfer Certificate of Title over Lot
25, Block 1 of the EVC Emerald Estate free from all liens and encumbrances; 3. Deliver and
transfer the possession or occupancy of the subject Cullinan House in favor of the complainants
in the same complete condition and fit state as promised in the contract upon completion
thereof and/or pursuant to respondent’s representations; 4. Pay the complainants as and by
way of damages the amount of Three Hundred Thousand (₱300,000.00) Pesos and the amount
of One Hundred Thousand (₱100,000.00) Pesos by way of attorney’s fees, and cost of litigation
in the amount of Five Thousand (₱5,000.00) Pesos. The counterclaims prayed for by respondent
are hereby denied for lack of merit.3
On 21 June 1996 the HLURB upheld the Decision.4 On 12 March 1998 the Office of the
President likewise sustained the Decision but deleted the award of moral damages. On 29 May
1998 reconsideration was denied.5 On 7 August 1998 the petition for review of petitioner with
the Court of Appeals was dismissed for insufficiency of the certificate of non-forum shopping.
On 8 October 1998 the appellate court denied reconsideration thereof.6 On 7 December 1998
we dismissed the petition for review on certiorari of the CA Decision for failure of petitioner
Jose Clavano, Inc. to submit a written explanation for substituted service thereof upon the
respondents spouses and the Court of Appeals.7
On 31 August 1999 the HLURB Decision, as modified by the Office of the President, lapsed into
finality and ripened for execution.8 The HLURB Regional Office issued a writ of execution to
enforce the judgment,9 and so petitioner was constrained to surrender to the spouses an
unnotarized deed of absolute sale over the subject house and lot, the corresponding original
owner’s duplicate of the transfer certificate of title in petitioner’s name, tax declaration
certificates, manager’s check for costs and attorney’s fees, miscellaneous documents, and the
keys to the house bought by the spouses.10
On 23 March 1999 private respondents filed a motion with the HLURB complaining about
several defects in the housing unit as well as the fact that the deed of absolute sale which
petitioner had delivered was unnotarized and the transfer certificate of title earlier produced
was still titled in the name of petitioner. The spouses also asked the HLURB to order petitioner
to pay for the expenses of the notarization of the deed and for the fees and taxes necessary for
transferring and recording the title in the spouses’ name.
On 15 June 1999 the HLURB granted the motion -
x x x the Sheriff of the Regional Trial Court of Cebu City is hereby x x x directed to assist
complainants [herein private respondents] to have the Deed of Absolute Sale notarized with
the actual expenses thereon by the complainants be chargeable against the herein respondent
[herein petitioner]. Immediately thereafter, the Register of Deeds of Cebu City is directed to
nullify and cause the corresponding cancellation of Transfer Certificate of Title in the name of
herein complainants upon payment of the essential fees or charges for registration of the deed
by complainants, subject to the further settlement of the assessed realty tax obligation for the
lot and unit by respondent which the complainants may, at their option, advance and demand a
reimbursement thereafter x x x x11
Petitioner moved for reconsideration of the 15 June 1999 HLURB Order and argued that it
amended the final HLURB Decision which as far as petitioner was concerned had been fully
executed. Petitioner also claimed that the Order set aside or nullified the provision in the
contract to sell (which the HLURB Decision supposedly enforced) obliging private respondents
as buyers of the disputed house and lot to answer for the expenses involved in the transfer of
title in their favor.12 On 16 November 1999 the HLURB denied reconsideration.13
On 10 December 1999 petitioner elevated the HLURB Orders on a Rule 65 certiorari to the
Court of Appeals.14 On 9 February 2000 the appellate court dismissed the petition and affirmed
the HLURB Orders. In its Decision, the Court of Appeals ruled that by virtue of the 14 November
1995 HLURB Decision petitioner was mandated to pay for or refund, as the case may be, the
expenses for the transfer of title of the subject house and lot to private respondents.15 On 23
February 2000, taking his cue from the CA Decision, the sheriff by notice thus demanded from
petitioner the reimbursement of ₱232,305.60 for the alleged actual expenses of private
respondents in notarizing and registering with the Register of Deeds the deed of absolute sale
for the house and lot and of recording the corresponding Torrens title in private respondents’
name.16 On 8 June 2000 reconsideration of the 9 February 2000 CA Decision was denied,17
hence, the instant petition for certiorari under Rule 65 of the 1997 Rule of Civil Procedure.
Petitioner denies any obligation to pay for the expenses of private respondents in obtaining for
themselves the transfer of ownership of the house and lot bought by them since neither the
contract to sell with private respondents nor the 14 November 1995 final HLURB Decision
exacts such obligation from petitioner.18 On the other hand, private respondents argue that
the instant petition for certiorari under Rule 65 is the wrong mode of seeking review of the
assailed orders and rulings, and that Art. 1358 of The Civil Code requires a public (hence
notarized) document to validly effect delivery of ownership of the subject house and lot to
private respondents.19
We rule for petitioner. Firstly, it must be stressed that the assailed rulings of the HLURB and the
Court of Appeals pertain to proceedings which have for their purpose the execution of the 14
November 1995 HLURB Decision. Obviously the Decision has long become final and, as
petitioner alleges, has also been completely satisfied. Under these facts, the HLURB is thus left
with no other authority but to enforce the dispositive part of its Decision which it can no longer
amend, modify or alter in a manner affecting the merits of the judgment.20 Since the instant
petition alleges the amendment or modification of the HLURB Decision which was beyond the
authority of the HLURB and the Court of Appeals to do, the proper remedy clearly is a petition
for certiorari under Rule 65 of the Rules of Court. In Estate of Salud Jimenez v. Philippine Export
Processing Zone,21 we said -
x x x the remedies of certiorari and appeal are not mutually exclusive remedies in certain
exceptional cases, such as when there is grave abuse of discretion, or when public welfare so
requires. The trial court gravely abused its discretion by setting aside the order x x x which has
long become final and executory x x x x Its action was clearly beyond its jurisdiction for it
cannot modify a final and executory order. x x x x Hence, though an order completely and
finally disposes of the case, if appeal is not a plain, speedy and adequate remedy at law or the
interest of substantial justice requires, a petition for certiorari may be availed of upon showing
of lack or excess of jurisdiction or grave abuse of discretion on the part of the trial court.
Secondly, the subsequent Orders of the HLURB requiring petitioner to pay for the expenses
incurred by private respondents in securing the transfer of title in their name do not fall within
the ambit of the HLURB Decision whether expressly or by necessary inference, i.e., "whatever
then is necessary to be done to carry out the decision should be ordered."22 The Orders are
completely separate from and independent of the Decision and do not merely enforce it as the
HLURB and the Court of Appeals would want to impress. The Orders cannot therefore be
considered part of the Decision which must be executed against petitioner. Fundamental is the
rule that execution must conform to that ordained or decreed in the dispositive part of the
decision;23 consequently, where the order of execution is not in harmony with and exceeds the
judgment which gives it life, the order has pro-tanto no validity.24
While the Decision commands petitioner to "execute a Deed of Absolute Sale in favor of
[private respondents] and deliver the corresponding Transfer Certificate of Title" to them and
that only a public document would serve to cede ownership of an immovable property,25 such
as the house and lot in question, we cannot infer from these directives that petitioner should
also pay for the expenses in notarizing the deed and in obtaining a new certificate of title. The
obligation to pay for such expenses is unconnected with and distinct from the obligations to
execute and deliver the deed of absolute sale and the certificate of title. Since there is no
qualification that the duties to execute and to deliver shall also compel petitioner to assume
the expenses for transferring the pertinent title in favor of private respondents, the ordinary
and literal meaning of the words "execute" and "deliver" should prevail,26 that is, for petitioner
to perform all necessary formalities of the deed of sale27 and give or cede the res of the
certificate of title (that certificate which naturally must be in their possession since petitioner
cannot give what it does not have) to the actual or constructive control of private
respondents.28 Needless to stress, petitioner can actually discharge these obligations without
settling for its own account the expenses which private respondents are demanding. In this
regard, petitioner can appear before the notary public for notarization of the deed of absolute
sale and assist in the cancellation of the certificate of title in its name by giving this certificate
together with the deed of absolute sale to private respondents for presentation at the Registry
of Deeds, which it has several times expressed willingness to do.
Clearly, there is nothing in the body much less in the dispositive portion of the HLURB Decision
nor in the pleadings of the parties from where we may deduce that petitioner must pay for the
amounts spent in transferring title to private respondents. It is well settled that under these
circumstances no process may be issued to enforce the asserted legal obligation.29 In De la
Cruz Vda. de Nabong v. Sadang30 we nullified an order requiring an indemnity bond since the
requirement was not contained in the dispositive part of the final judgment. Similarly in
Supercars, Inc. v. Minister of Labor31 we set aside the award of back wages for the period that
the writ of execution was unserved since the final and executory decision of the Minister of
Labor merely directed the reinstatement of the laborers to their former positions. Finally, David
v. Court of Appeals32 affirmed the ruling of the Court of Appeals mandating the payment of
simple legal interest only with nothing said about compounded interest since the judgment
sought to be executed therein ordered the payment of simple legal interest only and held
nothing about payment of compounded interest. This Court can do no less than follow these
precedents in the instant petition.
Thirdly, the HLURB or the Court of Appeals cannot order petitioner at this late stage to
reimburse the charges and fees relative to the transfer of title to private respondents of the
subject house and lot when they (private respondents) did not allege this obligation nor pray
for this relief in their complaint and other pleadings and did not attempt to prove this cause of
action one way or the other. It is elementary that a judgment must conform to, and be
supported by, both the pleadings and the evidence, and be in accordance with the theory of the
action on which the pleadings are framed and the case was tried.33 The judgment must be
secundum allegata et probata. In Falcon v. Manzano34 where the trial court rendered judgment
allowing plaintiff to recover from the defendant the unpaid portion of the purchase price of a
parcel of land when the plaintiff only asked for the nullification of the contract of sale of the
realty and the return of the property to her, we set aside the judgment of the trial court in
conceding to her a remedy which was not prayed for in the complaint -
The lower court rendered a judgment in favor of the plaintiff for one-half of the unpaid
purchase price. The question presented in the petition was not even discussed by the lower
court, to wit: the right of the plaintiff to have the contract declared null and the property in
question returned to her. The court, in rendering its decision, ought to have limited itself to the
issues presented by the parties in their pleadings.
In the analogous case of Lerma v. De la Cruz35 the plaintiff therein brought an action to recover
accrued rents and damages for the injury to the land but the trial court extended the relief
sought by giving judgment for possession of the land. We ruled: "The plaintiff did not ask for
possession, nor is there any prayer to that effect in the complaint, and the judgment must,
therefore be reversed insofar as it undertakes to provide for the restitution of the land in
question to the plaintiff." Clearly, in light of the pleadings and evidentiary deficiencies of private
respondents’ action, the HLURB cannot order petitioner to reimburse the money spent by
private respondents in securing the transfer of title in their name.36
Fourthly, neither can we imply such obligation from the HLURB Decision since private
respondents’ complaint in the proceedings a quo only asked for judgment to compel petitioner
to accept their payment, thereafter execute in their favor the necessary deed of absolute sale
for the disputed house and lot and to compensate them for damages they had incurred. Stated
otherwise, private respondents only sought the enforcement of the mutually binding contract
to sell so that they could finally own the house and lot but did not, never, ask for the transfer of
the title of the immovable property in their name at petitioner’s expense. Certainly these
remedies, while not exclusive of each other in that they may be joined in one complaint, are
not one and the same, nor can we simply infer one from the other.37
It was ill advised for private respondents to have failed to include in their pleadings before the
HLURB the appropriate allegations which would have formed (legitimately, that is) the basis for
an order in the 14 November 1995 HLURB Decision compelling petitioner to defray such
expenses. In Heirs of Remigio Tan v. Intermediate Appellate Court38 where after the judgment
had become final and executory the heirs sought to limit their liability for the debts of the
decedent to the extent only of their inheritance from him, we ruled -
On this issue, the respondent Intermediate Appellate Court held x x x x that "[T]he questions of
the limited liability of petitioners and entitlement to reimbursement for necessary, useful and
ornamental expenses should have been raised by them during the trial and on appeal. For the
lower court to consider them now and act as petitioners wish it to would be to vary the terms
of a final and executory judgment." We find no reversible error committed by the respondent
Intermediate Appellate Court. A review of the records show that the petitioners brought up the
matter of their limited liability only at the time of the execution of the judgment, after the same
had already become final and executory. The decision of the lower court which granted the
private respondents’ counterclaims condemned the petitioners, without qualification, to pay
certain amounts representing the share of the former in the income of the Carriedo property.
The petitioners at that point should have brought up the question which they are now raising x
x x x Instead, they allowed the decision to become final and executory without seeking a
limitation of their liability. When the decision was returned to the trial court for execution, all
that was needed to be done was to carry out the terms of the decision which had already
become final and executory. At that stage, it was too late for the petitioners to seek its
modification. The petitioners cannot claim that they are being deprived of their property
without due process of law since they had all the opportunity to raise the question they are
now raising before the decision became final and executory. Neither can they ask this Court to
disregard "procedural technicalities" to allow them to assert their claim at this very late date.
What is involved here is not a matter of procedural technicality, but the doctrine of finality of
judgment.
We cannot sanction the procedure adopted by the HLURB, affirmed by the Court of Appeals, in
ordering petitioner to settle the expenses for the transfer of title whereby private respondents
obtained such relief by filing a mere motion during the execution proceedings. In the case at
bar, none of the circumstances which this Court used in the past exist to justify evidentiary
hearings of new allegations during the execution of judgment as nonetheless being part of the
segmented proceedings in the suit, i.e., a fictional continuation of the trial proper. The instant
petition is not one where private respondents are enforcing subsidiary liability of an employer
in a criminal case for negligence;39 nor where the defense or claim sought to be heard on
execution has been raised or tried before the trial court;40 nor where the post-judgment
evidentiary hearings are meant to address the impossibility of exacting compliance with the
judgment as specified therein.41 In the instant case, we are not concerned with just varying or
replacing the means of executing the Judgment but with attempts to compel an altogether
different relief apart from those adjudged in the HLURB Decision.
Likewise, for obvious reasons, the assailed Orders do not involve supervening events where the
court a quo is allowed to admit evidence of new facts and circumstances and thereafter to
suspend execution of the judgment and grant relief as may be warranted which may or may not
result in its modification. Supervening events refer to facts which transpire after judgment has
become final and executory or to new circumstances which developed after the judgment has
acquired finality, including matters which the parties were not aware of prior to or during the
trial as they were not yet in existence at that time.42 Clearly, the responsibility for the expenses
for registering and titling the subject house and lot - a matter pre-dating the filing of the
complaint with the HLURB, and in fact, written in the contract to sell which private respondents
sought to enforce - does not qualify as a supervening event which would have justified such
post-judgment hearings as those undertaken by the HLURB and validated by the Court of
Appeals.
We find precedent in Baclayon v. Court of Appeals43 for our ruling in the instant petition. In
this case, the defendants failed to raise as counterclaim the expenses for reimbursement of
improvements built in good faith and allowed the judgment to become final and executory
without a decision on the value of the improvements. Subsequently, the trial court conducted
hearings supplementary to execution allowing defendants to prove that they were builders in
good faith of the improvements and their value. In nullifying the action of the lower court we
ruled -
x x x x The defense of builders in good faith of the improvements and evidence of the value of
said improvements were not raised/presented before the trial court. More importantly, in the
recent case of First Integrated Bonding and Insurance Co., Inc. x x x x [we ruled that] matters of
equity which can be raised in an execution proceeding, cannot refer to those which the court
could have passed upon before judgment. Otherwise, there will be no end to litigation, since
conceivably the proof of partial payments could be so seriously controversial as to need
another full blown trial, decision and appeal. The rule is well established that once a decision
has become final and executory the only jurisdiction left with the trial court is to order its
execution. To require now the trial court in a hearing supplementary to execution, to receive
private respondents' evidence to prove that they are builders in good faith of the
improvements and the value of said improvements, is to disturb a final executory decision;
which may even cause its substantial amendment.
More significantly, in the case at bar, private respondents should have asserted in the strongest
language and at the earliest possible opportunity, i.e., in the complaint for specific
performance, their reasons for requiring petitioner to shoulder the expenses of transferring
title to them since, as the records clearly show, the same contract to sell for which they sought
specific performance categorically imposed the burden at least prima facie upon them-
Upon full payment of the total purchase price of the house and lot package applies, the SELLER
shall forthwith execute and deliver to the BUYER a final Deed of Absolute Sale conveying the
property, free from all kinds of liens and encumbrances, except such as may be subsisting by
operation of law, it being understood that the expenses for the transfer of this title to the
BUYER including documentary stamps, shall be for the exclusive account of said buyer
(underscoring supplied).
It goes without saying that the foregoing matters, in addition to alleging them in the complaint,
should have also been heard during the trial on the merits before the HLURB where the parties
could have proved their respective claims.44 However, believing that the assailed rulings were
merely part of the execution of the HLURB Decision, the HLURB instead precipitately resolved
the issue in favor of private respondents with nary a notice and hearing demanded in
controversial cases. Jabon v. Alto45 invalidates such hasty approach -
As may be noted from the dispositive portion of the decision x x x x the court merely declares
plaintiff owner of the portions of the land under litigation x x x. It does not give plaintiff any
other relief, much less it orders plaintiff to be placed in possession of the land adjudicated to
him. It later developed, however, that when plaintiff attempted to execute that part of the
judgment rendered in his favor, a portion of the land was occupied by the defendants x x x. And
because the decision contains no directive for their ejectment, they resisted the execution. The
question now that arises x x x is whether that decision, which has become final and executory x
x x can still be amended by adding thereto a relief not originally included, such as the delivery
of the possession of the land and the ejectment therefrom of the defendants x x x x Our answer
is in the negative x x x x Here there has been only a declaration of ownership. No other relief is
awarded to the plaintiff. In the absence of any other declaration, can we consider a mere
declaration of ownership as necessarily including the possession of the property adjudicated?
We do not believe so, for ownership is different from possession. A person may be declared
owner, but he may not be entitled to possession. The possession may be in the hands of
another either as a lessee or a tenant. A person may have improvements thereon of which he
may not be deprived without due hearing. He may have other valid defenses to resist surrender
of possession.
Fifthly, the assailed Orders of the HLURB did not merely interpret for purposes of execution but
actually changed, amended or modified the HLURB Decision.46 By ordering petitioner to pay
for private respondents’ expenses in transferring the documents of title over the house and lot
in their names, the HLURB introduced new matters in the Decision which were both material
and substantial. In the original Decision petitioner was mandated only to execute the deed of
absolute of sale and to deliver the transfer certificate of title. But the assailed Orders granted
an entirely new relief which significantly affected the obligations of petitioner as judgment-
debtor; petitioner was not only to execute the deed and deliver the documents of title but must
also shell out money to settle the expenses incurred in the process of transferring title to
private respondents.
Verily, since the Orders in question are a wide departure from and a material amplification of
the final and at least executory HLURB Decision, they are pro tanto void and absolutely
unenforceable for any purpose. It is well settled that after the decision has become final and
executory, it can no longer be amended or corrected by the court except for clerical errors or
mistakes. In Robles v. Timario47 we nullified and set aside the imposition of interest in a
subsequent order of the lower court on the ground that the dispositive part of the judgment
"absolutely made no mention of any interest on the amount of the judgment, hence there is no
ambiguity to be clarified from the statements made in the body of the decision x x x." We shall
do the same in the instant case.
If neither the HLURB nor the Court of Appeals has jurisdiction to impose such obligation upon
petitioner, then the same would hold true for this Court. Under the circumstances, we have no
authority to unsettle the final and perhaps satisfactorily executed Decision of the HLURB. As we
have consistently ruled, "the general power of courts to amend their judgments or orders to
make them conformable to justice cannot be invoked to correct an oversight or error as a
judicial error may not be considered as a mere ambiguity, curable without a proper proceeding
filed before the judgment had become final."48

Finally, it is unfortunate that private respondents by their own negligence kept the issue
hanging as to who between them and petitioner should pay for the expenses for the execution
and registration of the sale as well as the fees and taxes for the issuance of new documents of
title. And so a corollary question that we might as well resolve now (although not raised as an
issue in the present petition but conformably with Gayos v. Gayos49 that it is a cherished rule
of procedure that a court should always strive to settle the entire controversy in a single
proceeding leaving no root or branch to bear the seeds of future litigation) is whether private
respondents can still file a separate complaint against petitioner to recover the expenses for
transferring to themselves the title to the subject house and lot.
We hold that private respondents are barred from raising the issue either in the instant case or
through another action. Under Sec. 47, Rule 39, the Rules of Court, a final and executory
judgment is conclusive upon any matter "that could have been raised in relation thereto." We
also ruled in Gabaya v. Mendoza50 that a final judgment is conclusive not only as to every
matter which was offered and received to sustain or defeat the claim or demand but as to any
other admissible matter which must have been offered for that purpose. Indubitably, the
responsibility for the expenses for transferring title over the house and lot to private
respondents is a stipulation in the contract to sell which they could have surely disputed in the
same action for specific performance of such contract.1âwphi1 Under the contract to sell the
expenses for the transfer of title are for the account of the buyers, private respondents herein.
Moreover, the allegations and the evidence pertaining to the payment or reimbursement of
registration and titling expenses are both admissible matters which (if not for private
respondents’ neglect in not raising this question) must have been offered in connection with
the spouses’ complaint before the HLURB. The HLURB Decision as res judicata now bars a
subsequent action based upon this unpleaded cause of action.
In sum, it is settled jurisprudence that except in the case of judgments which are void ab initio
or null per se for lack of jurisdiction which can be questioned at any time - and the HLURB
Decision here is not of this character - once a decision becomes final, even the court which has
rendered it can no longer alter or modify it, except to correct clerical errors or mistakes.
Otherwise, there would be no end to litigation and would set to naught the main role of courts
of justice which is to assist in the enforcement of the rule of law and the maintenance of peace
and order by settling justiciable controversies with finality.
WHEREFORE, the Petition for Certiorari is GRANTED. Particularly, the 15 June 1999 and 16
November 1999 Orders of the Housing and Land Use Regulatory Board and the 9 February 2000
Decision and the 8 June 2000 Resolution of the Court of Appeals, all of which require petitioner
Jose Clavano, Inc., to pay for or reimburse private respondents, the spouses Enrique and Venus
Tenazas, the fees for notarizing the Deed of Absolute Sale executed and delivered by petitioner
by virtue of the Decision of the HLURB in REM-0113-031095 as modified by the Office of the
President in O.P. Case No. 96-J-6631, as well as the expenses and taxes for registering the Deed
of Absolute Sale with the Register of Deeds and for obtaining the corresponding transfer
certificate of title in private respondents’ name, are SET ASIDE.
Consequently, we also NULLIFY the 23 February 2000 Sheriff’s Notice demanding from
petitioner the reimbursement of ₱232,305.60 for the alleged actual expenses of private
respondents in notarizing and registering with the Register of Deeds the deed of absolute sale
for the house and lot and of recording the corresponding Torrens title in private respondents’
name. The Decision of the HLURB in REM-0113-031095 as modified by the Office of the
President in O.P. Case No. 96-J-6631 shall be remanded for immediate execution until fully
satisfied in accordance with the terms of its dispositive portion. Hereafter, the Decision of the
HLURB in REM-0113-031095 as modified by the Office of the President in O.P. Case No. 96-J-
6631 as res judicata shall bar any complaint, suit or action regardless of form which deals with
or endeavors to raise the purported issue of who between petitioner and private respondents
shall pay for or reimburse the expenses in transferring the title over the subject house and lot
to private respondents. No pronouncement as to costs.SO ORDERED.
G.R. No. L-44077 September 30, 1978ELIODORA C. VDA. DE CORPUZ, petitioner,
vs.THE COMMANDING GENERAL, PHILIPPINE ARMY, respondent.GUERRERO, J.:
This is a petition for mandamus filed to compel the response lent Commanding General of the
Philippine Army to pay petitioner the full death compensation benefits awarded to her and her
children in the decision dated October 5, 1971 by Acting Referee Claro Q. Riego de Dios of the
Workmen's Compensation Unit Labor Regional Office No. 4, Manila, in WC Case No. R04-13114,
entitled Eliodora C. Vda. de Corpuz, et al., vs. Republic of the Philippines (Philippine Army)".
The facts of the case are simple and uncontroverted. Fro the service-connected death of T/Sgt.
Cornelio Corpuz, the wife. petitioner herein. and her children were. awarded the amount of
P6,000.00 plus burial expenses in the amount of P200.00. This ,award became final and
executory and the Solicitor General indorsed the same to respondent Commanding General of
the Philippine Army for payment. However, instead of implementing the full award, the office
of said respondent prepared General Voucher No. W-7023 in the amount of only P2.950.00,
deducting from the total award the amounts of P3,000.00 representing the gratuity paid to
petitioner under Republic Act No. 610, otherwise known as the Armed Forces Death Gratuity
and Disability Pension Act of 1951 and P250-00 for burial expenses under Section 699 of the
Revised Administrative Code, as amended, or a total of P3,250.00 apparently on the ground
that the benefits received under RA 610 was under Section 699 of the Revised Administratived
Code with respect to the burial expense and the Workmen's Compensation Act are mutually
exclusive.
Notwithstanding the vehement protest of petitioner against said deductions, respondent
refused to make full payment. Petitioner then sought the aid of the Office of the President of
the Republic of the Philippines, which rendered a decision on May 6, 1972, denominated as OP
Decision No. 19, S. 1972, thru Acting Assistant Executive Secretary Ronaldo B. Zamora. The
decision noted therein that "the payment of gratuity to the claimant under Republic Act No.
610 was not brought to the attention of the hearing officer; hence it was not considered in the
decision of this case which became final for failure of the Government to appeal the same
within the prescribed period," 1 and ruled in the dispositive portion as follows:
Premises considered, this Office holds that the deduction in question is without legal
justification. Accordingly, payment of the entire amount awarded as death compensation to the
heirs of the late T/Sgt. Cornelio Corpuz is hereby authorized, subject to availability of funds and
the usual auditing requirements. 2
Despite this definitive ruling, respondent Commanding General, thru Major Maraan Y. Calapis
Army Adjutant, insisted in his 1st Indorsement dated July 5, 1972 that "the deduction from the
award is in order and therefore the basic request of the claimants for full payment should be
denied.3 Respondent explained that the Philippine Army has a cause of action against claimants
for reimbursement of the sum of P3,250.00 already given to them under RA 610 and Section
699 of the Revised Administrative Code to avoid double compensation.
On account of this firm posture adopted by said respondent, Assistant Executive Secretary
Ronaldo B. Zamora reiterated that the deduction in question cannot be legally sustained in a
decision dated March 9, 1973 denominated as OP Decision No. 168, S. of 1973. While agreeing
that the Philippine Army has a cause of action against herein claimants for reimbursement of
the amount of P3,250.00, the Secretary, however, said that the recovery thereof should be
pursued through the proper legal remedy, not by way of deducting the same from the
Workmen's Compensation Award. He further emphasized "that the instant claim was granted
for the reason that, albeit the simultaneous payment of gratuity under the Workmen's
Compensation Act and Republic Act No. 610 is not allowed, (his) Office or any office under the
Executive Department is powerless to review or alter a decision of the Workmen's
Compensation Commission, much more after the same has become final and executory". 4 The
dispositive portion of the aforesaid decision states:
For all the foregoing, this Office reiterates that the deduction in question cannot be legally
sustained and hereby directs the payment of the entire amount awarded as death
compensation to herein claimants, subject to availability of funds and the usual auditing
requirements. 5
But this second directive failed to above respondent t release the balance of the award
prompting petitioner to file instant petition for mandamus.
For respondent Commanding General of the Philippine Army to insist on deducting from a final
and executory award under the Workmen's Compensation Act the sums paid to petitioner
under Republic Act No. 610 and Section 699 of the Revised Administrative Code is, indeed, an
unlawful act of excluding petitioner from the use and enjoyment of a right to which the latter is
entitled under the law. A final and executory award entities petitioner to its enforcement
according to its letter. It is not susceptible of any change or alteration by the officer charged
with its implementation as the latter's duty on the matter constitutes only a ministerial act that
does not call for the exercise of discretion. The adamant refusal of respondent to enforce the
award completely is also an unlawful neglect to perform an act which the law specifically
enjoins as a duty resulting from his office. Consequently, mandamus is a proper remedy.
Clearly, there is no other plain speedy and adequate remedy in the ordinary course of law than
the issuance of this writ especially in this case where petitioner had sought the help of the
office of the Chief Executive of the land which consistently ruled in her favor but failed to
convince respondent to effect the full payment of the award.
A case on all fours with the present case is that of Antonio Falcon vs. Ismael Mathay, Sr., etc., L-
30303, August 31, 1970, 34 SCRA 765, where this Court granted the writ of mandamus prayed
for to compel the Auditor General to pass in audit and approve for payment a final award of the
Workmen's Compensation Commission against the Republic of the Philippines. In disposing of
the case, this Court ruled:
The denial of the coed deduction by the Workmen's Compensation Commission having become
final, the respondent Auditor General has no alternative but to approve the payment of the
Commission's award. For him to insist on reducing the compensation payable thereunder by
insisting that the indemnity paid under Republic Act No. 610 should be subtracted from it
amounts to review by him of the Commission('s) final award, and no such review is authorized
by law or jurisprudence. The decision of the Workmen's Compensation Commission are
exclusively appealable to the Supreme Court, yet, even the latter is powerless to alter the
award that have become final, so long as they are made within the Commission's jurisdiction,
which is not questioned in this case.
Respondent, thru the Solicitor General, views this petition for mandamus as a mode for the
issuance of "an extraordinary judicial writ to coerce a double payment of benefits, a payment
not allowed and, in fact, excluded by the very statutes upon which entitlement is based." 6
Then, he concludes "that mandamus is not only improper but it also should not be used to
amend the law, reverse existing court decisions, and create an unfair advantage for one
beneficiary not enjoyed by countless others, ..." 7
The provisions of the statutes referred to above are Section 5 of the Workmen's Compensation
Act, as amended and Section 9 of the Republic Act No. 610, as amended, herein quoted as
follows:
Sec. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an
employee by reason of a personal injury entitling him to compensation shall exclude all other
rights and remedies accruing to the employee, his personal representatives, dependents or
nearest of kins against the employer under the Civil Code and other law, because of said injury.
8 (emphasis supplied)
Sec. 9. Repeal or modification of laws. Except as hereinafter provided, any gratuity or
pension revived under the pro. visions of this Act shall be in addition to any retirement pay
payable under existing laws. Provided, That no person who has received the death or disability
benefits under Republic Act Numbered Five Hundred seventy-three shall be entitled to the
benefits of this Act No payment shall hereafter be made to the beneficiaries of deceased
officers and enlisted men of the Armed Forces of the Philippines or the Philippine Constabulary
under the provisions of Republic Act Numbered Thirty or any other law granting similar benefits
to officers and employees generally, of the national, provincial or municipal government. ... 9
In support of his stand, respondent cites the case of Republic of the Philippines (Philippine Air
Force) vs. Workmen's Compensation Commission and Erlinda L Doyon No. L-30320, March
29,1972; 44 SCRA 191, where this Court ruled:
It will thus be seen that Republic Act No. 610 bars payment under other laws; so does the
Workmen's Compensation Act. Hence, if one is paid under Republic Act No. 610, he may not
again be paid under the Workmen's Compensation Act, unless as in the case at bar, what was
received under the first law is less than what can be received under the Workmen's
Compensation Act, in which event, considering that both laws are social legislations designed to
provide a system whereby dependents are awarded benefits to prevent them from being
destitute and a charge upon society, the difference in amount may still be ordered paid by the
Workmen's Compensation Commission in a proper case brought to it.
We find this line of reasoning of respondent completely devoid of merit as it conveniently
evades the material fact brought to light by petitioner that the award has become final and
executory. The finality of the award not having been denied or disputed, the case is closed
against respondent in view of the ruling in Falcon vs. Mathay (supra), a case squarely in point.
By reason also of the finality of the award, the doctrine enunciated in. Republic vs. Workmen's
Compensation Commission and Doyon (supra) is not applicable. An excerpt from the factual
backdrop of the said case is pertinent, and We quote:
Both the Philippine Air Force and the Office of the Solicitor General wrote the Commission that
they were not controverting the widow's claim, the death of Cpl. Doyon being in their opinion
compensable under the Workmen's Compensation Act. They request however, that the sum of
P3,000.00 already paid under Republic Act No 610 be deduct from whatever award would be
given to the widow; that there be no adjudication for burial expenses, payment thereof having
already been made.
While the payment, therefore, of gratuity under Republic Act No. 610 and the burial expense
benefits under Section 699 of the Revised Administrative Code were properly and timely raised
in the aforesaid case of Doyon, such facts were not brought to the attention of the hearing
officer in the instant case thereby resulting iii the rendition of an award which became final and
executory as the Solicitor General did not interpose an appeal.
Moreover, barely two months after the promulgation of the decision in Republic vs. Workmen's
Compensation and Doyon the validity of the doctrine therein laid was put in issue in the case of
Republic of the Philippines (Philippine Constabulary) vs. Workmen's Compensation Commission
and Flora A. Vda de Sanchez, No. L-34352, May 31, 1972; 45 SCRA 358 where this Court took
note of the "well-reasoned observation" of the Workmen's Compensation Commission in its
decision holding tht the amount received by the claimants under R.A. No. 610 should not be
charged against the compensation due under Act No. 3428, as amended, to wit:
... The death benefits given under R.A. 610 is given in recognition of the Added risks peculiar to
Armed Forces personnel as our guardian of our national security; while the benefits granted
under Act No. 3428, as amended, as part substitute for lost earnings of the workmen who are
victims of work-connected accidents, siickness or death. In other words, while the origin of the
employer's obligation emanated from only one reason, namely, the employee's injury, illness or
death, the former law is given as a gratuity in appreciaiton of said employee's past services,
while the latter law is a social legislation which has for its purpose the amelioration of service
connected injuries or illnesses of the victims and their dependent sin case of death so that they
will not become a social outcast.
While this Court ruled in the aforesaid Anchez case that the P3,000.00 previously received by
respondents-claimants under Republic Act 610 should be deducted from the total award made
to them under the Compensation Law, it did so "if only from the standpoint of adhering to
precedent" 10 and on the consideration "that , unlike previous laws of similar nature, Republic
Act 610 does not appear to be expressly intended to grant the benefits therein provided for 'in
recognition of the added risks peculiar to Armed Forces personnel as our guardian of our
national security' and all such though implies." 11
Petitioner herein now prays for a re-examinaiton of the aforeseaid doctrine claiming tht there is
no express provision in the law relative to the exclusiveness of R.A. 610 vis-a-vis the VWC and
neither is there any provisin in the Workmen's Compensation Act that expressly benefits under
R.A. 610 and Section 699 of the Revised Administrative Code. She further asserts that while it is
true that R.A. makes no express mention aobut its concept and purpose as a gratuity benefit,
the legislative intent prompting the passage of R, A. 610 in 1951 was to give higher benefits to
military men "in recognition of or commensurate with the hazards attendant to military
service." This particular intent, she states, can be deduced from the explanatory note to House
Bill No. 1516, the parent bill of R.A. 610. And from the deliberations of Senate Bill No. 252,
parent Bill of R.A. 5859 which amended R. A. 610 by increasing the gratuity from P3,000.00 to
P6,000.00, it can allegedly be seen that the purpose of such amendment is based on the
increased cost of living, medical care and attention and not on The basis of merely equalizing
said benefit with that granted in the Workmen's Compensation Act, as amended.
However, inasmuch as this is a suit for mandamus, We find Chat this is not the proper time for
the re-examination of the present doctrine. The right of petitioner to the enforcement of the
whole award under the Workmen's Compensation Act is clear, well- defined and certain as the
said award has become final and executory and it is elementary that once a judgment has
become final and executory, the prevailing party is entitled as a matter of right to a writ of
execution. 12 Any opinion expressed by this Court upon the validity of the doctrine wished to
be re-examined would, therefore, be not necessary to the Decision of this case and would
merely constitute an obiter dictum. 13 Moreover, a discussion thereof would, in effect, put in
issue the validity of the final and executory award of Acting Referee Claro Q. Riego de Dios
something which may not be done in a suit for mandamus as the validity of a final judgment
cannot be assailed collaterally unless the ground of attack is lack of jurisdiction or irregularity in
their entry apparent on the face of the record or because it is vitiated by fraud. 14
WHEREFORE, the writ of mandamus prayed for is hereby granted ordering respondent
Commanding General of the Philippine Army to pay petitioner the sum of P3,250.00 unlawfully
deducted from her award of P6,200.00 under the Workmen's Compensation Act. No costs.
SO ORDERED.
G.R. No. L-47651 December 11, 1978
AMBROSIO
This certiorari case is about the jurisdiction of the Court of First Instance of Rizal, Caloocan City
Branch XIV, to enjoin the execution of a final decision of the National Labor Relations
Commission (NLRC).
Thirty-nine (39) taxi-drivers filed a complaint with the NLRC on January 3 and February 8, 1973
against Extraco Taxi Through the General Manager and/or Personnel Manager". Extraco Taxi
was Identified as a public service operator doing business at 137 A. del Mundo Street, Caloocan
City. The plaintiffs prayed that certain exactions or wage deductions made by Extraco Taxi be
declared void and returned to them and that the defendant be required to remit to the Social
Security System (SSS) their contributions (NLRC Case No. 656).
The case was submitted for arbitration to an NLRC hearing officer. Extraco Taxi's personnel
manager and counsel appeared before the hearing officer and submitted a counter-affidavit. In
that counter-affidavit, the personnel manager swore that Extraco Taxi was "a single
proprietorship of which Mr. Lim Pa was the owner and proprietor" (p. 35, Rollo). The arbitrator
in a decision dated June 15, 1973 ordered Extraco Taxi to reimburse the complainants the sum
of P96,677 as illegal wage deductions plus interest and a fine of P2,000.
On appeal by Extraco Taxi or Extraco transportation Service and Shipping Agency, the NLRC in
its decision of June 9, 1975 reduced the claim to P64,536.60, eliminated the fine of P2,000, and
ordered the defendant to remit to the SSS and the Medicare Commission complaints'
contributions.
The Secretary of Labor affirmed that decision in his order of December 11, 1975. And on appeal
to the President of the Philippines, the said decision was affirmed by authority of the President
in the first indorsement of the Presidential Assistant for Legal Affairs dated October 4, 1976 (p.
129, Rollo).
To satisfy the judgment, the sheriff of the NLRC levied upon three lots, with a total area of
1,982.5 square meters, located at 137 A. Del Mundo Street, Caloocan City, and registered in the
name of Lim Pa. Extraco Taxi's office and garage were located on those three lots (p. 34, Rollo).
The levy was made on the assumption that Lim Pa was the real judgment debtor doing business
under the name Extraco Taxi. The sheriff issued a notice announcing the sale of the lots at
public auction. The sale was scheduled on June 8, 1977.
Lim Pa filed in the NLRC a motion to quash the writ of execution on the grounds that he was not
a party in the case and that he was never sued in the NLRC. In denying that motion, the Labor
Arbiter pointed out that in the counter-affidavit of the personnel manager of Extraco Taxi, Lim
Pa was categorically pinpointed as the sole owner and exclusive operator of Extraco Taxi, which
was a division of Extraco Transportation Service and Shipping Agency.
Instead of exhausting his remedies in the NLRC, Lim Pa filed an injunction complaint dated June
7, 1977 with the Court of First Instance at Caloocan City against the thirty-nine claimants, the
NLRC, its sheriff, and the register of deeds of Caloocan City. He prayed that the NLRC sheriff be
enjoined from proceeding with the levy and execution sale,, that the register of deeds be
restrained from recording the sale, and that the defendants be ordered to pay him damages in
the sum of P10,000 (Civil Case No. C-6353, Caloocan City Branch XIV, Rizal CFI).
Parenthetically, it should be noted that that case was a revival of Civil Case No. 91389 of the
Court of First Instance of Manila, entitled Extraco transportation Service & Shipping Agency vs.
National Labor Relations Commission, et al.", which was an injunction suit to restrain the
enforcement of the arbitrator's 1973 decision (pp. 39 and 86, Rollo). That case was dismissed
for failure to prosecute. Acting on that complaint in Civil Case No. C-6353, the lower court
issued on June 8, 1977 an order restraining the register of deeds from recording the sale of the
lots. In its order of September 7, 1977, the lower court directed the issuance of a writ of
preliminary injunction to restrain the register of deeds from registering title sale at public
auction of Lim Pa's lots by virtue of the judgment in the NLRC case. The lower court reasoned
out that the judgment was not binding on Lim Pa because, not having been impleaded, the
NLRC did not acquire jurisdiction over him.
That order is assailed by the 37 claimants in their instant petition for certiorari filed on February
16, 1978. The petition may also be treated as a special civil action for prohibition since the
petitioners are really controverting the lower court's jurisdiction to entertain an injunction suit
against the NLRC which is designed to frustrate the execution of the NLRC's final judgment.
It is true that the lower court's order of injunction is directed against the register of deeds of
Caloocan City. But it is incontestable that its far- reaching effect is to freeze the execution and
render nugatory the NLRC's final and executory decision. Note that the relief sought by Lim Pa
in his injunction suit is for the recall of the writ of execution issued by the NLRC and for
permanently enjoining the execution, against his properties, of the judgment rendered against
Extraco Taxi. Obviously, the order of injunction is an unwarranted interference with a processor
writ issued by the NLRC.
We hold that a Court of First Instance cannot issue an injunction against the NLRC which is the
successor of the Court of Industrial Relations and has the same rank as the Court of First
Instance. That holding obviates confusion and obstruction in the administration of justice.
Section 2, Rule 58 of the Rules of Court explicitly provides that a judge of the Court of First
Instance may issue a writ of preliminary injunction "in any action pending in an inferior court
within its district".
And section 4, Rule XVI of the Rules and Regulations Implementing the Labor Code, in dogmatic
terms provides that "no temporary injunction or restraining order many case involving or
growing out of a labor dispute shall be issued by any court or other entity. "
This Court set aside an order issued by the Court of First Instance of Manila restraining the
enforcement of a decision of the ad hoc NLRC as affirmed by the Secretary of Labor (Nation
Multi Service Labor Union vs. Agcaoili, L-39741, May 30, 1975,64 SCRA 274).
There is a ruling that the Court of First Instance cannot issue a writ of injunction or prohibition
against the Court of Industrial Relations because the CIR is equal in rank with the Court of First
Instance (Kaisahan ng Mga Manggagawa sa La Campana vs. Hon. Caluag, 112 Phil. 700). In that
La Campana case, it appears that La Campana Food Products, Inc. filed an action for prohibition
in the Court of First Instance of Quezon City in order to prevent the sheriff from enforcing the
writ of execution issued by the CIR for the satisfaction of its final and executory judgment. It
was ruled that the Court of First Instance had no jurisdiction over the subject-matter of the
case.
Similarly, a Court of First Instance has no authority to issue an injunction against the Public
Service Commission or any other court or semi-judicial body of equal rank (Iloilo Commercial
and Ice Co. vs. Public Service Commission, 56 Phil. 28; Regalado vs. Provincial Constabulary
Commander of Negros Occidental, 113 Phil. 490), nor against the Social Security Commission
which, in exercising its quasi-judicial functions, ranks with the Court of First Instance and the
default Public Service Commission (Poblete Construction Co. vs. Social Security Commission,
119 Phil. 264), nor against the Patent Office (Kabushiki Kaisha vs. San Diego, L-22756, March 18,
1966, 16 SCRA 406) and the Court of Agrarian Relations (Belleza vs. Dimson Farms, Inc., L-
33355, April 11, 1972, 44 SCRA 385).
Hence, for lack of jurisdiction, respondent Judge should dismiss the injunction case or Civil Case
No. C-6353 flied by Lim Pa against the thirty- seven respondents, the NLRC, its sheriff and the
register of deeds.
The petitioners and the Solicitor General questioned the joinder of the NLRC and Labor Arbiter
Francisco de los Reyes as respondents in this certiorari case, which joinder was ordered in this
Court's resolution of February 27, 1978. The thirty-seven claimants impleaded as respondents
herein only Judge Serafin Salvador and Lim Pa and did not join the NLRC and Labor Arbiter
Francisco de los Reyes.
The NLRC and the Labor Arbiter should have joined the thirty-seven claimants as petitioners but
since they did not do so, this Court, in order to hear their side of the issue of whether a Court of
First Instance may enjoin the implementation of a writ of execution issued by the NLRC,
ordered their joinder as respondents. Respondent Lim Pa is in error in characterizing that
joinder as "anomalous". It is quite obvious that the NLRC and its sheriff are proper parties in
this case (See Sec. 8, Rule 3, Rules of Court).
The other issue is whether Lim Pa who was not joined as a party in NLRC Case No. 656, is bound
by the judgment against Extraco Taxi.
As already noted, the thirty-seven claimants in NLRC Case No. 656 sued Extraco Taxi Through
the General Manager and/or Personnel Manager" without mentioning Lim Pa at all. It now
appears that Extraco Taxi is a mere business name. As correctly pointed out by Lim Pa "only
natural or juridical persons or entities authorized by law may be parties in a civil action" (Sec. 1,
Rule 3, Rules of Court; Metran vs. Parades, 79 Phil. 819).
Lim Pa is not mentioned in the judgment sought to be executed. His name is mentioned in the
writ of execution but that circumstance did not cure the grave deficiency in claimants'
complaint that they did not directly sue Lim Pa He was not heard in the NLRC. Only the
personnel manager of his business appeared before the arbitrator.
In the interest of justice and fair play, Lim Pa should be afforded an opportunity to be heard
before the judgment against Extraco Taxi can be enforced against him. We hold that the taxi-
drivers, who sued him in the NLRC, should amend their complaint by impleading Lim Pa and
should allege ultimate facts justifying their cause of action against him. That amendment could
have been effected during the hearing after the personnel manager and disclosed that Extraco
Taxi was a single proprietorship and that Lim Pa was the owner of the Taxicab business. He
should also be granted an opportunity to oppose the execution of the judgment against him.
The rudiments of fair play or due process require that he should be given that relief.
On the other hand, it is pertinent to State that Lim Pa instead of filing the injunction suit in the
Caloocan court, should have appealed to the NLRC the sheriff's order denying his motion to
quash the execution. From the order of the NLRC sustaining the writ of execution, he has a
recourse to this Court.
WHEREFORE, the order of injunction issued by respondent Judge is set aside. The lower court is
directed to dismiss Civil Case No. C-6353.
Within fifteen (15) days from the finality of this decision, the thirty-seven (37) claimants
mentioned in the NLRC decision of June 9, 1975 and in the Secretary of Labor's order of
December 11, 1975 should amend their complaint in the NLRC by impleading Lim Pa and
alleging matters to support their theory that he is doing business under the name Extraco Taxi"
and that he should be considered as the judgment debtor in the aforementioned NLRC
decision.
Aside from amending their complaint, the claimants should file within the same period a
motion in the same case for the execution of the NLRC decision against Lim Pa Copies of the
amended complaint and petition should be served upon Lim Pa's counsel who is hereby given
fifteen (15) days from service within which to answer the amended complaint and the motion
for execution.
In case no amicable settlement is reached, the NLRC should receive Lim Pa's evidence and any
rebutting evidence and when resolve the issues of whether its decision should be enforced
against Lim Pa and whether the execution sale should be held. No costs.
SO ORDERED:
G.R. No. L-56833 July 20, 1982RAMON V. MERANO, petitioner, vs.JUDGE EDUARDO C. TUTAAN,
Branch V, Court of First Instance of Quezon City; SAN MIGUEL CORPORATION, ANTONIO TRIA
TIRONA, Labor Arbiter, and NATIONAL LABOR RELATIONS COMMISSION, respondents.
Pacifico B. Advincula for petitioner.
Siguion Reyna, Montecillo and Ongsiako Law Offices for private respondents.
AQUINO, J.:The National Labor Relations Commission in a decision dated November 9, 1979
ordered San Miguel Corporation to reinstate Ramon V. Merano to his former position without
loss of seniority rights and other rights and benefits to which he is entitled under existing laws
and with backwages from December 16, 1977 up to his reinstatement (Case No. 13799-T).
This Court in its resolution of April 30, 1980 dismissed the petition of San Miguel Corporation
for the review of that decision (G. R. No. 52157). Hence, it became final and executory.
Pursuant to that decision, Merano was paid P53,949.16 as monetary award up to August 31,
1980 but he was not reinstated. San Miguel Corporation opposed the reinstatement due to his
supervening physical unfitness and asked that it be allowed to pay Merano separation pay in
lieu of reinstatement (pp. 124-125, Rollo).
The NLRC in its en banc resolution of June 11, 1981 ruled that because Merano could no longer
be reinstated due to his illness, he should be paid his additional backwages from September 1
to November 19, 1980, the date of the medical evaluation made by the Chief of the National
Orthopedic Hospital, and separation pay up to that date at the rate of one month's salary for
every year of service, a fraction of at least six months being considered as one year (pp. 128-
129, Rollo).
Even before the issuance of that NLRC resolution of June 11, 1981, or on February 10, 1981,
Merano filed in the Court of First Instance at Quezon City a special civil action of mandamus
against San Miguel Corporation and the Labor Arbiter who functioned as the execution arm of
the NLRC.
Merano prayed that the respondents be ordered to execute solidarily the judgment of the NLRC
and, on failure to do so, San Miguel Corporation should be required to pay him the sum of
P616,560 as his "expected income until he reaches the age of 60 years" plus his unpaid back
salaries, to deposit in court his monthly salary, to pay P35,000 as moral and exemplary damages
and P30,000 as attorney's fees and to defray the expenses for his surgical operation.
After receiving the comments of the respondents, the learned trial judge, Hon. Eduardo C.
Tutaan, in his order of April 20, 1981, dismissed Merano's petition on the ground that he had no
jurisdiction over the subject-matter of the case which falls within the competent of the NLRC.
That order of dismissal was appealed by Merano to this Court in this petition for review under
Republic Act No. 5440 which he filed on June 2, 1981. The appeal was given due course. The
NLRC was impleaded as a respondent.
We hold that respondent judge did not err in dismissing Merano's petition for mandamus on
the ground of lack of jurisdiction. The Court of First Instance is not the proper tribunal to pass
upon Merano's complaint against the failure of the Labor Arbiter to enforce the NLRC's decision
to reinstate him to his former position of sales staff assistant.
His remedy against the refusal or inaction of the Labor Arbiter, who is in charge of executing
the awards of the NLRC, is to call the NLRC's attention to the alleged nonfeasance and not to
file a mandamus action in the Court of First Instance which has no jurisdiction to interfere with
the execution of a final judgment of the NLRC. That labor tribunal has the same rank and is in
the same category as the Court of First Instance. (See Ambrocio vs. Salvador, L-47651,
December 11, 1978, 87 SCRA 217; Nation Multi Service Labor Union vs. Agcaoili, L-39741, May
30, 1975, 64 SCRA 274.)
Articles 217 and 223 of the Labor Code indicate that the NLRC has jurisdiction to review the
decisions, awards and orders of the labor Arbiter. It is elementary that mandamus does not lie
if the petitioner has another plain, speedy and adequate remedy in the ordinary course of law.
As already noted, the NLRC on June 11, 1981, acting on the Labor Arbiter's report that Merano
could not be reinstated because of the supervening fact that he was suffering from aseptic
necrosis of the hip, held that he should not be reinstated and should be given separation pay in
addition to his back salaries.
Another supervening fact is that on November 11, 1981 Merano and San Miguel Corporation
executed a notarized agreement whereby, in consideration of certain additional payments,
Merano released San Miguel Corporation from any further liability and manifested that the
instant appeal should be dismissed because he was no longer interested in his claim for
reinstatement and damages (pp. 199-204, Rollo).
However, Merano's counsel said that he was not bound by that agreement. He prayed that this
case be decided. Merano in his comment dated June 28, 1982 asked that this case be decided
notwithstanding that settlement.
Whether that settlement should terminate the case between Merano and San Miguel
Corporation is a point which is not decided in this case.
WHEREFORE, the petition is dismissed. The order of dismissal issued by respondent Judge is
affirmed. Costs against the petitionerSO ORDERED.