Consti2 Guzman2american

EN BANC
[G.R. No. L-68288. July 11, 1986.]
DIOSDADO GUZMAN, ULYSSES URBIZTONDO, and ARIEL

RAMACULA , petitioners, vs. NATIONAL UNIVERSITY and DOMINGO L.
JHOCSON, in his capacity as President of National University ,
respondents.
Efren H. Mercado and Haydee Yorac for petitioners.

Samson S. Alcantara for respondents.
DECISION
NARVASA , J : p
Petitioners Diosdado Guzman, Ulysses Urbiztondo and Ariel Ramacula, students of

respondent National University, have come to this Court to seek relief from what they
describe as their school's "continued and persistent refusal to allow them to enroll." In their
petition "for extraordinary legal and equitable remedies with prayer for preliminary
mandatory injunction" dated August 7, 1984, they allege:
1) that respondent University's avowed reason for its refusal to re-enroll them
in their respective courses is "the latter's participation in peaceful mass actions
within the premises of the University";
2) that this "attitude of the . . . (University) is simply a continuation of its
cavalier if not hostile attitude to the student's exercise of their basic constitutional
and human rights already recorded in Rockie C. San Juan vs. National University ,
S.C. G.R. No. 65443 (1983) and its utter contempt for the principle of due process
of law to the prejudice of petitioners;" and
3) that "in effect, petitioners are subjected to the extreme penalty of expulsion
without cause or if there be any, without being informed of such cause and
without being afforded the opportunity to defend themselves. Beriña v. Philippine
Maritime Institute (117 SCRA 581 [1983])."
In the comment led on September 24, 1986 for respondent University and its President
pursuant to this Court's requirement therefor 1 , respondents make the claim:
1) that "petitioners' failure to enroll for the rst semester of the school year
1984-1985 is due to their own fault and not because of their alleged exercise of
their constitutional and human rights;
"2) that petitioner Urbiztondo, sought to re-enroll only on July 5, 1986 "when
the enrolment period was already closed:
"3) that as regards petitioner Guzman, his "academic showing" was "poor",
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"due to his activities in leading boycotts of classes"; that when his father was
noti ed of this development sometime in August, 1982, the latter had demanded
that his son "reform or else we will recall him to the province"; that Guzman was
one of the petitioners in G.R. No. 65443 entitled "Rockie San Juan, et al. vs.
National University, et al.," at the hearing of which on November 23, 1983 this
Court had admonished "the students involved (to) take advantage and make the
most of the opportunity given to them to study;" that Guzman "however continued
to lead or actively participate in activities within the university premises,
conducted without prior permit from school authorities, that disturbed or
disrupted classes therein;" that moreover, Guzman "is facing criminal charges for
malicious mischief before the Metropolitan Trial Court of Manila (Crim. Case No.
066446) in connection with the destruction of properties of respondent University
on September 12, 1983", and "is also one of the defendants in Civil Case No.
8320483 of the Regional Trial Court of Manila entitled 'National University, Inc. vs.
Rockie San Juan et al', for damages arising from destruction of university
properties";
4) that as regards petitioner Ramacula, like Guzman "he continued to lead or

actively participate, contrary to the spirit of the Resolution dated November 23,
1983 of this . . . Court (in G.R. No. 65443 in which he was also one of the
petitioners) and to university rules and regulations, within university premises but
without permit from university officials in activities that disturbed or disrupted
classes;" and
5) that petitioners have "failures in their records, (and) are not of good
scholastic standing."
Respondents close their comment with the following assertions, to wit:

1) "By their actuations, petitioners must be deemed to have forfeited their
privilege, if any, to seek enrollment in respondent university. The rights of
respondent university, as an institution of higher learning, must also be respected.
It is also beyond comprehension why petitioners, who continually despise and
vilify respondent university and its of cials and faculty members, should persist
in seeking enrollment in an institution that they hate."
2) "Under the circumstances, and without regard to legal technicalities, it is

not to the best interest of all concerned that petitioners be allowed to enroll in
respondent university."
3) "In any event, petitioners' enrollment being on the semestral basis,

respondents cannot be compelled to enroll them after the end of the semester."
On October 2, 1984 this Court issued a resolution reading as follows:

". . . Acting on the Comment submitted by respondent, the Court Resolved to NOTE
the same and to require a REPLY to such Comment. The Court further Resolved to
ISSUE a MANDATORY INJUNCTION, enjoining respondent to allow the enrolment
of petitioners for the coming semester without prejudice to any disciplinary
proceeding to which any or all of them may be subjected with their right to lawful
defense recognized and respected. As regards petitioner Diosdado Guzman, even
if it be a fact that there is a pending criminal charge against him for malicious
mischief, the Court nonetheless is of the opinion that, as above-noted, without
prejudice to the continuation of any disciplinary proceeding against him, that he
be allowed to resume his studies in the meanwhile. As shown in Annex 2 of the
petition itself, Mr. Juan P. Guzman, father of said petitioner, is extending full
cooperation with petitioners to assure that whatever protest or grievance
petitioner Guzman may have would be ventilated in a lawful and peaceful
manner.'
Petitioners' REPLY inter alia —

1) denied that Urbiztondo attempted to enroll only on July 5, 1984 (when
enrollment was already closed), it being alleged that "while he did try to enroll that
day, he also attempted to do so several times before that date, all to no avail,
because respondents . . . persistently refused to allow him to do so," respondents'
ostensible reason being that "Urbiztondo (had) participated in mass actions . . .
within the school premises," although there were no "existing disciplinary charge
against petitioner Urbiztondo" at the time;
2) asserted that "neither the text nor the context of the resolution" 2 justifies
the conclusion that "petitioners' right to exercise their constitutional freedoms"
had thereby been restricted or limited; and
3) alleged that "the holding of activities (mass action) in the school premises
without the permission of the school . . . can be explained by the fact that the
respondents persistently refused to issue such permit repeatedly sought by the
students."
On November 23, 1984, this Court promulgated another resolution, this time reading as
follows:
. . . The Court, after considering the pleadings led and deliberating on the issues
raised in the petition for extraordinary legal and equitable remedies with prayer for
preliminary mandatory injunction as well as the respondents' comment on the
petition and the reply of counsel for petitioners to the respondents' comment,
Resolved to (a) give DUE COURSE to the petition; (b) consider the respondents'
comment as ANSWER to the petition; and (c) require the parties to le their
respective MEMORANDA within twenty (20) days from notice. . . . ."
Immediately apparent from a reading of respondents' comment and memorandum is the

fact that they had never conducted proceedings of any sort to determine whether or not
petitioners-students had indeed led or participated "in activities within the university
premises, conducted without prior permit from school authorities, that disturbed or
disrupted classes therein" 3 or perpetrated acts of "vandalism, coercion and intimidation,
slander, noise barrage and other acts showing disdain for and de ance of University
authority." 4 Parenthetically, the pendency of a civil case for damages and a criminal case
for malicious mischief against petitioner Guzman, cannot, without more, furnish suf cient
warrant for his expulsion or debarment from re-enrollment. Also apparent is the omission
of respondents to cite this Court to any duly published rule of theirs by which students
may be expelled or refused re-enrollment for poor scholastic standing.
Under the Education Act of 1982, 5 the petitioners, as students, have the right among
others "to freely choose their eld of study subject to existing curricula and to continue
their course therein up to graduation, except in case of academic de ciency, or violation of
disciplinary regulations." 6 Petitioners were being denied this right, or being disciplined,
without due process, in violation of the admonition in the Manual of Regulations for Private
Schools 7 that "(n)o penalty shall be imposed upon any student except for cause as
de ned in . . . (the) Manual and/or in the school rules and regulations as duly promulgated
and only after due investigation shall have been conducted." 8 This Court is therefore
constrained, as in Beriña v. Philippine Maritime Institute, 9 to declare illegal this act of
respondents of imposing sanctions on students without due investigation.
Educational institutions of course have the power to "adopt and enforce such rules as may
be deemed expedient for . . . (its) government, . . . (this being)" incident to the very object of
incorporation, and indispensable to the successful management of the college." 1 0 The
rules may include those governing student discipline. Indeed, the maintenance of "good
school discipline" is a duty speci cally enjoined on "every private school" by the Manual of
Regulations for Private Schools; 1 1 and in this connection, the Manual further provides that
—
". . . The school rules governing discipline and the corresponding sanctions
therefor must be clearly speci ed and de ned in writing and made known to the
students and or their parents or guardians. Schools shall have the authority and
prerogative to promulgate such rules and regulations as they may deem
necessary from time to time effective as of the date of their promulgation unless
otherwise specified." 1 2
But, to repeat, the imposition of disciplinary sanctions requires observance of procedural

due process. And it bears stressing that due process in disciplinary cases involving
students does not entail proceedings and hearings similar to those prescribed for actions
and proceedings in courts of justice. The proceedings in student discipline cases may be
summary; and cross-examination is not, contrary to petitioners' view, an essential part
thereof. There are withal minimum standards which must be met to satisfy the demands
of procedural due process; and these are, that (1) the students must be informed in writing
of the nature and cause of any accusation against them; (2) they shall have the right to
answer the charges against them, with the assistance of counsel, if desired; (3) they shall
be informed of the evidence against them; (4) they shall have the right to adduce evidence
in their own behalf; and (5) the evidence must be duly considered by the investigating
committee or official designated by the school authorities to hear and decide the case.
WHEREFORE, the petition is granted and the respondents are directed to allow the
petitioners to re-enroll or otherwise continue with their respective courses, without
prejudice to any disciplinary proceedings to which any or all of them may be subjected in
accordance with the standards herein set forth.
SO ORDERED.
Teehankee, C.J., Abad Santos, Feria, Yap, Fernan, Melencio-Herrera, Alampay, Gutierrez, Jr.,
Cruz and Paras, JJ., concur.
Footnotes
1. Resolution, Aug. 14, 1986.
2. In G.R. No. 65443 dated Nov. 23, 1983, supra.

3. Par. 3 (c), Comment; p. 11, rollo.
4. Par. 1, Memorandum of Respondents; p. 75, rollo.

5. B.P. Blg. 232, eff. Sept. 12, 1982; see Villar v. Technological Institute, etc., 135 SCRA 706,
710, citing Article 26 of the Universal Declaration of Human Rights.
6. Sec. 9 (2); See also, par. 107, Manual of Regulations for Private Schools.
7. Promulgated on the authority of the Private School Law, Act 2706.
8. Par. 145, emphasis supplied.
9. 117 SCRA 581.

10. Pratt vs. Wheaton College, 40 Ill. 186, cited in "The Law on Schools and Students,"
Dizon, A., Revised Ed., p. 29.
11. Supra; footnote 7; See Art. XV, Sec. 8 (4), 1973 Constitution.
12.

EN BANC
[G.R. No. 89317. May 20, 1990.]
ARIEL NON, REX MAGANA, ALVIN AGURA, NORMANDY OCCIANO,

JORGE DAYAON, LOURDES BANARES, BARTOLOME IBASCO,
EMMANUEL BARBA, SONNY MORENO, GIOVANI PALMA, JOSELITO
VILLALON, LUIS SANTOS, and DANIEL TORRES , petitioners, vs. HON.
SANCHO DAMES II, in his capacity as the Presiding Judge of 5th
Regional Trial Court, Br. 38, Daet, Camarines Norte; and MABINI
COLLEGES, INC., represented by its president ROMULO ADEVA and
by the chairman of the Board of Trustees, JUSTO LUKBAN ,
respondents.
Antonio A. Ayo, Jr. and Soliman M. Santos, Jr. for petitioners.

Pedro A. Venida, Agustin A. Ferrer and Gil F. Echaro for private respondents.
DECISION
CORTES , J : p
Petitioners urge the Court en banc to review and reverse the doctrine laid down
in Alcuaz, et al. v. Philippine School of Business Administration, et al. , G.R. No. 76353,
May 2, 1988, 161 SCRA 7, to the effect that a college student, once admitted by the
school, is considered enrolled only for one semester and, hence, may be refused
readmission after the semester is over, as the contract between the student and the
school is deemed terminated.
Petitioners, students in private respondent Mabini Colleges, Inc. in Daet,
Camarines Norte, were not allowed to re-enroll by the school for the academic year
1988-1989 for leading or participating in student mass actions against the school in
the preceding semester. The subject of the protests is not, however, made clear in the
pleadings. cdphil
Petitioners led a petition in the court a quo seeking their readmission or re-
enrollment to the school, but the trial court dismissed the petition in an order dated
August 8, 1988; the dispositive portion of which reads:
WHEREFORE, premises considered, and the fact that the ruling in the
Alcuaz vs. PSBA is exactly on the point at issue in this case but affirming
the authority of the school regarding admission of students, save as a
matter of compassionate equity — when any of the petitioners would, at the
least, qualify for re-enrollment, this petition is hereby DISMISSED.
SO ORDERED. [Rollo, p. 12-A.]
A motion for reconsideration was led, but this was denied by the trial court on
February 24, 1989 in this wise:
Perhaps many will agree with the critical comment of Joaquin G.
Bernas, S.J., and that really there must be a better way of treating students
and teachers than the manner ruled (not suggested) by the Supreme Court,
the Termination of Contract at the end of the semester, that is.
But applicable rule in this case is that enunciated by the Supreme
Court in the case of Sophia Alcuaz, et al. vs. Philippine School of Business
Administration, Quezon City Branch (PSBA), et al., G.R. No. 76353, May 2,
1988; that of the termination at the end of the semester, reason for the
critical comments of Joaquin G. Bernas, and Doods Santos, who both do not
agree with the ruling.
Petitioners' claim of lack of due process cannot prosper in view of
their failure to specifically deny respondent's affirmative defenses that "they
were given all the chances to air their grievances on February 9, 10, 16, and
18, 1988, and also on February 22, 1988 during which they were represented
by Atty. Jose L. Lapak" and that on February 22, 1988, the date of the
resumption of classes at Mabini College, petitioners continued their rally
picketing, even though without any renewal permit, physically coercing
students not to attend their classes, thereby disrupting the scheduled
classes and depriving a great majority of students of their right to be present
in their classes.
Against this backdrop, it must be noted that the petitioners waived-
their privilege to be admitted for re-enrollment with respondent college when
they adopted, signed, and used its enrollment form for the first semester of
school year 1988-89. Said form specifically states that:
The Mabini College reserves the right to deny admission of
students whose scholarship and attendance are unsatisfactory and
to require withdrawal of students whose conduct discredits the
institution and/or whose activities unduly disrupts or interfere with
the efficient operation of the college. Students, therefore, are required
to behave in accord with the Mabini College code of conduct and
discipline.
In addition, for the same semester, petitioners duly signed pledges
which among others uniformly reads:
In consideration of my admission to the Mabini College and of
my privileges as student of this institution, I hereby pledge/promise
under oath to abide and comply with all the rules and regulations laid
down by competent authorities in the College Department or School
in which I am enrolled. Specifically:
xxx xxx xxx
3.I will respect my Alma Mater, the Mabini College, which I
represent and see to it that I conduct myself in such a manner that
the college will not be put to a bad light;
xxx xxx xxx
9.I will not release false or unauthorized announcement which
tend to cause confusion or disrupt the normal appreciation of the
college.
Moreover, a clear legal right must first be established for a petition for
mandamus to prosper (Sec. 3, Rule 65). It being a mere privilege and not a
legal right for a student to be enrolled or re-enrolled, respondent Mabini
College is free to admit or not admit the petitioners for re-enrollment in view
of the academic freedom enjoyed by the school in accordance with the
Supreme Court rulings in the cases of Garcia vs. Faculty [Admission
Committee] (G.R. No. 40779, November 28, 1975) and Tangonon vs. Pano, et
al. (L-45157, June 27, 1985).
WHEREFORE, premises and jurisprudence considered, and for lack of
merit, the motion for reconsideration of the order of this Court dated August
8, 1988 is hereby DENIED.
SO ORDERED. [Rollo, pp. 15-16.]
Hence, petitioners led the instant petition for certiorari with prayer for
preliminary mandatory injunction.
The case was originally assigned to the Second Division of the Court, which
resolved on April 10, 1989 to refer the case to the Court of Appeals for proper
determination and disposition. The Court of Appeals ordered respondents to comment
on the petition and set the application for issuance of a writ of preliminary mandatory
injunction for hearing. After considering the comment and hearing the injunction
application, the Court of Appeals resolved on May 22, 1989 to certify the case back to
the Supreme Court considering that only pure questions of law were raised.
The case was assigned to the Third Division of the Court, which then transferred
it to the Court en banc on August 21, 1989 considering that the issues raised are
jurisdictional. On September 14, 1989, the Court en banc accepted the case and
required respondents to comment.
Respondents led their comment on November 13, 1989, Petitioners were
required to reply. As reply, they led a pleading entitled "Counter-Comment," to which
respondents led a rejoinder entitled "Reply to Counter-Comment." To this, petitioners
filed a "Rejoinder to Reply."
The issues having been joined, the case was deemed submitted.
At the heart of the controversy is the doctrine encapsuled in the following
excerpt from Alcuaz:
It is beyond dispute that a student once admitted by the school is
considered enrolled for one semester. It is provided in Paragraph 137
Manual of Regulations for Private Schools, that when a college student
registers in a school, it is understood that he is enrolling for the entire
semester. Likewise, it is provided in the Manual, that the "written contracts"
required for college teachers are for "one semester." It is thus evident that
after the close of the first semester, the PSBA-QC no longer has any existing
contract either with the students or with the intervening teachers. Such being
the case, the charge of denial of due process is untenable. It is a time-
honored principle that contracts are respected as the law between the
contracting parties (Henson vs. Intermediate Appellate Court, et al., G.R. No.
72456, February 19, 1987, citing: Castro vs. Court of Appeals, 99 SCRA 722;
Escano vs. Court of Appeals, 100 SCRA 197). The contract having been
terminated, there is no more contract to speak of. The school cannot be
compelled to enter into another contract with said students and teachers.
"The courts, be they the original trial court or the appellate court, have no
power to make contracts for the parties." (Henson vs. Intermediate Appellate
Court, at al., supra). [At 161 SCRA 17-18; Emphasis supplied.]
I n Alcuaz, the Second Division of the Court dismissed the petition led by the
students, who were barred from re-enrolling after they led mass assemblies and put up
barricades, but it added that "in the light of compassionate equity, students who were,
in view of the absence of academic de ciencies, scheduled to graduate during the
school year when this petition was led, should be allowed to re-enroll and to graduate
in due time." [At 161 SCRA 22.] Mr. Justice Sarmiento dissented from the majority
opinion.
A motion for reconsideration was led by the dismissed teachers in Alcuaz. The
students did not move for reconsideration. The Court en banc, to which the case had
been transferred, denied the motion for reconsideration in a Resolution dated
September 29, 1989, but added as an obiter dictum: LibLex
In conclusion, We wish to reiterate that while We value the right of

students to complete their education in the school or university of their
choice, and while We fully respect their right to resort to rallies and
demonstrations for the redress of their grievances and as part of their
freedom of speech and their right to assemble, still such rallies,
demonstrations, and assemblies must always be conducted peacefully, and
without resort to intimidation, coercion, or violence. Academic freedom in all
its forms, demands the full display of discipline. To hold otherwise would be
to subvert freedom into degenerate license.
The majority's failure to expressly repudiate the "termination of contract"
doctrine enunciated in the decision provoked several dissents on that issue. Although
seven (7) members of the Court * disagreed with the Second Division's dismissal of the
students' petition, a de nitive ruling on the issue could not have been made because no
timely motion for reconsideration was led by the students. (As stated above, the
motion for reconsideration was filed by the dismissed teachers.)
Be that as it may, the reassessment of the doctrine laid down in Alcuaz, insofar
as it allowed schools to bar the readmission or re-enrollment of students on the
ground of termination of contract, shall be made in this case where the issue is
squarely raised by petitioners [Petition, p. 4; Rollo, p. 5]
Initially, the case at bar must be put in the proper perspective. This is not a
simple case of a school refusing readmission or re-enrollment of returning students.
Undisputed is the fact that the refusal to readmit or re-enroll petitioners was decided
upon and implemented by school authorities as a reaction to student mass actions
directed against the school. Petitioners are students of respondent school who, after
leading and participating in student protests, were denied readmission or re-
enrollment for the next semester. This is a case that focuses on the right to speech
and assembly as exercised by students vis-a-vis the right of school of cials to
discipline them.
Thus, although respondent judge believed himself bound by the ruling in Alcuaz
[Order dated August 8, 1988; Rollo, pp. 12-12-A], he actually viewed the issue as a
conflict between students' rights and the school's power to discipline them, to wit:
Students should not be denied their constitutional and statutory right
to education, and there is such denial when students are expelled or barred
from enrollment for the exercise of their right to free speech and peaceable
assembly and or subjected to disciplinary action without abiding with the
requirements of due process. Also, it is understandable for student leaders to
let loose extremely critical and, at times, vitriolic language against school
authorities during a student rally.
But the right of students is no license and not without limit . . . [Order
of February 24, 1989; Rollo, p. 13.]
1.The Student Does Not Shed His Constitutionally Protected Rights at the
Schoolgate.
Central to the democratic tradition which we cherish is the recognition and
protection of the rights of free speech and assembly. Thus, our Constitution provides:
Sec. 4.No law shall be passed abridging the freedom of speech, of
expression, or of the press, or the right of the people peaceably to assemble
and petition the government for redress of grievances. [Art. III.]
This guarantee is not peculiar to the 1987 Constitution. A similar provision was
found in the 1973 Constitution, as amended [Art. VI, sec. 9], the 1935 Constitution, as
amended [Art. III, sec. 8], the Philippine Autonomy Act (Jones Law) [Sec. 3, para. 13],
and the Philippine Bill of 1902 [Sec. 15, para. 13]. Thus, as early as 1907, the Court in
People v. Apurado , 7 Phil. 422, upheld the right to speech and assembly to overturn a
conviction for sedition. It said:
Section 5 of the Act No. 292 is as follows:
All persons who rise publicly and tumultuously in order to attain by
force or outside of legal methods any of the following objects are guilty of
sedition:
xxx xxx xxx
2.To prevent the Insular Government, or any provincial or municipal
government or any public official, from freely exercising its or his duties or
the due execution of any judicial or administrative order.
But this law must not be interpreted so as to abridge "the freedom of
speech" or "the right of the people peaceably to assemble and petition the
Government for redress of grievances" guaranteed by the express provisions
of section 5 of "the Philippine Bill."
xxx xxx xxx
It is rather to be expected that more or less disorder will mark the
public assembly of the people to protest against grievances whether real or
imaginary, because on such occasions feeling is always wrought to a high
pitch of excitement, and the greater the grievance and the more intense the
feeling, the less perfect, as a rule, will be the disciplinary control of the
leaders over their irresponsible followers. But if the prosecution be permitted
to seize upon every instance of such disorderly conduct by individual
members of a crowd as an excuse to characterize the assembly as a
seditious and tumultuous rising against the authorities, then the right to
assemble and to petition for redress of grievances would become a delusion
and a snare and the attempt to exercise it on the most righteous occasion
and in the most peaceable manner would expose all those who took part
therein to the severest and most unmerited punishment, if the purposes
which they sought to attain did not happen to be pleasing to the prosecuting
authorities. If instances of disorderly conduct occur on such occasions, the
guilty individuals should be sought out and punished therefor, but the
utmost discretion must be exercised in drawing the line between disorderly
and seditious conduct and between an essentially peaceable assembly and
a tumultuous uprising. [At pp. 424, 426.]
That the protection to the cognate rights of speech and assembly guaranteed by
the Constitution is similarly available to students is well-settled in our jurisdiction. In
the leading case of Malabanan v. Ramento , G.R. No. 62270, May 21, 1984, 129 SCRA
359, the Court, speaking through Mr. Chief Justice Fernando in an en banc decision,
declared:
xxx xxx xxx
4.Petitioners invoke their rights to peaceable assembly and free
speech. They are entitled to do so. They enjoy like the rest of the citizens the
freedom to express their news and communicate their thoughts to those
disposed to listen in gatherings such as was held in this case. They do not,
to borrow from the opinion of Justice Fortas in Tinker v. Des Moines
Community School District, "shed their constitutional rights to freedom of
speech or expression at the schoolhouse gate." While, therefore, the authority
of educational institutions over the conduct of students must be recognized,
it cannot go so far as to be violative of constitutional safeguards. [At pp.
367-368.]
The facts in Malabanan are only too familiar in the genre of cases involving
student mass actions:
. . . Petitioners were officers of the Supreme Student Council of
respondent [Gregorio Araneta] University. They sought and were granted by
the school authorities a permit to hold a meeting from 8:00 A.M. to 12:00
P.M. on August 27, 1982. Pursuant to such permit, along with other students,
they held a general assembly at the Veterinary Medicine and Animal Science
(VMAS), the place indicated in such permit, not in the basketball court as
therein stated but at the second floor lobby. At such gathering they
manifested in vehement and vigorous language their opposition to the
proposed merger of the Institute of Animal Science with the Institute of
Agriculture. At 10:30 A.M., the same day, they marched toward the Life
Science building and continued their rally. It was outside the area covered by
their permit. They continued their demonstration, giving utterance to
language severely critical of the University authorities and using
megaphones in the process. There was, as a result, disturbance of the
classes being held. Also, the non-academic employees, within hearing
distance, stopped their work because of the noise created. They were asked
to explain on the same day why they should not be held liable for holding an
illegal assembly. Then on September 9, 1982, they were informed through a
memorandum that they were under preventive suspension for their failure to
explain the holding of an illegal assembly in front of the Life Science
Building. The validity thereof was challenged by petitioners both before the
Court of First Instance of Rizal in a petition for mandamus with damages
against private respondents and before the Ministry of Education, Culture,
and Sports. On October 20, 1982, respondent Ramento, as Director of the
National Capital Region, found petitioners guilty of the charge of having
violated par. 146(c) of the Manual for Private Schools more specifically their
holding of an illegal assembly which was characterized by the violation of
the permit granted resulting in the disturbance of classes and oral
defamation. The penalty was suspension for one academic year . . . [At pp.
363-364.]
The Court found the penalty imposed on the students too severe and reduced it
to a one-week suspension.
The rule laid down in Malabanan was applied with equal force in three other en
banc decisions of the Court. cdphil
I n Villar v. Technological Institute of the Philippines, G.R. No. 69198, April 17,
1985, 135 SCRA 706, the Court reiterated that the exercise of the freedom of assembly
could not be a basis for barring students from enrolling. It enjoined the school and its
of cials from acts of surveillance, blacklisting, suspension and refusal to re-enroll. But
the Court allowed the non-enrollment of students who clearly incurred marked
academic deficiency, with the following caveat:
xxx xxx xxx
4.The academic freedom enjoyed by "institutions of higher learning"
includes the right to set academic standards to determine under what
circumstances failing grades suffice for the expulsion of students. Once it
has done so, however, that standard should be followed meticulously. It
cannot be utilized to discriminate against those students who exercise their
constitutional rights to peaceable assembly and free speech. If it does so,
then there is a legitimate grievance by the students thus prejudiced, their
right to the equal protection clause being disregarded. [At p. 711].
I n Arreza v. Gregorio Araneta University Foundation, G.R. No. 62297, June 19,
1985, 137 SCRA 94, a case arising from almost the same facts as those in Malabanan,
the Court rejected "the in iction of the highly-disproportionate penalty of denial of
enrollment and the consequent failure of senior students to graduate, if in the exercise
of the cognate rights of free speech and peaceable assembly, improper conduct could
be attributed to them." [At p. 98].
In Guzman v. National University, G.R. No. 68288, July 11, 1986, 142 SCRA 699,
respondent school was directed to allow the petitioning students to re-enroll or
otherwise continue with their respective courses, without prejudice to any disciplinary
proceedings that may be conducted in connection with their participation in the
protests that led to the stoppage of classes.
2.Permissible Limitations on Student Exercise of Constitutional Rights Within the

School.
While the highest regard must be afforded the exercise of the rights to free
speech and assembly, this should not be taken to mean that school authorities are
virtually powerless to discipline students. This was made clear by the Court in
Malabanan, when it echoed Tinker v. Des Moines Community School District, 393 US
503, 514: "But conduct by the student, in class or out of it, which for any reason —
whether it stems from time, place, or type of behavior materially disrupts classwork or
involves substantial disorder or invasion of the rights of others is, of course, not
immunized by the constitutional guarantee of freedom of speech."
Thus, in Malabanan, the Court said:
xxx xxx xxx
8.It does not follow, however, that petitioners can be totally absolved
for the events that transpired. Admittedly, there was a violation of the terms
of the permit. The rally was held at a place other than that specified, in the
second floor lobby, rather than the basketball court, of the VMAS building of
the University. Moreover, it was continued longer than the period allowed.
According to the decision of respondent Ramento, the "concerted activity
[referring to such assembly] went on until 5:30 p.m." Private respondents
could thus, take disciplinary action. .. [At pp. 370-371].
But, as stated in Guzman, the imposition of disciplinary sanctions requires
observance of procedural due process. Thus:
. . . There are withal minimum standards which must be met to
satisfy the demands of procedural due process; and these are, that (1) the
students must be informed in writing of the nature and cause of any
accusation against them; (2) they shall have the right to answer the charges
against them, with the assistance of counsel, if desired; (3) they shall be
informed of the evidence against them; (4) they shall have the right to
adduce evidence in their own behalf; and (5) the evidence must be duly
considered by the investigating committee or official designated by the
school authorities to hear and decide the case. [At pp. 706-707].
Moreover, the penalty imposed must be proportionate to the offense
committed. As stated in Malabanan, "[i]f the concept of proportionality between the
offense committed and sanction imposed is not followed, an element of arbitrariness
intrudes." [At p. 371].
3.Circumventing Established Doctrine.
Malabanan was decided by the Court in 1984. Since then, student mass actions
have escalated not only because of political events that unfurled but also because of
the constantly raging controversy over increases in tuition fees. But the overeager
hands of some school authorities were not effectively tied down by the ruling in
Malabanan. Instead of suspending or expelling student leaders who fell into disfavor
with school authorities, a new variation of the same stratagem was adopted by the
latter: refusing the students readmission or re-enrollment on grounds not related to,
their alleged "misconduct" of "illegal assembly" in leading or participating in student
mass actions directed against the school. Thus, the spate of expulsions or exclusions
due to "academic deficiency."
4.The Nature of the Contract Between a School and its Student.
The Court, in Alcuaz, anchored its decision on the "termination of contract"
theory. But it must be repeatedly emphasized that the contract between the school and
the student is not an ordinary contract. It is imbued with public interest, considering
the high priority given by the Constitution to education and the grant to the State of
supervisory and regulatory powers over all educational institutions [See Art. XIV, secs.
1-2, 4(1)].
Respondent school cannot justify its actions by relying on Paragraph 137 of the
Manual of Regulations for Private Schools, which provides that "[w]hen a student
registers in a school, it is understood that he is enrolling . . . for the entire semester for
collegiate courses," which the Court in Alcuaz construed as authority for schools to
refuse enrollment to a student on the ground that his contract, which has a term of one
semester, has already expired. Cdpr
The "termination of contract" theory does not even nd support in the Manual.
Paragraph 137 merely clari es that a college student enrolls for the entire semester. It
serves to protect schools wherein tuition fees are collected and paid on an installment
basis, i.e. collection and payment of the downpayment upon enrollment and the
balance before examinations. Thus, even if a student does not complete the semester
for which he was enrolled, but has stayed on for more than two weeks, he may be
required to pay his tuition fees for the whole semester before he is given his
credentials for transfer. This is the import of Paragraph 137, subsumed under Section
VII on Tuition and Other Fees, which in its totality provides:
137.When a student registers in a school, it is understood that he is
enrolling for the entire school year for elementary and secondary courses,
and for the entire semester for collegiate courses. A student who transfers or
otherwise withdraws, in writing, within two weeks after the beginning of
classes and who has already paid the pertinent tuition and other school fees
in full or for any length of time longer than one month may be charged ten
per cent of the total amount due for the term if he withdraws within the first
week of classes, or twenty per cent if within the second week of classes,
regardless of whether or not he has actually attended classes. The student
may be charged all the school fees in full if he withdraws anytime after the
second week of classes. However, if the transfer or withdrawal is due to a
justifiable reason, the student shall be charged the pertinent fees only up to
and including the last month of attendance.
Clearly, in no way may Paragraph 137 be construed to mean that the student
shall be enrolled for only one semester, and that after that semester is over his re-
enrollment is dependent solely on the sound discretion of the school. On the contrary,
the Manual recognizes the right of the student to be enrolled in his course for the entire
period he is expected to complete it. Thus, Paragraph 107 states:
Every student has the right to enroll in any school, college or
university upon meeting its specific requirement and reasonable regulation:
Provided, that except in the case of academic delinquency and violation of
disciplinary regulation, the student is presumed to be qualified for
enrollment for the entire period he is expected to complete his course
without prejudice to his right to transfer.
This "presumption" has been translated into a right in Batas Pambansa Blg. 232,
the "Education Act of 1982." Section 9 of this act provides:
SEC. 9.Rights of Students in School. — In addition to other rights, and
subject to the limitations prescribed by law and regulations, students and
pupils in all schools shall enjoy the following rights:
xxx xxx xxx
2.The right to freely choose their field of study subject to
existing curricula and to continue their course therein up to
graduation, except in cases of academic deficiency, or violation of
disciplinary regulations.
xxx xxx xxx
5.Academic Freedom Not a Ground for Denying Students' Rights.
Respondent judge, in his order dated February 24, 1989, stated that "respondent
Mabini College is free to admit or not admit the petitioners for re-enrollment in view of
the academic freedom enjoyed by the school" [Rollo, p. 16]. To support this conclusion,
he cited the cases of Garcia v. The Faculty Admission Committee, Loyola School of
Theology, G.R. No. L-40779, November 28, 1975, 68 SCRA 277, and Tangonan v. Pano,
G.R. No. L-45157, June 27, 1985, 137 SCRA 245, where the Court emphasized the
institutions' discretion on the admission and enrollment of students as a major
component of the academic freedom guaranteed to institutions of higher learning.
These cases involve different facts and issues. In Garcia, the issue was whether
a female lay student has a clear legal right to compel a seminary for the priesthood to
admit her for theological studies leading to a degree. In Tangonan, the issue was
whether a nursing student, who was admitted on probation and who has failed in her
nursing subjects, may compel her school to readmit her for enrollment.
Moreover, respondent judge loses sight of the Court's unequivocal statement in
Villar that the right of an institution of higher learning to set academic standards
cannot be utilized to discriminate against students who exercise their constitutional
rights to speech and assembly, for otherwise there will be a violation of their right to
equal protection [At p. 711].
6.Capitol Medical Center and Licup .
In support of the action taken by respondent judge, private respondents cite the
recent cases of Capitol Medical Center, Inc. v. Court of Appeals, G.R. No. 82499,
October 13, 1989, and Licup v. University of San Carlos, G.R. No. 85839, October 19,
1989, both decided by the First Division of the Court.
We nd the issues raised and resolved in these two decisions dissimilar from
the issues in the present case.
In Capitol Medical Center, the Court upheld the decision of the school authorities
to close down the school because of problems emanating from a labor dispute
between the school and its faculty. The Court ruled that the students had no clear legal
right to demand the reopening of the school.
On the other hand, in Licup the issue resolved was whether or not the students
were afforded procedural due process before disciplinary action was taken against
them. Thus, the Court stated:
The Court finds no cogent basis for the protestations of petitioners
that they were deprived of due process of law and that the investigation
conducted was far from impartial and fair. On the contrary, what appears
from the record is that the charges against petitioners were adequately
established in an appropriate investigation. The imputation of bias and
partiality is not supported by the record . . .
Moreover, Licup, far from adopting the "termination of contract" theory in Alcuaz,
impliedly rejected it, to wit:
While it is true that the students are entitled to the right to pursue their
education, the USC as an educational institution is also entitled to pursue its
academic freedom and in the process has the concommitant right to see to
it that this freedom is not jeopardized.
True, an institution of learning has a contractual obligation to afford
its students a fair opportunity to complete the course they seek to pursue.
However, when a student commits a serious breach of discipline or fails to
maintain the required academic standard, he forfeits his contractual right;
and the court should not review the discretion of university authorities.
(Emphasis supplied.)
7.The Instant Case.
To justify the school's action, respondents, in their Comment dated November
12, 1989, quoting from their answer led in the trial court, allege that of the thirteen
(13) petitioners eight (8) have incurred failing grades, to wit:
a)Ariel Non has not only failed in four (4) subjects but also failed to
cause the submission of Form 137 which is a pre-requisite to his re-
enrollment and to his continuing as a student of Mabini;
b)Rex Magana not only has failed in one (1) subject but also has
incomplete grades in four (4) subjects as well as no grades in two (2)
subjects;
c)Elvin Agura failed in two (2) subjects and has three (3) incomplete
grades;
d)Emmanuel Barba has failed in one (1) subject, and has to still take
CMT 11 to 22. He is already enrolled at Ago Foundation;
e)Joselito Villalon has incomplete grades in nine (9) subjects;
f)Luis Santos has failed in one (1) subject;
g)George Dayaon has failed in four (4) subjects and has to remove
the incomplete grade in one (1) subject;
h)Daniel Torres has failed in five (5) subjects, has to remove
incomplete grades in five (5) more subjects, and has no grade in one (1)
subject. [Rollo, p. 79.]
Petitioners have not denied this, but have countered this allegation as follows:
xxx xxx xxx
(11)Petitioners were and are prepared to show, among others, that:
a)Three of the 13 of them were graduating. (Admitted in the
Answer.)
b)Their academic deficiencies, if any, do not warrant non-
readmission. (The Answer indicates only 8 of the 13 as with
deficiencies.)
c)Their breach of discipline, if any, was not serious.
d)The improper conduct attributed to them was during the
exercise of the cognate rights of free speech and peaceable
assembly, particularly a February 1988 student rally. (The crux
of the matter, as shown even in the Answer.)
e)There was no due investigation that could serve as basis for
disciplinary action. (In effect, admitted in the Answer; even
Alcuaz required due process.)
f)Respondents admit students with worse deficiencies — a
clear case of discrimination against petitioners for their role in
the student rally. (An equal protection question.)
g)Respondent school is their choice institution near their
places of residence which they can afford to pay for tertiary
education, of which they have already lost one-and-a-half
school-years — in itself punishment enough. [Rollo, p. 86].
Clearly, the ve (5) students who did not incur failing marks, namely, Normandy
Occiano, Lourdes Banares, Bartolome Ibasco, Sonny Moreno and Giovani Palma, were
refused re-enrollment without just cause and, hence, should be allowed to re-enroll.
On the other hand, it does not appear that the petitioners were afforded due
process, in the manner expressed in Guzman, before they were refused re-enrollment.
In fact, it would appear from the pleadings that the decision to refuse them re-
enrollment because of failing grades was a mere afterthought. It is not denied that
what incurred the ire of the school authorities was the student mass actions
conducted in February 1988 and which were led and/or participated in by petitioners.
Certainly, excluding students because of failing grades when the cause for the action
taken against them undeniably related to possible breaches of discipline not only is a
denial of due process but also constitutes a violation of the basic tenets of fair play.
Moreover, of the eight (8) students with failing grades, some have only one or
two failures, namely, Rex Magana, Elvin Agura, Emmanuel Barba, and Luis Santos.
Certainly, their failures cannot be considered marked academic de ciency within the
context of the Court's decision in Villar.
Then, as to the students who incurred several failing grades, namely, Ariel Non,
Joselito Villalon, George (Jorge) Dayaon, and Daniel Torres, it is not clear from
respondents' enumeration whether the failures were incurred in only one semester or
through the course of several semesters of study in the school. Neither are the
academic standards of respondent school, from which we can gauge whether or not
these students are academically de cient, alleged by respondents. Thus, while the
prerogative of schools to set academic standards is recognized, we cannot af rm
respondent school's action as to petitioners Non, Villalon, Dayaon and Torres because
of insufficient information.
With regard to petitioner Emmanuel Barba who respondents claim has enrolled
in Ago Foundation, such fact alone, if true, will not bar him from seeking readmission in
respondent school.
However, these should not be taken to mean that no disciplinary action could
have been taken against petitioners for breach of discipline if the facts had so
warranted. In line with the Court's ruling in Malabanan, petitioners could have been
subjected to disciplinary proceedings in connection with the February 1988 mass
actions. But the penalty that could have been imposed must be commensurate to the
offense committed and, as set forth in Guzman, it must be imposed only after the
requirements of procedural due process have been complied with. This is explicit from
the Manual of Regulations for Private Schools, which provides in Paragraph 145 that "
[n]o penalty shall be imposed upon any student, except for cause as de ned in this
Manual and/or in the schools rules and regulations duly promulgated and only after
due investigation shall have been conducted."
But this matter of disciplinary proceedings and the imposition of administrative
sanctions have become moot and academic. Petitioners, who have been refused
readmission or re-enrollment and who have been effectively excluded from respondent
school for four (4) semesters, have already been more than suf ciently penalized for
any breach of discipline they might have committed when they led and participated in
the mass actions that, according to respondents, resulted in the disruption of classes.
To still subject them to disciplinary proceedings would serve no useful purpose and
would only further aggravate the strained relations between petitioners and the
of cials of respondent school which necessarily resulted from the heated legal battle
here, in the Court of Appeals and before the trial court.
WHEREFORE, the petition is GRANTED. The orders of respondent judge dated
August 8, 1988 and February 24, 1989 are hereby ANNULLED. Respondent Mabini
College is ORDERED to readmit and to allow the re-enrollment of petitioners, if they are
still so minded, without prejudice to its taking the appropriate action as to petitioners
Ariel Non, Joselito Villalon, George (Jorge) Dayaon and Daniel Torres, if it is shown by
their records (Form 137) that they have failed to satisfy the school's prescribed
academic standards.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Paras, Gancayco, Bidin,
Medialdea and Regalado JJ., concur.
Griño-Aquino, J., is on leave.
Separate Opinions
MELENCIO-HERRERA , J., concurring:
Like Mr. Justice Teodoro R. Padilla, I had concurred in the majority opinion in
Alcuaz, et al., vs. Philippine School of Business Administration, et al., G.R. No. 76353, 2
May 1988, 161 SCRA 7.
But, as I had expressed in my vote on the Motion for Reconsideration in the said
Alcuaz case "Except for the general statement that students' enrollment is limited to
per semester, I concur."
In other words, I agree with Mme. Justice Cortes that the "termination of
contract doctrine" should be overturned for being a doctrinal error. It is now clear (it
was quoted out of context before) that paragraph 137 of the Manual of Regulations for
Public Schools falls under Section VII on Tuition and Other Fees and is intended merely
to protect schools wherein tuition fees are collected and paid on installment basis. It
cannot be construed to mean that a student shall be enrolled for only one semester. LLphil
As to the power of discipline, my view still is that schools should retain that
prerogative, with the caveat that the penalty they impose be proportionate to the
offense committed.
PADILLA , J., concurring:
I concurred in the majority opinion in Alcuaz, et al. vs. Philippine School of

Business Administration, et al., G.R. No. 76353, 2 May 1988, 161 SCRA 7 including
therefore that portion of the opinion which held that under par. 137, Manual of
Regulations for Private Schools, a college student in a private school is enrolled only
for one (1) semester and that after each semester "the school cannot be compelled to
enter into another contract with said students . . . ."
However, after carefully considering the decision penned by Madame Justice
Cortes in the case at bar, I am inclined to agree with her that "the contract between the
school and students is not an ordinary contract. It is imbued with public interest,
considering the high priority given by the Constitution to education . . ." (p. 15,
Decision).
It would indeed appear that, consistent with this constitutional priority given to
education, par. 107 of the Manual of Regulations for Private Schools should be
underscored. It provides that every student has the right to enroll in any school college
or university upon meeting its speci c requirements and reasonable regulations; . . .
and that "the student is presumed to be quali ed for enrollment for the entire period he
is expected to complete the course, without prejudice to his right to transfer."
It should be stressed, however, that this right of students to enroll is not

designed to leave schools completely helpless to deny enrollment or re-enrollment.
For, par. 107 itself of the Manual of Regulations for Private Schools still recognizes the
right of the school to refuse enrollment in case of academic de ciency or violation of
disciplinary regulations of the school.
SARMIENTO , J., concurring:
I have always held that schools are not free to penalize, by administrative
sanction or outright expulsion, students on account alone of the fact that they had
taken part in mass actions or assemblies. 1
Students, as all persons, enjoy freedom of speech and assembly, right granted
by the Constitution, and one nobody may abridge. The opinion of the majority reaf rms
this fundamental principle.
This case also clari es the true import of Paragraph 137 of the Manual of
Regulations for Private Schools, i.e., that it is intended merely to enable schools to
collect fees for the entire semester although the student may not have completed the
semester. But in no way may learning institutions use the provision as an excuse to
dismiss students after one semester on the ground of termination of contract. cdll
The "termination of contract" theory espoused by Alcuaz v. Philippine School of

Business Administration 2 has indeed allowed schools to circumvent the guarantees of
the Constitution by denying "erring" students of their right to enroll, when the single
"error" committed by the students was to participate in political activities. As I said, our
students have as much right to disagree — whether against school policies or
government programs, and whether in or out of the school compound — and no prior
or subsequent penalty may be inflicted on account of such acts alone.
To be sure, the school may punish students for breach of discipline, as, say, for
breaking chairs or window panes or for disrupting classes in the course of a
demonstration, but they may be penalized for those actions alone and not because of
the content of their speech or the vociferousness with which it was said. 3 Moreover,
violations of school discipline must be judged on a case to case basis and measured
depending on gravity before school authorities may legitimately act. I do not think that
the fact that a demonstration has disrupted ongoing classes is a ground for penalizing
students taking part therein because a demonstration, from its very nature, is likely to
disrupt classes. 4 The school must convincingly show that the demonstrators had
deliberately turned to lawlessness, say, by barricading the schoolgate or the classroom
entrances or otherwise prevented non-demonstrating students or members of the
faculty from attending a class or nishing one by threats or intimidation. Only in that
sense may school heads validly invoke "disruption of classes."
As far as discipline is concerned, this Court has laid down guidelines for proper
school action. In Malabanan v. Ramento , as in the present case, we held that the
punishment must t the crime, and in Guzman v. National University , 5 we ruled that
before any penalty may be imposed, the students concerned should be allowed to be
heard by themselves or representatives. In all cases, the courts should be wary — and
the school authorities must themselves convince the judge — that punishment meted
out is due to a real injury done to the school and not for the fact that the students had
simply expressed their constitutional right to disagree.
As to failing grades, I agree that, as we held in Villar v. Technological Institute of
the Philippines, 6 academic de ciency is a legal basis for, among other things,
expulsion. However, as Villar warned, educational institutions must set standards "to
determine under what circumstances failing grades suf ce for the expulsion of
students," 7 and that such standards "should be followed meticulously," 8 and that they
"cannot be utilized to discriminate against those students who exercise their
constitutional rights to peaceable assembly and free speech." 9 What this decision
makes plain is that the school must pre-set the ground rules for either suspension or
expulsion of students by reason of falling marks which must be observed with
reasonable uniformity. The school can not use it to spring surprises on students with
failing grades, who also happen to be politically active in the campus, after the
authorities had long tolerated their poor performance. In this case, our courts must
also exercise caution that, as "disruption of classes", resort to "failing grades" is not
done to evade the constitutional mandates.
I take note of the increasing practice by school heads to simply bar students
from enrollment for a host of excuses as a result of their exercise of constitutional
rights. I am gratified that the majority has put an end to this practice.
I concur fully with Mme. Justice Irene Cortes' ponencia.
Footnotes
*Mr. Chief Justice Fernan, Mr. Justice Narvasa, Mme. Justice Herrera, Mr. Justice Cruz,
Mr. Justice Feliciano, Mr. Justice Sarmiento, and Mme. Justice Cortes.
S ARMI ENT O, J., concurring:
1.See Alcuaz v. Philippine School of Business Administration, No. 76353, May 2, 1988,
161 SCRA 7, Sarmiento, J., Dissenting.
2.Supra.
3.Malabanan v. Ramento, No. 62270, May 21, 1984, 129 SCRA 359.
4.See US v. Apurado, 7 Phil. 422 (1907).
5.No. 68288, July 11, 1986, 142 SCRA 699.

6.No. 69198, April 17, 1985, 135 SCRA 706.
7.Supra, 711.
8.Supra.
9.Supra.

EN BANC
[G.R. No. 99327. May 27, 1993.]
ATENEO DE MANILA UNIVERSITY, FATHER JOAQUIN BERNAS, S.J.,

DEAN CYNTHIA ROXAS-DEL CASTILLO, JUDGE RUPERTO KAPUNAN,
JR., JUSTICE VENICIO ESCOLIN, FISCAL MIGUEL ALBAR, ATTYS.
MARCOS HERRAS, FERDINAND CASIS, JOSE CLARO TESORO,
RAMON CAGUIOA and RAMON ERENETA , petitioners, vs. HON.
IGNACIO M. CAPULONG, Presiding Judge of the RTC-Makati, Br.
134 ZOSIMO MENDOZA, JR. ERNEST MONTECILLO, ADEL ABAS,
JOSEPH LLEDO AMADO SABBAN, DALMACIO LIM, JR., MANUEL
ESCALONA and JUDE FERNANDEZ , respondents.
Bengzon, Zarraga, Narciso, Cudala, Pecson, Benson & Jimenez for petitioners.
Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles for petitioner Cynthia Roxas-del
Castillo.
Fabregas, Calida & Remollo for private respondents.
SYLLABUS
1. POLITICAL LAW; DUE PROCESS; REQUIREMENTS; MINIMUM STANDARD TO BE

SATISFIED IN IMPOSING DISCIPLINARY SANCTION BY AN ACADEMIC INSTITUTION. —
Corollary to respondent students' contention of denial of due process is their argument
that it is the Ang Tibay case [69 Phil. 635 (1940)] and not the Guzman case [142 SCRA
699], which is applicable in the case at bar. Though both cases essentially deal with the
requirements of due process, the Guzman case is more apropos to the instant case, since
the latter deals specifically with the minimum standards to be satisfied in the imposition
of disciplinary sanctions in academic institutions, such as petitioner university herein, thus:
"(1) the students must be informed in writing of the nature and cause of any
accusation against them; (2) that they shall have the right to answer the charges against
them with the assistance of counsel, if desired; (3) they shall be informed of the evidence
against them; (4) they shall have the right to adduce evidence in their own behalf; and (5)
the evidence must be duly considered by the investigating committee or official
designated by the school authorities to hear and decide the case."
2. ID.; ID.; ID.; MINIMUM STANDARD SATISFIED IN CASE AT BAR. — In view of the
death of Leonardo Villa, petitioner Cynthia del Castillo, as Dean of the Ateneo Law School,
notified and required respondent students on February 11, 1991 to submit within twenty-
four hours their written statement on the incident, the records show that instead of filing a
reply, respondent students requested through their counsel, copies of the charges. While
some of the students mentioned in the February 11, 1991 notice duly submitted written
statements, the others failed to do so. Thus, the latter were granted an extension of up to
February 18, 1991 to file their statements. Indubitably, the nature and cause of the
accusation were adequately spelled out in petitioners' notices dated February 14 and 20,
1991. It is to be noted that the February 20, 1991 letter which quoted Rule No. 3 of its
Rules of Discipline as contained in the Ateneo Law School Catalogue was addressed
individually to respondent students. Petitioners' notices/letters dated February 11,
February 14 and 20 clearly show that respondent students were given ample opportunity
to adduce evidence in their behalf and to answer the charges leveled against them. The
requisite assistance of counsel was met when, from the very start of the investigations
before the Joint Administration-Faculty-Student Committee, the law firm of Gonzales
Batiller and Bilog and Associates put in its appearance and filed pleadings in behalf of
respondent students.
3. ID.; ID.; DISCIPLINARY CASES INVOLVING STUDENTS, ADMINISTRATIVE IN
NATURE; RIGHT TO CROSS EXAMINE, NOT INVOLVED. — Respondent students may not
use the argument that since they were not accorded the opportunity to see and examine
the written statements which became the basis of petitioners' February 14, 1991 order,
they were denied procedural due process. Granting that they were denied such
opportunity, the same may not be said to detract from the observance of due process, for
disciplinary cases involving students need not necessarily include the right to cross
examination. An administrative proceeding conducted to investigate students'
participation in a hazing activity need not be clothed with the attributes of a judicial
proceeding. A closer examination of the March 2, 1991 hearing which characterized the
rules on the investigation as being summary in nature and that respondent students have
no right to examine affiants-neophytes, reveals that this is but a reiteration of our previous
ruling in Alcuaz vs. PSBA, Q.C. Branch, 161 SCRA 20.
4. ID.; ID.; ID.; PROOF BEYOND REASONABLE DOUBT, NOT REQUIRED. — With regard to
the charge of hazing, respondent students fault petitioners for not explicitly defining the
word "hazing" and allege that there is no proof that they were furnished copies of the 1990-
91 Ateneo Law School Catalogue which prohibits hazing. Such flawed sophistry is not
worthy of students who aspire to be future members of the Bar. It cannot be over-
emphasized that the charge filed before the Joint Administration-Faculty-Student
Investigating Committee and the Disciplinary Board is not a criminal case requiring proof
beyond reasonable doubt but is merely administrative in character. As such, it is not
subject to the rigorous requirements of criminal due process, particularly with respect to
the specification of the charge involved. As we have had occasion to declare in previous
cases of a similar nature, due process in disciplinary cases involving students does not
entail proceedings and hearings identical to those prescribed for actions and proceedings
in courts of justice. 3 4 Accordingly, disciplinary charges against a student need not be
drawn with the precision of a criminal information or complaint. Having given prior notice
to the students involved that "hazing" which is not defined in the School Catalogue shall be
defined in accordance with Senate Bill No. 3815, the proposed bill on the subject of Sen.
Jose Lina, petitioners have said what needs to be said. We deem this sufficient for
purposes of the investigation under scrutiny.
5. ID.; ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES,
EXCEPTION; CASE AT BAR. — It is accepted legal doctrine that an exception to the
doctrine of exhaustion of remedies is when the case involves a question of law, as in this
case, where the issue is whether or not respondent students have been afforded
procedural due process prior to their dismissal from petitioner university.
6. ID.; ACADEMIC FREEDOM CONSTRUED; CASE AT BAR. — At this juncture, it would be
meet to recall the essential freedoms subsumed by Justice Felix Frankfurter in the term
"academic freedom" cited in the case of Sweezy v. New Hampshire, 3 7 thus: (1) who may
teach; (2) what may be taught; (3) how it shall be taught; and (4) who may be admitted to
study. "Academic freedom", the term as it evolved to describe the emerging rights related
to intellectual liberty, has traditionally been associated with freedom of thought, speech,
expression and the press; in other words, with the right of individuals in university
communities, such as professors, researchers and administrators, to investigate, pursue,
discuss and, in the immortal words of Socrates, "to follow the argument wherever it may
lead," free from internal and external interference or pressure. But obviously, its optimum
impact is best realized where the freedom is exercised judiciously and does not
degenerate into unbridled license. Early cases on this individual aspect of academic
freedom have stressed the need for assuring to such individuals a measure of
independence through the guarantees of autonomy and security of tenure. The
components of this aspect of academic freedom have been categorized under the areas
of: (1) who may teach and (2) how to teach. It is to be realized that this individual aspect of
academic freedom could have developed only pari passu with its institutional counterpart.
As corporate entities, educational institutions of higher learning are inherently endowed
with the right to establish their policies, academic and otherwise, unhampered by external
controls or pressure. In the Frankfurter formulation, this is articulated in the areas of: (1)
what shall be taught, e.g., the curriculum and (2) who may be admitted to study. In an
attempt to give an explicit definition with an expanded coverage, the Commissioners of the
Constitutional Commission of 1986 came up with this formulation: "Academic freedom
shall be enjoyed by students, by teachers, and by researchers." After protracted debate
and ringing speeches, the final version which was none too different from the way it was
couched in the previous two (2) Constitutions, as found in Article XIV, Section 5 (2) states:
"Academic freedom shall be enjoyed in all institutions of higher learning." In anticipation of
the question as to whether and what aspects of academic freedom are included herein,
ConCom Commissioner Adolfo S. Azcuna explained: "Since academic freedom is a
dynamic concept, we want to expand the frontiers of freedom, especially in education,
therefore, we shall leave it to the courts to develop further the parameters of academic
freedom." While under the Education Act of 1982, students have a right "to freely choose
their field of study, subject to existing curricula and to continue their course therein up to
graduation," such right is subject, as all rights are, to the established academic and
disciplinary standards laid down by the academic institution. [Section 9 (2) of Batas
Pambansa Blg. 232, effective September 11, 1982]. "For private schools have the right to
establish reasonable rules and regulations for the admission, discipline and promotion of
students. This right . . . extends as well to parents . . . as parents are under a social and
moral (if not legal) obligation, individually and collectively, to assist and cooperate with the
schools." (Yap Chin Fah v. Court of Appeals [Resolution], G.R. No. 90063, December 12,
1989) Such rules are "incident to the very object of incorporation and indispensable to the
successful management of the college. The rules may include those governing student
discipline." Going a step further, the establishment of rules governing university-student
relations, particularly those pertaining to student discipline, may be regarded as vital, not
merely to the smooth and efficient operation of the institution, but to its very survival.
7. REMEDIAL LAW; PROVISIONAL REMEDIES; TEMPORARY RESTRAINING ORDER;

PROPER ISSUANCE THEREOF IN CASE AT BAR. — respondent students argue that we
erred in issuing a Temporary Restraining Order since petitioners do not stand to suffer
irreparable damage in the event that private respondents are allowed to re-enroll. No one
can be so myopic as to doubt that the immediate reinstatement of respondent students
who have been investigated and found by the Disciplinary Board to have violated petitioner
university's disciplinary rules and standards will certainly undermine the authority of the
administration of the school. This we would be most loathe to do.

DECISION
ROMERO , J : p
In 1975, the Court was confronted with a mandamus proceeding to compel the Faculty
Admission Committee of the Loyola School of Theology, a religious seminary which has a
working arrangement with the Ateneo de Manila University regarding accreditation of
common students, to allow petitioner who had taken some courses therein for credit
during summer, to continue her studies. 1 Squarely meeting the issue, we dismissed the
petition on the ground that students in the position of petitioner possess, not a right, but a
privilege, to be admitted to the institution. Not having satisfied the prime and
indispensable requisite of a mandamus proceeding since there is no duty, much less a
clear duty, on the part of the respondent to admit the petitioner, the petition did not
prosper.
In support of its decision, the Court invoked academic freedom of institutions of higher
learning, as recognized by the Constitution, the concept encompassing the right of a
school to choose its students.
Eighteen (18) years later, the right of a University to refuse admittance to its students, this
time in Ateneo de Manila University proper, is again challenged.
Whereas, in the Garcia case referred to in the opening paragraph, the individual concerned
was not a regular student, the respondents in the case at bar, having been previously
enrolled in the University, seek re-admission. Moreover, in the earlier case, the petitioner
was refused admittance, not on such considerations as personality traits and character
orientation, or even inability to meet the institution's academic or intellectual standards,
but because of her behavior in the classroom. The school pointedly informed her that ". . . it
would seem to be in your best interest to work with a Faculty that is more compatible with
your orientations."
On the other hand, students who are now being refused admission into petitioner
University have been found guilty of violating Rule No. 3 of the Ateneo Law School Rules on
Discipline which prohibits participation in hazing activities. The case attracted much
publicity due to the death of one of the neophytes and serious physical injuries inflicted on
another.
Herein lies an opportunity for the Court to add another dimension to the concept of
academic freedom of institutions of higher learning, this time a case fraught with social
and emotional overtones.
The facts which gave rise to this case which is far from novel, are as follows:
As a requisite to membership, the Aquila Legis, a fraternity organized in the Ateneo Law
School, held its initiation rites on February 8, 9 and 10, 1991, for students interested in
joining its ranks. As a result of such initiation rites, Leonardo "Lennie" H. Villa, a first year
student of petitioner university, died of serious physical injuries at the Chinese General
Hospital on February 10, 1991. He was not the lone victim, though, for another freshman by
the name of Bienvenido Marquez was also hospitalized at the Capitol Medical Center for
acute renal failure occasioned by the serious physical injuries inflicted upon him on the
same occasion.
In a notice dated February 11, 1991, petitioner Dean Cynthia del Castillo created a Joint
Administration-Faculty-Student Investigating Committee 2 which was tasked to investigate
and submit a report within 72 hours on the circumstances surrounding the death of Lennie
Villa. Said notice also required respondent students to submit their written statements
within twenty-four (24) hours from receipt. Although respondent students received a copy
of the written notice, they failed to file a reply. In the meantime, they were placed on
preventive suspension. 3 Through their respective counsels, they requested copies of the
charges and pertinent documents or affidavits.
In a notice dated February 14, 1991, the Joint Administration-Faculty-Student Investigating
Committee, after receiving the written statements and hearing the testimonies of several
witnesses, found a prima facie case against respondent students for violation of Rule 3 of
the Law School Catalogue entitled "Discipline." 4
Respondent students were then required to file their written answers to the formal charge
on or before February 18, 1991; otherwise, they would be deemed to have waived their
right to present their defenses.
On February 20, 1991, petitioner Dean created a Disciplinary Board composed of
petitioners Judge Ruperto Kapunan, Justice Venicio Escolin, Atty. Marcos Herras, Fiscal
Miguel Albar and Atty. Ferdinand Casis, to hear the charges against respondent students. Cdpr
In a letter dated February 20, 1991, respondent students were informed that they had
violated Rule No. 3 of the Rules on Discipline contained in the Law School Catalogue. Said
letter also states: "The complaint/charge against you arose from participation in acts of
hazing committed during the Aquila Legis initiations held on February 8-10, 1991. The
evidence against you consist of testimonies of students, showing your participation in
acts prohibited by the School regulations." Finally, it ordered respondent students to file
their written answers to the above charge on or before February 22, 1991, otherwise they
would be deemed to have waive their defense. 5
In a motion dated February 21, 1991, respondent students, through counsel, requested
that the investigation against them be held in abeyance, pending action on their request for
copies of the evidence against them. 6
Respondent students were then directed by the Board to appear before it at a hearing on
February 28, 1991 to clarify their answers with regard to the charges filed by the
investigating committee for violation of Rule No. 3. However, in a letter to petitioners dated
February 27, 1991, counsel for respondent students moved to postpone the hearing from
February 28, 1991 to March 1, 1991. 7
Subsequently, respondent students were directed to appear on March 2, 1991 for
clarificatory questions. 8 They were also informed that:
a) The proceedings will be summary in nature in accordance with the rules
laid down in the case of Guzman vs. National University ; 9
b) Petitioners have no right to cross-examine the affiants-neophytes;
c) Hazing which is not defined in the School catalogue shall be defined in

accordance with the proposed bill of Sen. Jose Lina, Senate Bill No. 3815;
d) The Board will take into consideration the degree of participation of the
petitioners in the alleged hazing incident in imposing the penalty;
e) The Decision of the Board shall be appealable to the President of the

University, i.e. Respondent Joaquin Bernas S. J.
On March 5, 1991, petitioner Bernas wrote Dean del Castillo that, "in cases where the
Disciplinary Board is not prepared to impose the penalty of dismissal, I would prefer that
the Board leave the decision on the penalty to the Administration so that this case be
decided not just on the Law School level but also on the University level." 1 0
In a resolution dated March 9, 1991, the Board found respondent students guilty of
violating Rule No. 3 of the Ateneo Law School Rules on Discipline which prohibits
participation in hazing activities. The Board found that respondent students acted as
master auxiliaries or "auxies" during the initiation rites of Aquila Legis, and exercised the
"auxies privilege," which allows them to participate in the physical hazing. Although
respondent students claim that they were there to assist and attend to the needs of the
neophytes, actually they were assigned a definite supportive role to play in the organized
activity. Their guilt was heightened by the fact that they made no effort to prevent the
infliction of further physical punishment on the neophytes under their care. The Board
considered respondent students part and parcel of the integral process of hazing. In
conclusion, the Board pronounced respondents guilty of hazing, either by active
participation or through acquiescence. However, in view of the lack of unanimity among
the members of the Board on the penalty of dismissal, the Board left the imposition of the
penalty to the University Administration. 11 Petitioner Dean del Castillo waived her
prerogative to review the decision of the Board and left to the President of the University
the decision of whether to expel respondent students or not.
Consequently, in a resolution dated March 10, 1991, petitioner Fr. Joaquin G. Bernas, as
President of the Ateneo de Manila University, accepted the factual findings of the Board,
thus: "that as Master Auxiliaries they exercised the 'auxie's privilege;' that even assuming
that they did not lay hands on the neophytes," respondent students are still guilty in
accordance with the principle that "where two or more persons act together in the
commission of a crime, whether they act through the physical volition of one or of all,
proceeding severally or collectively, each individual whose will contributes to the
wrongdoing is responsible for the whole." Fr. Bernas, in describing the offense which led to
the death of Leonardo Villa, concluded that the "offense of the respondents can be
characterized as grave and serious, subversive of the goals of Christian education and
contrary to civilized behavior." Accordingly, he imposed the penalty of dismissal on all
respondent students. 1 2
In a resolution dated March 18, 1991 and concurred in by petitioner Fr. Bernas, 1 3 the
Board excluded respondent students Abas and Mendoza from the coverage of the
resolution of March 10, 1991, inasmuch as at the time the latter resolution was
promulgated, neither had as yet submitted their case to the Board. Said resolution also set
the investigation of the two students on March 21, 1991.
On March 18, 1991, respondent students filed with the Regional Trial Court of Makati, a
petition for certiorari, prohibition and mandamus with prayer for temporary restraining
order and preliminary injunction 1 4 alleging that they were currently enrolled as students
for the second semester of schoolyear 1990-91. Unless a temporary restraining order is
issued, they would be prevented from taking their examinations. The petition principally
centered on the alleged lack of due process in their dismissal.
On the same day, Judge Madayag issued a temporary restraining order enjoining
petitioners from dismissing respondent students and stopping the former from
conducting hearings relative to the hazing incident. 15
Hearings in connection with the issuance of the temporary restraining order were then
held. On April 7, 1991, the temporary restraining order issued on March 18, 1991 lapsed.
Consequently, a day after the expiration of the temporary restraining order, Dean del
Castillo created a Special Board composed of Atty.(s) Jose Claro Tesoro, Ramon Caguioa,
and Ramon Ereñeta to investigate the charges of hazing against respondent students
Abas and Mendoza.
Respondent students reacted immediately by filing a Supplemental Petition of certiorari,
prohibition and mandamus with prayer for a temporary restraining order and preliminary
injunction, to include the aforesaid members of the Special Board, as additional
respondents to the original petition. 1 6
Petitioners moved to strike out the Supplemental Petition arguing that the creation of the
Special Board was totally unrelated to the original petition which alleged lack of due
process in the conduct of investigations by the Disciplinary Board against respondent
students; that a supplemental petition cannot be admitted without the same being set for
hearing and that the supplemental petition for the issuance of a temporary restraining
order will, in effect, extend the previous restraining order beyond its mandatory 20-day
lifetime. 1 7 Acting on the urgent motion to admit the supplemental petition with prayer for
a temporary restraining order, Judge Amin, as pairing judge of respondent Judge
Capulong, granted respondent students' prayer on April 10, 1991. 1 8
On May 17, 1991, respondent Judge ordered petitioners to reinstate respondent students.
Simultaneously, the court ordered petitioners to conduct special examinations in lieu of the
final examinations which allegedly the students were not allowed to take, and enjoined
them to maintain the status quo with regard to the cases of Adel Abas and Zosimo
Mendoza pending final determination of the issues of the instant case. Lastly, it directed
respondent students to file a bond in the amount of P50,000.00. 1 9
On the same date, May 17, 1991, the Special Board investigating petitioners Abas and
Mendoza concluded its investigation. On May 20, 1991, it imposed the penalty of
dismissal on respondent students Adel Abas and Zosimo Mendoza and directed the
dropping of their names from its roll of students. 2 0
The following day or on May 21, 1991, respondent judge issued the writ of preliminary
injunction upon posting by respondent students of a bond dated May 17, 1991 in the
amount of P50,000.00.
Hence, this special civil action of certiorari under Rule 65 with prayer for the issuance of a
temporary restraining order questioning the order of respondent judge reinstating
respondent students dated May 17, 1991. On May 30, 1991, this Court issued a temporary
restraining order enjoining the enforcement of the May 17, 1991 order of respondent
judge. 2 1
In the case at bar, we come to grips with two relevant issues on academic freedom,
namely: (1) whether a school is within its rights in expelling students from its academic
community pursuant to its disciplinary rules and moral standards; and (2) whether or not
the penalty imposed by the school administration is proper under the circumstances. Cdpr
We grant the petition and reverse the order of respondent judge ordering readmission of
respondent students. Respondent judge committed grave abuse of discretion when he
ruled that respondent students had been denied due process in the investigation of the
charges against them.
It is the threshold argument of respondent students that the decision of petitioner Fr.
Joaquin Bernas, S. J., then President of the Ateneo de Manila University, to expel them was
arrived at without affording them their right to procedural due process. We are constrained
to disagree as we find no indication that such right has been violated. On the contrary,
respondent students' rights in a school disciplinary proceeding, as enunciated in the cases
of Guzman v. National University, 2 2 Alcuaz v PSBA, Q.C. Branch 2 3 and Non v. Dames II 2 4
have been meticulously respected by petitioners in the various investigative proceedings
held before they were expelled.
Corollary to their contention of denial of due process is their argument that it is the Ang
Tibay case 2 5 and not the Guzman case which is applicable in the case at bar. Though both
cases essentially deal with the requirements of due process, the Guzman case is more
apropos to the instant case, since the latter deals specifically with the minimum standards
to be satisfied in the imposition of disciplinary sanctions in academic institutions, such as
petitioner university herein, thus:
"(1) the students must be informed in writing of the nature and cause of any
accusation against them; (2) that they shall have the right to answer the charges
against them with the assistance of counsel, if desired; (3) they shall be informed
of the evidence against them; (4) they shall have the right to adduce evidence in
their own behalf; and (5) the evidence must be duly considered by the
investigating committee or official designated by the school authorities to hear
and decide the case." 2 6
It cannot seriously be asserted that the above requirements were not met. When, in view of
the death of Leonardo Villa, petitioner Cynthia del Castillo, as Dean of the Ateneo Law
School, notified and required respondent students on February 11, 1991 to submit within
twenty-four hours their written statement on the incident, 2 7 the records show that instead
of filing a reply, respondent students requested through their counsel, copies of the
charges. 2 8 While some of the students mentioned in the February 11, 1991 notice duly
submitted written statements, the others failed to do so. Thus, the latter were granted an
extension of up to February 18, 1991 to file their statements. 2 9
Indubitably, the nature and cause of the accusation were adequately spelled out in
petitioners' notices dated February 14 and 20, 1991. 3 0 It is to be noted that the February
20, 1991 letter which quoted Rule No. 3 of its Rules of Discipline as contained in the
Ateneo Law School Catalogue was addressed individually to respondent students.
Petitioners' notices/letters dated February 11, February 14 and 20 clearly show that
respondent students were given ample opportunity to adduce evidence in their behalf and
to answer the charges leveled against them.
The requisite assistance of counsel was met when, from the very start of the
investigations before the Joint Administration-Faculty-Student Committee, the law firm of
Gonzales Batiller and Bilog and Associates put in its appearance and filed pleadings in
behalf of respondent students.
Respondent students may not use the argument that since they were not accorded the
opportunity to see and examine the written statements which became the basis of
petitioners' February 14, 1991 order, they were denied procedural due process. 3 1 Granting
that they were denied such opportunity, the same may not be said to detract from the
observance of due process, for disciplinary cases involving students need not necessarily
include the right to cross examination. An administrative proceeding conducted to
investigate students' participation in a hazing activity need not be clothed with the
attributes of a judicial proceeding. A closer examination of the March 2, 1991 hearing
which characterized the rules on the investigation as being summary in nature and that
respondent students have no right to examine affiants-neophytes, reveals that this is but a
reiteration of our previous ruling in Alcuaz. 3 2
Respondent students' contention that the investigating committee failed to consider their
evidence is far from the truth because the February 14, 1992 order clearly states that it
was reached only after receiving the written statements and hearing the testimonies of
several witnesses. 3 3 Similarly, the Disciplinary Board's resolution dated March 10, 1991
was preceded by a hearing on March 2, 1991 wherein respondent students were
summoned to answer clarificatory questions. prcd
With regard to the charge of hazing, respondent students fault petitioners for not explicitly
defining the word "hazing" and allege that there is no proof that they were furnished copies
of the 1990-91 Ateneo Law School Catalogue which prohibits hazing. Such flawed
sophistry is not worthy of students who aspire to be future members of the Bar. It cannot
be over-emphasized that the charge filed before the Joint Administration-Faculty-Student
Investigating Committee and the Disciplinary Board is not a criminal case requiring proof
beyond reasonable doubt but is merely administrative in character. As such, it is not
subject to the rigorous requirements of criminal due process, particularly with respect to
the specification of the charge involved. As we have had occasion to declare in previous
cases of a similar nature, due process in disciplinary cases involving students does not
entail proceedings and hearings identical to those prescribed for actions and proceedings
in courts of justice. 3 4 Accordingly, disciplinary charges against a student need not be
drawn with the precision of a criminal information or complaint. Having given prior notice
to the students involved that "hazing" which is not defined in the School Catalogue shall be
defined in accordance with Senate Bill No. 3815, the proposed bill on the subject of Sen.
Jose Lina, petitioners have said what needs to be said. We deem this sufficient for
purposes of the investigation under scrutiny.
Hazing, as a ground for disciplining a student, to the extent of dismissal or expulsion, finds
its raison d' etre in the increasing frequency of injury, even death, inflicted upon the
neophytes by their insensate "masters." Assuredly, it passes the test of reasonableness
and absence of malice on the part of the school authorities. Far from fostering
comradeship and esprit d' corps, it has merely fed upon the cruel and baser instincts of
those who aspire to eventual leadership in our country.
Respondent students argue that petitioners are not in a position to file the instant petition
under Rule 65 considering that they failed to file a motion for reconsideration first before
the trial court, thereby bypassing the latter and the Court of Appeals. 3 5
It is accepted legal doctrine that an exception to the doctrine of exhaustion of remedies is
when the case involves a question of law, 3 6 as in this case, where the issue is whether or
not respondent students have been afforded procedural due process prior to their
dismissal from petitioner university.
Lastly, respondent students argue that we erred in issuing a Temporary Restraining Order
since petitioners do not stand to suffer irreparable damage in the event that private
respondents are allowed to re-enroll. No one can be so myopic as to doubt that the
immediate reinstatement of respondent students who have been investigated and found
by the Disciplinary Board to have violated petitioner university's disciplinary rules and
standards will certainly undermine the authority of the administration of the school. This
we would be most loathe to do.
More importantly, it will seriously impair petitioner university's academic freedom which
has been enshrined in the 1935, 1973 and the present 1987 Constitutions.
At this juncture, it would be meet to recall the essential freedoms subsumed by Justice
Felix Frankfurter in the term "academic freedom" cited in the case of Sweezy v. New
Hampshire, 3 7 thus: (1) who may teach; (2) what may be taught; (3) how it shall be taught;
and (4) who may be admitted to study. LibLex
Socrates, the "first of the great moralists of Greece," proud to claim the title "gadfly of the
State," has deservedly earned for himself a respected place in the annals of history as a
martyr to the cause of free intellectual inquiry. To Plato, this great teacher of his was the
"best, the most sensible, and the most just man of his age." In 399 B.C., he willingly quaffed
the goblet of hemlock as punishment for alleged "corruption" of the youth of Athens. He
describes in his own words how this charge of "corruption," the forerunner of the concept
of academic freedom, came about:
"Young men of the richer classes, who have not much to do, come about me of
their own accord: they like to hear the pretenders examined, and they often imitate
me, and examine others themselves; there are plenty of persons, as they soon
discover, who think that they know something, but really know little or nothing;
and then those who are examined by them, instead of being angry with
themselves are angry with me. This confounded Socrates, they say; this villainous
misleader of youth. And then if somebody asks them, Why, what evil does he
practice or teach? they do not know, and cannot tell; but in order that they may
not appear to be at a loss, they repeat the ready-made charges which are used
against all philosophers about teaching things up in the clouds and under the
earth, and having no gods, and making the worse appear the better cause; for they
do not like to confess that their pretense of knowledge has been detected — which
is the truth; and as they are numerous and ambitious and energetic, and are all in
battle array and have persuasive tongues, they have filled your ears with their
loud and inveterate calumnies." 3 8
Since Socrates, numberless individuals of the same heroic mold have similarly defied the
stifling strictures of authority, whether State, Church, or various interest groups, to be able
to give free rein to their ideas. Particularly odious were the insidious and blatant attempts
at thought control during the time of the Inquisition until even the Medieval universities,
renowned as intellectual centers in Europe, gradually lost their autonomy.
In time, such noble strivings, gathering libertarian encrustations along the way, were
gradually crystallized in the cluster of freedoms which awaited the champions and martyrs
of the dawning modern age. This was exemplified by the professors of the new German
universities in the 16th and 17th centuries such as the Universities of Leiden (1575),
Helmstadt (1574) and Heidelberg (1652). The movement back to freedom of inquiry
gained adherents among the exponents of fundamental human rights of the 19th and 20th
centuries. "Academic freedom", the term as it evolved to describe the emerging rights
related to intellectual liberty, has traditionally been associated with freedom of thought,
speech, expression and the press; in other words, with the right of individuals in university
communities, such as professors, researchers and administrators, to investigate, pursue,
discuss and, in the immortal words of Socrates, "to follow the argument wherever it may
lead," free from internal and external interference or pressure.
But obviously, its optimum impact is best realized where the freedom is exercised
judiciously and does not degenerate into unbridled license. Early cases on this individual
aspect of academic freedom have stressed the need for assuring to such individuals a
measure of independence through the guarantees of autonomy and security of tenure. The
components of this aspect of academic freedom have been categorized under the areas
of: (1) who may teach and (2) how to teach.
It is to be realized that this individual aspect of academic freedom could have developed
only pari passu with its institutional counterpart. As corporate entities, educational
institutions of higher learning are inherently endowed with the right to establish their
policies, academic and otherwise, unhampered by external controls or pressure. In the
Frankfurter formulation, this is articulated in the areas of: (1) what shall be taught, e.g., the
curriculum and (2) who may be admitted to study.
In the Philippines, the Acts which were passed with the change of sovereignty from the
Spanish to the American government, namely, the Philippine Bill of 1902 and the Philippine
Autonomy Act of 1916 made no mention of the rights now subsumed under the catch-all
term of "academic freedom." This is most especially true with respect to the institutional
aspect of the term. It had to await the drafting of the Philippine Constitutions to be
recognized as deserving of legal protection.
The breakthrough for the concept itself was found in Section 5 of the 1935 Constitution
which stated: "Universities established by the State shall enjoy academic freedom." The
only State university at that time, being the University of the Philippines, the Charter was
perceived by some as exhibiting rank favoritism for the said institution at the expense of
the rest. prcd
In an attempt to broaden the coverage of the provision, the 1973 Constitution provided in
its Section 8 (2): "All institutions of higher learning shall enjoy academic freedom." In his
interpretation of the provision, former U.P. President Vicente G. Sinco, who was also a
delegate to the 1971 Constitutional Convention, declared that it "definitely grants the right
of academic freedom to the University as an institution as distinguished from the
academic freedom of a university professor." 3 9
Has the right been carried over to the present Constitution? In an attempt to give an
explicit definition with an expanded coverage, the Commissioners of the Constitutional
Commission of 1986 came up with this formulation: "Academic freedom shall be enjoyed
by students, by teachers, and by researchers." After protracted debate and ringing
speeches, the final version which was none too different from the way it was couched in
the previous two (2) Constitutions, as found in Article XIV, Section 5 (2) states: "Academic
freedom shall be enjoyed in all institutions of higher learning." In anticipation of the
question as to whether and what aspects of academic freedom are included herein,
ConCom Commissioner Adolfo S. Azcuna explained: "Since academic freedom is a
dynamic concept, we want to expand the frontiers of freedom, especially in education,
therefore, we shall leave it to the courts to develop further the parameters of academic
freedom." 4 0
More to the point, Commissioner Jose Luis Martin C. Gascon asked: "When we speak of
the sentence 'academic freedom shall be enjoyed in all institutions of higher learning,' do
we mean that academic freedom shall be enjoyed by the institution itself?" Azcuna replied:
"Not only that, it also includes . . ." Gascon finished off the broken thought, — "the faculty
and the students." Azcuna replied: "Yes."
Since Garcia v. Loyola School of Theology, 4 1 we have consistently upheld the salutary
proposition that admission to an institution of higher learning is discretionary upon a
school, the same being a privilege on the part of the student rather than a right. While
under the Education Act of 1982, students have a right "to freely choose their field of
study, subject to existing curricula and to continue their course therein up to graduation,"
such right is subject, as all rights are, to the established academic and disciplinary
standards laid down by the academic institution. 4 2
"For private schools have the right to establish reasonable rules and regulations for the
admission, discipline and promotion of students. This right . . . extends as well to parents .
. . as parents are under a social and moral (if not legal) obligation, individually and
collectively, to assist and cooperate with the schools." 4 3
Such rules are "incident to the very object of incorporation and indispensable to the
successful management of the college. The rules may include those governing student
discipline." 4 4 Going a step further, the establishment of rules governing university-student
relations, particularly those pertaining to student discipline, may be regarded as vital, not
merely to the smooth and efficient operation of the institution, but to its very survival.
Within memory of the current generation is the eruption of militancy in the academic
groves as collectively, the students demanded and plucked for themselves from the
panoply of academic freedom their own rights encapsulized under the rubric of "right to
education" forgetting that, in Hohfeldian terms, they have a concomitant duty, and that is,
their duty to learn under the rules laid down by the school.
Considering that respondent students are proud to claim as their own a Christian school
that includes Theology as part of its curriculum and assiduously strives to turn out
individuals of unimpeachable morals and integrity in the mold of the founder of the order
of the Society of Jesus, St. Ignatius of Loyola, and their God-fearing forbears, their barbaric
and ruthless acts are the more reprehensible. It must be borne in mind that universities are
established, not merely to develop the intellect and skills of the studentry, but to inculcate
lofty values, ideals and attitudes; nay, the development, or flowering if you will, of the total
man.
In essence, education must ultimately be religious — not in the sense that the founders or
charter members of the institution are sectarian or profess a religious ideology. Rather, a
religious education, as the renowned philosopher Alfred North Whitehead said, is "an
education which inculcates duty and reverence." 4 5 It appears that the particular brand of
religious education offered by the Ateneo de Manila University has been lost on the
respondent students.
Certainly, they do not deserve to claim such a venerable institution as the Ateneo de Manila
University as their own a minute longer, for they may foreseeably cast a malevolent
influence on the students currently enrolled, as well as those who come after them. cdphil
Quite applicable to this case is our pronouncement in Yap Chin Fah v. Court of Appeals
that: "The maintenance of a morally conducive and orderly educational environment will be
seriously imperilled if, under the circumstances of this case, Grace Christian is forced to
admit petitioner's children and to reintegrate them to the student body." 4 6 Thus, the
decision of petitioner university to expel them is but congruent with the gravity of their
misdeeds. That there must be such a congruence between the offense committed and the
sanction imposed was stressed in Malabanan v. Ramento. 4 7
Having carefully reviewed the records and the procedure followed by petitioner university,
we see no reason to reverse its decision founded on the following undisputed facts: that
on February 8, 9 and 10, 1991, the Aquila Legis Fraternity conducted hazing activities; that
respondent students were present at the hazing as auxiliaries, and that as a result of the
hazing, Leonardo Villa died from serious physical injuries, while Bienvenido Marquez was
hospitalized. In light of the vicious acts of respondent students upon those whom
ironically they would claim as "brothers" after the initiation rites, how can we countenance
the imposition of such nominal penalties as reprimand or even suspension? We, therefore,
affirm petitioners' imposition of the penalty of dismissal upon respondent students. This
finds authority and justification in Section 146 of the Manual of Regulations for Private
Schools. 4 8
WHEREFORE, the instant petition is GRANTED; the order of respondent Judge dated May
17, 1991 reinstating respondent students into petitioner university is hereby REVERSED.
The resolution of petitioner Joaquin Bernas S. J., then President of Ateneo de Manila
University dated March 10, 1991, is REINSTATED and the decision of the Special Board
DISMISSING respondent students ADEL ABAS and ZOSIMO MENDOZA dated May 20,
1991 is hereby AFFIRMED.
SO ORDERED.
Narvasa, C .J ., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Nocon, Bellosillo, Melo and
Quiason, JJ ., concur.
Griño Aquino, J ., is on leave.
Cruz, J ., concur in the result. I do not join in the statements in the ponencia which seem to
me to be a prejudgment of the criminal cases against the private respondents for the
death of Lenny Villa.
Footnotes
1. Garcia v. The Faculty Admission's Committee, Loyola School of Theology, No. L-40779,
November 28, 1975, 68 SCRA 277-298.
2. Composed of Faculty Members: Atty(s) Jacinto Jimenez, Sedfrey Candelaria, Carlos
Medina, Alternate: Dean Antonio Abad. Students: Mr.(s) Arthur Yap, Reynaldo Dizon, Ms.
Patricia Ty Administration: Dean Cynthia del Castillo (Chairperson).
3. Annex B, Rollo, p. 41.

4. "DISCIPLINE.
Dedication to study, respect for authority, strict observance of the rules and regulations of
the University and the school and unfailing courtesy are expected at all times of all
Ateneo Students. The Administration reserves to itself the right to suspend, dismiss from
the School at any time, strike from the list of candidates for graduation and/or withhold
the Ateneo diploma from or expel any student whom it may deem unworthy. Any of the
following acts shall constitute a ground for suspension, dismissal striking from the list
of candidates for graduation and/or withholding of the Ateneo diploma, or expulsion,
depending on the severity of the offense:
xxx xxx xxx
3. Hazing; carrying deadly weapons; drunkenness, vandalism; "assaulting a professor

or any other school authority, including members of the staff or employees of the
School;" Petition, p. 8, Emphasis supplied.
5. Annex D, Rollo, p. 45.
6. Annex E, Rollo, p. 46.

7. Annex F, Rollo, p. 48.
8. Annex G, Rollo, p. 49.

9. L-68288, July 11, 1986, 142 SCRA 699.
10. Annex Q, Rollo, p. 88.
11. Annex H, Rollo, p. 175.

12. The dismissed students are: Ernest Montecillo, E. Amado Sabban, Joseph Lledo,
Santiago Ranada III, Jude Fernandez, Dalmacio Lim, Adel Abas, Ronan de Guzman,
Zosimo Mendoza and Manuel Escalona. Annex I, Rollo, p. 52.
13. Annex J, Rollo, p. 54.
14. Annex K, Rollo, p. 55.
15. Annex L, Rollo, p. 67.

16. Annex M, Rollo, pp. 68-73.
17. Annex N, Rollo, pp. 76-81.
18. Rollo, p. 84.

19. Annex A, Rollo, p. 40.
20. Annex M, Rollo, p. 189.

21. Of the respondent students dismissed in the March 10, 1991 Resolution, Santiago
Ranada III and Ronan de Guzman are not named private respondents herein.
22. L-68288, July 11, 1986 142 SCRA 699.

23. L-76353, May 2, 1988, 161 SCRA 7.
24. G. R. No. 89317, May 20, 1990, 185 SCRA 523.
25. 69 Phil. 635 (1940).

26. Supra, at 22.
27. Annex B, Rollo p. 41.
28. Order dated May 17, 1991, Annex A, p. 35.
29. Annex C, Rollo, p. 43.
30. See Annex B, Rollo, p. 41 and Annex D, Rollo, p. 44.

31. Rollo, p. 115.
32. Supra at 20.
33. Annex C, Rollo, p. 43.
34. Alcuaz v. PSBA, QC Branch, supra at 20.

35. Rollo, pp. 99-100.
36. PALEA v. PAL, Inc., No. L-31396, January 30, 1982, 111 SCRA 215 and Central Bank v.
Cloribel, 44 SCRA 307, No. L-26971, April 11, 1972.
37. 354 U.S. 234 (1957).
38. Riley, Woodbridge, STORY OF ETHICS, Men and Morals, Vol. II, p. 62, Doubleday, Doran
and Co., Inc., 1933.
39. Sinco, PHILIPPINE POLITICAL LAW, p. 489 (1962).
40. 4 ConCom Record, p. 439.
41. No. L-40779, November 28, 1975, 68 SCRA 277. See also the cases of Tangonan v.
Pano, G. R. No. L-45157, June 27, 1985, 137 SCRA 245 and Magtibay v. Garcia, No. L-
28971, January 28, 1983, 120 SCRA 370.
42. Section 9 (2) of Batas Pambansa Blg. 232, effective September 11, 1982.
43. Yap Chin Fah v. Court of Appeals [Resolution], G.R. No. 90063, December 12, 1989.
44. Supra, at 22.
45. In his article "The Aims of Education," Alfred North Whitehead explained: "A religious
education is an education which inculcates duty and reverence. Duty arises from our
potential control over the course of events. Where attainable knowledge could have
changed the issue, ignorance has the guilt of vice. And the foundation of reverence is
this perception, that the present holds within itself the complete sum of existence,
backwards and forwards, that whole amplitude of time, which is eternity." Fuess, Claude
M. and Basford, Emory S., Editors, UNSEEN HARVESTS, A Treasury of Teaching, p. 92,
The Macmillan Company, 1947.
46. Supra, at 43.
47. G.R. No. 62270, May 21, 1984, 129 SCRA 359.
48. Ateneo de Manila v. Court of Appeals, No. L-56180, October 16, 1986, 145 SCRA 100.

EN BANC
[G.R. No. 110280. October 21, 1993.]
UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS and DR.

OLIVIA C. CAOILI in her capacity as Secretary of the Board ,
petitioners, vs. HON. ELSIE LIGOT-TELAN in her capacity as
Presiding Judge of Branch 87, Regional Trial Court of Quezon City
and RAMON P. NADAL , respondents.
U.P. Office of Legal Services for petitioners.

Bonifacio A. Alentajan for private respondent.
DECISION
ROMERO , J : p
In an effort to make the University of the Philippines (U.P.) truly the university of the
people, the U.P. administration conceptualized and implemented the socialized scheme of
tuition fee payments through the Socialized Tuition Fee and Assistance Program (STFAP),
popularly known as the "Iskolar ng Bayan" program. Spawned by the public clamor to
overcome what was perceived as the sharpening elitist pro le of the U.P. studentry, the
STFAP aspired to expand the coverage of government educational subsidies so as to
include the deserving in the lower rungs of the socio-economic ladder. llcd
After broad consultations with the various university constituencies by U.P.

President Jose V. Abueva, the U.P. Board of Regents issued on April 28, 1988 a Resolution
establishing the STFAP. A year later, it was granted o cial recognition when the Congress
of the Philippines allocated a portion of the National Budget for the implementation of the
program.
In the interest of democratizing admission to the State University, all students are
entitled to apply for STFAP bene ts which include reduction in tuition fees, living and book
subsidies and student assistantships which give undergraduate students the opportunity
to earn P12.00 per hour by working for the University. LLphil
Applicants are required to accomplish a questionnaire where, among others, they

state the amount and source of the annual income of the family, their real and personal
properties and special circumstances from which the University may evaluate their
nancial status and need on the basis of which they are categorized into brackets. At the
end of the application form, the student applicant, as well as his parent, signs a sworn
statement, as follows:
"Statement of the Student
I hereby certify, upon my honor, that all the data and information which I
have furnished are accurate and complete. I understand that any willful
misinformation and/or withholding of information will automatically disqualify
me from receiving any nancial assistance or subsidy, and may serve as ground
for my expulsion from the University. Furthermore, if such misinformation and/or
withholding of information on my part is discovered after I have been awarded
tuition scholarship or any form of nancial assistance, I will be required to
reimburse all nancial bene ts plus the legal rate of interest prevailing at the time
of reimbursement without prejudice to the ling of charges against me . (Italics
supplied for emphasis)
Moreover, I understand that the University may send a fact- nding team to
visit my home/residence to verify the veracity of the information provided in this
application and I will give my utmost cooperation in this regard. I also understand
that my refusal to cooperate with the fact- nding team may mean suspension or
withdrawal of STFAP benefits and privileges.
___________________
Student's Signature
Statement of the Applicant's Parent or Guardian

I hereby certify to the truthfulness and completeness of the information
which my son/daughter/dependent has furnished in this application together with
all the documents attached. I further recognize that in signing this application
form, I share with my son/daughter/dependent the responsibility for the
truthfulness and completeness of the information supplied herein. (Italics
supplied for emphasis)
Moreover, I understand that the University may send a fact- nding team to
visit my home/residence to verify the information provided in this application and
I will give my utmost cooperation in this regard. I also understand that my refusal
to cooperate with the fact- nding team may mean suspension or withdrawal of
STFAP benefits and privileges of my son/daughter/dependent.
____________________________________
Parent's/Legal Guardian's/Spouse's Signature" 1
From the early stages of its implementation, measures were adopted to safeguard
the integrity of the program. One such precautionary measure was the inclusion as one of
the punishable acts under Section 2 (a) of the Rules and Regulations on Student Conduct
and Discipline of the University the deliberate falsi cation or suppression/withholding of
any material information required in the application form. cdll
To further insure the integrity of the program, a random sampling scheme of

veri cation of data indicated in a student's application form is undertaken. Among those
who applied for STFAP bene ts for School Year 1989-90 was Ramon P. Nadal, a student
enrolled in the College of Law.
On March 14, 1991, a team composed of Arsenio L. Dona and Jose Carlo Manalo
conducted a home investigation at the residence of Nadal at 31 Twinpeaks Drive, Blue
Ridge, Quezon City.
Ms. Cristeta Packing, Nadal's aunt, was interviewed and the team submitted a home
visit report. Consolacion Urbino, Scholarship Affairs O cer II, found discrepancies
between the report and Nadal's application form. Forthwith, she and Bella M. Villanueva,
head of the O ce of Scholarships and Student Services, presented the matter to the
Diliman Committee on Scholarships and Financial Assistance. 2
In compliance with the said Committee's directive, Bella Villanueva wrote Nadal
informing him that the investigation showed that he had failed to declare, not only the fact
that he had been maintaining a 1977 Corolla car which was owned by his brother but also
the income of his mother who was supporting his brothers Antonio and Federico. Nadal
was likewise informed that the Diliman Committee had reclassi ed him to Bracket 9 (from
Bracket 4), retroactive to June 1989, unless he could submit "proofs to the contrary."
Nadal was required "to pay back the equivalent amount of full school fees" with "interest
based on current commercial rates." Failure to settle his account would mean the
suspension of his registration privileges and the withholding of clearance and transcript of
records. He was also warned that his case might be referred to the Student Disciplinary
Tribunal for further investigation. 3
On July 12, 1991, Nadal issued a certi cation stating, among other things, that his
mother migrated to the United States in 1981 but because her residency status had not
yet been legalized, she had not been able to nd a "stable, regular, well-paying
employment." He also stated that his mother, jointly with his brother Virgilio, Jr., was
shouldering the expenses of the college education of his two younger brothers. 4
Noting further discrepancies between Nadal's application form and the certi cation,
the U.P. charged Nadal before the Student Disciplinary Tribunal (SDT) on August 23, 1991
with the following:
"That respondent RAMON P. NADAL (UP Student No. 83-11640), a student
of the College of Law, UP System, Diliman, Quezon City, and STFAP (ISKOLAR NG
BAYAN) recipient (Bracket 4 for SY 1989-1990; Bracket 5 for SY 1990-1991) in his
applications for STFAP (ISKOLAR NG BAYAN) bene ts which he led for
schoolyear 1989-1990, and schoolyear 1990-1991, with the O ce of Scholarship
and Student Services (formerly Scholarship and Financial Assistance Service)
voluntarily and willfully withheld and did not declare the following:
(a) That he has and maintains a car (Toyota Corolla, Model
1977); and
(b) The income of his mother (Natividad Packing Nadal) in the

U.S.A. in support of the studies of his brothers Antonio and Federico,
which acts of willfully withholding information is tantamount to acts of
dishonesty in relation to his studies, in violation of paragraph (a), Section 2, of the
Rules and Regulations on Student Conduct and Discipline, as amended.
(Approved by the B.O.R. at its 876th meeting on 02 September 1976, amended at
the 923rd B.O.R. meeting on 31 January 1980, and further amended at its 1017th
B.O.R. meeting on 08 December 1988)." 5
On October 27, 1992, after hearing, the SDT 6 rendered a decision in SDT Case No.
91-026 exculpating Nadal of the charge of deliberately withholding in his STFAP
application form information that he was maintaining a Toyota Corolla car, but nding him
guilty of "wilfully and deliberately withholding information about the income of his mother,
who is living abroad, in support of the studies of his brothers Antonio and Federico, 7
which is tantamount to acts of dishonesty in relation to his studies in violation of
paragraph [a], Section 2 of the Rules [now covered by paragraph (i), Section 2 of the Rules,
as amended 25 June 1992]." As such, the SDT imposed upon Nadal the penalty of
expulsion from the University and required him to reimburse all STFAP bene ts he had
received but if he does not voluntarily make reimbursement, it shall be "effected by the
University thru outside legal action." 8

The SDT decision was thereafter automatically elevated to the Executive Committee
of U.P. Diliman for review pursuant to Sec. 20 of the U.P. Rules on Student Conduct and
Discipline. On November 26, 1992, the Executive Committee, voting 13:4, a rmed the
decision of the SDT; whereupon, Nadal appealed to the Board of Regents (BOR). The
appeal was included in the agenda of the BOR meeting on January 25, 1993. 9
On January 18, 1993, upon her assumption to the Chairmanship of the Senate
Committee on Education, thereby making her automatically a member of the BOR, Senator
Leticia Ramos-Shahani wrote the BOR a letter expressing her view that, after a close review
of Nadal's case by her legal staff, "it is only fair and just to nd Mr. Nadal's appeal
meritorious and his arguments worthy of belief. Consequently, he should be allowed to
graduate and take the bar examinations this year." 1 0
At its January 25, 1993 meeting, the BOR a rmed the decision of the SDT but
because "the Board was willing to grant a degree of compassion to the appellant in view of
the alleged status and predicament of the mother as an immigrant 'TNT' in the United
States," the penalty was modi ed "from Expulsion to One Year Suspension, effective
immediately, plus reimbursement of all bene ts received from the STFAP, with legal
interest." The BOR also decided against giving Nadal a certi cation of good moral
character. 1 1
Nadal forthwith led a motion for reconsideration of the BOR decision, allegedly
against the advice of his counsel. 1 2 The motion was placed on the agenda of the February
25, 1993 meeting of the BOR. A day before said date, Senator Shahani wrote the BOR
another letter requesting that deliberation on Nadal's case be deferred until such time as
she could attend a BOR meeting.
On March 15, 1993, the U.P. led an opposition to Nadal's motion for
reconsideration. Thereafter, the BOR held a special meeting to accommodate the request
of Regent Shahani with Nadal's case as the sole item on its agenda. Again, Nadal's motion
for reconsideration was included in the March 23, 1993 agenda but in view of the absence
of Senator Shahani, the decision thereon was deferred.
At the special meeting of the BOR on March 28, 1993 at the Board Room of the
Manila Polo Club in Forbes Park, Makati, Regent Antonio T. Carpio raised the "material
importance" of verifying the truth of Nadal's claim that earlier, he was a bene ciary of a
scholarship and nancial aid from the Ateneo de Manila University (AdeMU). Learning that
the "certi cation issued by the AdeMU that it had not given Nadal nancial aid while he was
a student there was made through a telephone call," Regent Carpio declared that there was
as yet "no direct evidence in the records to substantiate the charge." According to Carpio,
if it should be disclosed that Nadal falsely stated that he received such nancial aid, it
would be a clear case of gross and material misrepresentation that would even warrant
the penalty of expulsion. Hence, he cast a conditional vote that would depend on the
verification of Nadal's claim on the matter.
U.P. President and concurrently Regent Jose V. Abueva countered by stating that "a
decision should not be anchored solely on one piece of information which he considered
irrelevant, and which would ignore the whole pattern of the respondent's dishonesty and
deception from 1989 which had been established in the investigation and the reviews." He
added that "the respondent's eligibility for his AdeMU high school scholarship and nancial
assistance from 1979 to 1983 does not in any way establish that he is 'not guilty as
charged' before the SDT," since the formal charges against him do not include withholding
of information regarding scholarship grants received from other schools.
At the said March 28, 1993 special meeting, the Board decided to go into executive
session where the following transpired:
"The Chairman of the Board, together with the President, directed the
Secretary to re ect in the minutes of the meeting the following decisions of the
Board in executive session, with only the Board members present.
A vote was held by secret ballot on whether Ramon P. Nadal was guilty or
not guilty as charged of willful withholding of information in relation to his
application for Socialized Tuition and Financial Assistance Program (STFAP)
bene ts which he led for Schoolyears 1989-1990 and 1990-1991 which is
tantamount to act of dishonesty in relation to his studies, in violation of
paragraph (a), Section 2 of the Rules and Regulations on Student Conduct and
Discipline, as amended.
The Chairman gave the following results of the Board action during the
Executive Session: four (4) voted guilty; three (3) voted not guilty; and three (3)
gave conditional votes, pending veri cation with Father Raymond Holscher of
Ateneo de Manila University of Ramon P. Nadal's statement in his STFAP
application that he was granted scholarship while he was in high school. Should
Ateneo con rm that Nadal had not received nancial assistance, then the
conditional votes would be considered as guilty, and if otherwise, then not guilty.
The Chairman requested the President to make the veri cation as soon as
possible the next day. In answer to a query, the Chairman clari ed that once the
information was received from Ateneo, there would be no need for another
meeting to validate the decision.
The President reiterated his objections to the casting of conditional votes.

The Chairman himself did not vote." 1 3
In the morning of March 29, 1993, the AdeMU issued a certification to the effect that
Nadal was indeed a recipient of a scholarship grant from 1979 to 1983. That evening, the
BOR met again at a special meeting at the Westin Philippine Plaza Hotel. According to
Regent Carpio, in executive session, the BOR found Nadal "guilty" as the members voted as
follows: six members — guilty, three members — not guilty, and three members abstained.
14 Consequently, the BOR imposed on Nadal the penalties of suspension for one (1) year
effective March 29, 1993, non-issuance of any certi cate of good moral character during
the suspension and/or as long as Nadal has not reimbursed the STFAP bene ts he had
received with 12% interest per annum from March 30, 1993 and non-issuance of his
transcript of records until he has settled his financial obligations with the university. 1 5
On March 30, 1993, Nadal wrote President Abueva a handwritten letter stating that
"after learning of the latest decision" of the BOR, he had been "intensely concentrating on
(his) job so that (he) can earn enough to be able to pay for (his) nancial obligations to the
University." Alleging that he was "now letting nature take its course," Nadal begged
President Abueva not to issue any press release regarding the case. 1 6
However, on April 22, 1993, Nadal led in the Regional Trial Court of Quezon City a
petition for mandamus with preliminary injunction and prayer for a temporary restraining
order against President Abueva, the BOR, Oscar M. Alfonso, Cesar A. Buenaventura,
Armand V. Fabella and Olivia C. Caoili. The petition prayed:
"After trial on the merits, judgment be rendered as follows:

a. Making the preliminary injunction permanent;
b. Ordering respondents to uphold and implement their decision

rendered on 28 March 1993, exonerating petitioner from all the charges against
him, and accordingly dismissing SDT Case No. 91-026;
c. Ordering respondents jointly and severally to pay petitioner litigation

expenses of at least P150,000.00.
Other just and equitable reliefs are likewise prayed for." 1 7
The motion for the issuance of a temporary restraining order and the writ of
preliminary injunction was immediately set for hearing. At the May 10, 1993 hearing, the
lower court declared that the only issue to be resolved was "whether or not the
respondents in Civil Case No. 93-15665 violated (Nadal's) right to due process when it
rendered a decision nding Nadal guilty of the charges against him" during the March 29,
1993 meeting. After the respondents had presented their rst witness, Dr. Olivia C. Caoili,
the lower court asked respondents' counsel whether they were amenable to maintaining
the status quo. Said counsel replied in the negative asserting the University's prerogative
to discipline students found guilty of violating its rules of discipline. 1 8
On the same day, the lower court 1 9 issued the following Order:
"The parties were heard on their respective positions on the incident
(application for preliminary injunction and prayer for temporary restraining order
and opposition thereto). For lack of material time set this for continuation on May
17 and 18, 1993 both at 2:30 p.m.
In the meantime, in order that the proceedings of this case may not be
rendered moot and academic, the respondents herein, namely: Jose V. Abueva,
President of the University of the Philippines and Vice-Chairman of the U.P. Board
of Regents, Oscar M. Alfonso, Cesar A. Buenaventura and Armand V. Fabella,
members of the U.P. Board of Regents, Olivia C. Caoili, the o cers, agents,
representatives, and all persons acting in their behalf, are hereby temporarily
restrained from implementing their decision rendered on March 29, 1993 in
Administrative SDT Case No. 91-026 entitled University of the Philippines vs.
Ramon P. Nadal, as re ected in the Minutes of the 1062nd meeting of the Board
of Regents, U.P. held at the Romblon Room, Westin Phil. Plaza, Manila, until
further order from this Court.
SO ORDERED."
Thereafter, Nadal presented as witnesses Regents Emerenciana Y. Arcellana, Ariel P.

Tanangonan, Leticia R. Shahani and Antonio T. Carpio. The University, on the other hand,
presented Dr. Olivia Caoili and Nadal himself as a hostile witness. On May 29, 1993, the
lower court issued the following Order:
"The petitioner complains that he was not afforded due process when,
after the Board Meeting on SDT Case No. 91-026 on March 28, 1993 that resulted
in a decision of "NOT GUILTY" in his favor, the Chairman of the U.P. Board of
Regents, without notice to the herein petitioner, called another meeting the
following day to deliberate on his (the Chairman's) MOTION FOR
RECONSIDERATION, which this time resulted in a decision of "GUILTY." While the
main issue of violation of due process raised in the petition pends trial and
resolution, the petitioner prays for the issuance of a writ of preliminary injunction
prohibiting the respondents from further proceeding with SDT Case No. 91-026
and from suspending the petitioner for one year.
It is a basic requirement in the issuance of the preliminary injunctive writ

that there must be a right to be protected. As the issue in the case at bar is due
process in the March 29 Board meeting, there is, indeed, a right to be protected for,
in administrative proceedings, a respondent's right to due process exists not only
at the early stages but also at the final stage thereof.
With the circulation to the members of the Board of Regents, as well as to

other UP personnel, of the Minutes of the March 29, 1993 meeting, even after this
case had already been led, the Court is convinced that there now exists a threat
to the petitioner (respondent in SDT Case No. 91-026) that the decision of the
Board of Regents nally nding him guilty of willfully withholding information
material to his application for Socialized Tuition and Financial Assistance
Program (STFAP) bene ts, will be implemented at any time, especially during the
enrollment period, and that this implementation would work injustice to the
petitioner as it would delay him in nishing his course, and, consequently, in
getting a decent and good paying job. The injury thus caused would be
irreparable.
'Damages are irreparable within the meaning of the rule where there
is no standard by which their amount can be measured with reasonable
accuracy. Where the damage is susceptible of mathematical computation,
it is not irreparable.' (Social Security Commission v. Bayona, et al., G.R. No.
L-13555, May 30, 1962).
IN VIEW OF THE FOREGOING, and so as not to render moot the issues in
the instant proceedings, let a writ of preliminary injunction be issued restraining
the respondents, their o cers, agent(s), representatives, and all persons acting in
their behalf, from further proceeding with SDT Case No. 91-026, and from
suspending petitioner, upon the latter's filing a bond in the amount of P3,000.00.
IT IS SO ORDERED." 2 0
Dispensing with the ling of a motion for reconsideration, the petitioners led the
instant petition for certiorari and prohibition with prayer for the issuance of an injunction or
temporary restraining order, raising the following issues: whether or not Nadal was denied
due process in the administrative disciplinary proceedings against him, and, whether or not
the respondent judge gravely abused her discretion in issuing the May 29, 1993 writ of
preliminary injunction thereby preventing the BOR from implementing the one-year
suspension penalty it had imposed on Nadal.
Before proceeding with the discussion of the merits of the instant petition, we shall
confront a threshold issue raised by private respondent, namely, that Dr. Caoili, not having
been authorized by the Board of Regents as a collegial body to le the instant petition, and
Dr. Abueva, who veri ed the petition, not being the "Board of Regents" nor "the University of
the Philippines," they are not the real parties in interest who should file the same. 2 1
A real party in interest is one "who stands to be bene ted or injured by the judgment
or the party entitled to the avails of the suit. 'Interest' within the meaning of the rule means
material interest, an interest in issue and to be affected by the decree, as distinguished
from mere interest in the question involved, or a mere incidental interest." 2 2 Undoubtedly,
the U.P. Board of Regents has an interest to protect inasmuch as what is in issue here is its
power to impose disciplinary action against a student who violated the Rules and
Regulations on Student Conduct and Discipline by withholding information in connection
with his application for STFAP bene ts, which information, if disclosed, would have
su ced to disqualify him from receiving the nancial assistance he sought. Such
dishonesty, if left unpunished, would have the effect of subverting a commendable
program into which the University o cials had devoted much time and expended precious
resources, from the conceptualization to the implementation stage, to rationalize the
socialized scheme of tuition fee payments in order that more students may bene t from
the public funds allocated to the State University.
Having speci cally named Drs. Abueva and Caoili as respondents in the petition for
mandamus that he led below, Nadal is now estopped from questioning their personality
to le the instant petition. 2 3 Moreover, under Sec. 7 of the U.P. Charter (Act 1870) and
Sec. 11 of the University Code "all process" against the BOR shall be served on "the
president or secretary thereof." It is in accordance with these legal provisions that Dr.
Caoili is named as a petitioner. Necessarily, Dr. Abueva, the University President and
member of the BOR, has to verify the petition. It is not mandatory, however, that each and
every member of the BOR be named petitioners. As the Court has time and again held, an
action may be entertained, notwithstanding the failure to include an indispensable party
where it appears that the naming of the party would be but a formality. 2 4
No longer novel, as this is not a case of rst impression, is the issue on the right of
an academic institution to refuse admission to a student arising from the imposition upon
him of an administrative disciplinary sanction. In our recent decision in Ateneo de Manila
University v. Hon. Ignacio M. Capulong , 25 wherein certain law students were dismissed
for hazing resulting in the death of another, we held that the matter of admission of
students is within the ambit of academic freedom and therefore, beyond the province of
the courts to decide. Certain fundamental principles bear stressing.llcd
One of the arguments of Nadal in his petition for mandamus below was that he was
denied due process. To clarify, the so-called lack of due process referred only to the March
29, 1993 meeting of the BOR. As stated by respondent's counsel: "What was conceded by
undersigned counsel was that Nadal was afforded due process from the start of the
administrative proceeding up to the meeting of the Board of Regents on March 28, 1993."
26
With respect to the March 29, 1993 meeting, respondent considers the same as
"unquestionably void for lack of due process" inasmuch as he was not sent a notice of said
meeting. Counsel cites the ruling in Non v. Dames II 2 7 that imposition of sanctions on
students requires "observance of procedural due process," 2 8 the phrase obviously
referring to the sending of notice of the meeting.
Attention is drawn to the disparate factual environments obtaining in Non v. Dames
II and in the instant case. In the former case, the students were refused admission for
having led or participated in student mass actions against the school, thereby posing a
collision between constitutionally cherished rights — freedom of expression and academic
freedom. In the case at bar, Nadal was suspended for having breached the University's
disciplinary rules. In the Non case, the Court ruled that the students were not afforded due
process for even the refusal to re-enroll them appeared to have been a mere afterthought
on the part of the school administrators. Here, Nadal does not dispute the fact that his
right to due process was held inviolate until the BOR decided to meet on March 29, 1993
with his case as the sole item on the agenda.LLjur
In any event, it is gross error to equate due process in the instant case with the
sending of notice of the March 29, 1993 BOR meeting to respondent. University rules do
not require the attendance in BOR meetings of individuals whose cases are included as
items on the agenda of the Board. This is not exclusive of students whose disciplinary
cases have been appealed to the Board of Regents as the nal review body. At no time did
respondent complain of lack of notice given to him to attend any of the regular and special
BOR meetings where his case was up for deliberation. He would make an exception of the
March 29, 1993 meeting for it was "supposed to reconsider the decision made on March
28, 1993 exonerating respondent Nadal from all administrative charges against him." 2 9
Regent Antonio T. Carpio, in his testimony before the lower court on May 25, 1993
admitted that there was no nal verdict at the March 28, 1993 meeting in view of the
conditional votes resulting from his assertion that he was "not morally convinced that
there was su cient evidence to make a nding of guilty against Nadal because there was
no direct evidence that his mother received income from the United States and this income
was sent to the Philippines to support the studies of the children." 3 0 Two regents shared
the view of Regent Carpio, with the following result: four voted guilty, three, not guilty, and
three cast conditional votes. The BOR agreed that, upon the suggestion of Regent Carpio,
they would still verify from the AdeMU about Nadal's alleged scholarship as a student in
said institution. Consequently, no de nitive decision was arrived at by the BOR on March
28, 1993. Much less was a verdict of exoneration handed down as averred by respondent.
Regent Carpio testified, with respect to the March 29, 1993 meeting where all twelve
members of the BOR were present, that all of them participated in the voting held to
reconsider the previous day's decision. He stated: "I remember Regent Arcellana
questioning the voting again on the ground that there was already a nal decision, but
there was a vote taken on whether a motion for reconsideration can be decided by the
board, and a majority of the board ruled that the matter can be reconsidered again upon
motion of the chairman." 3 1
At said meeting, six (6) regents voted to nd respondent guilty, three (3) voted that
he was not guilty and three (3) abstained. As succinctly announced by Regent Carpio, the
nal decision was that which was rendered on March 29, 1993 as "no other decision was
made by the Board with respect to the same issue." 3 2
Counsel for Nadal charged before the lower court that his client was "not given due
process in the March 29 meeting because the ground upon which he was again convicted
was not the same as the original charge." 3 3 Obviously, he was referring to the basis of the
conditional votes on March 28, i.e., whether or not Nadal was telling the truth when he
claimed that he received a scholarship grant from the AdeMU. However, Regent Carpio
himself testi ed that the charge considered was "exactly the same charge" of withholding
information on the income of Nadal's mother. 3 4 It should be stressed that the reason why
Regent Carpio requested a veri cation of Nadal's claim that he was a scholar at the
AdeMU was that Regent Carpio was not "morally convinced" yet as to the guilt of Nadal. In
other words, he sought additional insights into the character of Nadal through the
information that would be obtained from the AdeMU. LLphil
In this regard, we nd such information to be irrelevant and a mere super uity. In his
July 12, 1991 certi cation aforementioned, Nadal admitted, although inconsistently, that
his mother was a "TNT" who could not nd a "stable, regular, well-paying employment" but
that she was supporting the education of his brothers with the help of another son. To our
mind, this constitutes su cient admission that Nadal withheld information on the income,
however measly and irregular, of his mother. Unlike in criminal cases which require proof
beyond reasonable doubt as basis for a judgment, in administrative or quasi-judicial
proceedings, only substantial evidence is required, that which means more than a mere
scintilla or relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other minds equally reasonable might conceivably opine otherwise. 3 5
In light of the foregoing circumstances, we nd that Nadal has been su ciently proven to
have violated his undertaking to divulge all information needed when he applied for the
benefits of the STFAP.
Let it not be forgotten that respondent aspires to join the ranks of the professionals
who would uphold truth at all costs so that justice may prevail. The sentinels who stand
guard at the portals leading to the hallowed Temples of Justice cannot be overzealous in
admitting only those who are intellectually and morally t. In those who exhibit duplicity in
their student days, one spots the shady character who is bound to sow the seeds of
chicanery in the practice of his profession.
Having reached his senior year, respondent is presumably aware that the bedrock
axiom, Canon I, Rule 1.01 of the Code of Professional Responsibility states: "A lawyer shall
not engage in unlawful, dishonest, immoral or deceitful conduct." Further on, Canon 7, Rule
7.01 provides: "A lawyer shall be answerable for knowingly making a false statement or
suppressing a material factin connection with his application for admission to the bar."
(Italics supplied for emphasis)
Surely, it is not too early to warn entrants to the noble profession of law that honesty
and integrity are requirements no less weighty than hurdling the Bar examinations. This is
the reason why a certi cation of good moral character is one of the documents that must
be submitted in applying to take said examination. In fact, a charge of immoral or deceitful
conduct on the part of an applicant, when proved, is a ground for disqualifying him.
To revert to the instant case, inasmuch as it has been shown su ciently that
respondent has committed an act of dishonesty in withholding vital information in
connection with his application for STFAP bene ts, all in blatant violation of the Rules and
Regulations on Student Conduct and Discipline of petitioner University, the latter's inherent
power and authority to impose disciplinary sanction may be invoked and rightfully
exercised.
As a Bohemian proverb puts it: "A school without discipline is like a mill without
water." Insofar as the water turns the mill, so does the school's disciplinary power assure
its right to survive and continue operating. In more relevant terms, through its power to
impose disciplinary sanctions, an educational institution is able to exercise its academic
freedom which is, in the case at bar, the right to suspend and refuse admission to a
student who has subverted its authority in the implementation of the critically important
STFAP.
At the risk of being repetitious, the matter of admission to a University is
encompassed by the right of academic freedom. In Garcia v. The Faculty Admission
Committee, Loyola School of Theology 3 6 the Court stated that a school or college which
is possessed of the right of academic freedom "decides for itself its aims and objectives
and how best to attain them. It is free from outside coercion or interference save possibly
when the overriding public welfare calls for some restraint. It has a wide sphere of
autonomy certainly extending to the choice of students." Elucidating, in Ateneo de Manila
University v. Hon. Ignacio M. Capulong, 3 7 the Court further expounded:
"Since Garcia v. Loyola School of Theology , we have consistently upheld
the salutary proposition that admission to an institution of higher learning is
discretionary upon a school, the same being a privilege on the part of the student
rather than a right. While under the Education Act of 1982, students have a right
'to freely choose their eld of study, subject to existing curricula and to continue
their course therein up to graduation,' such right is subject, as all rights are, to the
established academic and disciplinary standards laid down by the academic
institution.
'For private schools have the right to establish reasonable rules and
regulations for the admission, discipline and promotion of students. This right . . .
extends as well to parents . . . as parents are under a social and moral (if not
legal) obligation, individually and collectively, to assist and cooperate with the
schools.'
Such rules are 'incident to the very object of incorporation and
indispensable to the successful management of the college. The rules may
include those governing student discipline.' Going a step further, the
establishment of rules governing university-student relations, particularly those
pertaining to student discipline, may be regarded as vital, if not merely to the
smooth and efficient operation of the institution, but to its very survival.
Within memory of the current generation is the eruption of militancy in the
academic groves as collectively, the students demanded and plucked for
themselves from the panoply of academic freedom their own rights encapsulized
under the rubric of 'right to education' forgetting that, in Hohfeldian terms, they
have a concomitant duty, and that is, their duty to learn under the rules laid down
by the school." (Italics supplied.)
On the second issue presented for adjudication, the Court nds that the lower court
gravely abused its discretion in issuing the writ of preliminary injunction of May 29, 1993.
The issuance of the said writ was based on the lower court's nding that the
implementation of the disciplinary sanction of suspension on Nadal "would work injustice
to the petitioner as it would delay him in nishing his course, and consequently, in getting a
decent and good paying job." Sadly, such a ruling considers only the situation of Nadal
without taking into account the circumstances, clearly of his own making, which led him
into such a predicament. More importantly, it has completely disregarded the overriding
issue of academic freedom which provides more than ample justi cation for the
imposition of a disciplinary sanction upon an erring student of an institution of higher
learning. cdrep
From the foregoing arguments, it is clear that the lower court should have restrained
itself from assuming jurisdiction over the petition led by Nadal. Mandamus is never
issued in doubtful cases, a showing of a clear and certain right on the part of the petitioner
being required. 3 8 It is of no avail against an o cial or government agency whose duty
requires the exercise of discretion or judgment. 3 9
Hence, by issuing the writ of preliminary injunction, the lower court dared to tread
upon legally forbidden grounds. For, by virtue of the writ, the University's exercise of
academic freedom was peremptorily curtailed. Moreover, the door was ung wide open
for Nadal to do exactly what the decision of the BOR prohibited him from doing and that is,
to violate the suspension order by enrolling for the rst semester of 1993-1994. It must
have been with consternation that the University o cials helplessly watched him complete
his academic requirements for taking the Bar. 4 0 In the event that he be allowed to
continue with his studies, he would, in effect render moot and academic the disciplinary
sanction of suspension legally imposed upon him by the BOR's nal decision of March 29,
1993. What is to prevent other aspirants for STFAP scholarships from misleading the
University authorities by misrepresenting certain facts or as in instant case, withholding
vital information and stating downright falsehoods, in their application forms with
impunity? Not only would this undermine the authority of the U.P. to discipline its students
who violate the rules and regulations of the institution but, more importantly, subvert the
very concept and lofty intent to give nancial assistance to poor but deserving students
through the STFAP which, incidentally, has not ceased re ning and modifying its
operations.
WHEREFORE, the instant petition is GRANTED and the lower court is hereby ordered
to DISMISS the petition for mandamus.
SO ORDERED.
Narvasa, C . J ., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr.,
Nocon, Bellosillo, Melo, Quiason, Puno and Vitug, JJ ., concur.
Footnotes
1. Rollo, p. 72.
2. Ibid, pp. 133-134.
3. Ibid, p. 74.
4. Ibid, pp. 75-76.

5. Ibid, p. 39.
6. Composed of Fedor E. Santos as Chairman and Emmanuel J. de Guzman and Quintin R.

Resurreccion as Members.
7. Antonio was a dentistry student at the UERM while Federico was an economics student
at the De la Salle University (Rollo, p. 85).
8. Rollo, pp. 130, 150-151.

9. Ibid, pp. 153-154.
10. Ibid, p. 155.
11. Minutes of the 1057th Meeting of the BOR, Rollo, pp. 157-158.
12. Petition, p. 10; Rollo, p. 11.
13. Minutes of the 1061st (special) meeting of the BOR, Rollo, pp. 184-186.
14. TSN of the May 25, 1993 hearing at the lower court in SP. Civil Case No. Q-93-15655;
Rollo, p. 192.

16. Rollo, p. 214.
18. Ibid, pp. 15-16 or pp. 16-17.

19. Presided by Judge Elsie Ligot-Telan.
20. Rollo, p. 241.
21. Comment, pp. 2-3; Rollo, pp. 244-245.

22. Republic v. Sandiganbayan, G.R. No. 90667, November 5, 1991, 203 SCRA 310, 324;
Gan Hock v. Court of Appeals, G.R. No. 70648, May 20, 1991, 197 SCRA 223, 230.
23. Annex "T" to Petition; Rollo, p. 217.

24. Eden v. Ministry of Labor and Employment, G.R. No. 72145, February 28, 1990, 182
SCRA 840 citing Baguio v. Rodriguez, 105 Phil., 1323 (1959).
25. G.R. No. 99327, May 27, 1993.
26. Comment, p. 14; Rollo, p. 256.

27. G.R. No. 89317, May 20, 1990, 185 SCRA 523.

30. TSN, May 25, 1993, p. 3; Rollo, p. 189.
31. TSN, May 25, 1993, p. 16; Rollo, p. 294.

32. Ibid, at p. 18 or p. 203.
33. Ibid, at p. 6 or p. 192.

34. Ibid, at pp. 8 or 194.
35. Lansang v. Garcia, G.R. No. L-33964, December 11, 1971, 42 SCRA 480.
36. L-40779, November 28, 1975, 68 SCRA 277.

37. Supra.
38. University of Pangasinan Faculty Union v. NLRC, G.R. No. 64821-23, January 29, 1993.
39. Calderon v. Solicitor General, G.R. Nos. 103752-53, November 25, 1992, 215 SCRA 876,
882.
40. Reply, pp. 17-18; Rollo, pp. 422-423.

FIRST DIVISION
[G.R. No. 81798. December 29, 1989.]
LAO GI alias FILOMENO CHIA, SR., his wife, ONG UE, and his children
FILOMENO, JR., MANUEL, ROSITA VICENTA and DOMINGA, all surnamed
CHIA , petitioners, vs. HONORABLE COURT OF APPEALS AND
COMMISSION ON IMMIGRATION AND DEPORTATION , respondents.
Dakila F. Castro & Associates for petitioners.
DECISION
GANCAYCO , J : p
On September 3, 1958 the Secretary of Justice rendered Opinion No. 191, series of 1958
finding Filomeno Chia, Jr., alias Sia Pieng Hui to be a Filipino citizen as it appears that his
father Filomeno Chia, Sr. is a Filipino citizen born on November 28, 1899 being the
legitimate son of Inocencio Chia and Maria Layug of Guagua, Pampanga. However on
October 3, 1980 the Minister of Justice rendered Opinion No. 147, series of 1980
cancelling Opinion No. 191, series of 1958 and setting aside the citizenship of Filomeno
Chia, Sr. on the ground that it was founded on fraud and misrepresentation. A motion for
reconsideration of said Opinion was denied by the Minister of Justice on February 13,
1981. cdll
On March 9, 1981 a charge for deportation was filed with the Commission on Immigration
and Deportation (CID) against Lao Gi alias Filomeno Chia, Sr., his wife and children.
An amended charge was filed with the CID on March 19, 1981 alleging that said
respondents refused to register as aliens having been required to do so and continued to
refuse to register as such. On August 31, 1981 another amended charge was filed alleging
that Manuel Chia committed acts of undesirability.
On September 4, 1981 said respondents filed a motion to dismiss the amended charges
on the ground that the CID has no authority to reopen a matter long settled under Opinion
No. 191, series of 1958. The motion to dismiss was opposed by the private prosecutor.
The CID special prosecutor also filed an opposition on the ground that the citizenship may
be threshed out as the occasion may demand and that due process was accorded to
respondents. The respondents filed a reply thereto. The motion to dismiss was denied by
the CID and a motion for reconsideration of said denial was also denied in a resolution
dated December 10, 1981. LLphil
Said respondents then filed with this Court on February 11, 1982 a petition for certiorari
and prohibition with a prayer for the issuance of a writ of preliminary injunction and
restraining order docketed as G.R. No. 59619. After requiring a comment thereon, on April
28, 1982 this court en banc resolved to dismiss the petition for lack of merit.
Earlier, Manuel Chia was charged with falsification of public documents in the Court of
First Instance (CFI) of Manila in Criminal Case No. 60172 for alleging that he was a Filipino
citizen in the execution of a Deed of Absolute Sale of certain real property. He was
acquitted by the trial court in an order dated May 5, 1982 on the ground that Opinion No.
191, series of 1958 of the Secretary of Justice may be equated as res judicata and that
revocation thereof by Opinion No. 147, series of 1980 cannot be considered just, fair and
reasonable.
On June 1, 1982 respondents filed a motion for reconsideration of the aforesaid resolution
of this Court dismissing the petition but this was denied by another resolution of this Court
dated August 17, 1982. A second motion for reconsideration thereof was also denied by
this Court on September 16, 1982.
On September 23, 1982 the CID set the deportation case against respondents for hearing
and Acting Commissioner Victor G. Nituda gave respondents three (3) days to move for
reconsideration of the order directing them to register as aliens and to oppose the motion
for their arrest. On September 27, 1982 respondents filed said motion for reconsideration
and opposition but this was denied by Acting Commissioner Nituda on September 28,
1982. The latter directed respondents to register as aliens within two (2) days from notice
thereof. The deportation case was set for hearing on October 5, 1982 but on the same day
respondents filed the petition for certiorari and prohibition with a prayer for injunctive relief
in the Court of First Instance of Manila docketed as Civil Case No. 82-12935 whereby a
writ of preliminary injunction was issued. On April 17, 1985 a decision was rendered by the
trial court dismissing the petition for lack of legal basis and for want of supervisory
jurisdiction on the part of the trial court on the particular subject involved. The writ of
preliminary injunction previously issued was dissolved.
An appeal therefrom was interposed to the Court of Appeals. In due course a decision was
rendered on August 19, 1987 dismissing the appeal with costs against petitioners. A
motion for reconsideration of the decision filed by petitioners was also denied in a
resolution dated January 7, 1988.
Hence, the herein petition for certiorari filed by petitioners wherein they seek to set aside
the decision of the Court of Appeals and ask that a new one be rendered setting aside the
order of the CID dated September 28,1982 and directing it to proceed with the reception
of the evidence in support of the charges against the petitioners. The issues raised in the
petition are as follows:
"1. The issues raised in G.R. No. 59619 before the Honorable Supreme Court
were different from the issues raised in Civil Case No. 82-12935-CV.
2. The minute resolution of the Honorable Supreme Court in G.R. No. 59619
did not make a categorical ruling that petitioner entered and remained in the
Philippines by false pretenses.
3. The issue of whether or not petitioners' citizenship was secured by fraud is

precisely the subject matter of the proceedings before the Commission on
Immigration and Deportation, in which no evidence had been presented yet in
support of the charge of fraud in the acquisition of petitioners' citizenship.
4. Petitioners are not subject to immediate deportation.
5. The order for the arrest of petitioners in case of failure to register as aliens
was premature since there was no competent determination yet that their
citizenship was indeed procured by fraud.
6. The Honorable Court of Appeals overstepped its appellate jurisdiction,

when it ruled on matters not covered by the Decision of the lower court."
There can be no question that the CID has the authority and jurisdiction to hear and
determine the deportation case against petitioners and in the process determine also the
question of citizenship raised by the petitioners. Section 37(a) (1) of the Immigration Act
provides as follows:
"SEC. 37. (a) The following aliens shall be arrested upon the warrant of the
Commissioner of Immigration or of any other officer designated by him for the
purpose and deported upon the warrant of the Commissioner of Immigration after
a determination by the Board of Commissioners of the existence of the ground for
deportation as charged against the alien:
(1) Any alien who enters the Philippines after the effective date of this Act by
means of false and misleading statements or without inspection and admission
by the immigration authorities at a designated port of entry or at any place other
than at a designated port of entry. (As amended by Sec. 13, Rep. Act No. 503.) . . .
."
From the foregoing provision it is clear that before any alien may be deported upon a
warrant of the Commissioner of Immigration, there should be a prior determination by the
Board of Commissioners of the existence of the ground as charged against the alien.
In this case it appears that petitioners are charged with having entered the Philippines by
means of false and misleading statements or without inspection or admission by the
immigration authorities at a designated port of entry.
After appropriate charges are filed in the CID the specific grounds of which he should be
duly informed of, a hearing should be conducted, and it is only after such a hearing by the
CID that the alien may be ordered deported. In such a hearing, Opinion No. 191, Series of
1958 of the Secretary of Justice and Opinion No. 147, Series of 1980 of the Minister of
Justice will bear much weight in the determination by the CID of the citizenship of said
petitioners.
The petitioners question the Order of Acting Commissioner Nituda that they register as
aliens as required by the Immigration Act. While it is not disputed that it is also within the
power and authority of the Commissioner to require an alien to so register, such a
requirement must be predicated on a positive finding that the person who is so required is
an alien. In this case where the very citizenship of the petitioners is in issue there should be
a previous determination by the CID that they are aliens before the petitioners may be
directed and required to register as aliens. cdrep
The power to deport an alien is an act of the State. It is an act by or under the authority of
the sovereign power. 1 It is a police measure against undesirable aliens whose presence in
the country is found to be injurious to the public good and domestic tranquility of the
people. 2
Although a deportation proceeding does not partake of the nature of a criminal action,
however, considering that it is a harsh and extraordinary administrative proceeding
affecting the freedom and liberty of a person, the constitutional right of such person to
due process should not be denied. Thus, the provisions of the Rules of Court of the
Philippines particularly on criminal procedure are applicable to deportation proceedings.
Under Section 37 (c) of the Philippine Immigration Act of 1940 as amended, it is provided:

"c" No alien shall be deported without being informed of the specific grounds
for deportation nor without being given a hearing under rules of procedure to be
prescribed by the Commissioner of Immigration."
Hence, the charge against an alien must specify the acts or omissions complained of
which must be stated in ordinary and concise language to enable a person of common
understanding to know on what ground he is intended to be deported and enable the CID
to pronounce a proper judgment. 3
Before any charge should be filed in the CID a preliminary investigation must be conducted
to determine if there is a sufficient cause to charge the respondent for deportation. 4 The
issuance of warrants of arrest, arrests without warrant and service of warrants should be
in accordance likewise with Rule 113 of the 1985 Rules of Criminal Procedure; 5 search
warrants issued by the CID shall be governed by Rule 126 of the 1985 Rules of Criminal
Procedure; 6 and so the matter of bail, motion to quash, and trial, 7 among others. Fealty to
the prescribed rules of procedure in deportation cases shall insure a speedy, fair and just
dispensation of justice. cdrep
The Court takes note of the fact that a private prosecutor is assisting in the prosecution of
the case by the special prosecutor of the CID. The Court sees no reason why a private
prosecutor should be allowed to participate in a deportation case. Under the 1985 Rules
on Criminal Procedure, particularly Section 16, Rule 110 thereof, an offended party may
intervene in a criminal prosecution when there is civil liability arising from the criminal
action claimed by said party. In such case he may intervene by counsel.
In deportation cases, the Court cannot conceive of any justification for a private party to
have any right to intervene. Even if such party can establish any damages due him arising
from the deportation charge against the alien, such relief cannot be afforded him in the
deportation proceeding. His recourse if at all is in the ordinary courts. Thus the Court rules
that the intervention of a private prosecutor should not be allowed in deportation cases.
The possibility of oppression, harassment and persecution cannot be discounted. The
deportation of an alien is the sole concern of the State. This is the reason why there are
special prosecutors and fiscals tasked to prosecute such cases.
WHEREFORE, the petition is hereby GRANTED and the questioned order of the respondent
Commission on Immigration and Deportation dated September 28, 1982 is hereby set
aside. The respondent Commission on Immigration and Deportation is hereby directed to
continue hearing the deportation case against petitioners and thereafter, based on the
evidence before it, to resolve the issue of citizenship of petitioners, and if found to be
aliens, to determine whether or not the petitioners should be deported and/or otherwise
ordered to register as aliens. No costs. Cdpr
SO ORDERED.
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
Footnotes
1. In re R. McCulloch Dick, 38 Phil. 41, 211, 224 (1918).

2. Forbes vs. Chuoco Tiaco and Crossfield, 16 Phil. 534 (1910).
3. Section 9, Rule 110, 1985 Rules of Criminal Procedure.

4. Section 15, Preliminary Investigation, Deportation Rules of Procedure; Rule 112, Rules of
Criminal Procedure.
5. Sections 5 and 6 of the Deportation Rules of Procedure.
6. Section 7, supra.
7. Sections 16, 17 and 21, supra; Rules 114, 117 and 119, 1985 Rules of Criminal
Procedure.

SECOND DIVISION
[G.R. No. 154745. January 29, 2004.]
COMMISSIONER ANDREA D. DOMINGO, BUREAU OF IMMIGRATION ,

petitioner, vs . HERBERT MARKUS EMIL SCHEER , respondent.
DECISION
CALLEJO, SR. , J : p
This is a petition for review under Rule 45 of the Rules of Court, as amended, of the
Decision 1 of the Court of Appeals in CA-G.R. SP No. 71094 granting the respondent's
petition for certiorari and prohibition annulling the order of arrest issued by the petitioner,
and permanently enjoining her from deporting the respondent from the Philippines.
Through its decision, the CA virtually reversed the Summary Deportation Order 2 of the
Board of Commissioners (BOC) and its Omnibus Resolution 3 denying the respondent's
Urgent Motion for Reconsideration of said Order, and enjoining the petitioner from
deporting the respondent.
The facts as culled from the records are as follows:
Respondent Herbert Markus Emil Scheer, a native of Ochsenfurt, Germany, was a
frequent visitor of the Philippines. On July 18, 1986, his application for permanent resident
status was granted. 4 The Bureau of Immigration and Deportation (BID) issued in favor of
the respondent Alien Certificate of Registration No. B-396907 dated September 16, 1987 5
and Immigration Certi cate of Residence No. 256789 dated February 24, 1988. 6 The
Commissioner stated that the granting of the petition would redound to the bene t of the
Filipino people. 7 During his sojourn in the Philippines, the respondent married widowed
Edith delos Reyes 8 with whom he had two daughters. They had a son, Herbert Scheer, Jr.,
but he passed away on November 13, 1995. 9 They resided in Puerto Princesa City,
Palawan, where the respondent established and managed the Bavaria Restaurant. On May
21, 1991, he was appointed Confidential Agent by then NBI Director Alfredo S. Lim. 1 0
In a Letter dated June 29, 1995, Vice Consul Jutta Hippelein informed the Philippine
Ambassador to Bonn, Germany, that the respondent had police records and nancial
liabilities in Germany. 1 1
The Department of Foreign Affairs received from the German Embassy in Manila
No t e Verbale No. 369/95 dated July 26, 1995, informing it that the respondent was
wanted by the German Federal Police; that a warrant of arrest had been issued against
him; and that the respondent will be served with an o cial document requesting him to
turn over his German passport to the Embassy which was invalidated on July 2, 1995. 1 2
The Embassy requested the Department of Foreign Affairs to inform the competent
Philippine authorities of the matter. The BOC thereafter issued a Summary Deportation
Order dated September 27, 1997. The penultimate paragraph of the Order reads:
WHEREFORE, the foregoing considered, the Board Commissioners hereby
orders the following:

1. Cancellation of respondent's permanent residence visa;
2. Respondent's summary deportation and permanent exclusion from

the Philippines; and
3. Inclusion of his name on the Bureau's Blacklist.
PROVIDED, however that said summary deportation should be held in

abeyance in case said alien has a pending nal and executory criminal conviction
where the imposed penalty is imprisonment, in which case, he has to serve rst
such imposed penalty, and/or has a pending criminal, civil or administrative
action and a Hold Departure Order has been issued or that his presence in said
action is indispensable. In such instances, the alien should remain in the custody
of the Bureau until his turnover to the proper authorities in case he has to serve
imprisonment or in case of pendency of civil or criminal administrative action, he
shall remain in the custody of the Bureau until such time that his pending cases
shall have been decided, terminated or settled, as the case may be, unless
circumstances demand the immediate implementation of this summary
deportation.
xxx xxx xxx

SO ORDERED. 1 3
In issuing the said order, the BOC relied on the correspondence from the German
Vice Consul on its speculation that it was unlikely that the German Embassy will issue a
new passport to the respondent; on the warrant of arrest issued by the District Court of
Germany against the respondent for insurance fraud; and on the alleged illegal activities of
the respondent in Palawan. 1 4 The BOC concluded that the respondent was not only an
undocumented but an undesirable alien as well.
When the respondent was apprised of the deportation order, he forthwith aired his
side to then BID Commissioner Leandro T. Verceles. The Commissioner allowed the
respondent to remain in the Philippines, giving the latter time to secure a clearance and a
new passport from the German Embassy. 1 5 Then Presidential Assistant Teodorico K.
Imperial wrote a Testimonial dated November 24, 1995, in behalf of the respondent
addressed to Commissioner Verceles. Nonetheless, the respondent, through counsel, led
on December 5, 1995 an Urgent Motion for Reconsideration of the Summary Deportation
Order of the BOC. 1 6 In his motion, the respondent alleged, inter alia, that: AcSHCD
1. The elementary rules of due process require notice and opportunity

to be heard before a person can be lawfully deprived of his right (Ute Paterok vs.
Bureau of Customs, 193 SCRA 132). In the instant case, although it is
acknowledged that the Honorable O ce may conduct summary deportation
proceedings, respondent was not given notice and opportunity to be heard before
said Summary Deportation Order was issued. Respondent's right to procedural
due process was therefore violated. Consequently, the Summary Deportation
Order is invalid.
2. In issuing, the Summary Deportation Order, this Honorable O ce

relied on Note Verbal No. 369/95 issued by the Embassy of the Federal Republic
of Germany, Manila, notifying the Department of Foreign Affairs and this
Honorable O ce about the warrant of arrest against respondent for alleged
illegal insurance fraud and illegal activities. However, a close scrutiny of said note
verbal shows that nowhere therein does it state that respondent was involved in
insurance fraud or in any kind of illegal activities in Germany or anywhere else in
the world, such as in Palawan. Therefore, the main basis of the Summary
Deportation Order is incompetent as evidence against respondent who is, like
every Filipino, presumed to be innocent until his guilt is proven beyond reasonable
doubt.
3. The power to deport alien is a police power measure necessary

against undesirable alien whose presence in the country is injurious to the public
good and domestic tranquility of the country (Board of Commissioner
Commission on Immigration vs. De la Rosa, 197 SCRA 853). It is respectfully
submitted that respondent is not an undesirable alien. He has stayed in the
Philippines for more or less than (10) years. He has married a Filipina and has
three (3) minor children. He has established his business in Palawan and he has
no police record whatsoever. Respondent has considered the Philippines his
second home and he has nowhere else to go back to in Germany. Under the
circumstances and for humanitarian considerations, respondent is not an
undesirable alien whose deportation is warranted. Likewise, the mere fact that his
passport was not renewed by the German Embassy does not also automatically
justify the deportation of respondent. 1 7
However, the BOC did not resolve the respondent's motion. The respondent was
neither arrested nor deported.
Meanwhile, on February 15, 1996, the District Court of Straubing rendered a Decision
dismissing the criminal case against the respondent for physical injuries. 1 8 The German
Embassy in Manila, thereafter, issued a temporary passport to the respondent.
In a Letter dated March 1, 1996, the respondent informed Commissioner Verceles
that his passport had been renewed following the dismissal of the said criminal case. He
reiterated his request for the cancellation of the Summary Deportation Order dated
September 27, 1995 and the restoration of his permanent resident status. 1 9 Subsequently,
on March 12, 1996, the German Embassy issued to the respondent a regular passport, to
expire on March 11, 2006.
The BOC still failed to resolve the respondent's Urgent Motion for Reconsideration.
Commissioner Verceles did not respond to the respondent's March 1, 1996 Letter. The
respondent remained in the Philippines and maintained his business in Palawan. On March
20, 1997, the Department of Labor and Employment approved his application for Alien
Employment Registration Certi cate as manager of the Bavaria Restaurant in Puerto
Princesa City.
In the meantime, petitioner Immigration Commissioner Andrea T. Domingo
assumed o ce. She wrote the German Embassy and inquired if the respondent was
wanted by the German police. On April 12, 2002, the German Embassy replied that the
respondent was not so wanted. 2 0 At about midnight on June 6, 2002, Marine operatives
and BID agents apprehended the respondent in his residence on orders of the petitioner.
He was whisked to the BID Manila O ce and there held in custody while awaiting his
deportation. Despite entreaties from the respondent's wife 2 1 and his employees, the
petitioner refused to release the respondent. 2 2
Shocked at the sudden turn of events, the respondent promptly communicated with
his lawyer. The latter led with the BID a motion for bail to secure the respondent's
temporary liberty. On June 11, 2002, the respondent's counsel led with the Court of
Appeals a petition for certiorari, prohibition and mandamus with a prayer for temporary
restraining order and writ of preliminary injunction, to enjoin the petitioner from proceeding
with the respondent's deportation. 2 3 The respondent (petitioner therein) alleged, inter alia,
that his arrest and detention were premature, unjust, wrongful, illegal and unconstitutional,
effected without su cient cause and without jurisdiction or with grave abuse of
discretion. He asserted that there was no speedy remedy open to him in the ordinary
course of law 2 4 and that his Urgent Motion for Reconsideration of the Summary
Deportation Order of the BOC had not yet been resolved despite the lapse of more than six
years. The respondent averred that he was a fully documented alien, a permanent resident
and a law-abiding citizen. He, thus, prayed as follows:
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court that:
1. Upon the ling of this Petition, this Honorable Court issue a

Temporary Restraining Order to enjoin respondent Commissioner from enforcing
any order to deport petitioner;
2. After due hearing, a writ of preliminary and mandatory injunction be
correspondingly issued to maintain the status quo pending resolution of the
Petition on the merits.
3. After hearing, judgment be rendered:

a) Directing and mandating respondent Commissioner and the body
she heads to resolve the Motion for Reconsideration led in 1995, in his favor,
and nullifying or suspending the implementation of any order, oral or written, she
may have issued or issue to deport petitioner; and
b) Making the injunction in petitioner's favor permanent.

Petitioner likewise prays for such other and further relief as may be
deemed just and equitable in the premises, such as directing respondent, if
Herbert Scheer is deported before the matter is heard on notice, to authorize his
return. 2 5
The BOC ruled that its September 27, 1995 Order had become nal and executory
after the lapse of one year, citing our rulings in Sy vs. Vivo, 2 6 and Lou vs. Vivo. 2 7 The BOC
also held that it was not competent to reverse the September 27, 1995 Order, citing our
ruling in Immigration Commissioner vs. Fernandez. 2 8 It declared that the respondent may
seek the waiver of his exclusion via deportation proceedings through the exceptions
provided by Commonwealth Act No. 613, 2 9 Section 29(a)(15), but that his application for
the waiver presupposes his prior removal from the Philippines.
In a parallel development, the respondent procured a letter from the National Bureau
of Investigation (NBI) in Puerto Princesa City certifying that he had no pending criminal
record. 3 0 The Puerto Princesa City Philippine National Police (PNP) also issued a
certi cation that the respondent had no pending criminal or derogatory records in the said
office. 3 1
Meanwhile, on June 26, 2002, the Court of Appeals issued a status quo order
restraining the petitioner from deporting the respondent on a bond of P100,000.00. 3 2 On
July 18, 2002, the BOC issued an Omnibus Resolution dated June 14, 2002, pendente lite
denying the respondent's Urgent Motion for Reconsideration, Motion for
Bail/Recognizance, and the Letter dated June 11, 2002. The decretal portion of the
resolution reads:
Wherefore, in view of the foregoing circumstances, we deny the prayers of
the Urgent Motion for Reconsideration of 5 December 1995, the Motion for
Bail/Recognizance dated 7 June 2002 and the Letter of 11 June 2002. Further, we
hereby order the following:
1. Subject to the submission of appropriate clearances, the summary
deportation order the respondent Herbert Scheer, German, under BI O ce
Memorandum Order No. 34 (series of 1989) and the BOC Summary Deportation
Order of 27 September 1995;
2. Permanent exclusion of Herbert Scheer from the Philippines under
C.A. No. 613, Section 40(a)(15).
3. Inclusion of the name of Herbert Scheer in the Immigration Black
List; and
4. Forfeiture of the bail bond, if any, of Herbert Scheer under C.A. No.
613, Section 40(a)(15).
xxx xxx xxx

IT IS SO ORDERED. 3 3
During the hearing of the respondent's plea for a writ of preliminary mandatory
injunction before the CA on July 22, 2002, the O ce of the Solicitor General (OSG)
manifested that the State had no opposition to the respondent's re-entry and stay in the
Philippines, provided that he leave the country rst and re-apply for admission and
residency status with the assurance that he would be re-admitted. 3 4 The respondent's
counsel manifested to the appellate court that he had just been informed by the OSG of
the Omnibus Resolution of the BOC dated June 14, 2002.
In her Comment on the Petition, the petitioner (the respondent therein) alleged, inter
alia, the following:
1) that the BOC was an indispensable party to the petition; EaIDAT
2) the petitioner's failure to implead the BOC warranted the denial of the
petition;
3) the allowance by then Immigration Commissioner Leandro Verceles
for the petitioner therein to renew his passport and secure clearances,
even if proved, was not binding on the BOC;
4) the September 27, 1995 Order of the BOC was already executory
when the respondent filed her petition in the CA;
5) the German Embassy's issuance of a new passport did not legalize
the respondent's stay in this country, which became illegal on July 2,
1995 when his passport expired;
6) the respondent therein did not act with abuse of discretion in causing
the arrest and detention of the respondent based on the BOC's
Summary Deportation Order; and

7) the BOC did not act with grave abuse of discretion in issuing its
Summary Deportation Order and Omnibus Resolution and such order
and resolution were not mooted by the German Embassy's issuance
of a new passport in favor of the respondent.
In view of the Omnibus Resolution of the BOC, the respondent (petitioner therein) in
his Memorandum prayed for the nulli cation of the BOC's Order, as well as its Omnibus
Resolution denying his Urgent Motion for Reconsideration considering that with the
issuance of a new passport, there was no more basis for his deportation, thus:
RELIEF
WHEREFORE, it is most respectfully prayed of this Honorable Court that:

1. Upon the ling of this Memorandum, this Honorable Court forthwith
direct and authorize the immediate release of petitioner, even on undersigned's
recognizance, until further orders from this Honorable Court;
2. The Summary Deportation Order of September 27, 19[9]5, a rmed

by respondent allegedly on June 14, 2002 and made known only yesterday, be
nullified to the extent that it directs the deportation of petitioner, who has removed
the very basis of said Order of not having a valid passport, and that the
Resolution of June 14, 2002 be nullified in toto; and,
3. The Temporary Restraining Order of June 26, 2002 be converted
into a permanent injunction or writ of prohibition.
Petitioner likewise prays for such other and further relief as may be
deemed just and equitable in the premises. 3 5
Surprisingly, the respondent's counsel received on July 24, 2003 a Letter from the
petitioner dated July 16, 2002 stating that, "the BOC was in the course of reviewing the
deportation case against Mr. Scheer, and that its findings would be given in due time." 3 6
On August 20, 2002, the Court of Appeals rendered a Decision in favor of the
respondent granting his petition for certiorari and prohibition and permanently enjoining
the petitioner from deporting the respondent. The decretal portion of the Decision reads:
WHEREFORE, premises considered, the petitions for certiorari and
prohibition are hereby GRANTED. Accordingly, any order, oral or written, issued by
respondent Commissioner Domingo against petitioner, in relation to his
deportation, is hereby ANNULLED, and respondent Commissioner Domingo is
hereby permanently enjoined/prohibited from deporting petitioner, in so far as this
case is concerned.
It is likewise ordered that petitioner be released from his
con nement/detention in the Bureau of Immigration UNLESS there is/are fresh
new grounds/cases that will warrant his continued detention.
SO ORDERED. 3 7
The Court of Appeals ruled that the German Embassy's subsequent issuance of
passport to the respondent before the BOC's issuance of its Omnibus Resolution had
mooted the September 27, 1995 Summary Deportation Order, as well as the arrest and
detention of the respondent. According to the court, it made no sense to require the
respondent to leave the country and thereafter re-apply for admission with the BOC.
Furthermore, since the grounds cited by the BOC in its Summary Deportation Order no
longer existed, there was no factual and legal basis to disqualify the respondent from
staying in the country.
On the issue of whether the members of the BOC were indispensable parties, the CA
ruled as follows:
a) There are quite a number of cases in relevant jurisprudence wherein
only the Immigration Commissioner was impleaded to decide whether an alien
may stay or be deported, such as in the case of Vivo vs. Arca (19 SCRA 878) and
Vivo vs. Cloribel (22 SCRA 159).
b) In the case of Caruncho III vs. COMELEC (315 SCRA 693), it was
pronounced that: "Ordinarily, the nonjoinder of an indispensable party or the real
party interest is not by itself a ground for the dismissal of the petition. The court
before which the petition is led must rst require the joinder of such party. It is
the noncompliance with said order that would be a ground for the dismissal of
the petition."
thus, c) respondent may be estopped for not raising such issue earlier. 3 8
Aggrieved, the respondent therein, now the petitioner, through the O ce of the
Solicitor General, appealed to us for relief. The petitioner contends that the Court of
Appeals erred on a question of law in granting the respondent's petition in CA-G.R. SP No.
71094. 3 9
In support of his contention, the Solicitor General has submitted the following
arguments:
I. THE WRIT OF MAND AMUS DOES NOT LIE AGAINST THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION TO RESOLVE
RESPONDENT'S URGENT MOTION FOR RECONSIDERATION OF THE SUMMARY
DEPORTATION ORDER, CONSIDERING THAT IT IS THE BOARD OF
COMMISSIONERS, AND NOT THE COMMISSIONER ALONE, WHICH HAS
AUTHORITY TO MAKE SAID RESOLUTION.
II. THE WRIT OF CERTIORARI DOES NOT LIE AGAINST THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION, CONSIDERING THAT IT IS
THE BOARD OF COMMISSIONERS, AND NOT THE COMMISSIONER ALONE,
WHICH ISSUED THE SUMMARY DEPORTATION ORDER AND THE OMNIBUS
RESOLUTION.
III. THE WRIT OF PROHIBITION DOES NOT LIE AGAINST THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION, PROHIBITING THE
IMPLEMENTATION OF THE SUMMARY DEPORTATION ORDER AND THE
OMNIBUS RESOLUTION, CONSIDERING THAT THE BOARD OF COMMISSIONERS
WAS NOT IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP
NO. 71094.
IV. ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF

COMMISSIONERS WAS PROPERLY IMPLEADED AS PARTY-RESPONDENT IN
THE PETITION IN CA-G.R. SP NO. 71094, NEVERTHELESS, THE SUMMARY
DEPORTATION ORDER AND THE OMNIBUS RESOLUTION WERE NOT ISSUED
WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION. ATcaID
V. FURTHER ASSUMING BUT WITHOUT ADMITTING THAT THE

BOARD OF COMMISSIONERS WAS PROPERLY IMPLEADED AS PARTY-
RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094, THE COMMISSIONER
OF THE BUREAU OF IMMIGRATION DID NOT ACT WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN IMPLEMENTING THE SUMMARY
DEPORTATION ORDER AND THE OMNIBUS RESOLUTION. 4 0
Elucidating on his rst three arguments, the petitioner maintains that the
respondent's petition for certiorari, prohibition and mandamus before the Court of Appeals
should have been dismissed because he failed to implead the real party-in-interest as
mandated by Rule 3, Section 7 of the Rules of Court, as amended; in this case, the BOC.
According to the Solicitor General, this was a fatal procedural error. The inclusion of the
BOC as respondent in the case was necessary in order that its actions could be directly
attacked and for the court to acquire jurisdiction over it. The fact that Immigration
Commissioner Andrea T. Domingo was impleaded as the sole respondent was not enough,
as she is only one of the four Commissioners. Furthermore, the assailed Orders were
issued by the Board, and not by the Immigration Commissioner alone.
The respondent counters that the petitioner is already estopped from raising this
issue. He argues that —
In quite a number of jurisprudence, only the Immigration Commissioner is
impleaded to decide whether an alien may stay here or not. The bottom line is
petitioner, head of the Bureau of Immigration, was more than fully heard on its
institutional position, a Bureau which speaks with a single voice in this case. She
is in estoppel for not raising the issue earlier, either in a timely Comment or during
the oral argument . . . 4 1
In Caruncho III v. Comelec, it was held that —
[O]rdinarily, the nonjoinder of an indispensable party or real party in interest
is not by itself a ground for the dismissal of the petition. The court before
which the petition is filed must first require the joinder of such party. It is
the noncompliance with said order that would be a ground for the
dismissal of the petition.
But even as the Court of Appeals did not require respondent of such joinder
of parties, the respondent, in fact, begged leave, ad cautelam, in its Reply
Memorandum dated July 31, 2002 to implead the Board which speaks with a
single voice anyway in this case, and therefore, no claim can be made that a valid
point of view has not been heard . . . 4 2
Moreover, according to the respondent, the petitioner is clearly the BID's chosen
instrumentality for the relevant purpose. What the respondent ultimately questioned are
the acts or orders of the petitioner for the arrest and immediate deportation of the
respondent by way of implementing the BOC's Summary Deportation Order.
By way of reply, the O ce of the Solicitor General asserted that the Summary
Deportation Order and Omnibus Resolution were collegial actions of the BOC and not of
the petitioner alone. Although its Chairperson, the petitioner, is merely a member thereof,
her decisions and actions are still subject to the collective will of the majority. 4 3

The Ruling of the Court
The BOC is an Indispensable Party
We agree with the petitioner's contention that the BOC was an indispensable party
to the respondent's petition for certiorari, prohibition and mandamus in the Court of
Appeals. The respondent was arrested and detained on the basis of the Summary
Deportation Order of the BOC. The petitioner caused the arrest of the respondent in
obedience to the said Deportation Order. The respondent, in his Memorandum, prayed that
the CA annul not only the Summary Deportation Order of the BOC but also the latter's
Omnibus Resolution, and, thus, order the respondent's immediate release. The respondent
also prayed that the CA issue a writ of mandamus for the immediate resolution of his
Urgent Motion for Reconsideration. The said motion had to be resolved by the BOC as the
order sought to be resolved and reconsidered was issued by it and not by the petitioner
alone. The powers and duties of the BOC may not be exercised by the individual members
of the Commission. 4 4
Section 7, Rule 3 of the Rules of Court, as amended, requires indispensable parties
to be joined as plaintiffs or defendants. The joinder of indispensable parties is mandatory.
Without the presence of indispensable parties to the suit, the judgment of the court cannot
attain real nality. 4 5 Strangers to a case are not bound by the judgment rendered by the
court. 4 6 The absence of an indispensable party renders all subsequent actions of the
court null and void. Lack of authority to act not only of the absent party but also as to
those present. 4 7 The responsibility of impleading all the indispensable parties rests on the
petitioner/plaintiff. 4 8
However, the non-joinder of indispensable parties is not a ground for the dismissal
of an action. Parties may be added by order of the court on motion of the party or on its
own initiative at any stage of the action and/or such times as are just. 4 9 If the
petitioner/plaintiff refuses to implead an indispensable party despite the order of the
court, the latter may dismiss the complaint/petition for the petitioner/plaintiffs failure to
comply therefor. 5 0 The remedy is to implead the non-party claimed to be indispensable. 5 1
In this case, the CA did not require the respondent (petitioner therein) to implead the BOC
as respondent, but merely relied on the rulings of the Court in Vivo v. Arca , 5 2 and Vivo v.
Cloribel. 5 3 The CA's reliance on the said rulings is, however, misplaced. The acts subject of
the petition in the two cases were those of the Immigration Commissioner and not those
of the BOC; hence, the BOC was not a necessary nor even an indispensable party in the
aforecited cases.
The Non-joinder of an Indispensable Party
is not a Ground for the Dismissal of the Petition
The Court may be curing the defect in this case by adding the BOC as party-
petitioner. The petition should not be dismissed because the second action would only be
a repetition of the rst. 5 4 In Salvador, et al., v. Court of Appeals, et al ., 5 5 we held that this
Court has full powers, apart from that power and authority which is inherent, to amend the
processes, pleadings, proceedings and decisions by substituting as party-plaintiff the real
party-in-interest. The Court has the power to avoid delay in the disposition of this case, to
order its amendment as to implead the BOC as party-respondent. Indeed, it may no longer
be necessary to do so taking into account the unique backdrop in this case, involving as it
does an issue of public interest. 5 6 After all, the O ce of the Solicitor General has
represented the petitioner in the instant proceedings, as well as in the appellate court, and
maintained the validity of the deportation order and of the BOC's Omnibus Resolution. It
cannot, thus, be claimed by the State that the BOC was not afforded its day in court, simply
because only the petitioner, the Chairperson of the BOC, 5 7 was the respondent in the CA,
and the petitioner in the instant recourse. In Alonso v. Villamor , 5 8 we had the occasion to
state:
There is nothing sacred about processes or pleadings, their forms or
contents. Their sole purpose is to facilitate the application of justice to the rival
claims of contending parties. They were created, not to hinder and delay, but to
facilitate and promote, the administration of justice. They do not constitute the
thing itself, which courts are always striving to secure to litigants. They are
designed as the means best adapted to obtain that thing. In other words, they are
a means to an end. When they lose the character of the one and become the
other, the administration of justice is at fault and courts are correspondingly
remiss in the performance of their obvious duty.
The CA had Jurisdiction Over the Petition

for Certiorari, Prohibition and Mandamus
We do not agree with the petitioner's contention that the issue before the CA, as to
the power of the President to determine whether an alien may remain or be deported from
the Philippines, is beyond the appellate court's competence to delve into and resolve. The
contention of the petitioner is based on a wrong premise.
The settled rule is that the authority to exclude or expel aliens by a power affecting
international relation is vested in the political department of the government, and is to be
regulated by treaty or by an act of Congress, and to be executed by the executive authority
according to the regulations so established, except in so far as the judicial department has
been authorized by treaty or by statute, or is required by the Constitution to intervene. 5 9
The judicial department cannot properly express an opinion upon the wisdom or the justice
of the measures executed by Congress in the exercise of the power conferred on it, 6 0 by
statute or as required by the Constitution. Congress may, by statute, allow the decision or
order of the Immigration Commissioner or the BOC to be reviewed by the President of the
Philippines or by the courts, on the grounds and in the manner prescribed by law.
Article VIII, Section 1 of the Constitution has vested judicial power in the Supreme
Court and the lower courts such as the Court of Appeals, as established by law. Although
the courts are without power to directly decide matters over which full discretionary
authority has been delegated to the legislative or executive branch of the government and
are not empowered to execute absolutely their own judgment from that of Congress or of
the President, 6 1 the Court may look into and resolve questions of whether or not such
judgment has been made with grave abuse of discretion, when the act of the legislative or
executive department violates the law or the Constitution. In Harvy Bridges v. I.F. Wixon , 6 2
the United States Federal Supreme Court reversed an Order of Deportation made by the
Attorney General for insu ciency of evidence and for "improper admission of evidence." In
Nging v. Nagh, 6 3 the United States Court of Appeals (9th Circuit Court) held that
conclusions of administrative o ces on the issues of facts are invulnerable in courts
unless when they are not rendered by fair-minded men; hence, are arbitrary. In Toon v .
Stump, 6 4 the Court ruled that courts may supervise the actions of the administrative
o ces authorized to deport aliens and reverse their rulings when there is no evidence to
sustain them. When acts or omissions of a quasi-judicial agency are involved, a petition for
certiorari or prohibition may be led in the Court of Appeals as provided by law or by the
Rules of Court, as amended. 6 5

In this case, the respondent alleges that the petitioner acted arbitrarily, contrary to
law and with grave abuse of discretion in causing his arrest and detention at a time when
his Urgent Motion for Reconsideration of the BOC's Summary Deportation Order had yet to
be resolved. There was no factual or legal basis for his deportation considering that he
was a documented alien and a law-abiding citizen; the respondent, thus, prayed for a writ
o f mandamus to compel the petitioner, the Chairperson of the BOC, to resolve the said
motion. The petition before the CA did not involve the act or power of the President of the
Philippines to deport or exclude an alien from the country. This being so, the petition
necessarily did not call for a substitution of the President's discretion on the matter of the
deportation of the respondent with that of the judgment of the CA.
Irrefragably, the CA had jurisdiction over the petition of the respondent. DHACES
The BOC Committed a Grave Abuse of Discretion

Amounting to Lack or Excess of Jurisdiction
in Issuing its Summary Deportation Order
and Omnibus Resolution; The Petitioner
Committed a Grave Abuse of Her Discretion
Amounting to Lack or Excess of Jurisdiction
in Causing the Arrest and Detention
of the Private Respondent
On the Solicitor General's fourth and fth arguments, we are convinced that the BOC
committed a grave abuse of discretion amounting to excess or lack of jurisdiction in
issuing its Summary Deportation Order and Omnibus Resolution, and that the petitioner
committed grave abuse of discretion amounting to excess or lack of jurisdiction in
causing the arrest and detention of the private respondent.
The settled rule is that the entry or stay of aliens in the Philippines is merely a
privilege and a matter of grace; such privilege is not absolute nor permanent and may be
revoked. However, aliens may be expelled or deported from the Philippines only on
grounds and in the manner provided for by the Constitution, the Immigration. Act of 1940,
as amended, and administrative issuances pursuant thereto. In Mejoff v. Director of
Prisons, 6 6 we held, thus:
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines "adopts the
generally accepted principles of international law a part of the law of Nation." And
in a resolution entitled "Universal Declaration of Human Rights" and approved by
the General Assembly of the United Nations of which the Philippines is a member,
at its plenary meeting on December 10, 1948, the right to life and liberty and all
other fundamental rights as applied to all human beings were proclaimed. It was
there resolved that "All human beings are born free and equal in degree and
rights" (Art. 1); that "Everyone is entitled to all the rights and freedom set forth in
this Declaration, without distinction of any kind, such as race, color, sex,
language, religion, political or other opinion, nationality or social origin, property,
birth, or other status" (Art. 2); that "Every one has the right to an effective remedy
by the competent national tribunals for acts violating the fundamental rights
granted him by the Constitution or by law" (Art. 8); that "No one shall be subjected
to arbitrary arrest, detention or exile" (Art. 9); etc.
In this case, the BOC ordered the private respondent's deportation on September
27, 1995 without even conducting summary deportation proceedings. The BOC merely
relied on the June 29, 1995 Letter of the German Vice Consul and of the German
Embassy's Note Verbale No. 369/95 dated July 26, 1995. It issued the Summary
Deportation Order on September 27, 1995 allegedly under paragraph 3 of O ce
Memorandum Order No. 34 dated August 21, 1989 which reads:
3. If a foreign embassy cancels the passport of the alien or does not
reissue a valid passport to him, the alien loses the privilege to remain in the
country, under the Immigration Act, Sections 10 and 15 ( Schonemann vs.
Santiago, et al., G.R. No. 81461, 30 May 1989). The automatic loss of the privilege
obviates deportation proceedings. In such instance, the Board of Commissioners
may issue summary judgment of deportation which shall be immediately
executory.
However, as gleaned from the Summary Deportation Order, the respondent was
ordered deported not only because his passport had already expired; the BOC speculated
that the respondent committed insurance fraud and illegal activities in the Philippines and
would not, thus, be issued a new passport. This, in turn, caused the BOC to conclude that
the respondent was an undesirable alien. Section 37(c) of Commonwealth Act No. 613, as
amended, provides that:
No alien shall be deported without being informed of the speci c grounds
for deportation or without being given a hearing under rules of procedure to be
prescribed by the Commissioner of Immigration.
Under paragraphs 4 and 5 of O ce Memorandum Order No. 34, an alien cannot be

deported unless he is given a chance to be heard in a full deportation hearing, with the right
to adduce evidence in his behalf, thus:
4. All other cases shall be tried in full deportation hearing, with due
observance of the pertinent provisions of Law Instruction No. 39.
5. In all cases, the right of the alien to be informed of the charges

against him, to be noti ed of the time and place of hearing, when necessary, to
examine the evidence against him, and to present evidence in his own behalf,
where appropriate, shall be observed.
The respondent was not afforded any hearing at all. The BOC simply concluded that
the respondent committed insurance fraud and illegal activities in Palawan without any
evidence. The respondent was not afforded a chance to refute the charges. He cannot,
thus, be arrested and deported without due process of law as required by the Bill of Rights
of the Constitution. In Lao Gi v. Court of Appeals, 6 7 we held that:
Although a deportation proceeding does not partake of the nature of a
criminal action, however, considering that it is a harsh and extraordinary
administrative proceeding affecting the freedom and liberty of a person, the
constitutional right of such person to due process should not be denied. Thus, the
provisions of the Rules of Court of the Philippines particularly on criminal
procedure are applicable to deportation proceedings.
It must be noted that the respondent was a permanent resident before his passport
expired on July 2, 1995. In Chew v. Colding , 6 8 the United States Federal Supreme Court
ruled:
It is well established that if an alien is a lawful permanent resident of the
United States and remains physically present there, he is a person within the
protection of the Fifth Amendment. He may not be deprived of his life, liberty or
property without due process of law. Although it later may be established, as
respondents contend, that petitioner can be expelled and deported, yet before his
expulsion, he is entitled to notice of the nature of the charge and a hearing at
least before an executive or administrative tribunal. Although Congress may
prescribe conditions for his expulsion and deportation, not even Congress may
expel him without allowing him a fair opportunity to be heard.
As Mr. Justice Murphy said in his concurring opinion in Bridges v. Wixon: 6 9

The Bill of Rights belongs to them as well as to all citizens. It protects them
as long as they reside within the boundaries of our land. It. protects them in the
exercise of the great individual rights necessary to a sound political and
economic democracy.
According to Vattal, 7 0 an alien who is a permanent resident in a country is a member

of the new society, at least as a permanent inhabitant, and is a kind of citizen of inferior
order from the native citizens; but is, nevertheless, limited and subject to the society,
without participating in all its advantages. Sir Robert Philconse called them "de facto,"
though not de jure citizens of the country of their domicile. 7 1
Such permanent resident 7 2 may be classi ed as a " denizen," a kind of middle state
between alien and a natural-born subject and partakes of both. Paraphrasing Justice
Brewer in his dissenting opinion in Fong Yue Ting v. United States, 7 3 when the right to
liberty and residence is involved, some other protection than the mere discretion of the
petitioner or the BOC is required. We recall the warning of the United States Supreme Court
in Boyd v. United States: 7 4
Illegitimate and unconstitutional practices get their rst footing in that
way, namely, by silent approaches and slight deviations from legal modes of
procedure. This can only be obviated by adhering to the rule that constitutional
provisions for the security of person and property should be liberally construed. A
close and literal construction deprives them of half their e cacy, and leads to a
gradual depreciation of the right, as if it consisted more in sound than in
substance. It is the duty of the courts to be watchful for the constitutional rights
of the citizen, and against any stealthy encroachments thereon. Their motto
should be obsta principiis. EScAID
In sum, the arrest and detention of the respondent and his deportation under the
Summary Deportation Order of the BOC for insurance fraud and illegal activities in Palawan
violated his constitutional and statutory rights to due process.
The Respondent's Arrest and
Detention was Premature,
Unwarranted and Arbitrary
We agree that the Immigration Commissioner is mandated to implement a legal and
valid Summary Deportation Order within a reasonable time. But in this case, the arrest of
the respondent in his house, at near midnight, and his subsequent detention was
premature, unwarranted and arbitrary. Like a thunderbolt in the sky, the BID agents and
marines arrested the respondent on June 6, 2002, on orders of the petitioner based on the
September 27, 1995 Summary Deportation Order. Under the basic rudiments of fair play
and due process, the petitioner was required to rst resolve the respondent's Urgent
Motion for Reconsideration of the said Order, which was led more than six years before
or on December 5, 1995.
It may be argued that respondent's ling of an Urgent Motion for Reconsideration

did not ipso facto suspend the e cacy of the BOC's deportation order. However, such an
argument cannot be sustained in this case because of the extant and peculiar factual
milieu. It bears stressing that more than six years had elapsed, from the time the Summary
Deportation Order was issued, until the respondent was nally arrested. Supervening facts
and circumstances rendered the respondent's arrest and detention unjust, unreasonable,
barren of factual and legal basis. The BOC should have set the respondent's motion for
hearing to afford him a chance to be heard and adduce evidence in support thereon. It was
bad enough that the BOC issued its Summary Deportation Order without a hearing; the
BOC dealt the respondent a more severe blow when it refused to resolve his motion for
reconsideration before causing his arrest on June 6, 2002.
As aforestated, the BOC ordered the deportation of the respondent after a summary
proceeding without prior notice on the following grounds: (a) the respondent's German
passport had expired; (b) there was a pending criminal case for physical injuries against
him in Germany; (c) the respondent indulged in illegal activities in Palawan; (d) that in all
likelihood, the respondent's passport will not be renewed by the German Embassy as he
was wanted for insurance fraud in Germany; and, (e) he was an undesirable alien. But then,
in response to the written query of no less than the petitioner herself, the German Embassy
declared that the respondent was not wanted by the German police for any crime,
including insurance fraud. This could only mean that the warrant of arrest issued by the
German Federal police mentioned in Note Verbale No. 369/95 had been lifted, and that the
respondent was not involved in any illegal activities in Germany. The criminal case against
the respondent for physical injuries, which does not involve moral turpitude, was
dismissed by the German District Court. Furthermore, there was no evidence of insurance
fraud against the respondent.
The BOC issued its Summary Deportation Order without affording the respondent
the right to be heard on his motion and adduce evidence thereon. It merely concluded that
the respondent was involved in "illegal activities in Palawan." What made matters worse
was that the BOC indulged in sheer speculation, that the German Embassy is unlikely to
issue a new passport to the respondent. The deportation of aliens should not be based on
mere speculation or a mere product of procrastinations as in this case. As it turned out,
the German Embassy re-issued the respondent's passport; he was issued a temporary
passport, and, thereafter, a regular passport, yet to expire on March 12, 2006. The
petitioner cannot feign ignorance of this matter because the respondent himself, six years
before he was arrested, informed then Immigration Commissioner Verceles in a Letter
dated March 1, 1996. The respondent's letter forms part of the records of the BOC. There
is no evidence on record that the respondent committed any illegal activities in Palawan.
He was even designated as special agent of the NBI, and was, in fact, issued clearances by
the PNP and the NBI no less. Despite all the foregoing, the petitioner ordered and caused
the arrest and detention of the respondent.
What is most nettlesome is the apparent antedating of the BOC Omnibus
Resolution. The records show that the petitioner sought to assuage the respondent's
concern on the belated resolution of his pending urgent motion for reconsideration in a
Letter to the latter's counsel dated July 18, 2002 in which the petitioner assured the
respondent that the BOC will provide him of its action on the said motion:
Dear Atty. Sagisag,
We respond to your letter of 17 June 2002 by informing you that the case
of Mr. Herbert Scheer is being evaluated by the Board of Commissioners (BOC).
The BOC will provide you of the results of its collegial action in due time.
Very truly yours,
(Sgd.) ANDREA D. DOMINGO
Commissioner 7 5
However, the Omnibus Resolution of the BOC was dated June 14, 2002, although on
its face it was filed with the Records Division of the BID only on July 18, 2002.
The foregoing gave reason for the CA to suspect that the Omnibus Resolution of the
BOC was antedated. 7 6 The petition of the respondent in the CA must have jolted the
petitioner and the BOC from its stupor because it came out with its Omnibus Resolution on
July 18, 2002, which was, however, dated as early as June 14, 2002. The respondent had to
wait in anxiety for the BOC to quench his quest for justice. The BOC's wanton acts
amounted to an abdication of its duty to act and/or resolve cases/incidents with
reasonable dispatch. To recall our ruling in Board of Commissioners v. De la Rosa, 7 7 citing
Sheor v. Bengson, 7 8 thus:
This inaction or oversight on the part of the immigration o cials has
created an anomalous situation which, for reasons of equity, should be resolved
in favor of the minor herein involved.
The petitioner and the BOC should have taken to heart the following pronouncement
in Commissioner of Immigration v. Fernandez: 7 9
In the face of the disclosure that Teban Caoili had been all along working
in the Avenue Electrical Supply Co. (Avesco), located at No. 653 Rizal Avenue,
Manila, until his arrest, and the documentary evidence showing that he had been
issued a Philippine Passport; had regularly paid his Residence Tax Certi cates (A
& B), and led Income Tax Returns, a nding of fact is necessary whether the
Commissioner really had intended to notify Teban Caoili of the exclusion
proceedings the Board had conducted in his absence. While it may be true that
the proceedings is purely administrative in nature, such a circumstance did not
excuse the serving of notice. There are cardinal primary rights which must be
respected even in proceedings of administrative character, the rst of which is the
right of the party interested or affected to present his own case and submit
evidence in support thereof. 8 0
xxx xxx xxx
Since the proceedings affected Caoili's status and liberty, notice should
have been given. And in the light of the actuations of the new Board of
Commissioners, there is a necessity of determining whether the ndings of the
Board of Special Inquiry and the old Board of Commissioners are correct or not.
This calls for an examination of the evidence, and, the law on the matter. 8 1
Apparently, the BOC did not bother to review its own records in resolving the
respondent's Urgent Motion for Reconsideration. It anchored its Omnibus Resolution only
on the following: the membership of the BOC had changed when it issued its September
27, 1995 Summary Deportation Order and under Commonwealth Act No. 613, Section
27(b); the BOC is precluded from reversing a previous order issued by it; 8 2 and, the
September 27, 1995 Order of the BOC had become nal and could no longer be reviewed
and reversed by it after the lapse of one year. 8 3 However, the rulings cited by the
petitioner are not applicable in the instant case, as the said cases cited involve appeals to
the BOC from the decisions of the Board of Special Inquiry (BSI). In Sy v. Vivo 8 4 and Lou v.
Vivo, 8 5 we ruled that under Section 27(b) of Commonwealth Act No. 613, as amended, the
Decision of the BOC on appeal from the decision of the BSI becomes nal and executory
after one year:
(b) A board of special inquiry shall have authority (1) to determine
whether an alien seeking to enter or land in the Philippines shall be allowed to
enter or land or shall be excluded, and (2) to make its ndings and
recommendations in all the cases provided for in section twenty-nine of this Act
wherein the Commissioner of Immigration may admit an alien who is otherwise
inadmissible. For this purpose, the board or any member thereof, may administer
oaths and take evidence and in case of necessity may issue subpoena and/or
subpoena duces tecum. The hearing of all cases brought before a board of
special inquiry shall be conducted under rules of procedure to be prescribed by
the Commissioner of Immigration. The decision of any two members of the board
shall prevail and shall be nal unless reversed on appeal by the Board of
Commissioners as hereafter stated, or in the absence of an appeal, unless
reversed by the Board of Commissioners after a review by it, motu propio, of the
entire proceedings within one year from the promulgation of the decision.
EDCcaS
In Commissioner of Immigration v. Fernandez, 8 6 we held that the BOC composed of

new members is precluded from reversing, motu proprio, the decision of the BOC on
appeal from a BSI decision. But not to be ignored was our ruling that "at any rate, the issue
of authority should be made in accordance with the procedure established by law, with a
view to protecting the rights of individuals." 8 7
In this case, the Summary Deportation Order was issued by the BOC in the exercise
of its authority under O ce Memorandum Order No. 34, and not in the exercise of its
appellate jurisdiction of BSI decisions. There is no law nor rule which provides that a
Summary Deportation Order issued by the BOC in the exercise of its authority becomes
nal after one year from its issuance, 8 8 or that the aggrieved party is barred from ling a
motion for a reconsideration of any order or decision of the BOC. The Rules of Court may
be applied in a suppletory manner to deportation proceedings 8 9 and under Rule 37, a
motion for reconsideration of a decision or final order may be filed by the aggrieved party.
Neither is there any law nor rule providing that the BOC, composed of new members,
cannot revise a Summary Deportation Order previously issued by a different body of
Commissioners. The BOC that issued the Summary Deportation Order and the BOC which
resolved the respondent's Urgent Motion for Reconsideration are one and the same
government entity, with the same powers and duties regardless of its membership.
Similarly, an RTC judge who replaces another judge who presided over a case may review
the judgment or order of his predecessor as long as the said judgment or order has not as
yet become nal or executory, The act subject of review is not the act of the judge but the
act of the court.
The petitioner's contention that it failed to resolve the respondent's motion for
reconsideration because of the change of administration in the BOC was branded by the
CA as flimsy, if not bordering on the absurd:
Firstly, it was issued three days (June 14, 2002) after petitioner led this
instant petition on June 11, 2002 or almost seven years from the time the motion
for reconsideration was filed;
Secondly, respondent's counsel's excuse that it took such time to resolve it

because it was only later that the motion for reconsideration was discovered
because of change of administration, is flimsy, if not bordering on the absurd; 9 0
The Issuance of a New and Regular

Passport to the Respondent
Rendered the Summary
Deportation Order Moot and
Academic, and the Omnibus
Resolution of the BOC Lacking
in Legal Basis
We agree with the petitioner that a foreign embassy's cancellation of the passport it
had issued to its citizens, or its refusal to issue a new one in lieu of a passport that has
expired, will result in the loss of the alien's privilege to stay in this country and his
subsequent deportation therefrom. But even the BOC asserted in its Summary Deportation
Order that an embassy's issuance of a new passport to any of its citizens may bar the
latter's deportation, citing the resolution of this Court in Schonemann v. Commissioner
Santiago. 9 1
Irrefragably, Commissioner Verceles was mandated to cause the arrest of the
respondent preparatory to his deportation from the Philippines. However, there was no
xed period in the Order within which to comply with the same. The Commissioner is not
mandated to deport an alien immediately upon receipt of the BOC's deportation order. It is
enough that the Commissioner complies with the Order within a "reasonable time," which,
in Mejoff v. Director of Prisons, 9 2 we held to connote as follows:
The meaning of "reasonable time" depends upon the circumstances,
specially the di culties of obtaining a passport, the availability of transportation,
the diplomatic arrangements with the governments concerned and the efforts
displayed to send the deportee away; but the Court warned that "under
established precedents, too long a detention may justify the issuance of a writ of
habeas corpus.
In this case, the BOC had yet to act on the respondent's Urgent Motion for
Reconsideration. The respondent was also given a chance to secure a clearance and a new
passport with the German Embassy. After all, the possibility that the German Embassy
would renew the respondent's passport could not be ruled out. This was exactly what
happened: the German Embassy issued a new passport to the respondent on March 12,
1996 after the German District Court dismissed the case for physical injuries. Thus, the
respondent was no longer an undocumented alien; nor was he an undesirable one for that
matter.
The petitioner even admits that there is no longer a legal or factual basis to
disqualify the respondent from remaining in the country as a permanent resident. Yet, the
OSG insists that he has to be deported rst so that the BOC's Summary Deportation Order
could be implemented. This contention was rejected by the CA, thus:

During the hearing of petitioner's prayer for issuance of a writ of
preliminary injunction before Us, respondent's counsel from the O ce of the
Solicitor General had the occasion to manifest in open court that the State has no
opposition to petitioner's stay in the country provided he rst leave and re-enter
and re-apply for residency if only to comply with the Summary Deportation Order
of 1995. That, to Our mind, seems preposterous, if not ridiculous. An individual's
human rights and rights to freedom, liberty and self-determination recognize no
boundaries in the democratic, free and civilized world. Such rights follow him
wherever he may be. If presently , there is no factual or legal impediment to
disqualify petitioner in his stay in the country, other than allegedly those relied
upon in the Summary Deportation Order of 1995 (as hereinbefore discussed, had
ceased to exist), requiring petitioner to leave the country and re-enter and re-apply
for residency makes little sense or no sense at all, more so, in the case of
petitioner who, for many years past, had lived herein and nurtured a family that is
Filipino.
Thus, opined, We, therefore, believe and hereby rule, that there is presently
every reason to enjoin/prohibit the Bureau of Immigration, respondent
Commissioner Domingo in particular, from presently deporting petitioner. 9 3
We agree with the Court of Appeals. The Summary Deportation Order had been
rendered moot and academic upon the German Embassy's issuance of a new passport to
the respondent. The respondent had been in the Philippines as a permanent resident since
July 18, 1986, and had married a Filipino citizen, with whom he has two children. He is not a
burden to the country nor to the people of Palawan. He put up, and has been managing, the
Bavaria Restaurant with about 30 employees. He has no pending criminal case; nor does
he have any derogatory record. The respondent was allowed by then Immigration
Commissioner Verceles to renew his passport and was given time to secure a clearance
from the German Embassy. The respondent was able to do so. The case against him for
physical injuries was dismissed by the German District Court. Thus, the inceptual basis for
the respondent's deportation had ceased to exist.
The power to deport is a police matter against undesirable aliens, whose presence
in the country is found to be injurious to the public good. We believe that the deportation of
the respondent late in the day did not achieve the said purpose. The petitioner admitted
that there is no longer a factual and legal basis to disqualify the respondent from staying in
the country. He is not an undesirable alien; nor is his presence in the country injurious to
public good. He is even an entrepreneur and a productive member of society.
Arrest, detention and deportation orders of aliens should not be enforced blindly
and indiscriminately, without regard to facts and circumstances that will render the same
unjust, unfair or illegal. 9 4 To direct the respondent to leave the country rst before
allowing him re-entry is downright iniquitous. 9 5 If the respondent does leave the country,
he would thereby be accepting the force and effect of the BOC's Summary Deportation
Order with its attendant in rmities. He will thereby lose his permanent resident status and
admit the e cacy of the cancellation of his permanent resident visa. Moreover, his entry
into the country will be subject to such conditions as the petitioner may impose.
The deportation of an alien is not intended as a punishment or penalty. But in a real
sense, it is. In Bridges v. Wixon, 9 6 Mr. Justice Murphy declared that the impact of
deportation upon the life of an alien is often as great if not greater than the imposition of a
criminal sentence. In dealing with deportation, there is no justi able reason for
disregarding the democratic and human tenets of our legal system and descending to the
practices of despotism. As Justice Brewer opined in Fong Yue Ting v. United States, 9 7
deportation is a punishment because it requires rst, an arrest, a deprivation of liberty and
second, a removal from home, from family, from business, from property. To be forcibly
taken away from home, family, business and property and sent across the ocean to a
distant land is punishment; and that oftentimes is most severe and cruel. It would be
putting salt on the respondent's woes occasioned by the BOC's ineptitude. Considering the
peculiar backdrop and the equities in this case, the respondent's deportation and the
cancellation of his permanent resident visa as a precondition to his re-entry into this
country is severe and cruel; it is a form of punishment. aCSEcA
Our ruling in Vivo v. Cloribel, 9 8 has no application in this case, precisely because the
factual milieu here is entirely different. In that case, the Commissioner of Immigration
required the respondents to leave the country on or before September 12, 1962, because
their stay in the country as approved by the Secretary of Justice had been cancelled. Our
ruling in Bing v. Commission on Immigration, 9 9 even buttresses the case for the
respondent since we ruled therein that an alien entitled to a permanent stay cannot be
deported without being accorded due notice and hearing.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court
of Appeals is AFFIRMED.
SO ORDERED.
Puno, Quisumbing, Austria-Martinez and Tinga, JJ., concur.
Footnotes
1. Penned by Associate Justice Edgardo F. Sundiam, with Associate Justices Portia Aliño-
Hormachuelos and Elvi John S. Asuncion concurring.
2. Immigration Commissioner Leandro T. Verceles, Deputy Commissioner Joseph Lopez
and Deputy Commissioner Edgar L. Mendoza.
3. Commissioner Andrea D. Domingo, Associate Commissioners Arthel B. Caronongan,

Daniel C. Cueto and Orlando V. Dizon.
4. Rollo, p. 167.
5. Id. at 150.
6. Id. at 151.
7. Id. at 94.
8. Id. at 95.
9. Id. at 88, 171.
10. Id. at 173.
11. Id. at 60.
12. Id. at 59.
13. Id. at 60-61.
14. Id. at 60.
15. Id. at 163.
16. Id. at 83-86.
17. Id. at 84-85.
18. Id. at 164-165.
19. Id. at 163.
20. Id. at 93.
21. Id. at 88.
22. Id. at 89.
23. Docketed as CA-G.R. SP No. 71094.
24. Rollo, p. 292.

25. Id. at 294.
26. 95 SCRA 876 (1980).
27. 18 SCRA 145 (1969).

28. 11 SCRA 184 (1966).
29. An Act to Control and Regulate the Immigration of Aliens into the Philippines, also
known as the Philippine Immigration Act.
30. Rollo, p. 113.
31. Id. at 114.
32. Id. at 340.
33. Id. at 62.
34. Id. at 56 and 363.
35. Id. at 367.
36. Id. at 401.
37. Id. at 280-281.
38. Id. at 53.
39. Id. at 20.
40. Id. at 21-22.
41. Id. at 458-459.
42. Id. at 458-460.
43. Id. at 496.
44. Arocha vs. Vivo, 21 SCRA 538 (1967).
45. Servicewide Specialists, Inc. v. Court of Appeals, 251 SCRA 70 (1995).

46. Manliquin Integrated Food Products, Inc. v. Court of Appeals, et al., 203 SCRA 490
(1996).
47. Lim Tanhu v. Ramolete, 66 SCRA 425 (1975); Alabang Development Corporation v.
Valenzuela, 116 SCRA 261 (1982).
48. Arcelona v. Court of Appeals, 280 SCRA 80 (1997).
49. Rule 3, Section 11, Rules of Court, as amended.
50. Caruncho v. COMELEC, 315 SCRA 693 (1999).

51. Vesagas, et al. v. Court of Appeals, et al., 371 SCRA 508 (2001).
52. 19 SCRA 878 (1963).
53. 22 SCRA 159 (1968).
54. Cuyugan v. Dizon, 79 Phil. 80 (1947).

55. 243 SCRA 239 (1995).
56. Caruncho v. Comelec, 315 SCRA 693 (1996).
57. Balquied v. CA, et al., 80 SCRA 123 (1977).
58. 16 Phil. 315 (1910).
59. Fong Yue Ting v. United States, 149 U.S. 905 (1893).
60. Sing v. Court of Appeals, 180 U.S. 634 (1901).
61. Tatad v. Secretary of the Department of Energy, 281 SCRA 330 (1997); Ledesma v.
Court of Appeals, 278 SCRA 656 (1997); Tañada v. Angara, 272 SCRA 18 (1997);
Republic v. Sandiganbayan (First Division), 258 SCRA 685 (1996).
62. 89 L. ed. 2103 (1945).
63. 27 Federal Reporter 2d. 848 (1928).
64. Article, United States Court of Appeals, 232 Federal Reporter 194 (1946).
65. Section 4, Rule 65, Rules of Court, as amended.
66. 90 Phil. 71 (1951).
67. 180 SCRA 762 (1989).

68. 344 U.S. 571 (1953).
69. Supra, note 58.

70. Quoted in "The Venue," 12 U.S. 8 Crunch 253.
71. 1 Phillin International Law, Chapter 18, p. 347.

72. 149 U.S. 905 (1893).
73. Supra.

74. 116 U.S. 616 (1886).
75. Rollo, p. 177.
76. Id. at 56.
77. 197 SCRA 883 (1991).
78. 93 Phil. 1065 (1953).
79. 11 SCRA 184 (1964).

80. Id. at 191.
81. Id. at 193.
82. Id.
83. Sy v. Vivo, supra; Lou v. Vivo, supra.
84. Supra.
85. Supra.
86. Supra.
87. Supra note 71, at 191.
88. SEC. 10. Power to Countermand Decisions of the Board of Commissioners of the
Bureau of Immigration. — The decision of the Board of Commissioners which has
jurisdiction over all deportation cases shall become final and executory after thirty (30)
days from promulgation, unless within such period the President shall order the contrary.
89. Board of Commissioners v. De la Rosa, supra.
90. Rollo, p. 55.
91. Rollo, p. 60.
92. Supra.
93. Rollo, p. 56.
94. Bing v. Commissioner of Immigration, 52 O.G. 6551 (1956).
95. BOC v. De la Rosa, supra.
96. Supra.
97. Supra.
98. Supra.
99. Supra.

EN BANC
[G.R. No. 84818. December 18, 1989.]
PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION ,

petitioner, vs. JOSE LUIS A. ALCUAZ, as NTC Commissioner, and
NATIONAL TELECOMMUNICATIONS COMMISSION , respondents.
Rilloraza, Africa, De Ocampo & Africa for petitioner.

Victor de la Serna for respondent Alcuaz.
SYLLABUS
1. ADMINISTRATIVE LAW; REQUISITES OF A VALID DELEGATION OF LEGISLATIVE

POWER. — Fundamental is the rule that delegation of legislative power may be sustained
only upon the ground that some standard for its exercise is provided and that the
legislature in making the delegation has prescribed the manner of the exercise of the
delegated power. Therefore, when the administrative agency concerned, respondent NTC
in this case, establishes a rate, its act must both be non-confiscatory and must have been
established in the manner prescribed by the legislature; otherwise, in the absence of a
fixed standard, the delegation of power becomes unconstitutional.
2. ID.; RATE-FIXING POWER; STANDARDS REQUIRED; MAY BE IMPLIED. — In case of a
delegation of rate-fixing power, the only standard which the legislature is required to
prescribe for the guidance of the administrative authority is that the rate be reasonable
and just. However, it has been held that even in the absence of an express requirement as
to reasonableness, this standard may be implied. The inherent power and authority of the
State, or its authorized agent, to regulate the rates charged by public utilities should be
subject always to the requirement that the rates so fixed shall be reasonable and just. A
commission has no power to fix rates which are unreasonable or to regulate them
arbitrarily. This basic requirement of reasonableness comprehends such rates which must
not be so low as to be confiscatory, or too high as to be oppressive. What is a just and
reasonable rate is not a question of formula but of sound business judgment based upon
the evidence; it is a question of fact calling for the exercise of discretion, good sense, and
a fair, enlightened and independent judgment. In determining whether a rate is
confiscatory, it is essential also to consider the given situation, requirements and
opportunities of the utility. A method often employed in determining reasonableness is the
fair return upon the value of the property to the public utility. Competition is also a very
important factor in determining the reasonableness of rates since a carrier is allowed to
make such rates as are necessary to meet competition. (Mla. Railroad Co. vs. A.L. Ammon
Trans. Co. Inc. 218 Phil. 900 (1920)
3. ID.; ID.; INSTANCES WHEN THE SAME WAS CLASSIFIED AS QUASI-JUDICIAL WHEN
SAME WAS CLASSIFIED. — In Vigan Electric Light Co., Inc. vs. Public Service Commission,
we made a categorical classification as to when the rate-fixing power of administrative
bodies is quasi-judicial and when it is legislative, thus: "Moreover, although the rule-making
power end even the power to fix rates — when such rules and/or rates are meant to apply
to all enterprises of a given kind throughout the Philippines — may partake of a legislative
character, such is not the nature of the order complained of. Indeed, the same applies
exclusively to petitioner herein. What is more, it is predicated upon the finding of fact —
based upon a report submitted by the General Auditing Office — that petitioner is making a
profit of more than 12% of its invested capital, which is denied by petitioner. Obviously, the
latter is entitled to cross-examine the maker of said report, and to introduce evidence to
disprove the contents thereof and/or explain or complement the same, as well as to refute
the conclusion drawn therefrom by the respondent. In other words, in making said finding
of fact, respondent performed a function partaking of a quasi-judicial character, the valid
exercise of which demands previous notice and hearing." This rule was further explained in
the subsequent case of The Central Bank of the Philippines vs. Cloribel, et al. to wit: "It is
also clear from the authorities that where the function of the administrative body is
legislative, notice of hearing is not required by due process of law (See Oppenheiner,
Administrative Law, 2 Md. L.R. 185, 204, supra, where it is said: If the nature of the
administrative agency is essentially legislative, the requirements of notice and hearing are
not necessary. The validity of a rule of future action which affects a group, if vested rights
of liberty or property are not involved, is not determined according to the same rules which
apply in the case of the direct application of a policy to a specific individual) . . . It is said in
73 C.J.S. Public Administrative Bodies and Procedure, sec. 130, pages 452 and 453: Aside
from statute, the necessity of notice and hearing in an administrative proceeding depends
on the character of the proceeding and the circumstances involved. In so far as
generalization is possible in view of the great variety of administrative proceedings, it may
be stated as a general rule that notice and hearing are not essential to the validity of
administrative action where the administrative body acts in the exercise of executive,
administrative, or legislative functions; but where a public administrative body acts in a
judicial or quasi-judicial matter, and its acts are particular and immediate rather than
general and prospective, the person whose rights or property may be affected by the
action is entitled to notice and hearing.
4. ID.; ID.; REQUIREMENTS OF NOTICE AND HEARING NECESSARY EVEN IF THE
ORDER IS TEMPORARY IN NATURE. — While respondents may fix a temporary rate pending
final determination of the application of petitioner, such rate-fixing order, temporary
though it may be, is not exempt from the statutory procedural requirements of notice and
hearing, as well as the requirement of reasonableness. Assuming that such power is
vested in NTC, it may not exercise the same in an arbitrary and confiscatory manner.
Categorizing such an order as temporary in nature does not perforce entail the
applicability of a different rule of statutory procedure than would otherwise be applied to
any other order on the same matter unless otherwise provided by the applicable law. In the
case at bar, the applicable statutory provision is Section 16(c) of the Public Service Act
which provides: "Section 16. Proceedings of the Commission, upon notice and hearing . —
The Commission shall have power, upon proper notice and hearing in accordance with the
rules and provisions of this Act, subject to the limitations and exceptions mentioned and
saving provisions to the contrary: (c) To fix and determine individual or joint rates, . . .
which shall be imposed, observed and followed thereafter by any public service; . . . ."
5. ID.; ID.; TEMPORARY RATE-FIXING ORDER; A FINAL LEGISLATIVE ACT AS TO THE
PERIOD DURING WHICH IT HAS TO REMAIN IN FORCE. — The order requires the new
reduced rates to be made effective on a specified date. It becomes a final legislative act
as to the period during which it has to remain in force pending the final determination of
the case. An order of respondent NTC prescribing reduced rates, even for a temporary
period, could be unjust, unreasonable or even confiscatory, especially if the rates are
unreasonably low, since the utility permanently loses its just revenue during the prescribed
period. In fact, such order is in effect final insofar as the revenue during the period covered
by the order is concerned.
6. ID.; POWER TO REGULATE THE CONDUCT AND BUSINESS OF PUBLIC UTILITIES;
LIMITATION. — The rule is that the power of the State to regulate the conduct and
business of public utilities is limited by the consideration that it is not the owner of the
property of the utility, or clothed with the general power of management incident to
ownership, since the private right of ownership to such property remains and is not to be
destroyed by the regulatory power. The power to regulate is not the power to destroy
useful and harmless enterprises, but is the power to protect, foster, promote, preserve,
and control with due regard for the interest, first and foremost, of the public, then of the
utility and of its patrons. Any regulation, therefore, which operates as an effective
confiscation of private property or constitutes an arbitrary or unreasonable infringement
of property rights is void, because it is repugnant to the constitutional guaranties of due
process and equal protection of the laws.
DECISION
REGALADO , J : p
This case is posed as one of first impression in the sense that it involves the public utility
services of the petitioner Philippine Communications Satellite Corporation (PHILCOMSAT,
for short) which is the only one rendering such services in the Philippines. cdrep
The petition before us seeks to annul and set aside an Order 1 issued by respondent
Commissioner Jose Luis Alcuaz of the National Telecommunications Commission
(hereafter, NTC), dated September 2, 1988, which directs the provisional reduction of the
rates which may be charged by petitioner for certain specified lines of its services by
fifteen percent (15%) with the reservation to make further reductions later, for being
violative of the constitutional prohibition against undue delegation of legislative power and
a denial of procedural, as well as substantive, due process of law. llcd
The antecedental facts as summarized by petitioner 2 are not in dispute. By virtue of

Republic Act No. 5514, PHILCOMSAT was granted "a franchise to establish, construct,
maintain and operate in the Philippines, at such places as the grantee may select, station
or stations and associated equipment and facilities for international satellite
communications." Under this franchise, it was likewise granted the authority to "construct
and operate such ground facilities as needed to deliver telecommunications services from
the communications satellite system and ground terminal or terminals."
Pursuant to said franchise, petitioner puts on record that it undertook the following
activities and established the following installations:
1. In 1967, PHILCOMSAT established its provisional earth station in Pinugay,
Rizal.
2. In 1968, earth station standard "A" antenna (Pinugay I) was established.

Pinugay I provided direct satellite communication links with the Pacific Ocean
Region (the United States, Australia, Canada, Hawaii, Guam, Korea, Thailand,
China [PROC], New Zealand and Brunei) thru the Pacific Ocean INTELSAT
satellite.
3. In 1971, a second earth station standard "A" antenna (Pinugay II) was
established. Pinugay II provided links with the Indian Ocean Region (major cities
in Europe, Middle East, Africa, and other Asia Pacific countries operating within
the region) thru the Indian Ocean INTELSAT satellite.
4. In 1983, a third earth station standard "B" antenna (Pinugay III) was
established to temporarily assume the functions of Pinugay I and then Pinugay II
while they were being refurbished. Pinugay III now serves as spare or reserved
antenna for possible contingencies.
5. In 1983, PHILCOMSAT constructed and installed a standard "B" antenna at

Clark Air Field, Pampanga as a television receive-only earth station which
provides the U.S. Military bases with a 24-hour television service.
6. In 1989, petitioner completed the installation of a third standard "A" earth
station (Pinugay IV)to take over the links in Pinugay I due to obsolescence. 3
By designation of the Republic of the Philippines, the petitioner is also the sole signatory
for the Philippines in the Agreement and the Operating Agreement relating to the
International Telecommunications Satellite Organization (INTELSAT) of 115 member
nations, as well as in the Convention and the Operating Agreement of the International
Maritime Satellite Organization (INMARSAT) of 53 member nations, which two global
commercial telecommunications satellite corporations were collectively established by
various states in line with the principles set forth in Resolution 1721 (XVI) of the General
Assembly of the United Nations. llcd
Since 1968, the petitioner has been leasing its satellite circuits to:
1. Philippine Long Distance Telephone Company;
2. Philippine Global Communications, Inc.;
3. Eastern Telecommunications Phils., Inc.;
4. Globe Mackay Cable and Radio Corp. ITT; and
5. Capitol Wireless, Inc.
or their predecessors-in-interest. The satellite services thus provided by petitioner
enable said international carriers to serve the public with indispensable communication
services, such as overseas telephone, telex, facsimile, telegrams, high speed data, live
television in full color, and television standard conversion from European to American
or vice versa.
Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction of
the then Public Service Commission, now respondent NTC. However, pursuant to Executive
Order No. 196 issued on June 17, 1987, petitioner was placed under the jurisdiction,
control and regulation of respondent NTC, including all its facilities and services and the
fixing of rates. Implementing said Executive Order No. 196, respondents required
petitioner to apply for the requisite certificate of public convenience and necessity
covering its facilities and the services it renders, as well as the corresponding authority to
charge rates therefor. prcd
Consequently, under date of September 9, 1987, petitioner filed with respondent NTC an
application 4 for authority to continue operating and maintaining the same facilities it has
been continuously operating and maintaining since 1967, to continue providing the
international satellite communications services it has likewise been providing since 1967,
and to charge the current rates applied for in rendering such services. Pending hearing, it
also applied for a provisional authority so that it can continue to operate and maintain the
above mentioned facilities, provide the services and charge therefor the aforesaid rates
therein applied for.
On September 16, 1987, petitioner was granted a provisional authority to continue
operating its existing facilities, to render the services it was then offering, and to charge
the rates it was then charging. This authority was valid for six (6) months from the date of
said order. 5 When said provisional authority expired on March 17, 1988, it was extended
for another six (6) months, or up to September 16, 1988.
The NTC order now in controversy had further extended the provisional authority of the
petitioner for another six (6) months, counted from September 16, 1988, but it directed the
petitioner to charge modified reduced rates through a reduction of fifteen percent (15%)
on the present authorized rates. Respondent Commissioner ordered said reduction on the
following ground:
"The Commission in its on-going review of present service rates takes note that
after an initial evaluation by the Rates Regulation Division of the Common
Carriers Authorization Department of the financial statements of applicant, there
is merit in a REDUCTION in some of applicant's rates, subject to further
reductions, should the Commission finds (sic) in its further evaluation that more
reduction should be effected either on the basis of a provisional authorization or
in the final consideration of the case." 6
PHILCOMSAT assails the above-quoted order for the following reasons:

1. The enabling act (Executive Order No. 546) of respondent NTC empowering it to fix
rates for public service communications does not provide the necessary standards
constitutionally required, hence there is an undue delegation of legislative power,
particularly the adjudicatory powers of NTC;
2. Assuming arguendo that the rate-fixing power was properly and constitutionally
conferred, the same was exercised in an unconstitutional manner, hence it is ultra vires, in
that (a) the questioned order violates procedural due process for having been issued
without prior notice and hearing; and (b) the rate reduction it imposes is unjust,
unreasonable and confiscatory, thus constitutive of a violation of substantive due process.
I. Petitioner asseverates that nowhere in the provisions of Executive Order No. 546,
providing for the creation of respondent NTC and granting its rate-fixing powers, nor of
Executive Order No. 196, placing petitioner under the jurisdiction of respondent NTC, can it
be inferred that respondent NTC is guided by any standard in the exercise of its rate-fixing
and adjudicatory powers. While petitioner in its petition-in-chief raised the issue of undue
delegation of legislative power, it subsequently clarified its said submission to mean that
the order mandating a reduction of certain rates is undue delegation not of legislative but
of quasi-judicial power to respondent NTC, the exercise of which allegedly requires an
express conferment by the legislative body.
Whichever way it is presented, petitioner is in effect questioning the constitutionality of
Executive Orders Nos. 546 and 196 on the ground that the same do not fix a standard for
the exercise of the power therein conferred.
We hold otherwise.
Fundamental is the rule that delegation of legislative power may be sustained only upon
the ground that some standard for its exercise is provided and that the legislature in
making the delegation has prescribed the manner of the exercise of the delegated power.
Therefore, when the administrative agency concerned, respondent NTC in this case,
establishes a rate, its act must both be non-confiscatory and must have been established
in the manner prescribed by the legislature; otherwise, in the absence of a fixed standard,
the delegation of power becomes unconstitutional. In case of a delegation of rate-fixing
power, the only standard which the legislature is required to prescribe for the guidance of
the administrative authority is that the rate be reasonable and just. However, it has been
held that even in the absence of an express requirement as to reasonableness, this
standard may be implied. 7
It becomes important then to ascertain the nature of the power delegated to respondent
NTC and the manner required by the statute for the lawful exercise thereof.
Pursuant to Executive Orders Nos. 546 and 196, respondent NTC is empowered, among
others, to determine and prescribe rates pertinent to the operation of public service
communications which necessarily include the power to promulgate rules and regulations
in connection therewith. And, under Section 15(g) of Executive Order No. 546, respondent
NTC should be guided by the requirements of public safety, public interest and reasonable
feasibility of maintaining effective competition of private entities in communications and
broadcasting facilities. Likewise, in Section 6(d) thereof, which provides for the creation of
the Ministry of Transportation and Communications with control and supervision over
respondent NTC, it is specifically provided that the national economic viability of the entire
network or components of the communications systems contemplated therein should be
maintained at reasonable rates. We need not go into an in-depth analysis of the pertinent
provisions of the law in order to conclude that respondent NTC, in the exercise of its rate-
fixing power, is limited by the requirements of public safety, public interest, reasonable
feasibility and reasonable rates, which conjointly more than satisfy the requirements of a
valid delegation of legislative power.
II. On another tack, petitioner submits that the questioned order violates procedural
due process because it was issued motu proprio, without notice to petitioner and without
the benefit of a hearing. Petitioner laments that said order was based merely on an "initial
evaluation," which is a unilateral evaluation, but had petitioner been given an opportunity to
present its side before the order in question was issued, the confiscatory nature of the rate
reduction and the consequent deterioration of the public service could have been shown
and demonstrated to respondents. Petitioner argues that the function involved in the rate
fixing-power of NTC is adjudicatory and hence quasi-judicial, not quasi-legislative; thus,
notice and hearing are necessary and the absence thereof results in a violation of due
process.
Respondents admit that the application of a policy like the fixing of rates as exercised by
administrative bodies is quasi-judicial rather than quasi-legislative: that where the function
of the administrative agency is legislative, notice and hearing are not required, but where
an order applies to a named person, as in the instant case, the function involved is
adjudicatory. 8 Nonetheless, they insist that under the facts obtaining the order in question
need not be preceded by a hearing, not because it was issued pursuant to respondent
NTC's legislative function but because the assailed order is merely interlocutory, it being
an incident in the ongoing proceedings on petitioner's application for a certificate of public
convenience; and that petitioner is not the only primary source of data or information since
respondent is currently engaged in a continuing review of the rates charged.
We find merit in petitioner's contention.
In Vigan Electric Light Co., Inc. vs. Public Service Commission, 9 we made a categorical
classification as to when the rate-fixing power of administrative bodies is quasi-judicial
and when it is legislative, thus:
"Moreover, although the rule-making power end even the power to fix rates —
when such rules and/or rates are meant to apply to all enterprises of a given kind
throughout the Philippines — may partake of a legislative character, such is not
the nature of the order complained of. Indeed, the same applies exclusively to
petitioner herein. What is more, it is predicated upon the finding of fact — based
upon a report submitted by the General Auditing Office — that petitioner is making
a profit of more than 12% of its invested capital, which is denied by petitioner.
Obviously, the latter is entitled to cross-examine the maker of said report, and to
introduce evidence to disprove the contents thereof and/or explain or complement
the same, as well as to refute the conclusion drawn therefrom by the respondent.
In other words, in making said finding of fact, respondent performed a function
partaking of a quasi-judicial character, the valid exercise of which demands
previous notice and hearing."
This rule was further explained in the subsequent case of The Central Bank of the
Philippines vs. Cloribel, et al. 1 0 to wit:
"It is also clear from the authorities that where the function of the administrative
body is legislative, notice of hearing is not required by due process of law (See
Oppenheimer, Administrative Law, 2 Md. L.R. 185, 204, supra, where it is said: 'If
the nature of the administrative agency is essentially legislative, the requirements
of notice and hearing are not necessary. The validity of a rule of future action
which affects a group, if vested rights of liberty or property are not involved, is not
determined according to the same rules which apply in the case of the direct
application of a policy to a specific individual') . . . It is said in 73 C.J.S. Public
Administrative Bodies and Procedure, sec. 130, pages 452 and 453: 'Aside from
statute, the necessity of notice and hearing in an administrative proceeding
depends on the character of the proceeding and the circumstances involved. In so
far as generalization is possible in view of the great variety of administrative
proceedings, it may be stated as a general rule that notice and hearing are not
essential to the validity of administrative action where the administrative body
acts in the exercise of executive, administrative, or legislative functions; but where
a public administrative body acts in a judicial or quasi-judicial matter, and its acts
are particular and immediate rather than general and prospective, the person
whose rights or property may be affected by the action is entitled to notice and
hearing." 1 1
The order in question which was issued by respondent Alcuaz no doubt contains all the
attributes of a quasi-judicial adjudication. Foremost is the fact that said order pertains
exclusively to petitioner and to no other. Further, it is premised on a finding of fact,
although patently superficial, that there is merit in a reduction of some of the rates
charged — based on an initial evaluation of petitioner's financial statements — without
affording petitioner the benefit of an explanation as to what particular aspect or aspects
of the financial statements warranted a corresponding rate reduction. No rationalization
was offered nor were the attending contingencies, if any, discussed, which prompted
respondents to impose as much as a fifteen percent (15%) rate reduction. It is not far-
fetched to assume that petitioner could be in a better position to rationalize its rates vis-a-
vis the viability of its business requirements. The rates it charges result from an exhaustive
and detailed study it conducts of the multi-faceted intricacies attendant to a public service
undertaking of such nature and magnitude. We are, therefore, inclined to lend greater
credence to petitioner's ratiocination that an immediate reduction in its rates would
adversely affect its operations and the quality of its service to the public considering the
maintenance requirements, the projects it still has to undertake and the financial outlay
involved. Notably, petitioner was not even afforded the opportunity to cross-examine the
inspector who issued the report on which respondent NTC based its questioned order. LibLex
At any rate, there remains the categorical admission made by respondent NTC that the
questioned order was issued pursuant to its quasi-judicial functions. It, however, insists
that notice and hearing are not necessary since the assailed order is merely incidental to
the entire proceedings and, therefore, temporary in nature. This postulate is bereft of
merit.
While respondents may fix a temporary rate pending final determination of the application
of petitioner, such rate-fixing order, temporary though it may be, is not exempt from the
statutory procedural requirements of notice and hearing, as well as the requirement of
reasonableness. Assuming that such power is vested in NTC, it may not exercise the same
in an arbitrary and confiscatory manner. Categorizing such an order as temporary in nature
does not perforce entail the applicability of a different rule of statutory procedure than
would otherwise be applied to any other order on the same matter unless otherwise
provided by the applicable law. In the case at bar, the applicable statutory provision is
Section 16(c) of the Public Service Act which provides:
"Section 16. Proceedings of the Commission, upon notice and hearing. — The
Commission shall have power, upon proper notice and hearing in accordance with
the rules and provisions of this Act, subject to the limitations and exceptions
mentioned and saving provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, . . . which shall be imposed,
observed and followed thereafter by any public service; . . . ."
There is no reason to assume that the aforesaid provision does not apply to respondent
NTC, there being no limiting, excepting, or saving provisions to the contrary in Executive
Orders Nos. 546 and 196.
It is thus clear that with regard to rate-fixing, respondent has no authority to make such
order without first giving petitioner a hearing, whether the order be temporary or
permanent, and it is immaterial whether the same is made upon a complaint, a summary
investigation, or upon the commission's own motion as in the present case. That such a
hearing is required is evident in respondents' order of September 16, 1987 in NTC Case
No. 8794 which granted PHILCOMSAT a provisional authority "to continue operating its
existing facilities, to render the services it presently offers, and to charge the rates as
reduced by them" under the condition that "(s)ubject to hearing and the final consideration
of the merit of this application, the Commission may modify, revise or amend the rates . . .."
12
While it may be true that for purposes of rate-fixing respondents may have other sources
of information or data, still, since a hearing is essential, respondent NTC should act solely
on the basis of the evidence before it and not on knowledge or information otherwise
acquired by it but which is not offered in evidence or, even if so adduced, petitioner was
given no opportunity to controvert.
Again, the order requires the new reduced rates to be made effective on a specified date. It
becomes a final legislative act as to the period during which it has to remain in force
pending the final determination of the case. 1 3 An order of respondent NTC prescribing
reduced rates, even for a temporary period, could be unjust, unreasonable or even
confiscatory, especially if the rates are unreasonably low, since the utility permanently
loses its just revenue during the prescribed period. In fact, such order is in effect final
insofar as the revenue during the period covered by the order is concerned. Upon a
showing, therefore, that the order requiring a reduced rate is confiscatory, and will unduly
deprive petitioner of a reasonable return upon its property, a declaration of its nullity
becomes inductible, which brings us to the issue on substantive due process.
III. Petitioner contends that the rate reduction is confiscatory in that its
implementation would virtually result in a cessation of its operations and eventual closure
of business. On the other hand, respondents assert that since petitioner is operating its
communications satellite facilities through a legislative franchise, as such grantee it has no
vested right therein. What it has is merely a privilege or license which may be revoked at
will by the State at any time without necessarily violating any vested property right of
herein petitioner. While petitioner concedes this thesis of respondent, it counters that the
withdrawal of such privilege should nevertheless be neither whimsical nor arbitrary, but it
must be fair and reasonable.
There is no question that petitioner is a mere grantee of a legislative franchise which is

subject to amendment, alteration, or repeal by Congress when the common good so
requires. 1 4 Apparently, therefore, such grant cannot be unilaterally revoked absent a
showing that the termination of the operation of said utility is required by the common
good.
The rule is that the power of the State to regulate the conduct and business of public
utilities is limited by the consideration that it is not the owner of the property of the utility,
or clothed with the general power of management incident to ownership, since the private
right of ownership to such property remains and is not to be destroyed by the regulatory
power. The power to regulate is not the power to destroy useful and harmless enterprises,
but is the power to protect, foster, promote, preserve, and control with due regard for the
interest, first and foremost, of the public, then of the utility and of its patrons. Any
regulation, therefore, which operates as an effective confiscation of private property or
constitutes an arbitrary or unreasonable infringement of property rights is void, because it
is repugnant to the constitutional guaranties of due process and equal protection of the
laws. 1 5
Hence, the inherent power and authority of the State, or its authorized agent, to regulate
the rates charged by public utilities should be subject always to the requirement that the
rates so fixed shall be reasonable and just. A commission has no power to fix rates which
are unreasonable or to regulate them arbitrarily. This basic requirement of reasonableness
comprehends such rates which must not be so low as to be confiscatory, or too high as to
be oppressive. 1 6

What is a just and reasonable rate is not a question of formula but of sound business
judgment based upon the evidence; 1 7 it is a question of fact calling for the exercise of
discretion, good sense, and a fair, enlightened and independent judgment 1 8 In determining
whether a rate is confiscatory, it is essential also to consider the given situation,
requirements and opportunities of the utility. A method often employed in determining
reasonableness is the fair return upon the value of the property to the public utility.
Competition is also a very important factor in determining the reasonableness of rates
since a carrier is allowed to make such rates as are necessary to meet competition. 1 9
A cursory perusal of the assailed order reveals that the rate reduction is solely and
primarily based on the initial evaluation made on the financial statements of petitioner,
contrary to respondent NTC's allegation that it has several other sources of information
without, however, divulging such sources. Furthermore, it did not as much as make an
attempt to elaborate on how it arrived at the prescribed rates. It just perfunctorily declared
that based on the financial statements, there is merit for a rate reduction without any
elucidation on what implications and conclusions were necessarily inferred by it from said
statements. Nor did it deign to explain how the data reflected in the financial statements
influenced its decision to impose a rate reduction.
On the other hand, petitioner may likely suffer a severe drawback, with the consequent
detriment to the public service, should the order of respondent NTC turn out to be
unreasonable and improvident. The business in which petitioner is engaged is unique in
that its machinery and equipment have always to be taken in relation to the equipment on
the other end of the transmission arrangement. Any lack, aging, acquisition, rehabilitation,
or refurbishment of machinery and equipment necessarily entails a major adjustment or
innovation on the business of petitioner. As pointed out by petitioner, any change in the
sending end abroad has to be matched with the corresponding change in the receiving end
in the Philippines. conversely, any change in the receiving end abroad has to be matched
with the corresponding change in the sending end in the Philippines. An inability on the part
of petitioner to meet the variegations demanded by technology could result in a
deterioration or total failure of the service of satellite communications.
cdll
At present, petitioner is engaged in several projects aimed at refurbishing, rehabilitating,

and renewing its machinery and equipment in order to keep up with the continuing changes
of the times and to maintain its facilities at a competitive level with the technological
advances abroad. These projected undertakings were formulated on the premise that
rates are maintained at their present or at reasonable levels. Hence, an undue reduction
thereof may practically lead to a cessation of its business. While we concede the primacy
of the public interest in an adequate and efficient service, the same is not necessarily to be
equated with reduced rates. Reasonableness in the rates assumes that the same is fair to
both the public utility and the consumer. cdll
Consequently, we hold that the challenged order, particularly on the issue of rates provided
therein, being violative of the due process clause is void and should be nullified.
Respondents should now proceed, as they should heretofore have done, with the hearing
and determination of petitioner's pending application for a certificate of public
convenience and necessity and in which proceeding the subject of rates involved in the
present controversy, as well as other matters involved in said application, may be duly
adjudicated with reasonable dispatch and with due observance or our pronouncements
herein.
WHEREFORE, the writ prayed for is GRANTED and the order of respondents, dated
September 2, 1988, in NTC Case No. 87-94 is hereby SET ASIDE. The temporary restraining
order issued under our resolution of September 13, 1988, as specifically directed against
the aforesaid order of respondents on the matter of existing rates on petitioner's present
authorized services, is hereby made permanent.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Bidin,
Sarmiento, Cortés, Griño-Aquino and Medialdea, JJ., concur.
Padilla, J., took no part.
Separate Opinions
GUTIERREZ, JR., J., concurring:
I concur in the ponencia of Justice Ragalado and join him in the erudite and thorough
discussion of the respondent's authority. However, I have reservations about our
continuing to abide by the dictum that in the exercise of quasi-legislative power, notice and
hearing are not required. I believe that this doctrine is ripe for re-examination.
LibLex
Senators and Congressmen are directly elected by the people. Administrative officials are
not. If the members of an administrative body are, as is so often the case, appointed not
on the basis of competence and qualifications but out of political or personal
considerations, it is not only the sense of personal responsibility to the electorate affected
by legislation which is missing. The expertise and experience needed for the issuance of
sound rules and regulations would also be sorely lacking.
Congress never passes truly important legislation without holding public hearings. Yet,
administrative officials who are not directly attuned to the public pulse see no need for
hearings. They issue rules and circulars with far reaching effects on our economy and our
nation's future on the assumption that the head of an agency knows best what is good for
the people. I believe that in the exercise of quasi-legislative powers, administrative
agencies, much, much more than Congress, should hold hearings and should be given
guidelines as to when notices and hearings are essential even in quasi-legislation.
Footnotes
1. Annex A, Petition; Rollo, 37.
2. Rollo, 6-11, 137-139, 148-150.

3. Ibid., 149.
4. Annex C, Petition; Rollo, 48.
5. Annex B, id., ibid., 41.
6. Rollo, 37.
7. 42 Am. Jur. 357-358.

8. Memorandum for Private Respondents, 9-10; Rollo, 181-182.
9. 10 SCRA 46 (1964).

10. 44 SCRA 307 (1972).
11. Citing Albert vs. Public Service Commission, 120 A. 2d. 346, 350-351.
12. Rollo, 44.
13. William A. Predergast, et. al. vs. New York Tel. Co., 67 L. Ed. 853, 858.
14. Sec. 11, Art. XII, 1987 Constitution.

15. 73 C.J.S 1005.
16. Op. cit., 1010.

17. State Public Utilities Commission ex. rel. City of Springfield vs. Springfield Gas &
Electric Co., 125 N.E. 891.
18. 73 C.J.S. 1010.
19. Manila Railroad Co. vs. A.L. Ammen Transportation Co., Inc., 48 Phil. 900 (1926).

SECOND DIVISION
[G.R. No. 143964. July 26, 2004.]
GLOBE TELECOM, INC. , petitioner, vs . THE NATIONAL

TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A.
SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and
NESTOR DACANAY, and SMART COMMUNICATIONS, INC. ,
respondents.
DECISION
TINGA , J : p
Telecommunications services are affected by a high degree of public interest. 1

Telephone companies have historically been regulated as common carriers, 2 and indeed,
the 1936 Public Service Act has classi ed wire or wireless communications systems as a
"public service," along with other common carriers. 3
Yet with the advent of rapid technological changes affecting the
telecommunications industry, there has been a marked reevaluation of the traditional
paradigm governing state regulation over telecommunications. For example, the United
States Federal Communications Commission has chosen not to impose strict common
regulations on incumbent cellular providers, choosing instead to let go of the reins and rely
on market forces to govern pricing and service terms. 4
In the Philippines, a similar paradigm shift can be discerned with the passage of the
Public Telecommunications Act of 1995 ("PTA"). As noted by one of the law's principal
authors, Sen. John Osmeña, under prior laws, the government regulated the entry of pricing
and operation of all public telecommunications entities. The new law proposed to
dismantle gradually the barriers to entry, replace government control on price and income
with market instruments, and shift the focus of government's intervention towards
ensuring service standards and protection of customers. 5 Towards this goal, Article II,
Section 8 of the PTA sets forth the regulatory logic, mandating that "a healthy competitive
environment shall be fostered, one in which telecommunications carriers are free to make
business decisions and to interact with one another in providing telecommunications
services, with the end in view of encouraging their nancial viability while maintaining
affordable rates." 6 The statute itself de nes the role of the government to "promote a fair,
e cient and responsive market to stimulate growth and development of the
telecommunications facilities and services." 7
The present petition dramatizes to a degree the clash of philosophies between
traditional notions of regulation and the au corant trend to deregulation. Appropriately, it
involves the most ubiquitous feature of the mobile phone, Short Messaging Service
("SMS") 8 or "text messaging," which has been transformed from a mere technological fad
into a vital means of communication. And propitiously, the case allows the Court to
evaluate the role of the National Telecommunications Commission ("NTC") in this day and
age.

The NTC is at the forefront of the government response to the avalanche of
inventions and innovations in the dynamic telecommunications eld. Every regulatory
action it undertakes is of keen interest not only to industry analysts and players but to the
public at large. The intensive scrutiny is understandable given the high nancial stakes
involved and the inexorable impact on consumers. And its rulings are traditionally
accorded respect even by the courts, owing traditional deference to administrative
agencies equipped with special knowledge, experience and capability to hear and
determine promptly disputes on technical matters. 9
At the same time, judicial review of actions of administrative agencies is essential,
as a check on the unique powers vested unto these instrumentalities. 1 0 Review is available
to reverse the ndings of the specialized administrative agency if the record before the
Court clearly precludes the agency's decision from being justi ed by a fair estimate of the
worth of the testimony of witnesses or its informed judgment on matters within its special
competence, or both. 1 1 Review may also be warranted to ensure that the NTC or similarly
empowered agencies act within the con nes of their legal mandate and conform to the
demands of due process and equal protection. 1 2
Antecedent Facts
Globe and private respondent Smart Communications, Inc. ("Smart") are both
grantees of valid and subsisting legislative franchises, 1 3 authorizing them, among others,
to operate a Cellular Mobile Telephone System ("CMTS"), utilizing the Global System for
Mobile Communication ("GSM") technology. 1 4 Among the inherent services supported by
the GSM network is the Short Message Services (SMS), 1 5 also known colloquially as
"texting," which has attained immense popularity in the Philippines as a mode of electronic
communication.
On 4 June 1999, Smart filed a Complaint 1 6 with public respondent NTC, praying that
NTC order the immediate interconnection of Smart's and Globe's GSM networks,
particularly their respective SMS or texting services. The Complaint arose from the inability
of the two leading CMTS providers to effect interconnection. Smart alleged that Globe,
with evident bad faith and malice, refused to grant Smart's request for the interconnection
of SMS. 1 7
On 7 June 1999, NTC issued a Show Cause Order, informing Globe of the Complaint,
speci cally the allegations therein that, "among others . . . despite formal request made by
Smart to Globe for the interconnection of their respective SMS or text messaging services,
Globe, with evident bad faith, malice and to the prejudice of Smart and Globe and the
public in general, refused to grant Smart's request for the interconnection of their
respective SMS or text messaging services, in violation of the mandate of Republic Act
7925, Executive Order No. 39, and their respective implementing rules and regulations." 1 8
Globe led its Answer with Motion to Dismiss on 7 June 1999, interposing grounds
that the Complaint was premature, Smart's failure to comply with the conditions precedent
required in Section 6 of NTC Memorandum Circular 9-7-93, 1 9 and its omission of the
mandatory Certi cation of Non-Forum Shopping. 2 0 Smart responded that it had already
submitted the voluminous documents asked by Globe in connection with other
interconnection agreements between the two carriers, and that with those voluminous
documents the interconnection of the SMS systems could be expedited by merely
amending the parties' existing CMTS-to-CMTS interconnection agreements. 2 1
On 19 July 1999, NTC issued the Order now subject of the present petition. In the
Order, after noting that both Smart and Globe were "equally blameworthy" for their lack of
cooperation in the submission of the documentation required for interconnection and for
having "unduly maneuvered the situation into the present impasse," 2 2 NTC held that since
SMS falls squarely within the de nition of "value-added service" or "enhanced-service"
given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95) the implementation of
SMS interconnection is mandatory pursuant to Executive Order (E.O.) No. 59. 2 3
The NTC also declared that both Smart and Globe have been providing SMS without
authority from it, in violation of Section 420(f) of MC No. 8-9-95 which requires PTEs
intending to provide value-added services (VAS) to secure prior approval from NTC
through an administrative process. Yet, in view of what it noted as the "peculiar
circumstances" of the case, NTC refrained from issuing a Show Cause Order with a Cease
and Desist Order, and instead directed the parties to secure the requisite authority to
provide SMS within thirty (30) days, subject to the payment of ne in the amount of two
hundred pesos (P200.00) "from the date of violation and for every day during which such
violation continues." 2 4
Globe led with the Court of Appeals a Petition for Certiorari and Prohibition 2 5 to
nullify and set aside the Order and to prohibit NTC from taking any further action in the
case. It reiterated its previous arguments that the complaint should have been dismissed
for failure to comply with conditions precedent and the non-forum shopping rule. It also
claimed that NTC acted without jurisdiction in declaring that it had no authority to render
SMS, pointing out that the matter was not raised as an issue before it at all. Finally, Globe
alleged that the Order is a patent nullity as it imposed an administrative penalty for an
offense for which neither it nor Smart was su ciently charged nor heard on in violation of
their right to due process. 2 6
The Court of Appeals issued a Temporary Restraining Order on 31 August 1999. DTAIaH
In its Memorandum, Globe also called the attention of the appellate court to the
earlier decision of NTC pertaining to the application of Isla Communications Co., Inc.
("Islacom") to provide SMS, allegedly holding that SMS is a deregulated special feature of
the telephone network and therefore does not require the prior approval of NTC. 2 7 Globe
alleged that its departure from its ruling in the Islacom case constitutes a denial of equal
protection of the law.
On 22 November 1999, a Decision 2 8 was promulgated by the Former Special Fifth
Division of the Court of Appeals 2 9 a rming in toto the NTC Order. Interestingly, on the
same day Globe and Smart voluntarily agreed to interconnect their respective SMS
systems, and the interconnection was effected at midnight of that day. 3 0
Yet, on 21 December 1999, Globe led a Motion for Partial Reconsideration, 3 1
seeking to reconsider only the portion of the Decision that upheld NTC's nding that Globe
lacked the authority to provide SMS and its imposition of a ne. Both Smart and NTC led
their respective comments, stressing therein that Globe indeed lacked the authority to
provide SMS. 3 2 In reply, Globe asserted that the more salient issue was whether NTC
complied with its own Rules of Practice and Procedure before making the nding of want
of authority and imposing the ne. Globe also reiterated that it has been legally operating
its SMS system since 1994 and that SMS being a deregulated special feature of the
telephone network it may operate SMS without prior approval of NTC.

After the Court of Appeals denied the Motion for Partial Reconsideration, 33 Globe
elevated the controversy to this Court.
Globe contends that the Court of Appeals erred in holding that the NTC has the
power under Section 17 of the Public Service Law 3 4 to subject Globe to an administrative
sanction and a ne without prior notice and hearing in violation of the due process
requirements; that speci cally due process was denied Globe because the hearings
actually conducted dwelt on different issues; and, the appellate court erred in holding that
any possible violation of due process committed by NTC was cured by the fact that NTC
refrained from issuing a Show Cause Order with a Cease and Desist Order, directing
instead the parties to secure the requisite authority within thirty days. Globe also contends
that in treating it differently from other carriers providing SMS the Court of Appeals denied
it equal protection of the law.
The case was called for oral argument on 22 March 2004. Signi cantly, Smart has
deviated from its original position. It no longer prays that the Court a rm the assailed
Decision and Order, and the twin rulings therein that SMS is VAS and that Globe was
required to secure prior authority before offering SMS. Instead, Smart now argues that
SMS is not VAS and that NTC may not legally require either Smart or Globe to secure prior
approval before providing SMS. Smart has also chosen not to make any submission on
Globe's claim of due process violations. 3 5
As presented during the oral arguments, the central issues are: (1) whether NTC may
legally require Globe to secure NTC approval before it continues providing SMS; (2)
whether SMS is a VAS under the PTA, or special feature under NTC MC No. 14-11-97; and
(3) whether NTC acted with due process in levying the ne against Globe. 3 6 Another issue
is also raised — whether Globe should have rst led a motion for reconsideration before
the NTC, but this relatively minor question can be resolved in brief.
Necessity of Filing Motion for Reconsideration
Globe deliberately did not le a motion for reconsideration with the NTC before
elevating the matter to the Court of Appeals via a petition for certiorari. Generally, a motion
for reconsideration is a prerequisite for the filing of a petition for certiorari. 3 7 In opting not
to le the motion for reconsideration, Globe asserted before the Court of Appeals that the
case fell within the exceptions to the general rule. 3 8 The appellate court in the questioned
Decision cited the purported procedural defect, 3 9 yet chose anyway to rule on the merits
as well.
Globe's election to elevate the case directly to the Court of Appeals, skipping the
standard motion for reconsideration, is not a mortal mistake. According to Globe, the
Order is a patent nullity, it being violative of due process; the motion for reconsideration
was a useless or idle ceremony; and, the issue raised purely one of law. 4 0 Indeed, the
circumstances adverted to are among the recognized exceptions to the general rule. 4 1
Besides, the issues presented are of relative importance and novelty 4 2 so much so that it
is judicious for the Court to resolve them on the merits instead of hiding behind procedural
fineries.
The Merits
Now, on to the merits of the petition.
Deregulation is the mantra in this age of globalization. Globe invokes it in support of
its claim that it need not secure prior authority from NTC in order to operate SMS. The
claim has to be evaluated carefully. After all, deregulation is not a magic incantation that
wards off the spectre of intrusive government with the mere invocation of its name. The
principles, guidelines, rules and regulations that govern a deregulated system must be
rmly rooted in the law and regulations that institute or implement the deregulation
regime. 4 3 The implementation must likewise be fair and evenhanded.
Globe hinges its claim of exemption from obtaining prior approval from the NTC on
NTC Memorandum Circular No. 14-11-97 ("MC No. 14-11-97"). Globe notes that in a 7
October 1998 ruling on the application of Islacom for the operation of SMS, NTC declared
that the applicable circular for SMS is MC No. 14-11-97. 4 4 Under this ruling, it is alleged,
NTC effectively denominated SMS as a "special feature" which under MC No. 14-11-97 is a
deregulated service that needs no prior authorization from NTC. Globe further contends
that NTC's requiring it to secure prior authorization violates the due process and equal
protection clauses, since earlier it had exempted the similarly situated Islacom from
securing NTC approval prior to its operation of SMS. 4 5
On the other hand, the assailed NTC Decision invokes the NTC Implementing Rules
of the PTA (MC No. 8-9-95) to justify its claim that Globe and Smart need to secure prior
authority from the NTC before offering SMS.
The statutory basis for the NTC's determination must be thoroughly examined. Our
rst level of inquiry should be into the PTA. It is the authority behind MC No. 8-9-95. It is
also the law that governs all public telecommunications entities ("PTEs") in the Philippines.
46
Public Telecommunications Act

The PTA has not strictly adopted laissez-faire as its underlying philosophy to
promote the telecommunications industry. In fact, the law imposes strictures that restrain
within reason how PTEs conduct their business. For example, it requires that any access
charge/revenue sharing arrangements between all interconnecting carriers that are
entered into have to be submitted for approval to NTC. 4 7 Each "telecommunication
category" 4 8 established in the PTA is governed by detailed regulations. Also, international
carriers and operators of mobile radio services are required to provide local exchange
service in unserved or underserved areas. 4 9
At the same time, the general thrust of the PTA is towards modernizing the legal
framework for the telecommunications services sector. The transmutation has become
necessary due to the rapid changes as well within the telecommunications industry. As
noted by Senator Osmeña in his sponsorship speech:
[D]ramatic developments during the last 15 years in the eld of
semiconductors have drastically changed the telecommunications sector —
worldwide as well as in the Philippines. New technologies have fundamentally
altered the structure, the economics and the nature of competition in the
telecommunications business. Voice telephony is perhaps the most popular face
of telecommunications, but it is no longer the only one. There are other faces —
such as data communications, electronic mail, voice mail, facsimile transmission,
video conferencing, mobile radio services like trunked radio, cellular radio, and
personal communications services, radio paging, and so on. Because of the mind-
boggling developments in semiconductors, the traditional boundaries between
computers, telecommunications, and broadcasting are increasingly becoming
blurred. 5 0

One of the novel introductions of the PTA is the concept of a "value-added service"
("VAS"). Section 11 of the PTA governs the operations of a "value-added service provider,"
which the law de nes as "an entity which relying on the transmission, switching and local
distribution facilities of the local exchange and inter-exchange operators, and overseas
carriers, offers enhanced services beyond those ordinarily provided for by such carriers."
5 1 Section 11 recognizes that VAS providers need not secure a franchise, provided that
they do not put up their own network. 5 2 However, a different rule is laid down for
telecommunications entities such as Globe and PLDT. The section unequivocally requires
NTC approval for the operation of a value-added service. It reads, viz: ASHEca
Telecommunications entities may provide VAS, subject to the additional

requirements that:
a) prior approval of the Commission is secured to ensure that such
VAS offerings are not cross-subsidized from the proceeds of their
utility operations;
b) other providers of VAS are not discriminated against in rates nor
denied equitable access to their facilities; and
c) separate books of accounts are maintained for the VAS. (Emphasis
supplied) 5 3
Oddly enough, neither the NTC nor the Court of Appeals cited the above-quoted
provision in their respective decisions, which after all, is the statutory premise for the
assailed regulatory action. This failure is but a mere indicia of the pattern of ignorance or
incompetence that sadly attends the actions assailed in this petition.
It is clear that the PTA has left open-ended what services are classi ed as "value-
added," prescribing instead a general standard, set forth as a matter of principle and
fundamental policy by the legislature. 5 4 The validity of this standard set by Section 11 is
not put into question by the present petition, and there is no need to inquire into its
propriety. 5 5 The power to enforce the provisions of the PTA, including the implementation
of the standards set therein, is clearly reposed with the NTC. 5 6
It can also be gleaned from Section 11 that the requirement that PTEs secure prior
approval before offering VAS is tied to a de nite purpose, i.e., "to ensure that such VAS
offerings are not cross-subsidized from the proceeds of their utility operations." The
reason is related to the fact that PTEs are considered as public services, 5 7 and mandated
to perform certain public service functions. Section 11 should be seen in relation to E.O.
109, which mandates that "international gateway operators shall be required to provide
local exchange service," 5 8 for the purpose of ensuring availability of reliable and
affordable telecommunications service in both urban and rural areas of the country. 5 9
Under E.O. No. 109, local exchange services are to be cross-subsidized by other
telecommunications services within the same company until universal access is achieved.
6 0 Section 10 of the PTA speci cally a rms the requirements set by E.O. No. 109. The
relevance to VAS is clear: public policy maintains that the offer of VAS by PTEs cannot
interfere with the fundamental provision by PTEs of their other public service
requirements.
More pertinently to the case at bar, the quali cation highlights the fact that the legal
rationale for regulation of VAS is severely limited. There is an implicit recognition that VAS
is not strictly a public service offering in the way that voice-to-voice lines are, for example,
but merely supplementary to the basic service. Ultimately, the regulatory attitude of the
State towards VAS offerings by PTEs is to treat its provisioning as a "business decision"
subject to the discretion of the offeror, so long as such services do not interfere with
mandatory public service requirements imposed on PTEs such as those under E.O. No.
109. Thus, non-PTEs are not similarly required to secure prior approval before offering
VAS, as they are not burdened by the public service requirements prescribed on PTEs . 6 1
Due regard must be accorded to this attitude, which is in consonance with the general
philosophy of deregulation expressed in the PTA.
The Pertinent NTC Memorandum Circulars
Next, we examine the regulatory framework devised by NTC in dealing with VAS.
NTC relied on Section 420(f) of the Implementing Rules of the PTA ("Implementing
Rules") as basis for its claim that prior approval must be secured from it before Globe can
operate SMS. Section 420 of the Implementing Rules, contained in MC No. 8-9-95, states in
full:
VALUE ADDED SERVICES (VAS)
(a) A non-PTE VAS provider shall not be required to secure a franchise from
Congress.
(b) A non-PTE VAS provider can utilize its own equipment capable only of
routing, storing and forwarding messages in whatever format for the
purpose of providing enhanced or augmented telecommunications
services. It shall not put up its own network. It shall use the transmission
network, toll or local distribution, of the authorized PTES.
(c) The provision of VAS shall not in any way affect the cross subsidy to the
local exchange network by the international and national toll services and
CMTS service.
(d) Entities intending to provide value added services only shall submit to the
commission application for registration for approval. The application form
shall include documents showing, among others, system con guration,
mode of operation, method of charging rates, lease agreement with the
PTE, etc.
(e) The application for registration shall be acted upon by the Commission
through an administrative process within thirty (30) days from date of
application.
(f) PTEs intending to provide value added services are required to secure prior
approval by the Commission through an administrative process.
(g) VAS providers shall comply strictly with the service performance and other
standards prescribed commission. (Emphasis supplied.)
Instead of expressly de ning what VAS is, the Implementing Rules de nes what
"enhanced services" are, namely: "a service which adds a feature or value not ordinarily
provided by a public telecommunications entity such as format, media conversion,
encryption, enhanced security features, computer processing, and the like." 6 2 Given that
the PTA de nes VAS as "enhanced services," the de nition provided in the Implementing
Rules may likewise be applied to VAS. Still, the language of the Implementing Rules is
unnecessarily confusing. Much trouble would have been spared had the NTC consistently
used the term "VAS" as it is used in the PTA.
The de nition of "enhanced services" in the Implementing Rules, while more distinct
than that under the PTA, is still too sweeping. Rather than enumerating what possible
features could be classi ed as VAS or enhanced services, the Implementing Rules instead
focuses on the characteristics of these features. The use of the phrase "the like," 6 3 and its
implications of analogy, presumes that a whole myriad of technologies can eventually be
subsumed under the de nition of "enhanced services." The NTC should not be necessarily
faulted for such indistinct formulation since it could not have known in 1995 6 4 what
possible VAS would be available in the future. The de nition laid down in the Implementing
Rules may validly serve as a guide for the NTC to determine what emergent offerings
would fall under VAS.
Still, owing to the general nature of the de nition laid down in the Implementing
Rules, the expectation arises that the NTC would promulgate further issuances de ning
whether or not a speci c feature newly available in the market is a VAS. Such expectation
is especially demanded if the NTC is to penalize PTEs who fail to obtain prior approval in
accordance with Section 11 of the PTA. To our knowledge, the NTC has yet to come out
with an administrative rule or regulation listing which of the offerings in the market today
fall under VAS or "enhanced services."
Still, there is MC No. 14-11-97, entitled "Deregulating the Provision of Special
Features in the Telephone Network." Globe invokes this circular as it had been previously
cited by the NTC as applicable to SMS.
On 2 October 1998, Islacom wrote a letter to the NTC, informing the agency that "it
will be offering the special feature" of SMS for its CMTS, and citing therein that the notice
was being given pursuant to NTC Memorandum Circular No. 14-11-97. 6 5 In response, the
NTC acknowledged receipt of the letter "informing " it of Islacom's "offering the special
feature" of SMS for its CMTS, and instructed Islacom to "adhere to the provisions of MC
No. 14-11-97." 6 6 The clear implication of the letter is that NTC considers the Circular as
applicable to SMS.
An examination of MC No. 14-11-97 further highlights the state of regulatory
confusion befalling the NTC. The relevant portions thereof are reproduced below:
SUBJECT: DEREGULATING THE PROVISION OF SPECIAL FEATURES IN
THE TELEPHONE NETWORK.
For the purpose of exempting speci c telecommunications service from
rate or tariff regulations if the service has su cient competition to ensure fair
and reasonable rates or tariffs, the Commission hereby deregulates the provision
of special features inherent to the Telephone Network.
Section 1. For the purpose of this Circular, Special Feature shall refer
to a feature inherent to the telephone network which may not be ordinarily
provided by a Telephone Service Provider such as call waiting, call forwarding,
conference calling, speed dialing, caller ID, malicious call ID, call transfer,
charging information, call pick-up, call barring, recorded announcement, no
double connect, warm line, wake-up call, hotline, voicemail, and special features
offered to customers with PABXs such as direct inward dialing and number
hunting, and the like; provided that in the provision of the feature, no law, rule,
regulation or international convention on telecommunications is circumvented or
violated. The Commission shall periodically update the list of special features in
the Telephone Network which, including the charging of rates therefor, shall be
deregulated. ASaTHc
Section 2. A duly authorized Telephone Service Provider shall inform

the Commission in writing of the special features it can offer and the
corresponding rates thirty (30) days prior to launch date.
xxx xxx xxx
Section 4. Authorized Telephone Service Providers shall continue to
charge their duly approved rates for special services for 3 months from the
effectivity of this circular, after which they may set their own rates.
xxx xxx xxx (Emphasis supplied)
Just like VAS as de ned under the PTA, "special features" are also "not ordinarily
provided" by the telephone company. Considering that MC No. 14-11-97 was promulgated
after the passage of the PTA, it can be assumed that the authors of the Circular were well
aware of the regulatory scheme formed under the PTA. Moreover, MC No. 14-11-97
repeatedly invokes the word "deregulation," and it cannot be denied that the liberalization
ethos was introduced by the PTA. Yet, the net effect of MC No. 14-11-97 is to add to the
haze beclouding the NTC's rationale for regulation. The introduction of a new concept,
"special feature," which is not provided for in the PTA just adds to the confusion, especially
in light of the similarities between "special features" and VAS. Moreover, there is no
requirement that a PTE seeking to offer "special features" must secure prior approval from
the NTC.
Is SMS a VAS, "enhanced service," or a "special feature"? Apparently, even the NTC is
unsure. It had told Islacom that SMS was a "special feature," then subsequently held that it
was a "VAS." However, the pertinent laws and regulations had not changed from the time
of the Islacom letter up to the day the Order was issued. Only the thinking of NTC did.
More signi cantly, NTC never required ISLACOM to apply for prior approval in order
to provide SMS, even after the Order to that effect was promulgated against Globe and
Smart. This fact was admitted by NTC during oral arguments. 6 7 NTC's treatment of
Islacom, apart from being obviously discriminatory, puts into question whether or not NTC
truly believes that SMS is VAS. NTC is unable to point out any subsequent rule or
regulation, enacted after it promulgated the adverse order against Globe and Smart,
affirming the newly-arrived determination that SMS is VAS.
In fact, as Smart admitted during the oral arguments, while it did comply with the
NTC Order requiring it to secure prior approval, it was never informed by the NTC of any
action on its request. 6 8 While NTC counters that it did issue a Certificate of Registration to
Smart, authorizing the latter as a provider of SMS, such Certi cate of Registration was
issued only on 13 March 2003, or nearly four (4) years after Smart had made its request. 6 9
This inaction indicates a lack of seriousness on the part of the NTC to implement its own
rulings. Also, it tends to indicate the lack of belief or confusion on NTC's part as to how
SMS should be treated. Given the abstract set of rules the NTC has chosen to implement,
this should come as no surprise. Yet no matter how content the NTC may be with its
attitude of sloth towards regulation, the effect may prove ruinous to the sector it
regulates.

Every party subject to administrative regulation deserves an opportunity to know,
through reasonable regulations promulgated by the agency, of the objective standards
that have to be met. Such rule is integral to due process, as it protects substantive rights.
Such rule also promotes harmony within the service or industry subject to regulation. It
provides indubitable opportunities to weed out the most frivolous con icts with minimum
hassle, and certain footing in deciding more substantive claims. If this results in a tenfold
in administrative rules and regulations, such price is worth paying if it also results in clarity
and consistency in the operative rules of the game. The administrative process will best be
vindicated by clarity in its exercise. 7 0
In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been
duly established. The fault falls squarely on NTC. With the dual classi cation of SMS as a
special feature and a VAS and the varying rules pertinent to each classi cation, NTC has
unnecessarily complicated the regulatory framework to the detriment of the industry and
the consumers. But does that translate to a nding that the NTC Order subjecting Globe to
prior approval is void? There is a ne line between professional mediocrity and illegality.
NTC's byzantine approach to SMS regulation is certainly ine cient. Unfortunately for NTC,
its actions have also transgressed due process in many ways, as shown in the ensuing
elucidation.
Penalized Via a Quasi-Judicial Process,
Globe and Smart are Entitled to
Corresponding Protections
It is essential to understand that the assailed Order was promulgated by NTC in the
exercise of its quasi-judicial functions. The case arose when Smart had led the initial
complaint against Globe before NTC for interconnection of SMS. 7 1 NTC issued a Show
Cause Order requiring Globe to answer Smart's charges. Hearings were conducted, and a
decision made on the merits, signed by the three Commissioners of the NTC, sitting as a
collegial body. 7 2
The initial controversy may have involved a different subject matter, interconnection,
which is no longer contested. It cannot be denied though that the ndings and penalty now
assailed before us was premised on the same exercise of jurisdiction. Thus, it is not
relevant to this case that the process for obtaining prior approval under the PTA and its
Implementing Rules is administrative in nature. While this may be so, the assailed NTC's
determination and corresponding penalty were rendered in the exercise of quasi-judicial
functions. Therefore, all the requirements of due process attendant to the exercise of
quasi-judicial power apply to the present case. Among them are the seven cardinal primary
rights in justiciable cases before administrative tribunals, as enumerated in Ang Tibay v.
CIR. 7 3 They are synthesized in a subsequent case, as follows:
There are cardinal primary rights which must be respected even in
proceedings of this character. The rst of these rights is the right to a hearing,
which includes the right of the party interested or affected to present his own case
and submit evidence in support thereof. Not only must the party be given an
opportunity to present his case and to adduce evidence tending to establish the
rights which he asserts but the tribunal must consider the evidence presented.
While the duty to deliberate does not impose the obligation to decide right, it does
imply a necessity which cannot be disregarded, namely, that of having something
to support its decision. Not only must there be some evidence to support a nding
or conclusion, but the evidence must be substantial. The decision must be
rendered on the evidence presented at the hearing, or at least contained in the
record and disclosed to the parties affected. 7 4
NTC violated several of these cardinal rights due Globe in the promulgation of the
assailed Order.
First. The NTC Order is not supported by substantial evidence. Neither does it
sufficiently explain the reasons for the decision rendered.
Our earlier discussion pertained to the lack of clear legal basis for classifying SMS
as VAS, owing to the failure of the NTC to adopt clear rules and regulations to that effect.
Muddled as the legal milieu governing SMS already is, NTC's attempt to apply its confusing
standards in the case of Globe and Smart is even more disconcerting. The very rationale
adopted by the NTC in its Order holding that SMS is VAS is short and shoddy.
Astoundingly, the Court of Appeals a rmed the rationale bereft of intelligent inquiry, much
less comment. Stated in full, the relevant portion of the NTC Order reads:
. . . Getting down [to] the nitty-gritty, Globe's SMS involves the transmission
of data over its CMTS which is Globe's basic service. SMS is not ordinarily
provided by a CMTS operator like Globe, and since SMS enhances Globe's CMTS,
SMS ts in to a nicety [sic] with the de nition of "value-added-service" or
"enhanced-service" under NTC Memorandum Circular [8]-9-95 (Rule 001, Item
[15]). 7 5
The Court usually accords great respect to the technical ndings of administrative
agencies in the elds of their expertise, even if they are infelicitously worded. However, the
above-quoted " nding" is nothing more than bare assertions, unsupported by substantial
evidence. 7 6 The Order reveals that no deep inquiry was made as to the nature of SMS or
what its provisioning entails. In fact, the Court is unable to nd how exactly does SMS " ts
into a nicety" with NTC M.C. No. 8-9-95, which de nes "enhanced services" as analogous to
"format, media conversion, encryption, enhanced security features, computer processing,
and the like." 7 7 The NTC merely notes that SMS involves the "transmission of data over
[the] CMTS," a phraseology that evinces no causal relation to the de nition in M.C. No. 8-9-
95. Neither did the NTC endeavor to explain why the "transmission of data" necessarily
classifies SMS as a VAS.
In fact, if "the transmission of data over [the] CMTS" is to be reckoned as the
determinative characteristic of SMS, it would seem that this is already su ciently covered
by Globe and Smart's respective legislative franchises. 7 8 Smart is authorized under its
legislative franchise to establish and operate integrated
telecommunications/computer/electronic services for public domestic and international
communications, 7 9 while Globe is empowered to establish and operate domestic
telecommunications, and stations for transmission and reception of messages by means
of electricity, electromagnetic waves or any kind of energy, force, variations or impulses,
whether conveyed by wires, radiated through space or transmitted through other media
and for the handling of any and all types of telecommunications services. 8 0
The question of the proper legal classi cation of VAS is uniquely technical, tied as at
is to the scienti c and technological application of the service or feature. Owing to the
dearth of substantive technical ndings and data from the NTC on which a judicial review
may reasonably be premised, it is not opportunely proper for the Court to make its own
technical evaluation of VAS, especially in relation to SMS. Judicial fact- nding of the de
novo kind is generally abhorred and the shift of decisional responsibility to the judiciary is
not favored as against the substantiated and specialized determination of administrative
agencies. 8 1 With greater reason should this be the standard for the exercise of judicial
review when the administrative agency concerned has not in the rst place come out with
a technical finding based on evidence, as in this case.
Yet at the same time, this absence of substantial evidence in support of the nding
that SMS is VAS already renders reversible that portion of the NTC Order.
Moreover, the Order does not explain why the NTC was according the VAS offerings
of Globe and Smart a different regulatory treatment from that of Islacom. Indeed, to this
day, NTC has not offered any sensible explanation why Islacom was accorded to a less
onerous regulatory requirement, nor have they compelled Islacom to suffer the same
burdens as Globe and Smart.
While stability in the law, particularly in the business eld, is desirable, there is no
demand that the NTC slavishly follow precedent. 8 2 However, we think it essential, for the
sake of clarity and intellectual honesty, that if an administrative agency decides
inconsistently with previous action, that it explain thoroughly why a different result is
warranted, or if need be, why the previous standards should no longer apply or should be
overturned. 8 3 Such explanation is warranted in order to su ciently establish a decision as
having rational basis. 8 4 Any inconsistent decision lacking thorough, ratiocination in
support may be struck down as being arbitrary. And any decision with absolutely nothing
to support it is a nullity. 8 5
Second. Globe and Smart were denied opportunity to present evidence on the
issues relating to the nature of VAS and the prior approval.
Another disturbing circumstance attending this petition is that until the
promulgation of the assailed Order Globe and Smart were never informed of the fact that
their operation of SMS without prior authority was at all an issue for consideration. As a
result, neither Globe or Smart was afforded an opportunity to present evidence in their
behalf on that point.
NTC asserts that since Globe and Smart were required to submit their respective
Certi cates of Public Convenience and Necessity and franchises, the parties were
su ciently noti ed that the authority to operate such service was a matter which NTC
could look into. This is wrong-headed considering the governing law and regulations. It is
clear that before NTC could penalize Globe and Smart for unauthorized provision of SMS, it
must rst establish that SMS is VAS. Since there was no express rule or regulation on that
question, Globe and Smart would be well within reason if they submitted evidence to
establish that SMS was not VAS. Unfortunately, no such opportunity arose and no such
arguments were raised simply because Globe and Smart were not aware that the question
of their authority to provide SMS was an issue at all. Neither could it be said that the
requisite of prior authority was indubitable under the existing rules and regulations.
Considering the prior treatment towards Islacom, Globe (and Smart, had it chosen to do
so) had every right to rely on NTC's disposal of Islacom's initiative and to believe that prior
approval was not necessary.
Neither was the matter ever raised during the hearings conducted by NTC on
Smart's petition. This claim has been repeatedly invoked by Globe. It is borne out by the
records or the absence thereof. NTC could have easily rebuffed this claim by pointing to a
de nitive record. Yet strikingly, NTC has not asserted that the matter of Globe's authority
was raised in any pleading or proceeding. In fact, Globe in its Consolidated Reply before
this Court challenged NTC to produce the transcripts of the hearings it conducted to prove
that the issue of Globe's authority to provide SMS was put in issue. The Court similarly
ordered the NTC to produce such transcripts. 8 6 NTC failed to produce any. 8 7
The opportunity to adduce evidence is essential in the administrative process, as
decisions must be rendered on the evidence presented, either in the hearing, or at least
contained in the record and disclosed to the parties affected. 8 8 The requirement that
agencies hold hearings in which parties affected by the agency's action can be
represented by counsel may be viewed as an effort to regularize this struggle for
advantage within a legislative adversary framework. 8 9 It necessarily follows that if no
evidence is procured pertinent to a particular issue, any eventual resolution of that issue on
substantive grounds despite the absence of evidence is awed. Moreover, if the parties
did have evidence to counter the ruling but were wrongfully denied the opportunity to offer
the evidence, the result would be embarrassing on the adjudicator.
Thus, the comical, though expected, result of a de nitive order which is totally
unsupported by evidence. To this blatant violation of due process, this Court stands
athwart.
Third. The imposition of fine is void for violation of due process.
The matter of whether NTC could have imposed the ne on Globe in the assailed
Order is necessarily related to due process considerations. Since this question would also
call to fore the relevant provisions of the Public Service Act, it deserves its own extensive
discussion.
Globe claims that the issue of its authority to operate SMS services was never
raised as an issue in the Complaint led against it by Smart. Nor did NTC ever require
Globe to justify its authority to operate SMS services before the issuance of the Order
imposing the fine. AIHTEa
The Court of Appeals, in its assailed decision, upheld the power of NTC to impose a
ne and to make a pronouncement on Globe's alleged lack of operational authority without
need of hearing, simply by citing the provision of the Public Service Act 9 0 which
enumerates the instances when NTC may act motu proprio. That is Section 17, paragraph
(a), which reads thus:
Sec. 17. Proceedings of [the National Telecommunications
Commission] without previous hearing. The Commission shall have power,
without previous hearing, subject to established limitations and exceptions and
saving provisions to the contrary:
(a) To investigate, upon its own initiative, or upon complaint in writing,

any matter concerning any public service as regards matters under its jurisdiction;
to require any public service to furnish safe, adequate, and proper service as the
public interest may require and warrant; to enforce compliance with any standard,
rule, regulation, order or other requirement of this Act or of the Commission, and
to prohibit or prevent any public service as herein de ned from operating without
having rst secured a certi cate of public convenience or public necessity and
convenience, as the case may be, and require existing public services to pay the
fees provided for in this Act for the issuance of the proper certi cate of public
convenience or certi cate of public necessity and convenience, as the case may
be, under the penalty, in the discretion of the Commission, of the revocation and
cancellation of any acquired rights.
On the other hand, NTC itself, in the Order, cites Section 21 as the basis for its
imposition of fine on Globe. The provision states:
Sec. 21. Every public service violating or failing to comply with the
terms and conditions of any certi cate or any orders, decisions or regulations of
the Commission shall be subject to a fine of not exceeding two hundred pesos per
day for every day during which such default or violation continues; and the
Commission is hereby authorized and empowered to impose such ne, after due
notice and hearing. [Emphasis supplied.]
Sections 17 and 21 of the Public Service Act confer two distinct powers on NTC.
Under Section 17, NTC has the power to investigate a PTE compliance with a standard,
rule, regulation, order, or other requirement imposed by law or the regulations promulgated
by NTC, as well as require compliance if necessary. By the explicit language of the
provision, NTC may exercise the power without need of prior hearing. However, Section 17
does not include the power to impose ne in its enumeration. It is Section 21 which
adverts to the power to impose ne and in the same breath requires that the power may
be exercised only after notice and hearing.
Section 21 requires notice and hearing because ne is a sanction, regulatory and
even punitive in character. Indeed, the requirement is the essence of due process. Notice
and hearing are the bulwark of administrative due process, the right to which is among the
primary rights that must be respected even in administrative proceedings. 9 1 The right is
guaranteed by the Constitution itself and does not need legislative enactment. The
statutory a rmation of the requirement serves merely to enhance the fundamental
precept. The right to notice and hearing is essential to due process and its non-observance
will, as a rule, invalidate the administrative proceedings. 9 2
In citing Section 21 as the basis of the ne, NTC effectively concedes the necessity
of prior notice and hearing. Yet the agency contends that the sanction was justi ed by
arguing that when it took cognizance of Smart's complaint for interconnection, "it may very
well look into the issue of whether the parties had the requisite authority to operate such
services." 9 3 As a result, both parties were su ciently noti ed that this was a matter that
NTC could look into in the course of the proceedings. The parties subsequently attended
at least five hearings presided by NTC. 9 4
That particular argument of the NTC has been previously disposed of. But it is
essential to emphasize the need for a hearing before a ne may be imposed, as it is clearly
a punitive measure undertaken by an administrative agency in the exercise of its quasi-
judicial functions. Inherently, notice and hearing are indispensable for the valid exercise by
an administrative agency of its quasi-judicial functions. As the Court held in Central Bank of
the Phil. v. Hon. Cloribel: 9 5
[T]he necessity of notice and hearing in an administrative proceeding
depends on the character of the proceeding and the circumstances involved. In so
far as generalization is possible in view of the great variety of administrative
proceedings, it may be stated as a general rule that notice and hearing are not
essential to the validity of administrative action where the administrative body
acts in the exercise of executive, administrative, or legislative functions; but where
a public administrative body acts in a judicial or quasi-judicial matter, and its acts
are particular and immediate rather than general and prospective, the person
whose rights or property may be affected by the action is entitled to notice and
hearing. 9 6
The requirement of notice and hearing becomes even more imperative if the statute
itself demands it, as in the case of Section 21 of the Public Service Act.
As earlier stated, the Court is convinced that prior to the promulgation of the
assailed Order Globe was never noti ed that its authority to operate SMS was put in issue.
There is an established procedure within NTC that provides for the steps that should be
undertaken before an entity such as Globe could be subjected to a disciplinary measure.
Section 1, Rule 10 of the NTC Rules of Procedure provides that any action, the object of
which is to subject a holder of a certi cate of public convenience or authorization, or any
person operating without authority from NTC, to any penalty or a disciplinary or other
measure shall be commenced by the ling of a complaint. Further, the complaint should
state, whenever practicable, the provisions of law or regulation violated, and the acts or
omissions complained of as constituting the offense. 9 7 While a complaint was indeed
led against Globe by Smart, the lack of Globe's authority to operate SMS was not raised
in the Complaint, solely predicated as it was on Globe's refusal to interconnect with Smart.
98
Under the NTC Rules of Procedure, NTC is to serve a Show Cause Order on the
respondent to the complaint, containing therein a "statement of the particulars and
matters concerning which the Commission is inquiring and the reasons for such actions."
9 9 The Show Cause Order served on Globe in this case gave notice of Smart's charge that
Globe, acting in bad faith and contrary to law, refused to allow the interconnection of their
respective SMS systems. 1 0 0 Again, the lack of authority to operate SMS was not adverted
to in NTC's Show Cause Order.
The records also indicate that the issue of Globe's authority was never raised in the
subsequent hearings on Smart's complaint. Quite noticeably, the respondents themselves
have never asserted that the matter of Globe's authority was raised in any pleading or
proceeding. In fact, Globe in its Consolidated Reply before this Court challenged NTC to
produce the transcripts of the hearings it conducted to prove that the issue of Globe's
authority to provide SMS was put in issue. It did not produce any transcript.
Being an agency of the government, NTC should, at all times, maintain a due regard
for the constitutional rights of party litigants. 1 0 1 In this case, NTC blindsided Globe with a
punitive measure for a reason Globe was not made aware of, and in a manner that
contravened express provisions of law. Consequently, the fine imposed by NTC on Globe is
also invalid. Otherwise put, since the very basis for the ne was invalidly laid, the ne is
necessarily void.
Conclusion
In summary: (i) there is no legal basis under the PTA or the memorandum circulars
promulgated by the NTC to denominate SMS as VAS, and any subsequent determination
by the NTC on whether SMS is VAS should be made with proper regard for due process
and in conformity with the PTA; (ii) the assailed Order violates due process for failure to
su ciently explain the reason for the decision rendered, for being unsupported by
substantial evidence, and for imputing violation to, and issuing a corresponding ne on,
Globe despite the absence of due notice and hearing which would have afforded Globe the
right to present evidence on its behalf.

Thus, the Order effectively discriminatory and arbitrary as it is, was issued with
grave abuse of discretion and it must be set aside. NTC may not legally require Globe to
secure its approval for Globe to continue providing SMS. This does not imply though that
NTC lacks authority to regulate SMS or to classify it as VAS. However, the move should be
implemented properly, through unequivocal regulations applicable to all entities that are
similarly situated, and in an even-handed manner.
Concurrently, the Court realizes that the PTA is not intended to constrain the
industry within a cumbersome regulatory regime. 1 0 2 The policy as pre-ordained by
legislative at renders the traditionally regimented business in an elementary free state to
make business decisions, avowing that it is under this atmosphere that the industry would
prosper. 1 0 3 It is disappointing at least if the deregulation thrust of the law is skirted
deliberately. But it is ignominious if the spirit is defeated through a crazy quilt of vague,
overlapping rules that are implemented haphazardly.
By no means should this Decision be interpreted as removing SMS from the ambit
of jurisdiction and review by the NTC. The issue before the Court is only the prior approval
requirement as imposed on Globe and Smart. The NTC will continue to exercise, by way of
its broad grant, jurisdiction over Globe and Smart's SMS offerings, including questions of
rates and customer complaints. Yet caution must be had. Much complication could have
been avoided had the NTC adopted a proactive position, promulgating the necessary rules
and regulations to cope up with the advent of the technologies it superintends. With the
persistent advent of new offerings in the telecommunications industry, the NTC's role will
become more crucial than at any time before. If NTC's behavior in the present case is but
indicative of a malaise pervading this crucial regulatory arm of the State, the Court fears
the resultant confusion within the industry and the consuming public. The credibility of an
administrative agency entrusted with specialized elds subsists not on judicial doctrine
alone, but more so on its intellectual strength, adherence to law, and basic fairness.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated
22 November 1999, as well as its Resolution dated 29 July 2000, and the assailed Order of
the NTC dated 19 July 1999 are hereby SET ASIDE. No cost.
SO ORDERED.
Puno, Austria-Martinez, Callejo, Sr. and Chico-Nazario, JJ ., concur.
Footnotes
1. Boiser v. Court of Appeals, G.R. No. L-61438, 24 June 1983, 122 SCRA 945, 956.
2. See K. Middleton, R. Trager & B. Chamberlin, The Law of Public Communication 5th ed.,
578 (2001), citing 47 U.S.C. secs. 201, 202. See also Section 13(b), Public Service Act, as
amended (1936). But see note 4.
3. See Section 13(b), Public Service Act, as amended. (1936)

4. In a recent speech, US Federal Communications Commission (FCC) Commissioner
Kathleen Q. Abernathy noted that after federal oversight over the wireless industry was
granted to the FCC under the Communications Act in 1993, the FCC was faced with the
choice of imposing strict common carrier regulations on incumbent cellular providers
based on their supposed entrenchment, thus mandating for example, price regulation,
service quality controls and mandated certain technologies. Instead, the FCC went the
other direction, opting for less government regulation to allow for market forces to
dictate pricing and service mandates. See "Fifth Annual Midwestern
Telecommunications Conference Keynote Address of FCC Commissioner Kathleen Q.
Abernathy, Milwaukee WS – May 10, 2002" at
www.fcc.gov/Speeches/Abernathy/2002/spkqa211.html (Visited 28 June 2004).
5. See III RECORD OF THE SENATE No. 50, p. 810. The sponsorship remarks of
Congressman Jerome Paras, another principal author of the law, are in the same vein:
"The guiding principle of the abovementioned bill is to liberalize the telecommunications
industry in order to meet unmet demand. It is the objective of this bill to promote
competition in the telecommunications market. This will allow the Philippines to be part
of the worldwide information highway. During the recent decade, irreversible forces have
begun to change the telecommunications environment. Technology has led to the
development of new services and has enabled alternative providers to offer those
services economically. As business has come to recognize the importance of
telecommunications as a strategic tool, business users have become more sophisticated
and more demanding in their request for services. Both technological forces and
consumer demand are pushing toward a competitive approach to the provision of
services." (Records of the House of Representatives of 5 December 1994, p. 3)
6. Art. II, Sec. 4, par. (f), Rep. Act No. 7925.
7. Art. II, Sec. 4, par. (b), Rep. Act No. 7925.

8. SMS is the technology that allows the transmission and receipt of text messages to and
from mobile telephones, personal digital assistants and personal computers. It is a type
of Instant Messaging communications service and it enables users to exchange
messages in real time with other users. It was created as part of the GSM (Global
System for Mobile Communication) Phase 1 standard. See "SMS — An Introduction", at
http://www.ewh.ieee.org/r10/bombay/news6/SMSAndMMS/SMS.htm (Last visited 23
April 2004) It first appeared on the wireless scene in 1991 in Europe, where digital
wireless technology first took root. The European standard for digital wireless, now
known as the GSM, included SMS from the outset. See "Wireless Short Message Service
(SMS)", at http://www.iec.org (Last visited 24 April 2004).
9. See e.g., China Banking Corp. v. Court of Appeals, 337 Phil. 223, 235 (1997).
10. "Administrative agencies threaten this system of safeguards [of separation of powers
within government] by combining powers in ways that threaten to short-circuit the
checks relied upon by Madison. . . . Because agency decision making is not highly visible
and is not directly subject to the electoral check, there is a danger that the redistributive
authority of agencies will be exercised in favor of a limited group of organized interests
with a special stake in an agency's policies." S. Breyer & R. Stewart, Administrative Law
and Regulatory Policy 105 (1979). Co-author Stephen Breyer, who currently sits in the
United States Supreme Court, is recognized as one of the preeminent experts in
Administrative Law in the United States.
11. Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951).

12. "Judicial review of the decision of an administrative official is of course subject to
certain guideposts laid down in many decided cases. Thus, for instance, findings of fact
in such decision should not be disturbed if supported by substantial evidence; but review
is justified when there has been a denial of due process, or mistake of law, or fraud,
collusion or arbitrary action in the administrative proceeding." Atlas Cement Corp. v. Hon.
Gozon, et al., 127 Phil. 271, 279 (1967).

13. Smart's franchise is covered by Rep. Act No. 7294 (1992), while Globe's franchise is
ordained in Rep. Act No. 7229 (1992).
14. Rollo, p. 149.

15. Ibid.
16. Docketed as NTC Case No. 99-047. See Rollo, p. 36.
17. Rollo, pp. 149–150.

18. Id. at 152.
19. Section 6 of NTC Memorandum Circular 9-7-93 requires that the NTC can only intervene
"[s]hould parties fail to reach an agreement in ninety (90) days from the start of
negotiations in accordance with Section 6.1.3 Article II hereof." The start of negotiations
is in turn explicitly defined in the same Memorandum Circular as being "from the time
the party requesting interconnection shall have submitted to the other party the complete
data or information" required elsewhere in the Memorandum Circular. Globe alleges that
Smart admits to not having complied with these conditions precedent. (Rollo, p. 37.)
20. Rollo, p. 37.

21. Id. at 83.
22. Id. at 86. Particularly, Smart was faulted for its failure to resubmit the "voluminous"
documents which it had already previously submitted to Globe in relation to previous
interconnections, considering that all Smart would have to do would be to reproduce
said documents. On the other hand, Globe was faulted for insisting on the submission of
these voluminous documents, and yet in the same breath, claiming that the SMS service
is not a value-added-service and thus not covered by the mandatory interconnection
requirement. Id. at 84–85.
23. Section 5 of E.O. No. 59 provides: "Interconnection shall be mandatory with regard to
connecting other telecommunications services such as but not limited to value-added
services of radio paging, trunking radio, store and forward systems of facsimile or
messaging (voice or data), packet switching and circuit data switching (including the
conveyance of messages which have been or are to be transmitted or received at such
points of connection), information and other services as the NTC may determine to be in
the interest of the public and in the attainment of the objective of a universally
accessible, fully integrated nationwide telecommunications network."
24. Rollo, p. 87.
25. Docketed as CA-G.R. SP No. 54262.
26. Rollo, p. 40.

27. Id. at 43.
28. Rollo, p. 67.
29. Justice A. Tuquero penned the decision, which was concurred in by Justices B.L. Salas
and E.J. S. Asuncion.
30. Ibid.

31. Rollo, p. 89.
32. Smart, on the other hand, filed an application with the NTC on 22 July 1999, seeking
authorization to operate SMS services. NTC Records, pp. 8–12.
33. In a Resolution dated 29 July 2000.
34. Commonwealth Act No. 146, as amended. The provisions of the Public Service Act, as
amended, govern the National Telecommunications Commission. As explained in Radio
Communications of the Philippines, Inc. v. National Telecommunications Commission,
G.R. No. L-68729, 29 May 1987, 150 SCRA 455; "Pursuant to Presidential Decree No. 1
dated September 23, 1972, reorganizing the executive branch of the National
Government, the Public Service Commission was abolished and its functions were
transferred to three specialized regulatory boards, as follows: the Board of
Transportation, the Board of Communications and the Board of Power and Waterworks.
The functions so transferred were still subject to the limitations provided in sections 14
and 15 of the Public Service Law, as amended. With the enactment of Executive Order
No. 546 on July 23, 1979 implementing P.D. No. 1, the Board of Communications and
the Telecommunications Control Bureau were abolished and their functions were
transferred to the National Telecommunications Commission (Sec. 19(d), Executive
Order No. 546)." See also Republic v. Express Telecommunication Co., Inc., G.R. No.
147096, 15 January 2002, 373 SCRA 316, 334.
35. See Memorandum for Smart Communications, Inc., pp. 17–19.
36. TSN dated 22 March 2004, p. 1.
37. Pilipino Telephone Corporation v. NTC, G.R. No. 138295, 28 August 2003, citing
Bernardo v. Abalos Sr., G.R. No. 137266, 5 December 2001, 371 SCRA 459.
38. Specifically, Globe asserted that the Order was issued without jurisdiction or with grave
abuse of discretion amounting to lack of jurisdiction, the Order was a patent nullity, that
the deprivation of due process rendered the proceedings as nullity, and that motion for
reconsideration was a useless and inutile or idle ceremony, and that the issue raised was
one purely of law. Rollo, pp. 175–176.
39. See Rollo, p. 22.
40. Supra, note 26.

41. "The Court has ruled that a motion for reconsideration may be dispensed with prior to
commencement of an action for certiorari where the decision is a patent nullity or where
petitioner was deprived of due process." PNCC v. NLRC, et al., G.R. No. 103670, 10 July
1998, 292 SCRA 266, 271.
42. See NFSW v. Ovejera, No. L-59743, 31 May 1982, 114 SCRA 354, 363; Filoteo, Jr. v.
Sandiganbayan, G.R. No. 79543, 331 Phil. 539, 569 (1996).
43. During legislative deliberations, Congressman Paras clarified that the deregulation
contemplated in the Public PTA was insofar as "pricing and operating modalities are
concerned" Records of the House of Representatives of 6 December 1994, p. 2.
44. Captioned, "Deregulating the Provision of Special Features in the Telephone Network."
45. Rollo, p. 60.

46. See Rep. Act No. 7925 (1994), art I, sec. 2. Article I, Section 3 of the PTA defines a
public telecommunications entity as "any person, firm, partnership or corporation,
government or private, engaged in the provision of telecommunications services to the
public for compensation."
47. Id., art. VI, sec. 18.

48. Id., article IV, Sec. 7. There are six telecommunications categories provided for in the
PTA. They are "local exchange operator," "inter-exchange carrier," "international carrier,"
"value-added service provider," "mobile radio services," and "radio paging systems." Id.,
art. IV.
49. Id., art. IV, secs. 10 and 12.

50. IV RECORD OF THE SENATE No. 73, p. 870.
51. Id., art. I, sec. 3(h).

52. "Provided that it does not put its own network, a VAS provider need not secure a
franchise. A VAS provider shall be allowed to competitively offer its services and/or
expertise, and lease or rent telecommunications equipment and facilities necessary to
provide such specialized services, in the domestic and/or international market in
accordance with network compatibility." Rep. Act No. 7925 (1994), art. IV, Sec. 11.
53. Id., art. IV, sec. 11.

54. See Edu v. Ericta, 146 Phil. 469, 485 (1970); Agustin v. Edu, G.R. No. L-49112 February
2, 1979; Free Telephone Workers Union vs. MOLE, et al.; G.R. No. L-58184, 30 October
1981, 108 SCRA 757, 768; De La Llana v. Alba, G.R. No. 57883, 12 March 1982, 112
SCRA 292, 335; "A standard thus defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It indicates the circumstances
under which the legislative command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the executive or administrative office
designated may in pursuance of the above guidelines promulgate supplemental rules
and regulations." Edu v. Ericta, id.
55. An eminent member of this Court enunciated the following test for valid delegation:
"Although Congress may delegate to another branch of the Government the power to fill
details in the execution, enforcement or administration of a law, it is essential, to
forestall a violation of the principle of separation of powers, that said law: (a) be
complete in itself — it must set forth therein the policy to be executed, carried out or
implemented by the delegate — and (b) to fix a standard — the limits of which are
sufficiently determinate or determinable — to which the delegate must conform in the
performance of his functions. Indeed, without a statutory declaration of policy, which is
the essence of every law, and, without the aforementioned standard, there would be no
means to determine, with reasonable certainty, whether the delegate has acted within or
beyond the scope of his authority." J. Puno, concurring and dissenting, Defensor-
Santiago v. COMELEC, 336 Phil. 848, 912; citing Pelaez v. Auditor General, 15 SCRA 569
(1965).
56. Section 5 of Rep. Act No. 7925 reads:

SEC. 5. Responsibilities of the National Telecommunications Commission. — The
National Telecommunications Commission (Commission) shall be the principal
administrator of this Act and as such shall take the necessary measures to implement
the policies and objectives set forth in this Act. . . .
57. Supra note 3.

58. Local exchange service "refers to a telecommunications service, primarily but not
limited to voice-to-voice service, within a contiguous geographic area furnished to
individual" See Sec. 1(c), E.O. 109 (1992).
59. Termed under E.O. 109 as "universal access."
60. Section 4, E.O. 109.

61. Nor are they required to secure a legislative franchise. See Section 11, Rep. Act No.
7925.
62. Section 001(15), MC No. 8-9-95.

63. Ibid.
64. The year the Implementing Rules was promulgated.
65. Rollo, p. 267.

66. Ibid.
67. See TSN dated 22 March, 2004, pp. 105, 134–135, 153.
68. TSN dated 22 March 2004, pp. 107–108.
69. Annex "B" to NTC's Memorandum.
70. Phelps Dodge Corp. v. Labor Board, 313 U.S. 177, 197.
71. NTC has jurisdiction to "[M]andate a fair and reasonable interconnection of facilities of
authorized public network operators and other providers of telecommunications
services." See Art. III, Section 5(c), Rep. Act No. 7925.
72. See GMCR, Inc. v. Bell Telecommunications, Phils., Inc., 338 Phil. 507, 520 (1997).
73. 69 Phil. 635 (1940).
74. National Development Co., et al. v. Coll. of Customs of Manila, 118 Phil. 1265, 1270–
1271. (1963), citing Ang Tibay v. CIR, id.
75. Rollo, p. 85. The cited paragraph actually refers to "Memorandum Circular 9-9-95 (Rule
001, Item 16)" as providing for the definition of an enhanced service. However,
Memorandum Circular No. 9-9-95 does not exist. It is Memorandum Circular 8-9-95 (Rule
001, Item 15) that defines what an enhanced service is. We can reasonably presume that
it is the latter circular that the NTC was referring to in its assailed Order.
76. Substantial evidence is "such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion." Ang Tibay v. CIR, supra note 73.
77. Supra note 62.

78. As aptly noted by Senator J. Osmeña in his sponsorship speech of the Public PTA;
"Because of the mind-boggling developments in semiconductors, the traditional
boundaries between computers, telecommunications, and broadcasting are increasingly
becoming blurred." Supra note 50.
79. Section 1, Rep. Act No. 7294 (1992).
80. Section 1, Rep. Act No. 4540, in relation to Section 1, Rep. Act No. 7229. The reason
why the language contained in Smart's legislative franchise sounds more modish is that
it was drawn up in 1992, while Globe's franchise is the franchise issued to Clavecilla
Radio System in 1965.
81. . . . de novo judicial fact-finding would destroy many of the reasons for creating
administrative agencies in the first place. Speedy and cheap administrative resolution of
controversies would be threatened. The capability of administrative agencies to draw
specialized inferences based on their experience would be lost. . . . Administrative
agencies would become little more than evidence gatherers, and most decisional
responsibility would be shifted to the judiciary. S. Breyer & R. Stewart, supra note 10, at
184.
82. See Philippine Trust Co. and Smith, Bell & Co. vs. Mitchell, 59 Phil. 30, 36 (1933);
Osmeña v. COMELEC, G.R. No. 132231, 31 March 1998, 288 SCRA 447, 964.
83. "While administrative agencies can change previously announced policies . . . and can
fashion exceptions and qualifications, they must explain departures from agency
policies or rules apparently dispositive of a case . . . Brennan v. Gilles & Cotting, Inc., 504
F.2d 1255 (4th Cir. 1974); as cited in Breyer & Stewart, supra note 10, at 353.
84. "Patently inconsistent application of agency standards to similar situations lacks

rationality and is arbitrary." Contractors Transport Corp. v. U.S ., 537 F.2d 1160 (4th Cir.
1976), cited in Breyer & Stewart, supra note 10, at 352.
85. Edwards v. McCoy, 22 Phil. 598; Ang Tibay v. C.I.R., 69 Phil. 635, 642; Bataan Shipyard
Co. v. PCGG, G.R. No. L-75885, 27 May 1987; 150 SCRA 181, 217.
86. TSN dated 22 March 2004, p. 155.
87. In a Manifestation and Motion dated 3 May 2004, the NTC manifested that the TSNs
could no longer be located. An affidavit executed by the Chief of the Secretariat Division
of the NTC was attached, attesting to the fact that the case folder of NTC Adm. Case No.
99-047 has been lost, and was alleged to have been last seen in the possession of
former Deputy Commissioner Aurelio M. Umali. Interestingly, while the affidavit attests
to the entries of the docket book with respect to the said NTC Adm. Case, as well as the
contents of the records previously submitted to this Court, no mention whatsoever is
made therein of any transcript to any hearing conducted by NTC on the matter.
88. Air Manila, Inc. v. Balatbat, L-29064, 29 April 1971, 38 SCRA 489, 493; citing Garcia v.
Executive Secretary, 6 SCRA 1 (1962); Ang Tibay v. CIR, 69 Phil. 635.
89. S. Breyer & R. Stewart, supra note 10, at 105.
90. Rollo, p. 21.
91. Ang Tibay v. CIR, 65 Phil. 635 (1940).
92. Matuguina Integrated Wood Products, Inc. v. CA, 331 Phil. 795, 812 (1996).
93. Rollo, p. 334.
94. Ibid.
95. 150-A Phil. 86, 102 (1972).
96. Ibid.
97. Rule 10, Section 3, NTC Rules of Procedure.
98. Rollo, pp. 148–150.
99. Rule 10, Section 4, NTC Rules of Procedure.
100. Rollo, p. 152.
101. Danan and Fernandez v. Aspillera and Galang, et al., 116 Phil. 921, 924 (1962).
102. The following remarks of Sen. J. Osmeña in his sponsorship speech of the Public PTA
bear noting; "Technology, for one, has radically changed the nature and scope of
telecommunications. The very reason for the State's intervention in telecommunications
has been altered. In many parts of the world, the trend is toward deregulation; or more
accurately, less meddling from the bureaucratic hands has taken place." IV Record of the
Senate No. 73, p. 870.
103. Primary reliance for this statement is premised on par. (f), Section 4 of the Public PTA.
Supra note 24. The same provision has been used to justify the exercise by the NTC of
its regulatory powers, albeit under different factual circumstances. See Pilipino
Telephone Corporation v. NTC, G.R. No. 138295, 28 August 2003, citing Republic v.
Express Telecommunications Co., Inc., G.R. No. 147096, 15 January 2002, 373 SCRA
316, both cases pertaining to the authority of the NTC to issue provisional authority or
certificates of public convenience and necessity. The discretionary authority of the NTC
vis-à-vis these licenses, is, of course, also explicitly provided for by the statute. See Art.
VI, Section 16, Public PTA. Apparently, the aforementioned para. (f) affirms at the same
time the due respect accorded PTEs in making business decisions and the authority of
the NTC to enforce the law. This is indicative of the judicious balance adopted by the
law towards state concerns and business concerns.

EN BANC
[G.R. No. 111953. December 12, 1997.]
HON. RENATO C. CORONA, in his capacity as Assistant Secretary

for Legal Affairs, HON. JESUS B. GARCIA, in his capacity as Acting
Secretary, Department of Transportation and Communications, and
ROGELIO A. DAYAN, in his capacity as General Manager of
Philippine Ports Authority , petitioners, vs . UNITED HARBOR PILOTS
ASSOCIATION OF THE PHILIPPINES and MANILA PILOTS
ASSOCIATION , respondents.
The Solicitor General for petitioners.

Manuel E. Valenzuela and Jesus P. Amparo for private respondents.
SYNOPSIS
July 15, 1992, PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92,
limiting the term of Appointment of harbor pilots to one (1) year subject to renewal or
cancellation by the authority after conduct of a rigid evaluation of the appointee's
performance. Respondents, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-
92 before the Department of Transportation and Communication, but they were informed
by the Department Secretary that the matter of reviewing, recalling or annulling PPA's
administrative issuances lies exclusively with its Board of Directors as its governing body.
Respondents appealed to the O ce of the President which ordered the PPA to hold in
abeyance the implementation of the administrative order. However, the O ce of the
President through then Assistant Executive Secretary for Legal Affairs Renato C. Corona
dismissed the appeal/petition and lifted the restraining order issued earlier. Respondents
led a petition for certiorari, prohibition and injunction with the Regional Trial Court of
Manila. The trial court ruled that herein petitioners have acted in excess of jurisdiction and
with grave abuse of discretion in promulgating PPA AO No. 04-92 including its
implementing memoranda. The trial court also declared the administrative order null and
void and permanently enjoined its implementation. Hence, herein petitioners elevated the
case to the Court on certiorari.
The Supreme Court ruled that PPA-AO No. 04-92 was issued in utter disregard of
respondent's right against deprivation of property without due process of law. The Court
held that the provision limiting the term of appointment of harbor pilots unduly restricts
the right of harbor pilots to enjoy their profession before their retirement. Renewal of the
license is now dependent on a rigid evaluation of performance which is conducted only
after the license has been canceled. Hence, the use of the term "renewal." It is the "pre-
evaluation" cancellation which primarily makes PPA-AO No. 04-92 unreasonable and
constitutionally in rm. In a real sense, it is deprivation of property without due process of
law.
Petition denied.
SYLLABUS
CD Technologies Asia, Inc. 2018 cdasiaonline.com
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; PPA-AO NO. 04-92; DECLARED
UNCONSTITUTIONAL; THE PRE-EVALUATION CANCELLATION OF THE HARBOR PILOTS'
LICENSES IS WHAT PRIMARILY MAKES THE ADMINISTRATIVE ORDER UNREASONABLE
AND CONSTITUTIONALLY INFIRM; IT CONSTITUTES DEPRIVATION OF PROPERTY
WITHOUT DUE PROCESS OF LAW. — It is readily apparent that PPA-AO No. 04-92 unduly
restricts the right of harbor pilots to enjoy their profession before their compulsory
retirement. In the past, they enjoyed a measure of security knowing that after passing ve
examinations and undergoing years of on-the-job training, they would have a license which
they could use until their retirement, unless sooner revoked by the PPA for mental or
physical un tness. Under the new issuance, they have to contend with an annual
cancellation of their license which can be temporary or permanent depending on the
outcome of their performance evaluation. Veteran pilots and neophytes alike are suddenly
confronted with one-year terms which ipso facto expire at the end of that period. Renewal
of their license is now dependent on a "rigid evaluation of performance" which is
conducted only after the license has already been canceled. Hence, the use of the term
"renewal." It is this pre-evaluation cancellation which primarily makes PPA-AO No. 04-92
unreasonable and constitutionally in rm. In a real sense, it is a deprivation of property
without due process of law.
2. ID.; ID.; AN UNNECESSARY ENACTMENT; SINCE THE LAW ADDS NOTHING
NEW OR SUBSTANTIAL IT MUST BE STRUCK DOWN. — The Court notes that PPA-AO No.
04-92 and PPA-MO No. 08-92 are already covered by PPA-AO No. 03-85, which is still
operational. Respondents are correct in pointing out that PPA-AO No. 04-92 is a
"surplusage" and, therefore an unnecessary enactment. PPA-AO 03-85 is a comprehensive
order setting forth the "Rules and Regulations Governing Pilotage Services, the Conduct of
Pilots and Pilotage Fees in Philippine Ports." It provides, inter alia, for the quali cation,
appointment, performance evaluation, disciplining and removal of harbor pilots — matters
which are duplicated in PPA-AO No. 04-92 and its implementing memorandum order.
Since it adds nothing new or substantial, PPA-AO No. 04-92 must be struck down.
DECISION
ROMERO , J : p
In issuing Administrative Order No. 04-92 (PPA-AO No. 04-92) limiting the term of
appointment of harbor pilots to one year subject to yearly renewal or cancellation, did the
Philippine Ports Authority (PPA) violate respondents' right to exercise their profession and
their right to due process of law?
The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On
December 23, 1975, Presidential Decree No. 857 was issued revising the PPA's charter.
Pursuant to its power of control, regulation, and supervision of pilots and the pilotage
profession, 1 the PPA promulgated PPA-AO-03-85 2 on March 21, 1985, which embodied
the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage
Fees in Philippine Ports." These rules mandate, inter alia, that aspiring pilots must be
holders of pilot licenses 3 and must train as probationary pilots in outports for three
months and in the Port of Manila for four months. It is only after they have achieved
satisfactory performance 4 that they are given permanent and regular appointments by the
PPA itself 5 to exercise harbor pilotage until they reach the age of 70 , unless sooner
removed by reason of mental or physical un tness by the PPA General Manager. 6 Harbor
pilots in every harbor district are further required to organize themselves into pilot
associations which would make available such equipment as may be required by the PPA
for effective pilotage services. In view of this mandate, pilot associations invested in
oating, communications, and o ce equipment. In fact, every new pilot appointed by the
PPA automatically becomes a member of a pilot association and is required to pay a
proportionate equivalent equity or capital before being allowed to assume his duties, as
reimbursement to the association concerned of the amount it paid to his predecessor.
Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-
92 on July 15, 1992, whose avowed policy was to "instill effective discipline and thereby
7
afford better protection to the port users through the improvement of pilotage services."
This was implemented by providing therein that "all existing regular appointments which
have been previously issued either by the Bureau of Customs or the PPA shall remain valid
up to 31 December 1992 only" and that "all appointments to harbor pilot positions in all
pilotage districts shall, henceforth, be only for a term of one (1) year from date of
effectivity subject to yearly renewal or cancellation by the Authority after conduct of a rigid
evaluation of performance."
On August 12, 1992, respondents United Harbor Pilots Association and the Manila
Pilots Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92
before the Department of Transportation and Communication, but they were informed by
then DOTC Secretary Jesus B. Garcia that "the matter of reviewing, recalling or annulling
PPA's administrative issuances lies exclusively with its Board of Directors as its governing
body."
Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08-92 8
which laid down the criteria or factors to be considered in the reappointment of harbor
pilots viz.: (1) Qualifying Factors: 9 safety record and physical/mental medical exam report
and, (2) Criteria for Evaluation: 1 0 promptness in servicing vessels, compliance with PPA
Pilotage Guidelines, number of years as a harbor pilot, average GRT of vessels serviced as
pilot, awards/commendations as harbor pilot, and age.
Respondents reiterated their request for the suspension of the implementation of
PPA-AO No. 04-92, but Secretary Garcia insisted on his position that the matter was within
the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling to the
Office of the President (OP), reiterating his arguments before the DOTC.
On December 23, 1992, the OP issued an order directing the PPA to hold in
abeyance the implementation of PPA-AO No. 04-92. In its answer, the PPA countered that
said administrative order was issued in the exercise of its administrative control and
supervision over harbor pilots under Section 6-a (viii), Article IV of P. D. No. 857, as
amended, and it, along with its implementing guidelines, was intended to restore order in
the ports and to improve the quality of port services.
On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal
Affairs Renato C. Corona, dismissed the appeal/petition and lifted the restraining order
issued earlier. 11 He concluded that PPA-AO No. 04-92 applied to all harbor pilots and, for
all intents and purposes, was not the act of Dayan, but of the PPA, which was merely
implementing Section. 6 of P.D. No .857, mandating it "to control, regulate and supervise
pilotage and conduct of pilots in any port district."
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its
implementing memoranda and circulars, Secretary Corona opined that:
"The exercise of one's profession falls within the constitutional guarantee
against wrongful deprivation of, or interference with, property rights without due
process. In the limited context of this case, PPA-AO 04-92 does not constitute a
wrongful interference with, let alone a wrongful deprivation of, the property rights
of those affected thereby. As may be noted, the issuance aims no more. than to
improve pilotage services by limiting the appointment to harbor pilot positions to
one year, subject to renewal or cancellation after a rigid evaluation of the
appointee's performance.
PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor
pilots of their profession in PPA's jurisdictional area." (Emphasis supplied)
Finally, as regards the alleged "absence of ample prior consultation" before the
issuance of the administrative order, Secretary Corona cited Section 26 of P.D. No. 857,
which merely requires the PPA to consult with "relevant Government agencies." Since the
PPA Board of Directors is composed of the Secretaries of the DOTC, the Department of
Public Works and Highways, the Department of Finance, and the Department of
Environment and Natural Resources, as well as the Director-General of the National
Economic Development Agency, the Administrator of the Maritime Industry Authority
(MARINA), and the private sector representative who, due to his knowledge and expertise,
was appointed by the President to the Board, he concluded that the law has been
sufficiently complied with by the PPA in issuing the assailed administrative order.
Consequently, respondents led a petition for certiorari, prohibition and injunction
with prayer for the issuance of a temporary restraining order and damages, before Branch
6 of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93-65673. On
September 6, 1993, the trial court rendered the following judgment: 1 2
"WHEREFORE, for all the foregoing, this court hereby rules that:
1. Respondents (herein petitioners) have acted in excess of jurisdiction

and with grave abuse of discretion and in a capricious, whimsical and arbitrary
manner in promulgating PPA Administrative Order 04-92 including all its
implementing Memoranda, Circulars and Orders;
2. PPA Administrative Order 04-92 and its implementing Circulars and
Orders are declared null and void;
3. The respondents are permanently enjoined from implementing PPA
Administrative Order 04-92 and its implementing Memoranda, Circulars and
Orders.
No costs.
SO ORDERED."
The court a quo pointed out that the Bureau of Customs, the precursor of the PPA,
recognized pilotage as a profession and, therefore, a property right under Callanta v.
Carnation Philippines, Inc. 1 3 Thus, abbreviating the term within which that privilege may be
exercised would be an interference with the property rights of the harbor pilots.
Consequently, any "withdrawal or alteration" of such property right must be strictly made in
accordance with the constitutional mandate of due process of law. This was apparently
not followed by the PPA when it did not conduct public hearings prior to the issuance of
PPA-AO No. 04-92; respondents allegedly learned about it only after its publication in the
newspapers. From this decision, petitioners elevated their case to this Court on certiorari.
After carefully examining the records and deliberating on the arguments of the
parties, the Court is convinced that PPA-AO No. 04-92 was issued in stark disregard of
respondents' right against deprivation of property without due process of law.
Consequently, the instant petition must be denied.
Section 1 of the Bill of Rights lays down what is known as the "due process clause"
of the Constitution, viz.:
"SEC. 1. No person shall be deprived of life, liberty, or property without
due process of law, . . ."
In order to fall within the aegis of this provision, two conditions must concur,
namely, that there is a deprivation and that such deprivation is done without proper
observance of due process. When one speaks of due process of law, however, a
distinction must be made between matters of procedure and matters of substance. In
essence, procedural due process "refers to the method or manner by which the law is
enforced," while substantive due process "requires that the law itself, not merely the
procedures by which the law would be enforced, is fair, reasonable, and just." 14 PPA-AO
No. 04-92 must be examined in light of this distinction. prLL
Respondents argue that due process was not observed in the adoption of PPA-AO
No. 04-92 allegedly because no hearing was conducted whereby "relevant government
agencies" and the pilots themselves could ventilate their views. They are obviously
referring to the procedural aspect of the enactment. Fortunately, the Court has maintained
a clear position in this regard, a stance it has stressed in the recent case of Lumiqued v.
Hon. Exevea, 1 5 where it declared that "(a)s long as a party was given the opportunity to
defend his interests in due course, he cannot be said to have been denied due process of
law, for this opportunity to be heard is the very essence of due process. Moreover, this
constitutional mandate is deemed satis ed if a person is granted an opportunity to seek
reconsideration of the action or ruling complained of."
In the case at bar, respondents questioned PPA-AO No. 04-92 no less than four
times 1 6 before the matter was nally elevated to this Tribunal. Their arguments on this
score, however, fail to persuade. While respondents emphasize that the Philippine Coast
Guard, "which issues the licenses of pilots after administering the pilots' examinations,"
was not consulted, 1 7 the facts show that the MARINA, which took over the licensing
function of the Philippine Coast Guard, was duly represented in the Board of Directors of
the PPA. Thus, petitioners correctly argued that, there being no matters of naval defense
involved in the issuance of the administrative order, the Philippine Coast Guard need not be
consulted. 1 8
Neither does the fact that the pilots themselves were not consulted in any way taint
the validity of the administrative order. As a general rule, notice and hearing, as the
fundamental requirements of procedural due process, are essential only when an
administrative body exercises its quasi-judicial function. In the performance of its
executive or legislative functions, such as issuing rules and regulations, an administrative
body need not comply with the requirements of notice and hearing. 1 9
Upon the other hand, it is also contended that the sole and exclusive right to the
exercise of harbor pilotage by pilots is a settled issue. Respondents aver that said right
has become vested and can only be "withdrawn or shortened" by observing the
constitutional mandate of due process of law. Their argument has thus shifted from the
procedural to one of substance. It is here where PPA-AO No. 04-92 fails to meet the
condition set by the organic law.
There is no dispute that pilotage as a profession has taken on the nature of a
property right. Even petitioner Corona recognized this when he stated in his March 17,
1993, decision that "(t)he exercise of one's profession falls within the constitutional
guarantee against wrongful deprivation of, or interference with, property rights without due
process." 2 0 He merely expressed the opinion that "(i)n the limited context of this case
PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful
deprivation of, the property rights of those affected thereby, and that "PPA-AO 04-92 does
not forbid, but merely regulates, the exercise by harbor pilots of their profession." As will
be presently demonstrated, such supposition is gravely erroneous and tends to perpetuate
an administrative order which is not only unreasonable but also superfluous.
Pilotage, just like other professions, may be practiced only by duly licensed
individuals. Licensure is "the granting of license especially to practice a profession." It is
also "the system of granting licenses (as for professional practice) in accordance with
established standards." 21 A license is a right or permission granted by some competent
authority to carry on a business or do an act which, without such license, would be illegal.
22
Before harbor pilots can earn a license to practice their profession, they literally have
to pass through the proverbial eye of a needle by taking, not one but ve examinations,
each followed by actual training and practice. Thus, the court a quo observed:
"Petitioners (herein respondents) contend, and the respondents (herein
petitioners) do not deny, that here (sic) in this jurisdiction, before a person can be
a harbor pilot, he must pass ve (5) government professional examinations,
namely, (1) For Third Mate and after which he must work, train and practice on
board a vessel for at least a year; (2) For Second Mate and after which he must
work, train and practice for at least a year; (3) For chief Mate and after which he
must work, train and practice for at least a year; (4) For a Master Mariner and
after which he must work as Captain of vessels for at least two (2) years to
qualify for an examination to be a pilot; and nally, of course, that given for
pilots."
Their license is granted in the form of an appointment which allows them to engage
in pilotage until they retire at the age 70 years. This is a vested right. Under the terms of
PPA-AO No. 04-92, "(a)ll existing regular appointments which have been previously issued
by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only," and
"(a)ll appointments to harbor pilot positions in all pilotage districts shall, henceforth, be
only for a term of one (1) year from date of effectivity subject to renewal or cancellation by
the Authority after conduct of a rigid evaluation of performance."
It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor
pilots to enjoy their profession before their compulsory retirement. In the past, they
enjoyed a measure of security knowing that after passing ve examinations and
undergoing years of on-the-job training, they would have a license which they could use
until their retirement, unless sooner revoked by the PPA for mental or physical un tness.
Under the new issuance, they have to contend with an annual cancellation of their license
which can be temporary or permanent depending on the outcome of their performance
evaluation. Veteran pilots and neophytes alike are suddenly confronted with one-year
terms which ipso facto expire at the end of that period. Renewal of their license is now
dependent on a "rigid evaluation of performance" which is conducted only after the license
has already been cancelled. Hence, the use of the term "renewal " It is this pre-evaluation
cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally
infirm. In a real sense, it is a deprivation of property without due process of law.
The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered
by PPA-AO No. 03-85, which is still operational. Respondents are correct in pointing out
that PPA-AO No. 04-92 is a "surplusage" 2 3 and, therefore, an unnecessary enactment.
PPA-AO 03-85 is a comprehensive order setting forth the "Rules and Regulations
Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." It
provides, inter alia, for the quali cation, appointment, performance evaluation, disciplining
and removal of harbor pilots — matters which are duplicated in PPA-AO No. 04-92 and its
implementing memorandum order. Since it adds nothing new or substantial, PPA-AO No.
04-92 must be struck down.
Finally, respondents' insinuation that then PPA General Manager Dayan was
responsible for the issuance of the questioned administrative order may have some
factual basis; after all, power and authority were vested in his o ce to propose rules and
regulations. The trial court's nding of animosity between him and private respondents
might likewise have a grain of truth. Yet the number of cases led in court between private
respondents and Dayan, including cases which have reached this Court cannot certainly be
considered the primordial reason for the issuance of PPA-AO No. 04-92. In the absence of
proof to the contrary, Dayan should be presumed to have acted in accordance with law and
the best of professional motives. In any event, his actions are certainly always subject to
scrutiny by higher administrative authorities.
WHEREFORE the instant petition is hereby DISMISSED and the assailed decision of
the court a quo dated September 6, 1993, in Civil Case No. 93-65673 is AFFIRMED. No
pronouncement as to costs. Cdpr
SO ORDERED.
Narvasa, C .J ., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Francisco and Panganiban, JJ ., concur.
Martinez, J ., took no part.
Footnotes
1. Pilotage is the act of conducting a vessel from the high seas into a port. Usually, pilotage
is conducted within a two-mile area offshore to an assigned berthing area and vice
versa.
2. Rollo, p. 87.
3. The pilot licensing function itself which used to be exercised by the Philippine Coast
Guard pursuant to the Revised Coast Guard Law of 1974 (P. D. No. 601) has been
transferred to the Maritime Industry Authority (MARINA) by virtue of Executive Order No.
125, which took effect on January 30, 1987.
4. Determined by an Evaluation Committee.
5. Upon the recommendation of the PPA General Manager.

6. Article IV, Section 20.
7. Rollo, p. 41.
8. Ibid., p. 42.
9. Qualifying factors are requirements which must be met before a pilot's application for
reappointment is even evaluated by the PPA.
10. These criteria are used for evaluation by the PPA after a pilot has complied with all the
requirements to qualify for evaluation. Each criterion is assigned a certain number of
points.
11. Rollo, pp. 36-40.
12. Ibid., pp. 29-35.
13. 145 SCRA 268 (1986).
14. De Leon, Textbook on the Philippine Constitution, 1991, p. 81.
15. G.R. No. 117565, November 18, 1997, citing Legarda v. Court of Appeals, G.R. No.
94457, October 16, 1997, and Pizza Hut/Progressive Development Corporation v. NLRC,
322 Phil. 573.
16. Questioned twice before the DOTC, appealed to the OP, before finding affirmative relief
with the RTC of Manila.
17. Rollo, p. 55.

18. Ibid., p. 163.
19. Philippine Communications Satellite Corporation v. Alcuaz, 180 SCRA 218 (1989),
citing 73 C.J.S. 452-453.
20. Rollo, p. 38.
21. Webster's Third World International Dictionary, 1993 ed., p. 1304.
22. 53 C.J.S. 445, citing 37 C.J. 168, In Tan v. Director of Forestry , 210 Phil. 244 (1983), the
Court defined a license as merely a permit or privilege to do what otherwise would be
unlawful. It is not a contract between the authority, federal, state, or municipal, granting
it and the person to whom it is granted. Neither is it property or a property right, nor does
it create a vested right; nor is it taxation.
23. Rollo, p. 65.

FIRST DIVISION
[G.R. No. 153022. April 10, 2006.]
NATIONAL POWER CORPORATION , petitioner, vs . AGUSTIN A.

ZOZOBRADO , respondent.
DECISION
CHICO-NAZARIO , J : p
Assailed in this Petition for Review under Rule 45 of the Rules of Court is the
Decision 1 dated 5 November 2001 of the Court of Appeals granting respondent's appeal
and the Resolution 2 dated 12 April 2002 denying petitioner's motion for reconsideration.
In granting respondent's appeal, the Court of Appeals reversed the Resolution dated 14
October 1999 of the Civil Service Commission (CSC), disposing of the appeal as follows:
WHEREFORE , the instant petition is GRANTED and the assailed CSC
Resolutions Nos. 99-2365 and 000213 are hereby REVERSED and SET ASIDE .
The petitioner's reinstatement and/or continuous service is hereby ordered with
full payment of backwages and other emoluments. 3
While the factual background of this case is being disputed, the procedural
antecedents of the case are as follows:
On 28 August 1998, respondent Agustin A. Zozobrado, a permanent employee of
petitioner National Power Corporation (NPC 4 ) assigned as Pilot in the aviation group,
received a letter dated 18 August 1998 from NPC President Frederico C. Puno, informing
him that that he was being dropped from the rolls.
On 14 September 1998, respondent Zozobrado led an appeal before the CSC
questioning NPC's implementation of dropping him from the rolls.
On 14 October 1999, the CSC issued a Resolution dismissing petitioner's appeal, the
dispositive portion whereof is as follows:
WHEREFORE, the appeal of Agustin A. Zozobrado is hereby dismissed for
lack of merit. Accordingly, the Memorandum dated June 29, 1998 as approved by
then NPC President Guido Alfredo A. Delgado dropping Zozobrado from the rolls
is hereby affirmed. 5
On 9 November 1999, respondent Zozobrado led a Motion for Reconsideration of

the said Resolution, which the CSC denied in another Resolution dated 25 January 2000.
On 22 March 2000, respondent led with the Court of Appeals a Petition for Review
on Certiorari under Rule 43 of the Rules of Court. The Court of Appeals granted the appeal
in the assailed 5 November 2001 Decision. Petitioner led a motion for reconsideration,
but the same was denied in the 12 April 2002 assailed resolution.
Hence, this petition.
Petitioner submits the following allegations in its discussion:
1. Contrary to the Court of Appeal's findings, actual and constructive notice
had been served upon respondent; 6 and
2. Contrary to the finding of the Court of Appeals, the ratings given to

respondent resulting to his dropping from the rolls, were official and
regular acts by NPC based on his performance during the rating periods
and by no means a premeditated design to drop respondent from the rolls.
7
Respondent had been dropped by petitioner from the rolls based on the following
provision in the Civil Service Rules:
2. Dropped from the rolls DHaECI
xxx xxx xxx
2.2 Unsatisfactory or Poor Performance
a. An o cial or employee who is given two (2)

consecutive unsatisfactory ratings may be dropped from the rolls
after due notice. Notice shall mean that the o cer or employee
concerned is informed in writing of his unsatisfactory performance
for a semester and is su ciently warned that a succeeding
unsatisfactory performance shall warrant his separation from the
service. Such notice shall be given not later than 30 days from the
end of the semester and shall contain su cient information which
shall enable the employee to prepare an explanation. 8
The Court of Appeals, in nding that the respondent's separation "was made with
utter lack of due process," held:
Dropping from the rolls means separation from the service. Such
separation is made summarily, without any case, investigation or due process.
For this reason we submit that the rule should be strictly construed in order that it
may not be used as a tool for harassment, vindictiveness or removal of any
employee who happens to fall out of grace of his supervisor or superior officers.
Thus, before the dropping from the rolls, it is imperative that the following
requisites should be complied with:
a) the employee concerned should be informed of his unsatisfactory

performance for a semester;
b) such notice shall be in writing;

c) the same must be made within thirty (30) days from the end of the
semester when the first unsatisfactory rating was given;
d) the notice should contain a warning that a succeeding

unsatisfactory performance shall warrant his separation from the
service; and
e) the notice shall contain sufficient information to enable the

employee to prepare an explanation.
In the instant case, the notice required by law was not given to the
petitioner. He was not given notice after the rating of unsatisfactory during the
rst semester of 1997 within thirty (30) days therefrom. The alleged verbal notice,
to our mind, is not su cient for the reason that it is easily concocted. And when
there are con icting allegations as to the alleged verbal notice, such that there is
a clash between the word of a superior o cer and that of a subordinate, the latter
is usually at a disadvantage. Hence, a verbal notice cannot be considered as
substantial compliance with the Civil Service Rules.
Moreover, the notice should contain su cient information to enable the

employee to prepare an explanation. This is the opportunity given the employee to
explain why his e ciency had fallen — if such were the fact — and explain
circumstances why his performance has deteriorated, so to speak, which might be
considered by the rater. In any case, he is given the opportunity to improve, which
is why the notice is given within thirty (30) days from the end of the rating period,
so that he has su cient time to do better, make amends, and enhance his
performance at the succeeding period.
This was not done in the case at bar. On the contrary, the rst
unsatisfactory rating was obviously withheld from the petitioner. According to the
respondent, the written notice was made on January 29, 1998, which is way
beyond the 30-day period required by the rules. AECacS
What is more, the records disclose that:
1. In previous years, the petitioner was rated every semester, i.e., from
January to June, and from July to December.
2. After the rst rating of "unsatisfactory" in the rst semester

(January-June) of 1997, he was given the next rating of unsatisfactory at the
middle of the second semester, i.e., for the period from July to October 1997.
There is no explanation for the shift from semester to quarter, and neither is there
any showing that all the other employees were rated quarterly thenceforward. As
a matter of fact, after the petitioner's transfer to another unit, he was again rated
for the semester January to June 1998, where he received a "very satisfactory
rating".
3. In previous years, the petitioner was rated as a supervisory

employee. Without any apparent change of position title nor of his duties and
responsibilities, he was suddenly rated as a non-supervisory employee, which has
different rating factors from those of supervisors. The shift to such category
should have been explained to him, if the same were based on reasonable
grounds. However, no explanation was made, thus giving the impression that the
change was made arbitrarily.
4. The NAPOCOR Performance Appraisal System (PAS) as approved

by the Civil Service Commission consists of three (3) main parts, and each part
has a corresponding percentage equivalent, to wit:
Part I Corporate Performance - 20%
(rated by Management)
Part II Functional Performance - 20%
(rated by the Oversight Committee)
Part III Individual Tasks/Assignments - 30%
(rated by Immediate Supervisor)
As shown on the rating form itself, these are rated by different raters. In
addition to the above, there is a Part IV for evaluation of Behavioral Dimensions,
which is assigned 30%, to make a total perfect score of 100%. In the two
performance ratings under question, only Parts III and IV were rated by Gen. Jorge
Lagera, the petitioner's immediate supervisor. Thus, as pointed out by the
petitioner, the evaluation was incomplete. It is therefore impossible for him to get
a fair rating without the other parts being accomplished.
Moreover, we observe that the petitioner had been getting "very satisfactory
ratings for 8 1/2 years before the controversial ratings were made solely by Gen.
Lagera. All previous performance ratings appear to have complete evaluation on
all factors, and signed in acknowledgement by the ratee himself.
It also appears that when the petitioner brought to the Grievance
Committee the matter of his unsatisfactory ratings, the said committee
recommended a review thereof to take into account the dimension of the quantity
in the performance standard. However, Gen. Lagera blocked such review, claiming
that it was not necessary because he had already considered the same, albeit
minimally. This is an indication that Gen. Lagera really wanted to take it upon
himself to solely give the rating to the petitioner, in violation of the approved PAS
of NAPOCOR. Thus, the Grievance Committee had no recourse but to elevate it to
the President [of NPC] for review. However, the latter, instead of making a fair and
impartial review, just adopted the recommendation of Gen. Lagera.
All these are indications that there was a pattern to dislodge the petitioner
from NAPOCOR's rolls. This started when he exposed certain anomalous
transactions in the purchase of helicopter parts and materials. There are allegedly
charges and counter charges between the petitioner and other pilots, which the
respondent never categorically denied. Likewise not denied was the alleged
efforts exerted by Gen. Lagera for the petitioner to withdraw his charges. Thus, at
a time when he was supposed to testify in court at the hearing of a case against
the other pilots, Gen. Lagera suddenly sent him to y the NAPOCOR President
albeit another pilot was assigned to such mission. Although his failure to y on
such ight was fully explained to Gen. Lagera, this was obviously made the basis
of the unsatisfactory rating given to the petitioner. These circumstances which
were fully narrated by the petitioner had never been refuted by the respondent. CSTDIE
It is also worthy to note that when the petitioner was transferred to the
Engineering and Maintenance Division, after the two unsatisfactory ratings in
1997, he was again given a Very Satisfactory rating for January to June 1998.
Hence, at the time he was noti ed of his being dropped from the rolls, on August
28, 1998, his immediate past rating was "very satisfactory" and not
"unsatisfactory".
In view of all the foregoing, we believe and so hold that the Civil Service
Commission was in error when it upheld the arbitrary rating of unsatisfactory
upon the petitioner, as to summarily cause his separation from the service.
Indeed, the petitioner's separation was made with utter lack of due process.
The petitioner should not be denied his right to his job for failure of the
respondent to comply with the requirements provided by law. As the Supreme
Court constantly rules, it is bad enough to lose a job; it is worse if it is taken away
by government itself without due process of law. Our Constitution abhors such
arbitrariness. 9
After a careful review of the records, we nd no shred of reason to disturb the

findings of the Court of Appeals.
The dropping of respondent from
the rolls is a violation of procedural
due process.
Petitioner claims that, contrary to the ndings of the Court of Appeals, its
compliance with Memorandum Circular No. 12 is full and not merely substantial. However,
the evidence submitted by petitioner to prove this allegation, namely the a davit of Gen.
Lagera, only con rms the ndings of the Court of Appeals that if there really was a notice
to respondent, it had been oral. 1 0 This is in clear contravention of the requirement in
Memorandum Circular No. 12. As held by the Court of Appeals, dropping from the rolls is
made summarily, making it imperative to strictly observe the circular to prevent its being
used for harassment or vindictiveness.
Not even one of the requisites mentioned by the Court of Appeals had been
complied with. It is an uncontested fact that respondent was never notified in writing of his
Unsatisfactory rating within 30 days from the end of the semester when the Unsatisfactory
rating was given. It is likewise uncontested that respondent was never warned in writing
that a succeeding Unsatisfactory performance shall warrant his separation from the
service. Even the allegation of the oral notice itself (that petitioner claims and respondent
categorically denies) is clearly an afterthought, having been utilized for the rst time in the
Motion for Reconsideration of the assailed Court of Appeals decision and was never used
as an argument in the administrative proceedings. The proof of such notice, a self-serving
a davit of the very individual who unilaterally gave the apparently groundless rating,
deserves scant consideration.
Petitioner also refutes the nding that respondent was denied due process by
claiming that the action to drop an employee from the rolls is not disciplinary in character.
Petitioner claims that such dropping from the rolls does not carry with it forfeiture of Civil
Service eligibility and other bene ts arising from employment, nor does it involve a
disquali cation from holding a public o ce or re-entry in the service. This Court is
appalled by such an argument. One's employment, profession, trade or calling is a property
right, the wrongful interference therewith is an actionable wrong. 1 1 Taking this away
without due process is a violation of a constitutional human right, and the consolation of
not being disqualified for later employment does not erase nor mitigate such infraction.
The dropping of respondent from
the rolls is a violation of substantive
due process.
Petitioner claims that, contrary to the ndings of the Court of Appeals, the ratings
given to respondent resulting to his dropping from the rolls were o cial and regular acts
by the NPC based on his performance during the rating periods and by no means a
premeditated design to drop respondent from the rolls. According to petitioner,
respondent failed to prove ill motive on the part of Gen. Lagera as to the "unsatisfactory"
rating given to him. 1 2
Evidence, however, shows otherwise. Petitioner never denied that respondent's
unsatisfactory rating was due to respondent's testimony in court concerning the graft
charges against NPC employees. On the day respondent was supposed to testify in court
under pain of contempt, Gen. Lagera suddenly sent him to y the NPC President despite
the fact that another pilot was assigned to such mission. Instead of denying the deliberate
attempt to thwart respondent's testimony, petitioner, in its memorandum to this Court,
arrogantly insisted that respondent's failure to perform his duty for the highest o cer of
the corporation does not deserve the "Fair" or "Unsatisfactory" rating but outright
dismissal from service. 1 3
Gen. Lagera's ill motive is further proved by the fact that respondent was kept in the
dark as to the status of his employment even though the same had already been
terminated two months earlier. It appears that the sad news was relayed to respondent
only on his natal day affair. We can see no reason for the two months delay other than the
devastation Gen. Lagera expected to cause by imparting the shocking news on
respondent's birth anniversary, during a celebration and in front of other people. IAcDET
Petitioner claims that it was non-sequitur for the Court of Appeals to conclude that,
just because respondent received a "Very Satisfactory" rating for 8 1/2 years, he could not
possibly receive a lower rating thereafter. 1 4 The Court of Appeals never said that. The
Court of Appeals was revealing petitioner's ill-disguised attempt to illegally dismiss
respondent by means of unsatisfactory ratings. As observed by the Court of Appeals, the
"Very Satisfactory" performance ratings for those 8 1/2 years have complete evaluation on
all factors, and signed in acknowledgement by all three raters. This is as opposed to the
"Unsatisfactory" ratings made solely by Gen. Lagera, who is only one of the raters. The
ratings, furthermore, had been made on a per semester basis (January to June and July to
December) for all those 8 1/2 years, while the last "Unsatisfactory" rating was made for a
four-month period (July to October, 1997), an innovation applied only to respondent
among the hundreds of employees of petitioner. As a matter of fact, respondent was again
rated "Very Satisfactory" and on a per semester basis (January to June 1998) after he was
transferred to another unit.
On this note, petitioner claims that the "Very Satisfactory" ratings by the Engineering
and Training Division (ETD) should not have been considered in doubting the ratings given
by Gen. Lagera. 1 5 According to petitioner, the job respondent handled at the ETD is
different from the job of a pilot, and that "respondent was dropped from the rolls because
of unsatisfactory performance as a pilot and not for being a researcher or ordinary
employee in ETD." 1 6 Petitioner mockingly claims that respondent may have a talent for
research but not for flying. 1 7
We disagree. Even if we disregard respondent's believable claim that his ETD
activities require the skill and technical know-how of a pilot, the "Very Satisfactory" rating in
the ETD shows the credibility of respondent in all aspects of the work he rendered, and
that the only reason for the "Unsatisfactory" ratings is respondent's reporting of the
alleged anomalies in the NPC. It is uncontested that, sometime in May 1997, respondent
brought to the attention of the Chairman and the President of the NPC several alleged
anomalies in the Aviation Group. In November 1997, the Philippine Daily Inquirer reported
the alleged anomalous purchases in a three-part series of an investigative Special Report.
Complaints had been led by respondent, and complaints had been led against him. The
ratings for the second half of 1996 (where respondent was rated 76% which translates to
"Fair") were released in the second half of 1997, followed by the ratings for January to June
1997 and July to October 1997. Needing two consecutive "Unsatisfactory" ratings to
dismiss respondent, and seeing that the second "Unsatisfactory" rating was made for a
period of July to October 1997, petitioner argued that the "Fair" rating is equivalent to
"Unsatisfactory." This is a wild supposition which does not deserve merit at all.
As further found by the Court of Appeals, when respondent brought to the Grievance
Committee the matter of his unsatisfactory ratings, the Grievance Committee
recommended a review thereof to take into account respondent's quantity of ying hours.
Pilots have traditionally been rated by the number of ying hours spent in their career, and
respondent had more than double the ying hours of the two other pilots of the Aviation
Group combined. However, Gen. Lagera blocked such review, claiming that he had already
considered the same, albeit minimally. This is a clear indication that Gen. Lagera really
wanted to take it upon himself to solely give the "Unsatisfactory" ratings to respondent, in
violation of the approved Performance Appraisal System (PAS) of the NPC.
WHEREFORE, the petition is DENIED. The Decision dated 5 November 2001 and the
Resolution dated 12 April 2002 of the Court of Appeals are hereby AFFIRMED. Costs
against petitioner. HIESTA
SO ORDERED.
Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Callejo, Sr. JJ., concur.
Footnotes
1. Penned by Associate Justice Delilah Vidallon-Magtolis with Associate Justices Candido
V. Rivera and Juan Q. Enriquez, Jr., concurring.
2. Rollo, p. 60.
3. Id., p. 58.
4. In some documents and portions of the Court of Appeals decision, the abbreviation
"NAPOCOR" was used.
5. Rollo, p. 71.
6. Id., p. 19.
7. Id., p. 28.
8. CSC Memorandum Circular No. 12, series of 1994.
9. Rollo, pp. 54-58.
10. Id., p. 79.
11. Crespo v. Provincial Board of Nueva Ecija, G.R. No. L-33237, 15 April 1988, 160 SCRA
66, 68.
12. Petitioner's Memorandum, rollo, pp. 713-714.

13. Id., p. 708.
14. Id., p. 716.
15. Id., p. 725.
16. Id., p. 726.
17. Id., p. 726.

SECOND DIVISION
[G.R. No. 90786. September 27, 1991.]
ESPERO SANTOS SALAW , petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION, ASSOCIATED BANK AND/OR JOSE R.
TENGCO, Chairman of the Board, ROLLIE TUAZON, Manager ,
respondents.
Nicolas R. Ruiz, II for petitioner.

Soluta, Leonidas, Marifosque, Javier & Aguila Law O ces for private
respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;

TWO-FOLD REQUIREMENTS FOR LAWFUL DISMISSAL OF EMPLOYEES. — Under the
Labor Code, as amended, the requirements for the lawful dismissal of an employee by
his employer are two-fold: the substantive and the procedural. Not only must the
dismissal be for a valid or authorized cause as provided by law (Articles 279, 281, 282-
284, New Labor Code), but the rudimentary requirements of due process — notice and
hearing — must also be observed before an employee may be dismissed. One does not
su ce; without their concurrence, the termination would, in the eyes of the law, be
illegal.
2. ID.; ID.; ID.; REQUIREMENTS OF NOTICE AND HEARING; PURPOSE. — The
inviolability of notice and hearing for a valid dismissal of an employee can not be over-
emphasized. Those twin requirements constitute essential elements of due process in
cases of employee dismissal. The requirement of notice is intended to inform the
employee concerned of the employer's intent to dismiss him and the reason for the
proposed dismissal; on the other hand, the requirement of hearing affords the
employee the opportunity to answer his employer's charges against him and
accordingly to defend himself therefrom before dismissal is effected. Neither one of
these two requirements can be dispensed with without running afoul of the due
process requirement of the Constitution. (Century Textile Mills, et al. v. NLRC, et al., No.
77859, May 25, 1988, 161 SCRA 528)
3. ID.; ID.; RIGHTS OF EMPLOYEE ILLEGALLY DISMISSED. — We reiterate the
rule laid down in Santos v. NLRC (G.R. No. 76721, September 21, 1987, 154 SCRA 166)
that "the normal consequences of a nding that an employee has been illegally
dismissed are, rstly, that the employee becomes entitled to reinstatement to his
former position without loss of seniority rights and, secondly, the payment of
backwages corresponding to the period from his illegal dismissal up to actual
reinstatement."
4. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; MUST BE
OBSERVED IN THE DISPOSITION OF LABOR CASES. — The investigation of petitioner
Salaw by the respondent Bank's investigating committee violated his constitutional
right to due process, in as much as he was not given a chance to defend himself, as
provided in Rule XIV, Book V of the Implementing Rules and Regulations of the Labor
Code governing the dismissal of employees. Section 5 of the said Rule requires that
"the employer shall afford the worker ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desires." Here petitioner was
perfunctorily denied the assistance of counsel during the investigation to be conducted
by the PDIC. No reasons were proffered which vitiated the denial with irregularity and
unfairness. Signi cantly, the dismissal of the petitioner from his employment was
characterized by undue haste. The law is clear that even in the disposition of labor
cases, due process must not be subordinated to expediency or dispatch. Otherwise,
the dismissal of the employee will be tainted with illegality.
5. ID.; ID.; RIGHT TO COUNSEL OF ANY PERSON UNDER INVESTIGATION;
MUST BE OBSERVED EVEN BEFORE ADMINISTRATIVE AND QUASI-JUDICIAL BODIES.
— It is true that administrative and quasi-judicial bodies are not bound by the technical
rule of procedure in the adjudication of cases. However, the right to counsel, a very
basic requirement of substantive due process, has to be observed. Indeed, the rights to
counsel and to due process of law are two of the fundamental rights guaranteed by the
1987 Constitution to any person under investigation, be the proceeding administrative,
civil, or criminal. Thus, Section 12(1), Article III thereof speci cally provides: "Any
person under investigation for the commission of an offense shall have the right to . . .
have competent and independent counsel preferably of his own choice. If the person
cannot afford the service of counsel, he must be provided with one.
6. ID.; ID.; ID.; ID.; EFFECT IN CASE OF VIOLATION THEREOF. — These rights
cannot be waived except in writing and in the presence of counsel." To underscore the
inviolability of this provision, the third paragraph of the same section explicitly states
that, "any confession or admission obtained in violation of this or the preceding section
shall be inadmissible in evidence against him."
DECISION
SARMIENTO , J : p
This is a petition for review on certiorari of the Decision 1 rendered in NLRC Case
No. 4-1272-85 dated July 26, 1989, a rming the dismissal of the petitioner by the
respondent bank, and reversing thereby the Decision 2 of Labor Arbiter Benigno C.
Villarente, Jr. of March 29, 1988 which declared the petitioner's dismissal as illegal and
ordered his reinstatement with backwages and benefits.
The records show that the petitioner, Espero Santos Salaw, was employed by the
private respondents in September 1967 as a credit investigator-appraiser. His duties
included inspecting, investigating, appraising, and identifying the company's foreclosed
assets; giving valuation to its real properties, and verifying the genuineness and
encumbrances of the titles of properties mortgaged to the respondents.
Or November 27, 1984, the Criminal Investigation Service (CIS) of the Philippine
Constabulary, National Capital Region, extracted from the petitioner — without the
assistance of counsel — a Sworn Statement 3 which made it appear that the petitioner,
in cahoots with a co-employee, Reynaldo Madrigal, a supervisor in charge of the
acquired assets of respondent Associated Bank, sold twenty sewing machines and
electric generators which had been foreclosed by the respondent bank from Worldwide
Garment and L.P. Money Garment, for P60,000.00, and divided the proceeds thereof in
equal shares of P30,000.00 between the two of them. Cdpr
On December 5, 1984, the petitioner was requested by private respondent Rollie

Tuazon, the bank manager, to appear before the bank's Personnel Discipline and
Investigation Committee (PDIC) which would be meeting the following day, December
6, 1984, at 9:00 a.m., in connection with the Worldwide case.
When petitioner Salaw signi ed his readiness to appear before the PDIC, private
respondent Rollie Tuazon sent him a letter 4 stating —
Your request to appear before the Personnel Discipline and Investigation
Committee (PDIC) with regard to the Worldwide Case has been accepted.
Thus, you are requested to come on Thursday, February 28, 1985 at 11:00 at the
Board Room, 10th Floor of the Madrigal Building, Ayala, without counsel or
representative. (Emphasis supplied).
On April 1, 1985, the petitioner was terminated from his employment effective
March 27, 1985, for alleged serious misconduct or willful disobedience and fraud or
willful breach of the trust reposed on him by the private respondents.
Subsequently, the petitioner filed with the NLRC on April 17, 1985, a complaint for
illegal dismissal against respondent Bank Jose R. Tengco, and Rollie Tuazon. This case
was docketed as Case No. NCR-4-1272-85. He likewise submitted an a davit
recanting his Sworn Statement before the CIS (Annex "A") mentioned earlier. LibLex
After the proper proceedings, on March 29, 1988, Labor Arbiter Benigno C.
Villarente, Jr., rendered a Decision, 5 the decretal portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring the
dismissal of complainant illegal and ordering respondents to reinstate
complainant to his former or equivalent position without loss of seniority rights
and to pay him his backwages and bene ts due an employee of respondent Bank
from the time of illegal dismissal until actual reinstatement.
The private respondents appealed the labor arbiter's decision to the National
Labor Relations Commission (NLRC) which on July 26, 1989, rendered a Decision 6
reversing that of the labor arbiter and dismissing the case for lack of merit.
The petitioner led a Motion for Reconsideration of the NLRC decision, but this
was denied in a Resolution 7 dated October 31, 1989. Hence, this recourse.
The only issue for our resolution is whether or not the dismissal of the petitioner
by the private respondents was legally justified.
Under the Labor Code, as amended, the requirements for the lawful dismissal of
an employee by his employer are two-fold: the substantive and the procedural. Not only
must the dismissal be for a valid or authorized cause as provided by law (Articles 279,
281, 282-284, New Labor Code), but the rudimentary requirements of due process —
notice and hearing — must also be observed before an employee may be dismissed.
One does not su ce; without their concurrence, the termination would, in the eyes of
the law, be illegal. 8
The inviolability of notice and hearing for a valid dismissal of an employee can
not be over-emphasized. Those twin requirements constitute essential elements of due
process in cases of employee dismissal. The requirement of notice is intended to
inform the employee concerned of the employer's intent to dismiss him and the reason
for the proposed dismissal; on the other hand, the requirement of hearing affords the
employee the opportunity to answer his employer's charges against him and
accordingly to defend himself therefrom before dismissal is effected. Neither one of
these two requirements can be dispensed with without running afoul of the due
process requirement of the Constitution. 9
We agree with the labor arbiter that the petitioner was terminated without the
benefit of due process of law. His dismissal was, therefore, illegal. Thus,
Respondents' initial act in convening their Personnel Discipline and Investigation
Committee (PDIC) to investigate complainant (after the CIS experience) would
have complied with the demands of due process had complainant been given the
opportunity to present his own defense and confront the witnesses, if any, and
examine the evidence against him. But as the records clearly show, complainant
was denied that constitutional right when he subsequent request to refute the
allegations against him was granted and a hearing was set "without counsel or
representative." (See respondent Tuazon's letter to respondent dated February 25,
1985). 1 0
The investigation of petitioner Salaw by the respondent Bank's investigating

committee violated his constitutional right to due process, in as much as he was not
given a chance to defend himself, as provided in Rule XIV, Book V of the Implementing
Rules and Regulations of the Labor Code governing the dismissal of employees.
Section 5 of the said Rule requires that "the employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his representative,
if he so desires." 1 1 (Emphasis supplied.) Here petitioner was perfunctorily denied the
assistance of counsel during the investigation to be conducted by the PDIC. No
reasons were proferred which vitiated the denial with irregularity and unfairness. Cdpr
It is true that administrative and quasi-judicial bodies are not bound by the
technical rules of procedure in the adjudication of cases. However, the right to counsel,
a very basic requirement of substantive due process, has to be observed. Indeed, the
rights to counsel and to due process of law are two of the fundamental rights
guaranteed by the 1987 Constitution to any person under investigation, be the
proceeding administrative, civil, or criminal. Thus, Section 12(1), Article III thereof
speci cally provides: "Any person under investigation for the commission of an offense
shall have the right to . . . have competent and independent counsel preferably of his
own choice. If the person cannot afford the service of counsel, he must be provided
with one. These rights cannot be waived except in writing and in the presence of
counsel." 1 2 To underscore the inviolability of this provision, the third paragraph of the
same section explicitly states that, "any confession or admission obtained in violation
of this or the preceding section shall be inadmissible in evidence against him." 1 3
As aptly observed by the labor arbiter, the respondents premised their action in
dismissing the complainant on his supposed admission of the offense imputed to him
by the Criminal Investigation Service (CIS) in its interrogation in November, 1984. The
said admission was carried in a three-page Sworn Statement signed by the
complainant. Aside from this Statement, no other evidence was presented by the
respondents to establish the culpability of the complainant in the fraudulent sale of the
respondents' foreclosed properties. Even the minutes of the proceeding taken during
the investigation conducted by the respondents were not presented . . . This is a glaring
denial of due process. We nd it worth reiterating the cardinal primary rights which
must be respected even in proceedings of an administrative character as enunciated by
this Court in the classic landmark decision of Justice Laurel in Ang Tibay, 1 4 to wit:
(1) The rst of these rights is the right to a hearing, which includes the right
of the party interested or affected to present his own case and submit evidence in
support thereof. In the language of Chief Justice Hughes, in Morgan v. U.S., 304
U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the citizen
shall be protected by the rudimentary requirements of fair play."
(2) Not only must the party be given an opportunity to present his case and to
adduce evidence tending to establish the rights which he asserts but the tribunal
must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S.
298 U.S. 468, 56 S. Ct. 906, 80 Law. ed. 1288). In the language of this Court in
Edwards vs. McCoy, 22 Phil. 598, "the right to adduce evidence, without the
corresponding duty on the part of the board to consider it, is vain. Such right is
conspicuously futile if the person or persons to whom the evidence is presented
thrust it aside without notice or consideration."
(3) "While the duty to deliberate does not impose the obligation to decide
right, it does imply a necessity which cannot be disregarded, namely, that of
having something to support its decision. A decision with absolutely nothing to
support it is a nullity." (Edward vs. McCoy, supra.) . . .
(4) Not only must there be some evidence to support a nding or conclusion
(City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937,
XXXVI O.G. 1335), but the evidence must be "substantial." (Washington, Virginia &
Maryland Coach Co. v. National Labor Relations Board, 301 U.S. 142, 147, 57 S.
Ct. 648, 650, 81 Law. ed. 965.) "Substantial evidence is more than a mere scintilla.
It means such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion." (Appalachian Electric Power v. National Labor Relations
Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson
Products, 6 Cir., 97 F. 2d 13,15 Ballston-Stillwater Knitting Co. v. National Labor
Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . .
(5) The decision must be rendered on the evidence presented at the hearing,
or at least contained in the record and disclosed to the parties affected. (Interstate
Commence Commission vs. L. & N.R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed.
431) . . .
(6) The Court of Industrial Relations (now the National Labor Relations
Commission) or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply
accept the views of a subordinate in arriving at a decision . . .
(7) The Court of Industrial Relations (now NLRC) should, in all controversial
questions, render its decision in such a manner that the parties to the proceeding
can know the various issues involved, and the reasons for the decisions rendered.
The performance of this duty is inseparable from the authority conferred upon it.
xxx xxx xxx
Considering further that the admission by the petitioner, which was extracted
from him by the Criminal Investigation Service of the Philippine Constabulary (National
Capital Region) without the assistance of counsel and which was made as the sole
basis for his dismissal, can not be admitted in evidence against him, then, the nding of
guilt of the PDIC, which was a rmed by the public respondent NLRC; has no more leg
to stand on. A decision with absolutely nothing to support it is a nullity. LLpr
Signi cantly, the dismissal of the petitioner from his employment was
characterized by undue haste. The law is clear that even in the disposition of labor
cases, due process must not be subordinated to expediency or dispatch. Otherwise,
the dismissal of the employee will be tainted with illegality. On this point, we have ruled
consistently. 1 5
We reiterate the rule laid down in Santos v. NLRC 1 6 that "the normal
consequences of a nding that an employee has been illegally dismissed are, rstly,
that the employee becomes entitled to reinstatement to his former position without
loss of seniority rights and, secondly, the payment of backwages corresponding to the
period from his illegal dismissal up to actual reinstatement." The petitioner is entitled to
no less.
WHEREFORE, premises considered, judgment is hereby rendered SETTING ASIDE
the appealed decision of the NLRC and REINSTATING the decision of the labor arbiter.
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Regalado, JJ., concur.
Footnotes
1. "Espero Santos Salaw v. Associated Bank, et al.," NLRC NCR 4-1272-85, July 26, 1989,
Rosario G. Encarnacion, Commissioner; Rollo, 68.
2. "Salaw v. Associated Bank et al.," NLRC NCR 4-1275-85, March 29, 1988, Benigno C.
Villarente, Jr., Labor Arbiter; Rollo, 46.
3. Annex "A", Rollo, 30.
4. Annex "E", Rollo, 38.
5. "Salaw v. Associated Bank, et al.," supra, note 2, 1.
6. "Salaw v. Associated Bank, et al.," supra, note 1, 1.

7. Annex "P", Rollo, 87.
8. San Miguel Corporation v. NLRC, G.R. No. 78277, May 12, 1989, 173 SCRA 314.
9. Century Textile Mills, et al., v. NLRC, et al., No. 77859, May 25, 1988, 161 SCRA 528.
10. "Salaw v. Associated Bark, et al.," supra, note 5, 3.
11. The Labor Code of the Phils. and its implementing rules and regulations, 1990 ed.
12. Section 12(1), 1987 Constitution.
13. Section 12(3), 1987 Constitution.
14. Ang Tibay v. Court of Industrial Relations, 69 Phil. 635.
15. See San Miguel Corporation v. NLRC, supra., note 8, 4; Far East Bank and Trust Co., v.
IAC, G.R. Nos. 73131-32, August 31, 1988, 165 SCRA 218; National Service Corporation v.
NLRC, G.R. No. 69870, November 29, 1988, 168 SCRA 122, San Miguel v. NLRC, No.
78993, June 22, 1988, 612 SCRA 441.
16. G.R. No. 76721, September 21, 1987, 154 SCRA 166.

EN BANC
[G.R. No. 129952. June 16, 1998.]
GOVERNOR JOSIE CASTILLO-CO , petitioner, vs . HONORABLE ROBERT

BARBERS, DEPUTY OMBUDSMAN JESUS GUERRERO, EMILIO
GONZALES, III and CONGRESSMAN JUNIE CUA , respondents.
Vicente D. Millora for petitioner.

The Solicitor General for respondents.
SYNOPSIS
Congressman Junie Cua, in the course of the congressional investigation,

discovered irregularities in the purchase of heavy equipment by petitioner and the
Provincial Engineer constituting overpricing, purchase of reconditioned and not brand new
equipments, absence of public bidding and inspection, and advance payment prior to
delivery. He led a complaint against the two before the O ce of the Ombudsman for
violation of Sections 3(e) and 3 (g) of the Anti-Graft and Corrupt Practices Act, as
amended. Petitioner was placed under preventive suspension for 6 months a week after
the ling of the complaint. The order was approved by the Deputy Ombudsman for Luzon.
Their motions for reconsideration having been denied, petitioner led the present recourse
contesting the authority of the Deputy Ombudsman to sign the order of preventive
suspension, the period of suspension was excessive, and denial of due process.
The Supreme Court held that R.A. 7975 (An Act to Strengthen the Functional and
Standard Organization of the Sandiganbayan, as amended) does not suggest that only the
Ombudsman and not his deputy may order the preventive suspension of o cials
occupying positions classi ed as grade 27 or above; that the Ombudsman and his deputy
may order preventive suspension pursuant to the provisions of Section 24 of R.A. 6770
and Section 9, Rule 111 of the Rules of Procedure of the O ce of the Ombudsman; that
preventive suspension, being merely a preliminary step in an administrative investigation,
may be decreed even before the charges are heard; and that the six-month suspension of
petitioner is within the limits prescribed by Section 24 of R.A. 6770.
SYLLABUS
1. ADMINISTRATIVE LAW; PUBLIC OFFICERS; PREVENTIVE SUSPENSION; A PUBLIC

OFFICER WITH A SALARY GRADE OF 27 OR ABOVE MAY BE SUSPENDED BY THE
OMBUDSMAN OR HIS DEPUTY. — Under the provisions of Section 24 of Rep. Act No. 6770
and Section 9, Rule III of the Rules of Procedure of the o ce of the Ombudsman, there
cannot be any doubt that the Ombudsman or his Deputy may preventively suspend an
o cer or employee, where appropriate, as indicated by the word "or" between the
"Ombudsman" and "his Deputy." The word "or" is a disjunctive term signifying
disassociation and independence of one thing from each of the other things enumerated.
The law does not require that only the Ombudsman himself may sign the order of
suspension. aDSHIC

2. ID.; ID.; ID.; NOT IN THE NATURE OF PENALTY, HENCE, CAN BE DECREED EVEN
BEFORE THE CHARGES ARE HEARD. — A preventive suspension, however, can be decreed
on an o cial under investigation after charges are brought and even before the charges
are heard since the same is not in the nature of a penalty, but merely a preliminary step in
an administrative investigation.
3. ID.; ID.; ID.; IMMEDIATE ISSUANCE THEREOF DOES NOT CONSTITUTE GRAVE
ABUSE OF DISCRETION. — The fact that the said order was issued seven days after the
complaint was led did not constitute grave abuse of discretion. The immediate issuance
of such order is required in order to prevent the subject of the suspension from
committing further irregularities. Such prompt action, moreover, is in consonance with
Section 15 of R.A. 6770.
4. REMEDIAL LAW; EVIDENCE; PRESUMPTIONS; PUBLIC OFFICIALS ENJOY THE
PRESUMPTION OF REGULARITY OF PERFORMANCE OF DUTIES. — We do not give much
credence to petitioner's suggestions of a malicious conspiracy between the Deputy
Ombudsman Guerrero and Congressman Cua, reputedly petitioner's political adversary, to
harass her. The Deputy Ombudsman and the Congressman, being public o cials, enjoy the
presumption of regularity of performance of duties. Such presumption can be overcome
only by strong and convincing evidence. No such evidence exists in this case.
5. ADMINISTRATIVE LAW; PUBLIC OFFICERS; PREVENTIVE SUSPENSION;
CONDITIONS; MET IN CASE AT BAR. — Contrary to petitioner's contention, the conditions
required to sustain her preventive suspension have been met in this case. These conditions
are: (1) That the evidence of guilt is strong; and (2) That any of the following
circumstances are present: (a) the charge against such o cer or employee involves
dishonesty, oppression, or grave misconduct or neglect in the performance of duty; (b) the
charges would warrant removal from the service; or (c) the respondent's continued stay in
office may prejudice the case filed against him.
6. ID.; ID.; ID.; DETERMINATION WHETHER THE EVIDENCE OF GUILT IS STRONG
RESTS UPON THE DETERMINATION OF THE OMBUDSMAN. — The rst requisite rests
upon the determination of the disciplining authority, the O ce of the Ombudsman in this
case: As held in Buenaseda v. Flavier , however, whether the evidence of guilt is strong is
left to the determination of the Ombudsman by taking into account the evidence before
him. A preliminary hearing as in bail petitions in cases involving capital offenses is not
required. In rejecting a similar argument as that made by petitioner in this case, this Court
said in that case: The import of the Nera decision is that the disciplining authority is given
the discretion to decide when the evidence of guilt is strong. This fact is bolstered by
Section 24 of R.A. No. 6770, which expressly left such determination of guilt to the
'judgment' of the Ombudsman on the basis of the administrative complaint . . . We nd no
reason to disturb such determination in this case.
7. ID.; ID.; ID.; EVIDENCE NEED NOT BE ADDUCED TO PROVE THAT PETITIONER
MAY INFLUENCE POSSIBLE WITNESSES OR MAY TAMPER WITH PUBLIC RECORDS. —
Petitioner's high position likewise gives her access to public records and the clout to
in uence possible witnesses. Her continued stay in o ce may thus prejudice the
prosecution of the case led against her. It is immaterial that, as petitioner contends, no
evidence has been adduced to prove that petitioner may in uence possible witnesses or
may tamper with the public records. It is sufficient that there exists such a possibility.
8. ID.; ID.; ID.; SUSPENSION FOR SIX (6) MONTHS, WITHIN THE PRESCRIBED
LIMITS. — Finally, the duration of petitioner's suspension is not excessive. Petitioner's
suspension for six (6) months is within the limits prescribed by Section 24 of R.A. 6770.
The length of the period of suspension within such limits, like the evaluation of the strength
of the evidence, lies in the discretion of the Ombudsman.
RESOLUTION
KAPUNAN , J : p
Petitioner Governor Josie Castillo-Co of Quirino, through this special civil action for
certiorari and prohibition, with prayer for temporary restraining order/writ of preliminary
injunction, seeks to nullify the Order of the Deputy Ombudsman directing her preventive
suspension. cdtai
On 27 June 1997, Quirino Congressman Junie Cua led a complaint before the
O ce of the Ombudsman against Governor Castillo-Co and Provincial Engineer Virgilio
Ringor. Congressman Cua alleged that in the course of its investigation in aid of legislation,
the House of Representatives Committee on Good Government chaired by him uncovered
irregularities in the purchase of heavy equipment by the Governor and the Provincial
Engineer. Congressman Cua charged that the equipment purchased was "reconditioned"
instead of "brand new" as required by resolutions of the province's Sanggunian authorizing
such purchase. Other irregularities claimed to have been committed included overpricing,
lack of public bidding, lack of inspection, advance payment prior to delivery in violation of
Section 338 of the Local Government Code, and an attempt to cover up such irregularities.
Congressman Cua thus accused Governor Castillo-Co and Provincial Engineer Ringor of
violating Sections 3(e) and 3(g) of the Anti-Graft and Corrupt Practices Act, 1 as amended,
and Articles 213 2 and 217 3 of the Revised Penal Code.
In an Order 4 dated 4 July 1997, that is, a week after the complaint was led,
Governor Castillo-Co and Provincial Engineer Ringor were placed under preventive
suspension for a period of six (6) months. Said order was signed by Emilio A. Gonzalez III,
Director, and approved by Jesus Guerrero, Deputy Ombudsman for Luzon.
Governor Castillo-Co and Provincial Engineer Ringor thereafter led separate
motions for reconsideration. Both motions were denied in a "Joint Order" 5 dated 1 August
1997 signed by Director Gonzales and approved by Deputy Ombudsman Guerrero.
On 12 August 1997, Governor Castillo-Co led the present petition. Petitioner
imputes grave abuse of discretion upon the Deputy Ombudsman for issuing the order of
preventive suspension against her. As may be deduced from the petition, the grounds
invoked in support thereof are:
(1) The Deputy Ombudsman is not authorized to sign the order of preventive
suspension;
(2) The issuance of such order was hasty and selective, and deprived
petitioner of due process; and
(3) The conditions required to sustain petitioner's preventive suspension
have not been met and that, at any rate, the duration thereof is
excessive.

In a Resolution dated 26 August 1997, 6 this Court resolved, among others, to grant
petitioner's prayer for a temporary restraining order.
The petition has no merit.
I
Petitioner claims that under Republic Act No. 7975, 7 only the Ombudsman has the
authority to sign the order placing o cials with a 27 salary grade or above, like petitioner-
governor, under preventive suspension. 8 In this case, the suspension order was neither
signed nor approved by Ombudsman Aniano Desierto. Rather, said order was signed by
Director Emilio Gonzales III and approved by Deputy Ombudsman for Luzon Jesus
Guerrero.
There is nothing in RA 7975, however, that would remotely suggest that only the
Ombudsman, and not his Deputy, may sign an order preventively suspending o cials
occupying positions classified as grade 27 or above.
On the other hand, Section 24 of Republic Act No. 6770 9 provides:
SEC. 24. Preventive Suspension. — The Ombudsman or his Deputy may
preventively suspend any o cer or employee under his authority pending an
investigation, if in his judgment, the evidence of guilt is strong, and (a) the charge
against such o cer or employee involves dishonesty, oppression or gross
misconduct, or neglect in the performance of duty; or (b) the charge would
warrant removal from the service; or (c) the respondent's continued stay in o ce
may prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated by
the O ce of the Ombudsman but not more than six months, without pay, except
when the delay in the disposition of the case by the O ce of the Ombudsman is
due to the fault, negligence or petition of the respondent, in which case the period
of such delay shall not be counted in computing the period of suspension herein
provided. (Emphasis supplied.)
Similarly, Section 9, Rule III of the Rules of Procedure of the O ce of Ombudsman 1 0

provides:
SEC. 9. Preventive suspension. — Pending investigation, the respondent
may be preventively suspended without pay for a period of not more than six (6)
months, if, in the judgment of the Ombudsman or his proper deputy , the evidence
of guilt is strong, and (a) the charge against such o cer or employee involves
dishonesty, oppression or gross misconduct, or neglect in the performance of
duty, (b) the charge would warrant removal from the service; or (c) the
respondent's continued stay in office may prejudice the case filed against him.
If the administrative investigation is not terminated within the period the
respondent is suspended, the respondent shall be automatically reinstated unless
the delay in the disposition of the case is due to the fault, negligence or any cause
attributable to the respondent, in which case the period of such delay shall not be
counted in computing the period of suspension. (Emphasis supplied.)
Under these provisions, there cannot be any doubt that the Ombudsman or his
Deputy may preventively suspend an o cer or employee, where appropriate, as indicated
by the word "or" between the "Ombudsman" and "his Deputy." The word "or" is a disjunctive
term signifying disassociation and independence of one thing from each of the other
things enumerated. 1 1 The law does not require that only the Ombudsman himself may
sign the order of suspension. Cdpr
II
Petitioner next questions the manner by which the suspension order was issued.
She claims that she was denied due process because she was not afforded the
opportunity to controvert the evidence against her before the order of preventive
suspension was issued. 1 2 A preventive suspension, however, can be decreed on an o cial
under investigation after charges are brought and even before the charges are heard since
the same is not in the nature of a penalty, 1 3 but merely a preliminary step in an
administrative investigation. Thus, in Lastimosa vs. Vasquez, 1 4 we quoted with favor our
pronouncement in Nera vs. Garcia: 1 5
In connection with the suspension of petitioner before he could le his
answer to the administrative complaint, su ce it to say that the suspension was
not a punishment or penalty for the acts of dishonesty and misconduct in o ce,
but only as a preventive measure. Suspension is a preliminary step in an
administrative investigation. If after such investigation, the charges are
established and the person investigated is found guilty of acts warranting his
removal, then he is removed or dismissed. This is the penalty. There is, therefore,
nothing improper in suspending an o cer pending his investigation and before
the charges against him are heard and be given an opportunity to prove his
innocence.
The fact that the said order was issued seven days after the complaint was led did
not constitute grave abuse of discretion. The immediate issuance of such order is required
in order to prevent the subject of the suspension from committing further irregularities.
Such prompt action, moreover, is in consonance with Section 15 of RA 6770 which exhorts
the Ombudsman to:
. . . give priority to complaints led against high ranking government
o cials and/or those occupying supervisory positions, complaints involving
grave offenses as well as complaints involving large sums of money and/or
properties.
We do not give much credence to petitioner's suggestions of a malicious conspiracy

between the Deputy Ombudsman Guerrero and Congressman Cua, reputedly petitioner's
political adversary, to harass her. The Deputy Ombudsman and the Congressman, being
public o cials, enjoy the presumption of regularity of performance of duties. Such
presumption can be overcome only by strong and convincing evidence. 1 6 No such
evidence exists in this case.
III
Contrary to petitioner's contention, the conditions required to sustain her preventive
suspension have been met in this case. These conditions are:
(1) That the evidence of guilt is strong; and
(2) That any of the following circumstances are present:
(a) the charge against such o cer or employee involves dishonesty,
oppression, or grave misconduct or neglect in the performance
of duty;
(b) the charges would warrant removal from the service; or
(c) the respondent's continued stay in o ce may prejudice the case
filed against him. 1 7
The rst requisite rests upon the determination of the disciplining authority, the
Office of the Ombudsman in this case:
As held in Buenaseda v. Flavier, however, whether the evidence of guilt is
strong is left to the determination of the Ombudsman by taking into account the
evidence before him. A preliminary hearing as in bail petitions in cases involving
capital offenses is not required. In rejecting a similar argument as that made by
petitioner in this case, this Court said in that case:
The import of the Nera decision is that the disciplining authority is
given the discretion to decide when the evidence of guilt is strong. This
fact is bolstered by Section 24 of R.A. No. 6770, which expressly left such
determination of guilt to the 'judgment' of the Ombudsman on the basis of
the administrative complaint . . .18
We find no reason to disturb such determination in this case.
All the circumstances enumerated in the second requisite are likewise present.
Petitioner is charged with, among others, fraud against the public treasury and
malversation, offenses indubitably involving dishonesty and grave misconduct. These
charges, if proven true, also constitute grounds for her removal upon order of the proper
court. Section 60(c) of the Local Government Code states:
SEC. 60. Grounds for Disciplinary Actions. — An elective o cial may be
disciplined, suspended or removed from office on any of the following grounds:
xxx xxx xxx
c) Dishonesty , oppression, misconduct in o ce , gross negligence, or an

offense punishable by at least prision mayor.
. . . (Emphasis supplied)
Petitioner's high position likewise gives her access to public records and the clout
to in uence possible witnesses. Her continued stay in o ce may thus prejudice the
prosecution of the case led against her. It is immaterial that, as petitioner contends, no
evidence has been adduced to prove that petitioner may in uence possible witnesses or
may tamper with the public records. It is sufficient that there exists such a possibility.
Finally, the duration of petitioner's suspension is not excessive. Petitioner's
suspension for six (6) months is within the limits prescribed by Section 24 of R.A. 6770.
The length of the period of suspension within such limits, like the evaluation of the strength
of the evidence, lies in the discretion of the Ombudsman.
WHEREFORE, this petition is hereby DISMISSED. The temporary restraining order
issued by this Court per its Resolution dated 26 August 1997 is hereby LIFTED with
immediate effect.
SO ORDERED. LLjur
Narvasa, C .J ., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Mendoza,
Panganiban, Martinez and Quisumbing, JJ ., concur.
Purisima, J ., is on leave.
Footnotes
1. Republic Act No. 3019.
2. Frauds against the public treasury and similar offenses.
3. Malversation of public funds or property.
4. Rollo, pp. 24-26.

5. Id., at 412-413.
6. Id., at 144.
7. An Act To Strengthen The Functional And Standard Organization Of The Sandiganbayan,
Amending For That Purpose Presidential Decree No. 1606, As Amended.
8. Rollo, p. 4.
9. An Act Providing For The Functional And Structural Organization Of The O ce Of The
Ombudsman, And For Other Purposes.
10. Administrative Order No. 07.
11. People vs. Martin, 39 SCRA 430 (1971).
12. Rollo, p. 5.
13. Hagad vs. Gozo-Dadole, 251 SCRA 242 (1995).
14. Lastimosa vs. Vasquez, 243 SCRA 497 (1995).
15. 106 Phil. 1031 (1960).
16. Tatad vs. Garcia, 243 SCRA 436 (1995).

17. Section 24, RA 6770.
18. Lastimosa vs. Vasquez, supra, note 14.

EN BANC
[G.R. No. 92422. May 23, 1991.]
AMERICAN INTER-FASHION CORPORATION , petitioner, vs. OFFICE OF

THE PRESIDENT, GARMENTS & TEXTILE EXPORT BOARD &
GLORIOUS SUN FASHION GARMENTS MANUFACTURING CO.
(PHILS.) INC. , respondents.
Cuevas, De la Cuesta & De las Alas for petitioner.

The Solicitor General for the President.
Tañada, Vivo & Tan for private respondent.
SYLLABUS
1. SANDIGANBAYAN; JURISDICTION; ALREADY SETTLED IN THE CASE OF PCGG vs.

PEÑA [159 SCRA 556]. — In the case of Republic v. Sandiganbayan (182 SCRA 911 [1990])
the Court stated: "The jurisdiction of the Sandiganbayan has already been settled in
Presidential Commission on Good Government v. Hon. Emmanuel G. Pena, etc., et al., (159
SCRA 556 [1988]) where the Court held that: '. . . Under Section 2 of the President's
Executive Order No. 14 issued on May 7, 1986, all cases of the Commission regarding the
Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former
President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close Relatives,
Subordinates, Business Associates, Dummies, Agents, or Nominees, whether civil or
criminal, are lodged within the 'exclusive and original jurisdiction of the Sandiganbayan' and
all incidents arising from, incidental to, or related to, such cases necessarily fall likewise
under the Sandiganbayan's exclusive and original jurisdiction, subject to review on
certiorari exclusively by the Supreme Court.' In reiterating the aforequoted ruling in six (6)
subsequent cases (Soriano III v. Yuzon, 164 SCRA 226) which were decided jointly, again,
the Court held that — '. . . [T]he exclusive jurisdiction conferred on the Sandiganbayan
would evidently extend not only to the principal causes of action, i.e., the recovery of
alleged ill-gotten wealth, but also to 'all incidents arising from, incidental to, or related to,
such cases,' such as the dispute over the sale of the shares, the propriety of the issuance
of ancillary writs or provisional remedies relative thereto, the sequestration thereof, which
may not be made the subject of separate actions or proceedings in another forum."'
2. ID.; NOT THE PROPER FORUM TO TAKE COGNIZANCE OF THE ISSUES RESOLVED
BY THE OFFICE OF THE PRESIDENT; REASONS. — The issue resolved by the Office of the
President is not proper for the Sandiganbayan for the following reasons: First, the 1984
cancellation of the export quotas of Glorious Sun is a main case. As a principal case it
cannot be an incident of any sequestration or ill-gotten wealth case which should be
referred to the Sandiganbayan. Neither petitioner American Inter-Fashion nor non-party De
Soleil was in existence when the proceedings which led to this case were initiated by GTEB
in 1984. The fact that the cancelled quotas were given to the hastily created corporations
does not preclude an examination of the validity of the order of cancellation which led to
their creation. A 1986 sequestration order (now lifted) against the then non-existent
American Inter-Fashion should not be allowed to stop Glorious Sun from insisting before
the proper tribunal that it was not accorded due process when its export quotas were
arbitrarily stripped from it in 1984. Second, the Sandiganbayan has no jurisdiction to
ascertain whether or not the questioned Malacañang decision is tainted by grave abuse of
discretion. Whether or not the Office of the President correctly reviewed a 1984 GTEB
decision is not proper for the Sandiganbayan to ascertain. The Office of the President
reviewed the 1984 GTEB finding that Glorious Sun was guilty of misdeclaration of denim
importations. It decided that GTEB did not observe rudimentary requirements of due
process when it rendered its decision. The Office of the President ordered a remand for
the proper taking of evidence. The correctness of that decision is for the Supreme Court to
decide and not for the Sandiganbayan.
3. REMEDIAL LAW; RES JUDICATA; REQUISITES. — Time and again we have held that
for a judgment to be a bar to a subsequent case, the following requisites must concur: ". . .
(1) it must be a final judgment; (2) the court which resolved it had jurisdiction over the
subject matter and the parties; (3) it must be a judgment on the merits; and (4) there must
be identity between the two cases, as to the parties, subject matter and cause of action.
(Bringas v. Hernando, 144 SCRA 346, 359).
4. ID.; ID.; PRINCIPLE NOT APPLICABLE IN CASE AT BAR; "JUDGMENT ON THE
MERITS," CONSTRUED. — The well-entrenched principle is that "a judgment on the merits is
one rendered after a determination of which party right, as distinguished from a judgment
rendered upon preliminary or final or merely technical point." (Deang v. Intermediate
Appellate Court supra citing Santos v. Intermediate Appellate Court, 145 SCRA 238, 245-
246). In the later case of Escarte, Jr., et al. v. Office of the President of the Philippines, et
al., (supra) we further stated: "As a technical legal term, 'merits' has been defined in law
dictionaries as matter of substance in law, as distinguished from matter of form, and as
the real or substantial grounds of action or defense in contradiction to some technical or
collateral matter raised in the course of the suit. A judgment is upon the merits when it
amounts to a declaration of the law as to the respective rights and duties of the parties,
based upon the ultimate fact or state of facts disclosed by the pleadings and evidence,
and upon which the right of recovery depends, irrespective of formal, technical or dilatory
objection or contentions (Vicente J. Francisco, Revised Rules of Court, Volume II, pp. 841-
842). Certainly, the dismissal of G.R. No. 67180 can not be categorized as a judgment on
the merits. Our action in 1984 did not resolve anything. In fact when we heard the parties
during oral arguments, GTEB was unable to present any showing of misdeclaration of
imports. Concerned about the alleged railroading of the case, we directed GTEB to allow
Glorious Sun a period not exceeding 60 days to fully disclose its evidence relative to the
charges against it. The motion to withdraw the petition arose from the fears of Mr.
Nemesio Co that not only Glorious Sun but his other businesses would be destroyed by the
martial law regime. No issues had been joined. The movant never admitted the correctness
of the Board's findings. Significantly, our resolution dismissing the petition in G.R. No.
67180 was based solely on this notice of withdrawal by the private respondent. The
dismissal of the petition in G.R. No. 67180 was clearly based on a technical matter rather
than on the merits of the petition. Hence, the dismissal of the petition with the factual
issues hanging in mid-air cannot, under the circumstances, constitute res judicata.
5. CONSTITUTIONAL LAW; DUE PROCESS; NOT PROPERLY OBSERVED IN CASE AT
BAR. — The petitioner claims that the subsequent disclosure of the documents by GTEB to
Glorious Sun in 1987 cured the defect of non-disclosure of evidence in 1984 under the
constitutional provision of due process enunciated in the landmark case of Ang Tibay v.
The Court of Industrial Relations (69 Phil. 635 [1940]) and other subsequent cases. (See
Provincial Chapter of Laguna, Nacionalista Party v. Comelec, 122 SCRA 423 [1983];
Mangubat v. De Castro, 163 SCRA 608 [1988]). The petitioner's posture is to say the least
misleading. At issue in this petition is the 1984 resolution of the GTEB. This resolution was
the sole reason for stripping off Glorious Sun's export quotas and awarding the export
quotas to two newly and hastily created corporations, the petitioner herein and De Soleil.
The petitioner can not use as an excuse the subsequent disclosure of the evidence used by
the GTEB to Glorious Sun in 1987 to justify the 1984 GTEB resolution. The glaring fact is
that Glorious Sun was denied due process when the GTEB failed to disclose evidence used
by it in rendering a resolution against Glorious Sun. Moreover, as pointed out by Deputy
Executive Secretary Magdangal B. Elma, the documents disclosed to Glorious Sun by
GTEB in 1987 enhanced the change that Glorious Sun was denied due process. The record
clearly manifests that in cancelling the export quotas of the private respondent GTEB
violated the private respondent's constitutional right to due process. Before the
cancellation in 1984, the private respondent had been enjoying export quotas granted to it
since 1977. In effect the private respondent's export quota allocation which initially was a
privilege evolved into some form of property right which should not be removed from it
arbitrarily and without due process only to hurriedly confer it on another.
6. ADMINISTRATIVE LAW; FINDINGS OF ADMINISTRATIVE AGENCIES GENERALLY
ACCORDED RESPECT AND FINALITY; EXCEPTIONS. — Findings of administrative agencies
are accorded respect and finality, and generally should not be disturbed by the courts. This
general rule, however, is not without exceptions: "As recently reiterated, it is
jurisprudentially settled that absent a clear, manifest and grave abuse of discretion
amounting to want of jurisdiction, the findings of the administrative agency on matters
falling within its competence will not be disturbed by the court. Specifically with respect to
factual findings, they are accorded respect, if not finality, because of the special
knowledge and expertise gained by these tribunals from handling the specific matters
falling under their jurisdiction. Such factual findings may be disregarded only if they "are
not supported by evidence; where the findings are initiated by fraud, imposition or
collusion; where the procedures which lead to the factual findings are irregular; when
palpable errors are committed; or when grave abuse of discretion arbitrariness or
capriciousness is manifest." (Mapa v. Arroyo, 176 SCRA 76 [1989]) The decision penned
by Deputy Executive Secretary Magdangal B. Elma and the resolution penned by Acting
Deputy Executive Secretary Mariano Sarmiento II are not tainted in the slightest by any
grave abuse of discretion. They outline in detail why the private respondent was denied
due process when its export quotas were cancelled by GTEB. The findings are supported
by the records.
FELICIANO, J., concurring:

1. REMEDIAL LAW; CIVIL PROCEDURE; GRAVE ABUSE OF DISCRETION OR ACT
WITHOUT OR IN EXCESS OF JURISDICTION; NOT ESTABLISHED IN CASE AT BAR. —
President in rendering its decision on OP Case No. 3781 dated 7 September 1989. That
decision directed the Garments and Textile Export Board ("GTEB") to reopen OSC Case No.
84-B-1 and to review a decision rendered therein by the GTEB on 27 April 1984 ordering
revocation of the export quota allocation of private respondent Glorious Sun Fashion
Garments Manufacturing Company (Philippines), Inc. ("Glorious Sun") and disqualifying its
officials from availing of export quotas in the garment business. At the same time, it
seems useful to record the consensus of the Court reached during its deliberation on this
case that, firstly, there is nothing in the present decision that in any way modifies the rule in
Presidential Commission on Good Government v. Hon. Emmanuel G. Peña, etc., et al. (159
SCRA 556 [1988]). Secondly, such conclusions as the GTEB may reach in respect of the
factual and legal issues involved in OSC Case No. 84-B-1, relate to the administrative
charges against private respondent Glorious Sun for misdeclaration of importations, and
will not bind the Sandiganbayan in resolving Civil Cases Nos. 0002 and 0081 presently
pending before the Sandiganbayan, involving charges of acquisition of "ill-gotten" wealth by
members of the Marcos family and their business associates or cronies.
DECISION
GUTIERREZ, JR. , J : p
The private respondent interposed a motion for reconsideration of the October 2, 1990
resolution which referred the issues in this petition to the Sandiganbayan for proper
disposition and ordered the Garments and Textile Export Board (GTEB) to refrain from
conducting further proceedings in OSC Case No. 84-B-1, subject to a final determination of
the merits of the respective claims of the parties herein. LLjur
The motion questions the findings that the instant petition ". . . raises matters which are
incidents arising from or incidental to, or related to, several cases pending before the
Sandiganbayan which pertain to funds, properties and assets alleged to have been illegally
acquired or misappropriated by the members of the Marcos family and their business
associates or cronies."
After a re-examination of the jurisdiction of the Sandiganbayan under Executive Order No.
14 and the issues raised in the instant petition, we resolve to set aside the October 2, 1990
resolution and grant the motion for reconsideration.
In the case of Republic v. Sandiganbayan (182 SCRA 911 [1990]) the Court stated:
"The jurisdiction of the Sandiganbayan has already been settled in Presidential
Commission on Good Government v. Hon. Emmanuel G. Pena, etc., et al., (159
SCRA 556 [1988]) where the Court held that:
'. . . Under Section 2 of the President's Executive Order No. 14 issued

on May 7, 1986, all cases of the Commission regarding the Funds, Moneys,
Assets, and Properties Illegally Acquired or Misappropriated by Former
President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close
Relatives, Subordinates, Business Associates, Dummies, Agents, or
Nominees, whether civil or criminal, are lodged within the 'exclusive and
original jurisdiction of the Sandiganbayan' and all incidents arising from,
incidental to, or related to, such cases necessarily fall likewise under the
Sandiganbayan's exclusive and original jurisdiction, subject to review on
certiorari exclusively by the Supreme Court.'
In reiterating the aforequoted ruling in six (6) subsequent cases (Soriano III v.
Yuzon, 164 SCRA 226) which were decided jointly, again, the Court held that —
'. . . [T]he exclusive jurisdiction conferred on the Sandiganbayan
would evidently extend not only to the principal causes of action, i.e., the
recovery of alleged ill-gotten wealth, but also to 'all incidents arising from,
incidental to, or related to, such cases,' such as the dispute over the sale of
the shares, the propriety of the issuance of ancillary writs or provisional
remedies relative thereto, the sequestration thereof, which may not be
made the subject of separate actions or proceedings in another forum."' (at
p. 917-918)
Thus, in the above cited case we ruled that the motion for intervention filed by the private
respondents being merely ancillary and supplemental to an existing litigation (Civil Case
No. 0025) and not an independent action, the Sandiganbayan which has exclusive and
original jurisdiction over Civil Case No. 0025, has likewise original and exclusive jurisdiction
over the private respondent's action for intervention therein.
This can not be said, however, of the instant case.
This case arose from an April 24, 1984 ruling of the GTEB that respondent Glorious Sun
was guilty of misdeclaration of imported raw materials resulting in dollar salting abroad
and, therefore, its export quotas should be cancelled. Its quotas were given to two newly-
formed corporations — De Soleil Apparel Manufacturing Corporation (De Soleil) and the
American Inter-Fashion Corporation (AIFC). These two corporations were joint ventures of
the Hongkong investors and majority stockholders of Glorious Sun on one hand and,
allegedly, a member of the family and a crony of President Marcos on the other. The Office
of the President set aside the GTEB decision and remanded the case for genuine hearings
where due process would be accorded both parties. The petitioner now alleges that the
GTEB decision is res judicata and that Glorious Sun was given every opportunity to be
heard by the Board. Cdpr
Whether or not the Malacañang decision suffers from grave abuse of discretion is the
question before us. It must be emphasized, however, that Glorious Sun has never been
sequestered. The records also show that American Inter-Fashion's sequestration has been
lifted and apparently only De Soleil remains sequestered. However, De Soleil is not a party
in this petition and it appears that it is not interested in what happens to the sequestration.
Significantly, it was the Glorious Sun's owner which filed the sequestration case against
American Inter-Fashion and De Soleil with the PCGG. cdll
The issue resolved by the Office of the President is not proper for the Sandiganbayan for
the following reasons:
First, the 1984 cancellation of the export quotas of Glorious Sun is a main case. As a
principal case it cannot be an incident of any sequestration or ill-gotten wealth case which
should be referred to the Sandiganbayan. Neither petitioner American Inter-Fashion nor
non-party De Soleil was in existence when the proceedings which led to this case were
initiated by GTEB in 1984. The fact that the cancelled quotas were given to the hastily
created corporations does not preclude an examination of the validity of the order of
cancellation which led to their creation. A 1986 sequestration order (now lifted) against
the then non-existent American Inter-Fashion should not be allowed to stop Glorious Sun
from insisting before the proper tribunal that it was not accorded due process when its
export quotas were arbitrarily stripped from it in 1984. LexLib
Second, the Sandiganbayan has no jurisdiction to ascertain whether or not the questioned
Malacañang decision is tainted by grave abuse of discretion. Whether or not the Office of
the President correctly reviewed a 1984 GTEB decision is not proper for the
Sandiganbayan to ascertain. The Office of the President reviewed the 1984 GTEB finding
that Glorious Sun was guilty of misdeclaration of denim importations. It decided that
GTEB did not observe rudimentary requirements of due process when it rendered its
decision. The Office of the President ordered a remand for the proper taking of evidence.
The correctness of that decision is for the Supreme Court to decide and not for the
Sandiganbayan. Cdpr
In this regard, the petitioner itself invokes the jurisdiction of this Court under Rule 65 of the
Rules of Court to correct or remedy the alleged grave abuse of discretion committed by
the Office of the President. Only the Supreme Court through the petition for certiorari
under Rule 65 in the exercise of its appellate jurisdiction can decide whether or not the
Office of the President committed grave abuse of discretion amounting to lack of
jurisdiction in issuing the questioned decision. (See Republic v. Sandiganbayan supra;
Dario v. Mison, 176 SCRA 84 [1989])
With these findings, we now proceed to resolve the main issue in the petition.
As stated in the October 2, 1990 resolution, the facts of the case are as follows:
"On April 27, 1984, respondent GLORIOUS was found guilty of dollar-salting and
misdeclaration of importations by the GTEB in OSC Case No. 84-B-1 and, as a
result of which, the export quotas allocated to it were cancelled. Soon after the
rendition of the GTEB decision, respondent GLORIOUS filed a petition for certiorari
and prohibition with the Court, docketed as G.R. No. 67180, contending that its
right to due process of law was violated, and that the GTEB decision was not
supported by substantial evidence. Giving credence to the allegations of
respondent GLORIOUS, the Court issued a resolution on June 4, 1984, ordering
GTEB to conduct further proceedings in the administrative case against
respondent GLORIOUS. However, on July 26, 1984, respondent GLORIOUS filed a
manifestation of its intention to withdraw the petition. On August 20, 1984, the
Court granted respondent GLORIOUS' motion for withdrawal. Respondent
GLORIOUS filed another motion to dismiss with prejudice, which was duly noted
by the Court in a resolution dated September 10, 1984.
More than two years later, on October 15, 1986, respondent GLORIOUS filed with
the GTEB a petition for the restitution of its export quota allocation and requested
for a reconsideration of the GTEB decision dated April 27, 1984. Once again,
respondent GLORIOUS alleged that the charges against it in OSC Case No. 84-B-1
were not supported by evidence. Moreover, it alleged that the GTEB decision
cancelling its export quotas was rendered as a result of duress, threats,
intimidation and undue influence exercised by former Minister Roberto V. Ongpin
in order to transfer GLORIOUS' export quotas to 'Marcos crony-owned'
corporations De Soleil Apparel Manufacturing Corporation [DSA] and petitioner
AIFC. Respondent GLORIOUS further alleged that it was coerced by Mr. Roberto
Ongpin to withdraw its petition in G.R. No. 67180 and to enter into joint venture
agreements paving the way for the creation of DSA and petitioner AIFC which
were allowed to service respondent GLORIOUS' export quotas and to use its plant
facilities, machineries and equipment.
On September 4, 1987, the GTEB denied the petition of respondent GLORIOUS. An

appeal was then taken on October 5, 1987 to the Office of the President, docketed
as OP Case No. 3781. At this point, petitioner AIFC sought to intervene in the
proceedings and filed its opposition to GLORIOUS' appeal on November 27, 1987,
claiming that the GTEB decision dated April 27, 1984 has long become final, and
that a favorable action on the appeal would result in the forfeiture of the export
quotas which were legally allocated to it. On September 7, 1989, the Office of the
President ruled in favor of respondent GLORIOUS, finding the proceedings before
the GTEB in 1984 irregular and remanded the case to GTEB for further
proceedings. The motion for reconsideration of AIFC was subsequently denied on
February 20, 1990." (Rollo, Vol. III, pp. 7972-7974).
The petitioner raises the following alleged errors:

I
RESPONDENT OFFICE OF THE PRESIDENT COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HAVING TAKEN
COGNIZANCE OF GLORIOUS SUN'S APPEAL SINCE:
a. it amounted to an administrative review of the final judgment
of the courts;
b. Glorious Sun had long ago abandoned its right to appeal the
1984 Decision of the GTEB.
II
ASSUMING ARGUENDO THAT GLORIOUS SUN'S APPEAL WAS PROPER, THE

OFFICE OF THE PRESIDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN FINDING THAT THERE WAS A
VIOLATION OF GLORIOUS SUN'S RIGHT TO PROCEDURAL DUE PROCESS. (Rollo,
Vol. I, pp. 12-13)
As can be gleaned from the issue raised in the first assigned error, the petitioner
capitalizes on the fact that we granted a motion to withdraw the petition in G.R. No. 67180,
Glorious Sun v. GTEB on August 20, 1984. Thus, the petitioner contends that in entertaining
the appeal of private respondent GLORIOUS, the Office of the President "had unwittingly
made itself a tool in a cunning move to resurrect a decision which had become final and
executory more than three (3) years earlier." (Petition p. 5) The petitioner asseverates that
the resolution dismissing the petition in G.R. No. 67180 was res judicata on the matter. Cdpr
Time and again we have held that for a judgment to be a bar to a subsequent case, the
following requisites must concur:
". . . (1) it must be a final judgment; (2) the court which resolved it had jurisdiction
over the subject matter and the parties; (3) it must be a judgment on the merits;
and (4) there must be identity between the two cases, as to the parties, subject
matter and cause of action. (Bringas v. Hernando, 144 SCRA 346, 359 citing the
cases of Martines v. Court of Appeals, 139 SCRA 558; Carandang v. Venturanza,
133 SCRA 344; Pantranco North Express, Inc. v. National Labor Relations
Commission, 126 SCRA 526; and Castro v. Court of Appeals, 95 SCRA 539 cited in
Deang v. Intermediate Appellate Court, 154 SCRA 250 [1987]; See also Escarte, Jr.,
et al. v. Office of the President of the Philippines, et al., G.R. No. 53668, December
4, 1990).
The crucial question before us is whether or not the final judgment in G.R. No. 67180
constitutes res judicata to the instant case on the ground that the final judgment in G.R.
No. 67180 was a judgment on the merits.
The well-entrenched principle is that "a judgment on the merits is one rendered after a
determination of which party right, as distinguished from a judgment rendered upon
preliminary or final or merely technical point." (Deang v. Intermediate Appellate Court supra
citing Santos v. Intermediate Appellate Court, 145 SCRA 238, 245-246). In the later case of
Escarte, Jr., et al. v. Office of the President of the Philippines, et al., (supra) we further
stated:
xxx xxx xxx
"As a technical legal term, 'merits' has been defined in law dictionaries as matter
of substance in law, as distinguished from matter of form, and as the real or
substantial grounds of action or defense in contradiction to some technical or
collateral matter raised in the course of the suit. A judgment is upon the merits
when it amounts to a declaration of the law as to the respective rights and duties
of the parties, based upon the ultimate fact or state of facts disclosed by the
pleadings and evidence, and upon which the right of recovery depends,
irrespective of formal, technical or dilatory objection or contentions (Vicente J.
Francisco, Revised Rules of Court, Volume II, pp. 841-842).
Certainly, the dismissal of G.R. No. 67180 can not be categorized as a judgment on the
merits. Our action in 1984 did not resolve anything. In fact when we heard the parties
during oral arguments, GTEB was unable to present any showing of misdeclaration of
imports. Concerned about the alleged railroading of the case, we directed GTEB to allow
Glorious Sun a period not exceeding 60 days to fully disclose its evidence relative to the
charges against it. The motion to withdraw the petition arose from the fears of Mr.
Nemesio Co that not only Glorious Sun but his other businesses would be destroyed by the
martial law regime. The motion to withdraw states that:
". . . [I]t has painfully arrived at the conclusion that, without admitting the truth of
the findings of respondent Board, it is but to give notice of withdrawal of its
petition in this case, thereby to enable petitioner's President, Mr. Nemesio Co, to
immediately free himself from further tension affecting his state of health. This
notice is being filed under Section 1 of Rule 20 since anyway the issues in the
case have not yet been formally joined". (Rollo — G.R. No. 67180, p. 580).
No issues had been joined. The movant never admitted the correctness of the Board's
findings. Significantly, our resolution dismissing the petition in G.R. No. 67180 was based
solely on this notice of withdrawal by the private respondent. The dismissal of the petition
in G.R. No. 67180 was clearly based on a technical matter rather than on the merits of the
petition. Hence, the dismissal of the petition with the factual issues hanging in mid-air
cannot, under the circumstances, constitute res judicata.
Under its second assigned error, the petitioner assails the questioned resolutions of the
Office of the President on the ground that private respondent Glorious Sun was not denied
due process during the hearings held in GTEB.
Specifically, the petitioner disagrees with the Office of the President's findings that during
the hearings conducted in 1984, Glorious Sun was not confronted with the evidence, which,
per the records, were marked as GTEB's exhibits.
In its petition, however, the petitioner admits that the GTEB in the 1984 hearings failed to
disclose to Glorious Sun vital evidence used by GTEB in arriving at its conclusion that
Glorious Sun was guilty of dollar-salting. The petition states:
". . . In its own Decision, the Office of the President took note of the fact that after
GTEB required Glorious Sun to submit its reason why its petition for restitution of
export quotas should be given due course, the former furnished the latter various
relevant documents for its perusal and examination (See Annex "A"). These very
same documents are constitutive of the evidence submitted by the GTEB which it
considered in arriving at its 1984 Decision. With this subsequent disclosure,
Glorious Sun was given all the opportunity, to comment thereon, with the end in
view of convincing GTEB that its petition for restitution should be given due
course. It was very clear from the 1987 GTEB Resolution (See Annex "E") that it
took into consideration the arguments advanced by Glorious Sun in refutation of
the GTEB evidence which were just disclosed to them. Unfortunately for Glorious
Sun, despite the arguments they presented, the GTEB remained unconvinced to
disturb the earlier findings. GTEB's ruling runs thus —
'However, the recommendation of the investigating panel and the

decision of the Board were not based on the data you have for the simple
reason that the specifications are different. On the other hand, the records
made available to you earlier on which the investigating panel and the
Board based their recommendation and decision show importations of
other importers with the same specifications as your importations. These
documents are intact and filed in orderly fashion and were again reviewed
by us. The evidences are so detailed, clear and overwhelming that they
show that your prices were much higher than the importations of the other
Philippine importers.' (See Annex "E", p. 3)
Evidently, the protestation of Glorious Sun of non-disclosure of evidence had been
effectively remedied by the subsequent accommodation by the GTEB of its
request for copies of the relevant documents. After Glorious Sun had examined
the same, and submitted their arguments in refutation of previous findings which
were based thereon, the GTEB considered these arguments. These subsequent
events, we respectfully mention, are clear indications that effective disclosure
within the context of the due process clause had been more than sufficiently met.
Even with a categorical statement from the GTEB that the Supreme Court case is
without any bearing on the present inquiry on account of the withdrawal thereof
by Glorious Sun, the move of the GTEB in this respect is a sure sign that it did not
relegate to oblivion the admonition of the High Court to afford Glorious Sun 'a
reasonable opportunity of having full disclosure of the evidence relative to the
charge filed against it and the same opportunity to present rebuttal evidence.'"
(Rollo, Vol. I, pp. 21-23).
The petitioner claims that the subsequent disclosure of the documents by GTEB to
Glorious Sun in 1987 cured the defect of non-disclosure of evidence in 1984 under the
constitutional provision of due process enunciated in the landmark case of Ang Tibay v.
The Court of Industrial Relations (69 Phil. 635 [1940]) and other subsequent cases. (See
Provincial Chapter of Laguna, Nacionalista Party v. Comelec, 122 SCRA 423 [1983];
Mangubat v. De Castro, 163 SCRA 608 [1988]).
The petitioner's posture is to say the least misleading. At issue in this petition is the 1984
resolution of the GTEB. This resolution was the sole reason for stripping off Glorious Sun's
export quotas and awarding the export quotas to two newly and hastily created
corporations, the petitioner herein and De Soleil. The petitioner can not use as an excuse
the subsequent disclosure of the evidence used by the GTEB to Glorious Sun in 1987 to
justify the 1984 GTEB resolution. The glaring fact is that Glorious Sun was denied due
process when the GTEB failed to disclose evidence used by it in rendering a resolution
against Glorious Sun. (Ang Tibay v. The Court of Industrial Relations, supra: Provincial
Chapter of Laguna, Nacionalista Party v. Comelec, supra; Mangubat v. Castro, supra).
Moreover, as pointed out by Deputy Executive Secretary Magdangal B. Elma, the
documents disclosed to Glorious Sun by GTEB in 1987 enhanced the change that Glorious
Sun was denied due process. Secretary Elma said:
"The GTEB's violation of Appellant's right to due process becomes all the more
clear by documents it furnished the latter in 1987, particularly the summer of the
1983 import prices of twelve (12) importers for 100% cotton denims, 44/45" per
yard, as follows
(1) Pioneer Texturizing US$1.65 C&F
(2) Jag & Hagger Jeans 1.90 C&F
(3) GTI Sportswear Corporation 1.678 CF
(4) Midas Diversified Export Corporation 1.65 C&F
(only one importation indicated)
(5) Glorious Sun Fashion Mgt. Mftg.
Phils., Inc. (Appellant herein) 2.00 FOB
(6) Lee (Phils.) Inc. 3.55 C&F
(7) International Garments 2.10 C&F
(8) Carousel Children's Wear Inc. A 1.50 C&F
(9) Sampaguita (no price per yard indicated)
(10) Pie — Wynner 1.42 CF
(11) Marlu Garment Corporation —
7,997 yards priced at $14,394.69 or
$14,393.69 divided by 7,977 equals 1.80
(12) Levi Straus 2.66
As shown above, the highest recorded import prices in 1983 for 100% cotton
denims 44/45" per yard were as follows:
(1) Lee (Phils.) Inc. US$3.55 C&F
(2) Lee (Phils.) Inc. 3.13 CIF
(3) Levi Strauss 2.66
(4) International Garments 2.10 C&F
(5) Glorious Sun (Appellant) 2.00 FOB
Considering that whether the importation is CIF, C&F, CF or FOB, the freight cost
difference is only US$0.01 per yard (tsn, Feb. 29, 1984 hearing, p. 32), it is clear
that Appellant posted only the fifth highest price at US$2.00. And since the price
registered in 1983 reached a high of $3.55 and a low of US$1.42, Appellant's price
US$2.00 is, on average, below the median of US$2.485.
As indicated by the data gathered by the GTEB Secretariat on then unit price of
denim fabrics imported by garment manufacturers in 1982 and 1983, the
following were the highest import prices recorded:
'FOB : $2.9/m or $2.65/yd.
C&F : 3.56/yd.
CIF : 3.13/yd.
HCV : 2.12/m or 1.94/yd."
(Memorandum of GTEB Raw Materials Importation Regulation Division dated

March 25, 1987.)'
Apparently, the 1984 GTEB Investigating Panel picked up four importers —
identified initially by letters A, B, C, and D, but subsequently identified as Pioneer
Texturizing Corporation, Jag & Hagger Jeans & Sportswear, GTI Sportswear, and
Midas Diversified Corporation — whose import prices were lower than that of
Appellant, in order to show that Appellant's import prices was the highest. In so
picking, it could, as it did, justify the cancellation of Appellant's export quotas in
obedience to the instruction on the matter of then Minister Ongpin. (See Affidavit
of Assistant Minister and 1984 GTEB hearing Committee Chairman Rodolfo V.
Puno dated April 7, 1986, supra).
Nonetheless, the appealed decision of September 4, 1987, states:
'However, the recommendation of the board investigating panel and
the decision of the Board were not based on the data you (Appellant) have
for the simple reason that the specifications are different. On the other
hand, the records made available to you earlier on which the investigating
panel and the Board based their recommendation and decision show
importations of other importers with the same specifications as your
(Appellant's) importations. These documents are intact and filed in orderly
fashion and were again reviewed by us. The evidences are so detailed,
clear, and overwhelming that they show that your prices were much higher
than the importations of the other Philippine importers.'
The documents used by the GTEB in its 1984 decision and referred to in the 1987
decision as being 'intact' relates to what the GTEB labelled as 'Documents used
by GTEB' and 'Additional Documents' which, as earlier discussed, were either not
disclosed to Appellant for being privileged or unmarked as exhibits or not
presented in evidence.
At any rate, the conclusions of GTEB as to the excessiveness of Appellant's
import prices drew a controverting statement from its own Raw Materials
Importation Regulation Division, thus:
"Considering the unit prices gathered with the unit prices of Glorious
Sun would lead one to believe that Glorious Sun's prices are not
exceptionally high at $2.00/yd. (FOB). However, it should be noted that the
denim fabrics are extremely heterogeneous as can be seen in (1) above,
with respect to width, construction, yarn count, weight, weave, color, and
sourcing or country of origin. These factors, in one way or another affect
the unit prices of the fabrics. For example, although Levi's has a higher unit
price than Glorious Sun ($2.65/yd. as against $2.00/yd.), it should be
noted that they have different sourcing. Glorious Sun imports its fabrics
from Hongkong, while Levi's imports denim fabrics from Japan (this is
specified by the buyer), believed to be superior in quality, thereby more
expensive. The same is true for Lee Phils., which sources its denim fabrics
from the U.S.A. Therefore, it would not be wise to make conclusions from
the comparison of prices, without considering other factors such as those
mentioned above.
Furthermore, it can be seen from (1) that some descriptions of the
materials are not complete. Thus there is not enough basis for comparing
import prices. (Memorandum dated March 25, 1987, supra; . . .)" (Rollo, Vol.
I, pp. 49-51).
The petitioner cites what it calls "inconsequential matters which formed the basis of the
decision of the Office of the President . . . which ought to have been disregarded for lack of
legal worth." (p. 22, Petition) In this regard, the petitioner cites the dissenting opinion in the
case of Presidential Commission on Good Government v. Peña (159 SCRA 556 [1988]), to
wit:
"I participated in the deliberations and hearings of the Glorious Sun case in 1984
and I recall that there was not the slightest scintilla of evidence to support the
charges of dollar salting made by GTEB. A scrap of yellow pad paper on which
were pencilled a few computations and with nothing to support them, a graph of
import prices of four local importers identified only by letters, and another piece
of paper with supposed 1983 prices of fabrics were the only 'proof that the
respondent Minister with all the power (he was issuing warrants of arrest) and
resources at his command could produce before the Court. So patently arbitrary
was the finding of dollar salting that it would have been easy for the First Division
to uphold the exporter's rights . . ." (at pp. 588-589).
The petitioner contends that this pronouncement is obiter dicta since the issue on the
matter was not presented in that case.
Even assuming that the observations were obiter dicta in the Peña case, we find no legal
impediment to re-examining the same conclusions which are borne by the records of the
instant case since we are now confronted with the issue as to the correctness of the 1984
GTEB decision.
The petitioner also cites the affidavit of Chairman Puno. The Puno affidavit is a sworn
statement dated April 7, 1986 given before the Presidential Commission on Good
Government (PCGG) by Assistant Minister of Trade and Industry Rodolfo V. Puno,
Chairman of the Investigating Panel created by the Ministry of Trade and Industry to
conduct hearings on the dollar salting charge against the respondent. It was the "Report to
the Board" (GTEB) which formed the basis of the 1984 GTEB decision finding the
respondent guilty of dollar salting.
The pertinent portion of the Affidavit states:
xxx xxx xxx
"2. Prior to the start of the investigation, I was instructed by Minister Ongpin
to submit a report finding Glorious Sun (Appellant herein) guilty of dollar-salting
and other violations that would justify the cancellation of Glorious Sun's export
quotas which were among the most substantial and valuable in the garments
industry in trouser's line.
3. After Glorious Sun submitted its evidence refuting the dollar salting charge,
I told Minister Ongpin that there was no evidence to substantiate the dollar-salting
charge against Glorious Sun or any other violations of existing laws or rules.
However, Minister Ongpin still instructed me to submit a report to the GTEB, of
which Minister Ongpin was the Chairman, finding Glorious Sun guilty of dollar-
salting. (Rodolfo Puno's Affidavit dated April 7, 1986; . . ." (Elma Decision, Rollo,
Vol. I, pp. 47-48; Emphasis supplied).
The petitioner would like to impress on this Court that the Puno affidavit is an
"inconsequential matter" on the ground that the GTEB did not give credence to the
affidavit. The GTEB said:
"The affidavit of Mr. Rodolfo Puno was studied and evaluated. None of the
members of the committee would agree that there was any pressure or instruction
from former Minister Roberto V. Ongpin to look for ways and means to remove
the quotas from your company. In other words, our investigation showed that the
committee chaired by Mr. Rodolfo Puno based its recommendations on the facts
and documents on hand that the members were free in making their decision the
way they did.
xxx xxx xxx
It is important to dwell further on the affidavit of Mr. Rodolfo Puno who chaired
the investigating panel. His participation during the investigation was so deep
and his involvement as shown by his questions were so detailed that one could
see the thrust of his questions and the points he wanted to bring out. It is logical
to assume that his posture in the original decision was based on the points
elicited during the investigation. For him to make a complete turn about now is
difficult to understand especially when none of the members of the committee
share his new protestation. (See Annex "E", Rollo, Vol. I, pp. 69-70)
The fact that the other members would not agree that there was pressure from Minister
Ongpin to cancel the export quotas of the respondent does not mean that Mr. Puno was
not telling the truth. Mr. Puno stated that he was pressured by Minister Ongpin. He did not
state that the members of the Investigating Panel were pressured. Mr. Puno was the
Chairman of the Investigating Panel. Hence, it is plausible that in view of his position in the
Panel, he was the one pressured by Minister Ongpin. There is every reason to suspect that
even before Glorious Sun was investigated, a decision to strip it of its quotas and to award
them to friends of their administration had already been made. At the very least, Mr. Puno's
"complete turn about" casts doubts on the veracity and fairness of the Investigating
Panel's Report to GTEB which formed the basis for the 1984 GTEB decision. Hence, the
need for further proceedings before the GTEB. prLL
Findings of administrative agencies are accorded respect and finality, and generally should
not be disturbed by the courts. This general rule, however, is not without exceptions:
"As recently reiterated, it is jurisprudentially settled that absent a clear, manifest
and grave abuse of discretion amounting to want of jurisdiction, the findings of
the administrative agency on matters falling within its competence will not be
disturbed by the court. Specifically with respect to factual findings, they are
accorded respect, if not finality, because of the special knowledge and expertise
gained by these tribunals from handling the specific matters falling under their
jurisdiction. Such factual findings may be disregarded only if they "are not
supported by evidence; where the findings are initiated by fraud, imposition or
collusion; where the procedures which lead to the factual findings are irregular;
when palpable errors are committed; or when grave abuse of discretion
arbitrariness or capriciousness is manifest." (Mapa v. Arroyo, 176 SCRA 76
[1989])
Contrary to the petitioner's posture, the record clearly manifests that in cancelling the
export quotas of the private respondent GTEB violated the private respondent's
constitutional right to due process. Before the cancellation in 1984, the private respondent
had been enjoying export quotas granted to it since 1977. In effect the private
respondent's export quota allocation which initially was a privilege evolved into some form
of property right which should not be removed from it arbitrarily and without due process
only to hurriedly confer it on another. Thus, in the case of Mabuhay Textile Mills
Corporation v. Ongpin (141 SCRA 437, 450 [1986]), we stated:
"In the case at bar, the petitioner was never given the chance to present its side
before its export quota allocations were revoked and its officers suspended. While
it is true that such allocations as alleged by the Board are mere privileges which it
can revoke and cancel as it may deem fit, these privileges have been accorded to
petitioner for so long that they have become impressed with property rights
especially since not only do these privileges determine the continued existence of
the petitioner with assets of over P80,000,000.00 but also the livelihood of some
700 workers who are employed by the petitioner and their families . . . (Emphasis
supplied)
The decision penned by Deputy Executive Secretary Magdangal B. Elma and the resolution
penned by Acting Deputy Executive Secretary Mariano Sarmiento II are not tainted in the
slightest by any grave abuse of discretion. They outline in detail why the private
respondent was denied due process when its export quotas were cancelled by GTEB. The
findings are supported by the records.
Finally, American Inter-Fashion is hardly the proper party to question the Malacañang
decision. It was incorporated after the incidents in this case happened. It was created
obviously to be the recipient of export quotas arbitrarily removed from the rightful owner.
It was sequestered precisely because of the allegation that it is a crony corporation which
profited from an act of injustice inflicted on another private corporation. LLjur
PREMISES CONSIDERED, the motion for reconsideration is GRANTED. The instant petition
is DISMISSED. The questioned decision and resolution of the Office of the President are
hereby AFFIRMED.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Gancayco, Padilla, Bidin, Medialdea, Regalado
and Davide, Jr., JJ., concur.
Paras, Sarmiento and Griño-Aquino, JJ., took no part.
Separate Opinions
FELICIANO , J., concurring:
I concur in the result reached by the Court, that is, that petitioner American Inter-fashion
Corporation has failed to show any grave abuse of discretion or act without or in excess of
jurisdiction on the part of the public respondent Office of the President in rendering its
decision in OP Case No. 3781 dated 7 September 1989. That decision directed the
Garments and Textile Export Board ("GTEB") to reopen OSC Case No. 84-B-1 and to review
a decision rendered therein by the GTEB on 27 April 1984 ordering revocation of the
export quota allocation of private respondent Glorious Sun Fashion Garments
Manufacturing Company (Philippines), Inc. ("Glorious Sun") and disqualifying its officials
from availing of export quotas in the garment business. LLjur
At the same time, it seems useful to record the consensus of the Court reached during its
deliberation on this case that, firstly, there is nothing in the present decision that in any way
modifies the rule in Presidential Commission on Good Government v. Hon. Emmanuel G.
Peña, etc., et al. (159 SCRA 556 [1988]). Secondly, such conclusions as the GTEB may
reach in respect of the factual and legal issues involved in OSC Case No. 84-B-1, relate to
the administrative charges against private respondent Glorious Sun for misdeclaration of
importations, and will not bind the Sandiganbayan in resolving Civil Cases Nos. 0002 and
0081 presently pending before the Sandiganbayan, involving charges of acquisition of "ill-
gotten" wealth by members of the Marcos family and their business associates or cronies.

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EN BANC

[G.R. No. L-68288. July 11, 1986.]

DIOSDADO GUZMAN, ULYSSES URBIZTONDO, and ARIEL

Efren H. Mercado and Haydee Yorac for petitioners.

Petitioners Diosdado Guzman, Ulysses Urbiztondo and Ariel Ramacula, students of

4) that as regards petitioner Ramacula, like Guzman "he continued to lead or

Respondents close their comment with the following assertions, to wit:

2) "Under the circumstances, and without regard to legal technicalities, it is

3) "In any event, petitioners' enrollment being on the semestral basis,

On October 2, 1984 this Court issued a resolution reading as follows:

Petitioners' REPLY inter alia —

Immediately apparent from a reading of respondents' comment and memorandum is the

But, to repeat, the imposition of disciplinary sanctions requires observance of procedural

2. In G.R. No. 65443 dated Nov. 23, 1983, supra.

4. Par. 1, Memorandum of Respondents; p. 75, rollo.

9. 117 SCRA 581.

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[G.R. No. 89317. May 20, 1990.]

ARIEL NON, REX MAGANA, ALVIN AGURA, NORMANDY OCCIANO,

Antonio A. Ayo, Jr. and Soliman M. Santos, Jr. for petitioners.

In conclusion, We wish to reiterate that while We value the right of

2.Permissible Limitations on Student Exercise of Constitutional Rights Within the

PADILLA , J., concurring:

I concurred in the majority opinion in Alcuaz, et al. vs. Philippine School of

It should be stressed, however, that this right of students to enroll is not

SARMIENTO , J., concurring:

The "termination of contract" theory espoused by Alcuaz v. Philippine School of

5.No. 68288, July 11, 1986, 142 SCRA 699.

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[G.R. No. 99327. May 27, 1993.]

ATENEO DE MANILA UNIVERSITY, FATHER JOAQUIN BERNAS, S.J.,

1. POLITICAL LAW; DUE PROCESS; REQUIREMENTS; MINIMUM STANDARD TO BE

7. REMEDIAL LAW; PROVISIONAL REMEDIES; TEMPORARY RESTRAINING ORDER;

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c) Hazing which is not defined in the School catalogue shall be defined in

e) The Decision of the Board shall be appealable to the President of the

3. Annex B, Rollo, p. 41.

3. Hazing; carrying deadly weapons; drunkenness, vandalism; "assaulting a professor

5. Annex D, Rollo, p. 45.

6. Annex E, Rollo, p. 46.

8. Annex G, Rollo, p. 49.

10. Annex Q, Rollo, p. 88.

11. Annex H, Rollo, p. 175.

14. Annex K, Rollo, p. 55.

15. Annex L, Rollo, p. 67.

17. Annex N, Rollo, pp. 76-81.

18. Rollo, p. 84.

20. Annex M, Rollo, p. 189.

22. L-68288, July 11, 1986 142 SCRA 699.

24. G. R. No. 89317, May 20, 1990, 185 SCRA 523.

25. 69 Phil. 635 (1940).

29. Annex C, Rollo, p. 43.

30. See Annex B, Rollo, p. 41 and Annex D, Rollo, p. 44.

34. Alcuaz v. PSBA, QC Branch, supra at 20.

40. 4 ConCom Record, p. 439.

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[G.R. No. 110280. October 21, 1993.]

UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS and DR.

U.P. Office of Legal Services for petitioners.

After broad consultations with the various university constituencies by U.P.

Applicants are required to accomplish a questionnaire where, among others, they

Statement of the Applicant's Parent or Guardian