G.R. NO. 160093, July 31, 2007 set forth in R.A. No.
6656[4] or the "Rules on Governmental
MALARIA EMPLOYEES AND WORKERS ASSOCIATION OF THE
PHILIPPINES, INC. (MEWAP), REPRESENTED BY ITS NATIONAL
PRESIDENT, DR. RAMON A. SULLA, AND MEWAP DOH
CENTRAL OFFICE CHAPTER PRESIDENT, DR. GRACELA
FIDELA MINA-RAMOS, AND PRISCILLA CARILLO, AND
HERMINIO JAVIER, PETITIONERS,VS. THE HONORABLE
EXECUTIVE SECRETARY ALBERTO ROMULO, (SUBSTITUTING
THE FORMER EXECUTIVE SECRETARY RENATO DE VILLA),
THE HONORABLE SECRETARY OF HEALTH MANUEL DAYRIT
AND THE HONORABLE SECRETARY OF BUDGET AND
MANAGEMENT EMILIA T. BONCODIN, RESPONDENTS.
DECISION
PUNO, C.J.:
At bar is a Petition for Review on Certiorari of the Decision of
the Court of Appeals in CA-G.R. SP No. 65475 dated September
12, 2003 which upheld the validity of Executive Order (E.O.) No.
102,[1] the law Redirecting the Functions and Operations of the
Department of Health. Then President Joseph E. Estrada issued
E.O. No. 102 on May 24, 1999 pursuant to Section 20, Chapter 7,
Title I, Book III of E.O. No. 292, otherwise known as the
Administrative Code of 1987, and Sections 78 and 80 of Republic
Act (R.A.) No. 8522, also known as the General Appropriations
Act (GAA) of 1998. E.O. No. 102 provided for structural changes
and redirected the functions and operations of the Department of
Health.
On October 19, 1999, the President issued E.O. No. 165
"Directing the Formulation of an Institutional Strengthening and
1 Streamlining Program for the Executive Branch" which created
the Presidential Committee on Executive Governance (PCEG)
composed of the Executive Secretary as chair and the Secretary of
the Department of Budget and Management (DBM) as co-chair.
The DBM, on July 8, 2000, issued the Notice of Organization,
Staffing and Compensation Action (NOSCA). On July 17, 2000,
the PCEG likewise issued Memorandum Circular (M.C.) No. 62,
entitled "Implementing Executive Order No. 102, Series of 1999
Redirecting the Functions and Operations of the Department of
Health."[2] M.C. No. 62 directed the rationalization and
streamlining of the said Department.
On July 24, 2000, the Secretary of Health issued Department
Memorandum No. 136, Series of 2000, ordering the
Undersecretary, Assistant Secretaries, Bureau or Service Directors
and Program Managers of the Department of Health to direct all
employees under their respective offices to accomplish and
submit the Personal Information Sheet due to the approval of the
Department of Health – Rationalization and Streamlining Plan.
On July 28, 2000, the Secretary of Health again issued Department
Circular No. 221, Series of 2000, stating that the Department will
start implementing the Rationalization and Streamlining Plan by a
process of selection, placement or matching of personnel to the
approved organizational chart and the list of the approved
plantilla items.[3] The Secretary also issued Administrative Order
(A.O.) No. 94, Series of 2000, which set the implementing
guidelines for the restructuring process on personnel selection
and placement, retirement and/or voluntary resignation. A.O.
No. 94 outlined the general guidelines for the selection and
placement of employees adopting the procedures and standards
1|Page
Reorganization," Civil Service Rules and Regulations, Sections 76
to 78 of the GAA for the Year 2000, and Section 42 of E.O. No.
292.
On August 29, 2000, the Secretary of Health issued Department
Memorandum No. 157, Series of 2000, viz.:
Pursuant to the Notice of Organization, Staffing and
Compensation Action (NOSCA) approved by the DBM on 8 July
2000 and Memorandum Circular No. 62 issued by the Presidential
Committee on Effective Governance (PCEG) on 17 July 2000,
Implementing E.O. 102 dated 24 May 1999, the following
approved Placement List of DOH Personnel is hereby
disseminated for your information and guidance.
All personnel are hereby directed to report to their new
assignments on or before 2 October 2000 pending processing of
new appointments, required clearances and other pertinent
documents.
All Heads of Office/Unit in the Department of Health are hereby
directed to facilitate the implementation of E.O. 102, to include[,]
among others, the transfer or movement of personnel, properties,
records and documents to appropriate office/unit and device
other necessary means to minimize disruption of office functions
and delivery of health services.
Appeals, oversights, issues and concerns of personnel related to
this Placement List shall be made in writing using the Appeals
Form (available at the Administrative Service) addressed to the
Appeals Committee chaired by Dr. Gerardo Bayugo. All Appeals
Forms shall be submitted to the Re-Engineering Secretariat xxx
not later than 18 September 2000. [5]
Petitioner Malaria Employees and Workers Association of the
Philippines, Inc. (MEWAP) is a union of affected employees in
the Malaria Control Service of the Department of Health.
MEWAP filed a complaint, docketed as Civil Case No. 00-98793,
with the Regional Trial Court of Manila seeking to nullify
Department Memorandum No. 157, the NOSCA and the
Placement List of Department of Health Personnel and other
issuances implementing E.O. No. 102.
On May 2, 2001, while the civil case was pending at the Regional
Trial Court of Manila, Branch 22, petitioners filed with this Court
a petition for certiorari under Rule 65 of the Rules of Court.
Petitioners sought to nullify E.O. No. 102 for being issued with
grave abuse of discretion amounting to lack or excess of
jurisdiction as it allegedly violates certain provisions of E.O. No.
292 and R.A. No. 8522. The petition was referred to the Court of
Appeals which dismissed the same in its assailed Decision. Hence,
this appeal where petitioners ask for a re-examination of the
pertinent pronouncements of this Court that uphold the authority
of the President to reorganize a department, bureau or office in
the executive department. Petitioners raise the following issues,
viz.:
1. Whether Sections 78 and 80 of the General Provision of
Republic Act No. 8522, otherwise known as the General
Appropriation[s] Act of 1998[,] empower former President
Joseph E. Estrada to reorganize structurally and functionally
the Department of Health.
ADMINLAW CASES
 2. Whether Section 20, Chapter I, title i, Book III of the
Administrative Code of 1987 provides legal basis in
reorganizing the Department of Health.
(A) Whether Presidential Decree No. 1416, as amended by
Presidential Decree No. 1772, has been repealed.
3. Whether the President has authority under Section 17, Article
VIII of the Constitution to effect a reorganization of a
department under the executive branch.
4. Whether there has been abuse of discretion amounting to
lack or excess of jurisdiction on the part of former President
Joseph E. Estrada in issuing Executive Order No. 102,
Redirecting the functions and operations of the Department
of Health.
5. Whether Executive Order No. 102 is null and void.[6]
We deny the petition.
The President has the authority to carry out a reorganization of
the Department of Health under the Constitution and statutory
laws. This authority is an adjunct of his power of control under
Article VII, Sections 1 and 17 of the 1987 Constitution, viz.:
Section 1. The executive power shall be vested in the President of
the Philippines.
Section 17. The President shall have control of all the executive
departments, bureaus and offices. He shall ensure that the laws be
2 faithfully executed.
In Canonizado v. Aguirre,[7] we held that reorganization "involves
the reduction of personnel, consolidation of offices, or
abolition thereof by reason of economy or redundancy of
functions." It alters the existing structure of government offices
or units therein, including the lines of control, authority and
responsibility between them.[8] While the power to abolish an
office is generally lodged with the legislature, the authority of the
President to reorganize the executive branch, which may include
such abolition, is permissible under our present laws, viz.:
The general rule has always been that the power to abolish a public
office is lodged with the legislature. This proceeds from the legal
precept that the power to create includes the power to destroy. A
public office is either created by the Constitution, by statute, or
by authority of law. Thus, except where the office was created by
the Constitution itself, it may be abolished by the same legislature
that brought it into existence.
The exception, however, is that as far as bureaus, agencies or
offices in the executive department are concerned, the President's
power of control may justify him to inactivate the functions of a
particular office, or certain laws may grant him the broad authority
to carry out reorganization measures.[9]
The President's power to reorganize the executive branch is also
an exercise of his residual powers under Section 20, Title I, Book
III of E.O. No. 292 which grants the President broad organization
powers to implement reorganization measures, viz.:
SEC. 20. Residual Powers. – Unless Congress provides otherwise,
the President shall exercise such other powers and functions
vested in the President which are provided for under the laws
2|Page
and which are not specifically enumerated above, or which are not
delegated by the President in accordance with law.[10]
We explained the nature of the President's residual powers under
this section in the case of Larin v. Executive Secretary, [11] viz.:
This provision speaks of such other powers vested in the
President under the law. What law then gives him the power
to reorganize? It is Presidential Decree No. 1772 which
amended Presidential Decree No. 1416. These decrees
expressly grant the President of the Philippines the
continuing authority to reorganize the national government,
which includes the power to group, consolidate bureaus and
agencies, to abolish offices, to transfer functions, to create
and classify functions, services and activities and to
standardize salaries and materials. The validity of these two
decrees [is] unquestionable. The 1987 Constitution clearly
provides that "all laws, decrees, executive orders, proclamations,
letters of instructions and other executive issuances not
inconsistent with this Constitution shall remain operative until
amended, repealed or revoked." So far, there is yet no law
amending or repealing said decrees.[12]
The pertinent provisions of Presidential Decree No. 1416, as
amended by Presidential Decree No. 1772, clearly support the
President's continuing power to reorganize the executive branch,
viz.:
1. The President of the Philippines shall have continuing
authority to reorganize the National Government. In
exercising this authority, the President shall be guided by
generally acceptable principles of good government and
responsive national development, including but not limited
to the following guidelines for a more efficient, effective,
economical and development-oriented governmental
framework:
xxx
b) Abolish departments, offices, agencies or functions which may
not be necessary, or create those which are necessary, for the
efficient conduct of government functions, services and activities;
c) Transfer functions, appropriations, equipment, properties,
records and personnel from one department, bureau, office,
agency or instrumentality to another;
d) Create, classify, combine, split, and abolish positions;
e) Standardize salaries, materials, and equipment;
f) Create, abolish, group, consolidate, merge, or integrate entities,
agencies, instrumentalities, and units of the National
Government, as well as expand, amend, change, or otherwise
modify their powers, functions, and authorities, including, with
respect to government-owned or controlled corporations, their
corporate life, capitalization, and other relevant aspects of their
charters;
g) Take such other related actions as may be necessary to carry
out the purposes and objectives of this Decree.
Petitioners argue that the residual powers of the President under
Section 20, Title I, Book III of E.O. No. 292 refer only to the
Office of the President and not to the departments, bureaus or
ADMINLAW CASES
 offices within the executive branch. They invoke Section 31,
Chapter 10, Title III, Book III of the same law, viz.:
Section 31. Continuing Authority of the President to Reorganize
his Office. – The President, subject to the policy in the Executive
Office and in order to achieve simplicity, economy and efficiency,
shall have continuing authority to reorganize the administrative
structure of the Office of the President. x x x
The interpretation of petitioners is illogically restrictive and lacks
legal basis. The residual powers granted to the President under
Section 20, Title I, Book III are too broad to be construed as
having a sole application to the Office of the President. As
correctly stated by respondents, there is nothing in E.O. No. 292
which provides that the continuing authority should apply only to
the Office of the President.[13] If such was the intent of the law,
the same should have been expressly stated. To adopt the
argument of petitioners would result to two conflicting provisions
in one statute. It is a basic canon of statutory construction that in
interpreting a statute, care should be taken that every part thereof
be given effect, on the theory that it was enacted as an integrated
measure and not as a hodge-podge of conflicting provisions. The
rule is that a construction that would render a provision
inoperative should be avoided; instead, apparently inconsistent
provisions should be reconciled whenever possible as parts of a
coordinated and harmonious whole.[14]
In fact, as pointed out by respondents, the President's power to
reorganize the executive department even finds further basis
under Sections 78 and 80 of R.A. No. 8522, viz.:[15]
Section 78. Organizational Changes ' Unless otherwise provided
by law or directed by the President of the Philippines, no
organizational unit or changes in key positions in any department
3 or agency shall be authorized in their respective organizational
structure and funded from appropriations provided by this Act.
Be that as it may, the President must exercise good faith in
carrying out the reorganization of any branch or agency of the
executive department. Reorganization is effected in good faith if
it is for the purpose of economy or to make bureaucracy more
efficient.[18] R.A. No. 6656[19] provides for the circumstances
which may be considered as evidence of bad faith in the removal
of civil service employees made as a result of reorganization, to
wit: (a) where there is a significant increase in the number of
positions in the new staffing pattern of the department or agency
concerned; (b) where an office is abolished and another
performing substantially the same functions is created; (c) where
incumbents are replaced by those less qualified in terms of status
of appointment, performance and merit; (d) where there is a
classification of offices in the department or agency concerned
and the reclassified offices perform substantially the same
functions as the original offices; and (e) where the removal
violates the order of separation.
We agree with the ruling of the Court of Appeals that the
President did not commit bad faith in the questioned
reorganization, viz.:
In this particular case, there is no showing that the reorganization
undertaking in the [Department of Health] had violated this
requirement, nor [are] there adequate allegations to that effect. It
is only alleged that the petitioners were directly affected by the
reorganization ordered under E.O. [No.] 102. Absent is any
showing that bad faith attended the actual implementation of the
said presidential issuance.
IN VIEW WHEREOF, the petition is DENIED. The assailed Decision of the Court of
Appeals in CA-G.R. SP No. 65475 dated September 12, 2003 is AFFIRMED.
Costs against petitioners. SO ORDERED.

Section 80. Scaling Down and Phase-out of Activities of Agencies

within the Executive Branch – The heads of departments,
bureaus, offices and agencies are hereby directed to identify their
respective activities which are no longer essential in the delivery
of public services and which may be scaled down, phased-out or
abolished subject to Civil Service rules and regulations. Said
activities shall be reported to the Office of the President through
the Department of Budget and Management and to the Chairman,
Committee on Appropriations of the House of Representatives
and the Chairman, Committee on Finance of the Senate. Actual
scaling down, phase-out or abolition of the activities shall be
effected pursuant to Circulars or Orders issued for the purpose
by the Office of the President.
Petitioners contend that Section 78 refers only to changes in
"organizational units" or "key positions" in any department or
agency, while Section 80 refers merely to scaling down and
phasing out of "activities" within the executive department. They
argue that neither section authorizes reorganization. Thus, the
realignment of the appropriations to implement the
reorganization of the Department of Health under E.O. No. 102
is illegal.

Again, petitioners' construction of the law is unduly restrictive.

This Court has consistently held in Larin[16] and Buklod ng
Kawanihang EIIB v. Zamora[17] that the corresponding
pertinent provisions in the GAA in these subject cases authorize
the President to effect organizational changes in the department
or agency concerned.

3|Page ADMINLAW CASES

 G.R. No. 196425, July 24, 2012
PROSPERO A. PICHAY, JR., PETITIONER, VS. OFFICE OF THE
DEPUTY EXECUTIVE SECRETARY FOR LEGAL AFFAIRS
INVESTIGATIVE AND ADJUDICATORY DIVISION, HON.
PAQUITO N. OCHOA, JR., IN HIS CAPACITY AS EXECUTIVE
SECRETARY, AND HON. CESAR V. PURISIMA, IN HIS CAPACITY
AS SECRETARY OF FINANCE, AND AS AN EX OFFICIO MEMBER
OF THE MONETARY BOARD, RESPONDENTS.
DECISION
PERLAS-BERNABE, J.:
The Case
This is a Petition for Certiorari and Prohibition with a prayer for
the issuance of a temporary restraining order, seeking to declare
as unconstitutional Executive Order No. 13, entitled, “Abolishing
the Presidential Anti-Graft Commission and Transferring Its Investigative,
Adjudicatory and Recommendatory Functions to the Office Of The Deputy
Executive Secretary For Legal Affairs, Office of the President”,[1] and to
permanently prohibit respondents from administratively
proceeding against petitioner on the strength of the assailed
executive order.
The Facts
On April 16, 2001, then President Gloria Macapagal-Arroyo
issued Executive Order No. 12 (E.O. 12) creating the
Presidential Anti-Graft Commission (PAGC) and vesting it with
the power to investigate or hear administrative cases or
complaints for possible graft and corruption, among others,
4 continuing authority to reorganize the administrative structure of
against presidential appointees and to submit its report and
recommendations to the President. Pertinent portions of E.O.
12 provide:
Section 4. Jurisdiction, Powers and Functions. –
(a) xxx xxx xxx
(b) The Commission, acting as a collegial body, shall have the
authority to investigate or hear administrative cases or
complaints against all presidential appointees in the government
and any of its agencies or instrumentalities xxx
xxx xxx xxx
Section 8. Submission of Report and Recommendations. – After
completing its investigation or hearing, the Commission en banc
shall submit its report and recommendations to the President.
The report and recommendations shall state, among others, the
factual findings and legal conclusions, as well as the penalty
recommend (sic) to be imposed or such other action that may be
taken.”
On November 15, 2010, President Benigno Simeon Aquino III
issued Executive Order No. 13 (E.O. 13), abolishing the PAGC
and transferring its functions to the Office of the Deputy
Executive Secretary for Legal Affairs (ODESLA), more
particularly to its newly-established Investigative and
Adjudicatory Division (IAD). The full text of the assailed
executive order reads:
4|Page
EXECUTIVE ORDER NO. 13
ABOLISHING THE PRESIDENTIAL ANTI-GRAFT
COMMISSION AND TRANSFERRING ITS
INVESTIGATIVE, ADJUDICATORY AND
RECOMMENDATORY FUNCTIONS TO THE OFFICE OF
THE DEPUTY EXECUTIVE SECRETARY FOR LEGAL
AFFAIRS, OFFICE OF THE PRESIDENT
WHEREAS, this administration has a continuing mandate and
advocacy to fight and eradicate corruption in the different
departments, bureaus, offices and other government agencies
and instrumentalities;
WHEREAS, the government adopted a policy of streamlining
the government bureaucracy to promote economy and efficiency
in government;
WHEREAS, Section VII of the 1987 Philippine Constitution
provides that the President shall have control of all the executive
departments, bureaus and offices;
WHEREAS, Section 31 Chapter 10, Title III, Book III of
Executive Order 292 (Administrative Code of 1987) provides for
the continuing authority of the President to reorganize the
administrative structure of the Office of the President;
WHEREAS, Presidential Decree (PD) No. 1416 (Granting
Continuing Authority to the President of the Philippines to
Reorganize the National Government), as amended by PD 1722,
provides that the President of the Philippines shall have
the National Government and may, at his discretion, create,
abolish, group, consolidate, merge or integrate entities, agencies,
instrumentalities and units of the National Government, as well
as, expand, amend, change or otherwise modify their powers,
functions and authorities;
WHEREAS, Section 78 of the General Provisions of Republic
Act No. 9970 (General Appropriations Act of 2010) authorizes
the President of the Philippines to direct changes in the
organizational units or key positions in any department or
agency;
NOW, THEREFORE, I, BENIGNO S. AQUINO III,
President of the Philippines, by virtue of the powers vested in
me by law, do hereby order the following:
SECTION 1. Declaration of Policy. It is the policy of the
government to fight and eradicate graft and corruption in the
different departments, bureaus, offices and other government
agencies and instrumentalities.
The government adopted a policy of streamlining the
government bureaucracy to promote economy and efficiency in
the government.
SECTION 2. Abolition of Presidential Anti-Graft Commission
(PAGC). To enable the Office of the President (OP) to directly
investigate graft and corrupt cases of Presidential appointees in
the Executive Department including heads of government-
owned and controlled corporations, the Presidential Anti-Graft
Commission (PAGC) is hereby abolished and their vital
ADMINLAW CASES
 functions and other powers and functions inherent or incidental
thereto, transferred to the Office of the Deputy Executive
Secretary for Legal Affairs (ODESLA), OP in accordance with
the provisions of this Executive Order.
SECTION 3. Restructuring of the Office of the Deputy
Executive Secretary for Legal Affairs, OP. In addition to the
Legal and Legislative Divisions of the ODESLA, the
Investigative and Adjudicatory Division shall be created.
The newly created Investigative and Adjudicatory Division shall
perform powers, functions and duties mentioned in Section 2
hereof, of PAGC.
The Deputy Executive Secretary for Legal Affairs (DESLA) will
be the recommending authority to the President, thru the
Executive Secretary, for approval, adoption or modification of
the report and recommendations of the Investigative and
Adjudicatory Division of ODESLA.
SECTION 4. Personnel Who May Be Affected By the Abolition
of PAGC. The personnel who may be affected by the abolition
of the PAGC shall be allowed to avail of the benefits provided
under existing laws if applicable. The Department of Budget and
Management (DBM) is hereby ordered to release the necessary
funds for the benefits of the employees.
SECTION 5. Winding Up of the Operation and Disposition of
the Functions, Positions, Personnel, Assets and Liabilities of
PAGC. The winding up of the operations of PAGC including
the final disposition or transfer of their functions, positions,
5 personnel, assets and liabilities as may be necessary, shall be in
accordance with the applicable provision(s) of the Rules and
Regulations Implementing EO 72 (Rationalizing the Agencies
Under or Attached to the Office of the President) dated March
15, 2002. The winding up shall be implemented not later than 31
December 2010.
The Office of the Executive Secretary, with the assistance of the
Department of Budget and Management, shall ensure the
smooth and efficient implementation of the dispositive actions
and winding-up of the activities of PAGC.
SECTION 6. Repealing Clause. All executive orders, rules,
regulations and other issuances or parts thereof, which are
inconsistent with the provisions of this Executive Order, are
hereby revoked or modified accordingly.
SECTION 7. Effectivity. This Executive Order shall take effect
immediately after its publication in a newspaper of general
circulation.
On April 6, 2011, respondent Finance Secretary Cesar V.
Purisima filed before the IAD-ODESLA a complaint affidavit[2]
for grave misconduct against petitioner Prospero A. Pichay, Jr.,
Chairman of the Board of Trustees of the Local Water Utilities
Administration (LWUA), as well as the incumbent members of
the LWUA Board of Trustees, namely, Renato Velasco, Susana
Dumlao Vargas, Bonifacio Mario M. Pena, Sr. and Daniel
Landingin, which arose from the purchase by the LWUA of
Four Hundred Forty-Five Thousand Three Hundred Seventy
Seven (445,377) shares of stock of Express Savings Bank, Inc.
5|Page
On April 14, 2011, petitioner received an Order[3] signed by
Executive Secretary Paquito N. Ochoa, Jr. requiring him and his
co-respondents to submit their respective written explanations
under oath. In compliance therewith, petitioner filed a Motion to
Dismiss Ex Abundante Ad Cautelam manifesting that a case
involving the same transaction and charge of grave misconduct
entitled, “Rustico B. Tutol, et al. v. Prospero Pichay, et al.”, and
docketed as OMB-C-A-10-0426-I, is already pending before the
Office of the Ombudsman.
Now alleging that no other plain, speedy and adequate remedy is
available to him in the ordinary course of law, petitioner has
resorted to the instant petition for certiorari and prohibition
upon the following grounds:
I. E.O. 13 IS UNCONSTITUTIONAL FOR USURPING
THE POWER OF THE LEGISLATURE TO CREATE A
PUBLIC OFFICE.
II. E.O. 13 IS UNCONSTITUTIONAL FOR USURPING
THE POWER OF THE LEGISLATURE TO
APPROPRIATE FUNDS.
III. E.O. 13 IS UNCONSTITUTIONAL FOR USURPING
THE POWER OF CONGRESS TO DELEGATE QUASI-
JUDICIAL POWERS TO ADMINISTRATIVE
AGENCIES.
IV. E.O. 13 IS UNCONSTITUTIONAL FOR
ENCROACHING UPON THE POWERS OF THE
OMBUDSMAN.
V. E.O. 13 IS UNCONSTITUTIONAL FOR VIOLATING
THE GUARANTEE OF DUE PROCESS.
VI. E.O. 13 IS UNCONSTITUTIONAL FOR
VIOLATING THE EQUAL PROTECTION CLAUSE.
Our Ruling
In assailing the constitutionality of E.O. 13, petitioner
asseverates that the President is not authorized under any
existing law to create the Investigative and Adjudicatory
Division, Office of the Deputy Executive Secretary for Legal
Affairs (IAD-ODESLA) and that by creating a new, additional
and distinct office tasked with quasi-judicial functions, the
President has not only usurped the powers of congress to create
a public office, appropriate funds and delegate quasi-judicial
functions to administrative agencies but has also encroached
upon the powers of the Ombudsman.
Petitioner avers that the unconstitutionality of E.O. 13 is also
evident when weighed against the due process requirement and
equal protection clause under the 1987 Constitution.
The contentions are unavailing.
The President has Continuing Authority to Reorganize the
Executive Department under E.O. 292.
Section 31 of Executive Order No. 292 (E.O. 292), otherwise
known as the Administrative Code of 1987, vests in the
ADMINLAW CASES
 President the continuing authority to reorganize the offices
under him in order to achieve simplicity, economy and
efficiency. E.O. 292 sanctions the following actions undertaken
for such purpose:
(1) Restructure the internal organization of the Office of the
President Proper, including the immediate Offices, the
Presidential Special Assistants/Advisers System and the
Common Staff Support System, by abolishing, consolidating,
or merging units thereof or transferring functions from one
unit to another;
(2) Transfer any function under the Office of the President
to any other Department or Agency as well as transfer
functions to the Office of the President from other Departments
and Agencies; and
(3) Transfer any agency under the Office of the President to
any other Department or Agency as well as transfer agencies
to the Office of the President from other departments or
agencies.[4]
In the case of Buklod ng Kawaning EIIB v. Zamora the Court[5]
affirmed that the President's authority to carry out a
reorganization in any branch or agency of the executive
department is an express grant by the legislature by virtue of
E.O. 292, thus:
But of course, the list of legal basis authorizing the President to
reorganize any department or agency in the executive branch
6 does not have to end here. We must not lose sight of the very
source of the power – that which constitutes an express grant
of power. Under Section 31, Book III of Executive Order No.
292 (otherwise known as the Administrative Code of 1987), “the
President, subject to the policy of the Executive Office and in
order to achieve simplicity, economy and efficiency, shall have
the continuing authority to reorganize the administrative
structure of the Office of the President.” For this purpose, he
may transfer the functions of other Departments or Agencies to
the Office of the President. (Emphasis supplied)
And in Domingo v. Zamora,[6] the Court gave the rationale behind
the President's continuing authority in this wise:
The law grants the President this power in recognition of the
recurring need of every President to reorganize his office “to
achieve simplicity, economy and efficiency.” The Office of the
President is the nerve center of the Executive Branch. To
remain effective and efficient, the Office of the President
must be capable of being shaped and reshaped by the
President in the manner he deems fit to carry out his
directives and policies. After all, the Office of the President is
the command post of the President. (Emphasis supplied)
Clearly, the abolition of the PAGC and the transfer of its
functions to a division specially created within the ODESLA is
properly within the prerogative of the President under his
continuing “delegated legislative authority to reorganize” his own office
pursuant to E.O. 292.
Generally, this authority to implement organizational changes is
6|Page
limited to transferring either an office or a function from the
Office of the President to another Department or Agency, and
the other way around.[7] Only Section 31(1) gives the President a
virtual freehand in dealing with the internal structure of the
Office of the President Proper by allowing him to take actions as
extreme as abolition, consolidation or merger of units, apart
from the less drastic move of transferring functions and offices
from one unit to another. Again, in Domingo v. Zamora[8] the
Court noted:
However, the President's power to reorganize the Office of the
President under Section 31 (2) and (3) of EO 292 should be
distinguished from his power to reorganize the Office of the
President Proper. Under Section 31 (1) of EO 292, the President
can reorganize the Office of the President Proper by abolishing,
consolidating or merging units, or by transferring functions from one
unit to another. In contrast, under Section 31 (2) and (3) of EO
292, the President's power to reorganize offices outside the
Office of the President Proper but still within the Office of the
President is limited to merely transferring functions or agencies
from the Office of the President to Departments or Agencies,
and vice versa.
The distinction between the allowable organizational actions
under Section 31(1) on the one hand and Section 31 (2) and (3)
on the other is crucial not only as it affects employees' tenurial
security but also insofar as it touches upon the validity of the
reorganization, that is, whether the executive actions undertaken
fall within the limitations prescribed under E.O. 292. When the
PAGC was created under E.O. 12, it was composed of a
Chairman and two (2) Commissioners who held the ranks of
Presidential Assistant II and I, respectively[9], and was placed
directly “under the Office of the President.”[10] On the other
hand, the ODESLA, to which the functions of the PAGC have
now been transferred, is an office within the Office of the
President Proper.[11] Since both of these offices belong to the
Office of the President Proper, the reorganization by way of
abolishing the PAGC and transferring its functions to the ODESLA
is allowable under Section 31 (1) of E.O. 292.
Petitioner, however, goes on to assert that the President went
beyond the authority granted by E.O. 292 for him to reorganize
the executive department since his issuance of E.O. 13 did not
merely involve the abolition of an office but the creation of one
as well. He argues that nowhere in the legal definition laid down
by the Court in several cases does a reorganization include the
act of creating an office.
The contention is misplaced.
The Reorganization Did not Entail the Creation of a New,
Separate and Distinct Office.
The abolition of the PAGC did not require the creation of a
new, additional and distinct office as the duties and functions
that pertained to the defunct anti-graft body were simply
transferred to the ODESLA, which is an existing office within the
Office of the President Proper. The reorganization required no
more than a mere alteration of the administrative structure of the
ODESLA through the establishment of a third division – the
Investigative and Adjudicatory Division – through which
ODESLA could take on the additional functions it has been
ADMINLAW CASES
 tasked to discharge under E.O. 13. In Canonizado v. Aguirre,[12]
We ruled that –
Reorganization takes place when there is an alteration of the
existing structure of government offices or units therein,
including the lines of control, authority and responsibility
between them. It involves a reduction of personnel,
consolidation of offices, or abolition thereof by reason of
economy or redundancy of functions.
The Reorganization was
Pursued in Good Faith.
A valid reorganization must not only be exercised through
legitimate authority but must also be pursued in good faith. A
reorganization is said to be carried out in good faith if it is done
for purposes of economy and efficiency.[13] It appears in this case
that the streamlining of functions within the Office of the
President Proper was pursued with such purposes in mind. In its
Whereas clauses, E.O. 13 cites as bases for the reorganization the
policy dictates of eradicating corruption in the government and promoting
economy and efficiency in the bureaucracy. Indeed, the economical
effects of the reorganization is shown by the fact that while
Congress had initially appropriated P22 Million for the PAGC's
operation in the 2010 annual budget,[14] no separate or added
funding of such a considerable amount was ever required after
the transfer of the PAGC functions to the IAD-ODESLA.
Apparently, the budgetary requirements that the IAD-ODESLA
needed to discharge its functions and maintain its personnel
would be sourced from the following year's appropriation for
the President's Offices under the General Appropriations Act of
7 2011.[15] Petitioner asseverates, however, that since Congress did
not indicate the manner by which the appropriation for the
Office of the President was to be distributed, taking therefrom
the operational funds of the IAD-ODESLA would amount to
an illegal appropriation by the President. The contention is
without legal basis.
There is no usurpation of the legislative
power to appropriate public funds.
In the chief executive dwell the powers to run government.
Placed upon him is the power to recommend the budget
necessary for the operation of the Government,[16] which implies
that he has the necessary authority to evaluate and determine the
structure that each government agency in the executive
department would need to operate in the most economical and
efficient manner.[17] Hence, the express recognition under
Section 78 of R.A. 9970 or the General Appropriations Act of
2010 of the President’s authority to “direct changes in the
organizational units or key positions in any department or
agency.” The aforecited provision, often and consistently
included in the general appropriations laws, recognizes the
extent of the President’s power to reorganize the executive
offices and agencies under him, which is, “even to the extent of
modifying and realigning appropriations for that purpose.”[18]
And to further enable the President to run the affairs of the
executive department, he is likewise given constitutional
authority to augment any item in the General Appropriations
Law using the savings in other items of the appropriation for his
office.[19] In fact, he is explicitly allowed by law to transfer any
fund appropriated for the different departments, bureaus, offices
7|Page
and agencies of the Executive Department which is included in
the General Appropriations Act, to any program, project or
activity of any department, bureau or office included in the
General Appropriations Act or approved after its enactment.[20]
Thus, while there may be no specific amount earmarked for the
IADODESLA from the total amount appropriated by Congress in
the annual budget for the Office of the President, the necessary
funds for the IADODESLA may be properly sourced from the
President's own office budget without committing any illegal
appropriation. After all, there is no usurpation of the legislature's
power to appropriate funds when the President simply allocates the
existing funds previously appropriated by Congress for his office.
The IAD-ODESLA is a fact- finding and recommendatory
body not vestedwith quasi- judicial powers.
Petitioner next avers that the IAD-ODESLA was illegally vested
with judicial power which is reserved to the Judicial Department
and, by way of exception through an express grant by the
legislature, to administrative agencies. He points out that the
name Investigative and Adjudicatory Division is proof itself that
the IAD-ODESLA wields quasi-judicial power.
The argument is tenuous. As the OSG aptly explained in its
Comment,[21] while the term “adjudicatory” appears part of its
appellation, the IAD-ODESLA cannot try and resolve cases, its
authority being limited to the conduct of investigations,
preparation of reports and submission of recommendations.
E.O. 13 explicitly states that the IAD-ODESLA shall “perform
powers, functions and duties xxx, of PAGC.”[22]
Under E.O. 12, the PAGC was given the authority to
“investigate or hear administrative cases or complaints against all
presidential appointees in the government”[23] and to “submit its
report and recommendations to the President.”[24] The IAD-
ODESLA is a fact-finding and recommendatory body to the
President, not having the power to settle controversies and
adjudicate cases. As the Court ruled in Cariño v. Commission on
Human Rights,[25] and later reiterated in Biraogo v. The Philippine
Truth Commission:[26]
Fact-finding is not adjudication and it cannot be likened to the
judicial function of a court of justice, or even a quasi-judicial
agency or office. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial
function. To be considered as such, the act of receiving evidence
and arriving at factual conclusions in a controversy must be
accompanied by the authority of applying the law to the factual
conclusions to the end that the controversy may be decided or
determined authoritatively, finally and definitively, subject to
such appeals or modes of review as may be provided by law.
The President's authority to issue E.O. 13 and constitute the
IAD ODESLA as his fact-finding investigator cannot be
doubted. After all, as Chief Executive, he is granted full control
over the Executive Department to ensure the enforcement of
the laws. Section 17, Article VII of the Constitution provides:
Section 17. The President shall have control of all the executive
departments, bureaus and offices. He shall ensure that the
laws be faithfully executed.
ADMINLAW CASES

The obligation to see to it that laws are faithfully executed
necessitates the corresponding power in the President to
conduct investigations into the conduct of officials and
employees in the executive department.[27]
The IAD-ODESLA does not encroach
upon the powers and duties of the Ombudsman.
Contrary to petitioner's contention, the IAD-ODESLA did not
encroach upon the Ombudsman's primary jurisdiction when it
took cognizance of the complaint affidavit filed against him
notwithstanding the earlier filing of criminal and administrative
cases involving the same charges and allegations before the
Office of the Ombudsman. The primary jurisdiction of the
Ombudsman to investigate and prosecute cases refers to
criminal cases cognizable by the Sandiganbayan and not to
administrative cases. It is only in the exercise of its primary
jurisdiction that the Ombudsman may, at any time, take over the
investigation being conducted by another investigatory agency.
Section 15 (1) of R.A. No. 6770 or the Ombudsman Act of
1989, empowers the Ombudsman to –
(1) Investigate and prosecute on its own or on complaint by any
person, any act or omission of any public officer or employee,
office or agency, when such act or omission appears to be illegal,
unjust, improper or inefficient. It has primary jurisdiction over
cases cognizable by the Sandiganbayan and, in the exercise of its
primary jurisdiction, it may take over, at any stage, from any
investigatory agency of government, the investigation of
such cases. (Emphasis supplied)
8
Since the case filed before the IAD-ODESLA is an administrative
disciplinary case for grave misconduct, petitioner may not invoke
the primary jurisdiction of the Ombudsman to prevent the IAD-
ODESLA from proceeding with its investigation. In any event,
the Ombudsman's authority to investigate both elective and
appointive officials in the government, extensive as it may be, is
by no means exclusive. It is shared with other similarly authorized
government agencies.[28]
While the Ombudsman's function goes into the determination of
the existence of probable cause and the adjudication of the merits
of a criminal accusation, the investigative authority of the IAD-
ODESLA is limited to that of a fact-finding investigator whose
determinations and recommendations remain so until acted upon
by the President. As such, it commits no usurpation of the
Ombudsman's constitutional duties.
Executive Order No. 13 Does Not Violate Petitioner's Right
to Due Process and the Equal Protection of the Laws.
Petitioner goes on to assail E.O. 13 as violative of the equal
protection clause pointing to the arbitrariness of limiting the IAD-
ODESLA's investigation only to presidential appointees
occupying upper-level positions in the government. The equal
protection of the laws is a guaranty against any form of undue
favoritism or hostility from the government.[29] It is embraced
under the due process concept and simply requires that, in the
application of the law, “all persons or things similarly situated
should be treated alike, both as to rights conferred and
responsibilities imposed.”[30] The equal protection clause,
8|Page
however, is not absolute but subject to reasonable classification
so that aggrupations bearing substantial distinctions may be
treated differently from each other. This we ruled in Farinas v.
Executive Secretary,[31] wherein we further stated that –
The equal protection of the law clause is against undue favor and
individual or class privilege, as well as hostile discrimination or the
oppression of inequality. It is not intended to prohibit legislation
which is limited either in the object to which it is directed or by
territory within which it is to operate. It does not demand absolute
equality among residents; it merely requires that all persons shall
be treated alike, under like circumstances and conditions both as
to privileges conferred and liabilities enforced. The equal
protection clause is not infringed by legislation which
applies only to those persons falling within a specified class,
if it applies alike to all persons within such class, and
reasonable grounds exist for making a distinction between
those who fall within such class and those who do not.
(Emphasis supplied)
Presidential appointees come under the direct disciplining
authority of the President. This proceeds from the well settled
principle that, in the absence of a contrary law, the power to
remove or to discipline is lodged in the same authority on which
the power to appoint is vested.[32] Having the power to remove
and/or discipline presidential appointees, the President has the
corollary authority to investigate such public officials and look
into their conduct in office.[33] Petitioner is a presidential
appointee occupying the high-level position of Chairman of the
LWUA. Necessarily, he comes under the disciplinary jurisdiction
of the President, who is well within his right to order an
investigation into matters that require his informed decision.
There are substantial distinctions that set apart presidential
appointees occupying upper-level positions in government from
non-presidential appointees and those that occupy the lower
positions in government. In Salumbides v. Office of the Ombudsman,[34]
we had ruled extensively on the substantial distinctions that exist
between elective and appointive public officials, thus:
Substantial distinctions clearly exist between elective
officials and appointive officials. The former occupy their
office by virtue of the mandate of the electorate. They are
elected to an office for a definite term and may be removed
therefrom only upon stringent conditions. On the other hand,
appointive officials hold their office by virtue of their
designation thereto by an appointing authority. Some
appointive officials hold their office in a permanent capacity and
are entitled to security of tenure while others serve at the
pleasure of the appointing authority.
x x x x
An election is the embodiment of the popular will, perhaps the
purest expression of the sovereign power of the people. It
involves the choice or selection of candidates to public office by
popular vote. Considering that elected officials are put in office
by their constituents for a definite term, x x x complete deference
is accorded to the will of the electorate that they be served by such
officials until the end of the term for which they were elected. In
ADMINLAW CASES
 contrast, there is no such expectation insofar as appointed
officials are concerned. (Emphasis supplied)
Also, contrary to petitioner's assertions, his right to due process
was not violated when the IAD-ODESLA took cognizance of the
administrative complaint against him since he was given sufficient
opportunity to oppose the formal complaint filed by Secretary
Purisima. In administrative proceedings, the filing of charges and
giving reasonable opportunity for the person so charged to answer
the accusations against him constitute the minimum requirements
of due process,[35] which simply means having the opportunity to
explain one’s side.[36] Hence, as long as petitioner was given the
opportunity to explain his side and present evidence, the
requirements of due process are satisfactorily complied with
because what the law abhors is an absolute lack of opportunity to
be heard.[37] The records show that petitioner was issued an Order
requiring him to submit his written explanation under oath with
respect to the charge of grave misconduct filed against him. His
own failure to submit his explanation despite notice defeats his
subsequent claim of denial of due process.
Finally, petitioner doubts that the IAD-ODESLA can lawfully
perform its duties as an impartial tribunal, contending that both
the IAD-ODESLA and respondent Secretary Purisima are
connected to the President. The mere suspicion of partiality will
not suffice to invalidate the actions of the IADODESLA. Mere
allegation is not equivalent to proof. Bias and partiality cannot be
presumed.[38] Petitioner must present substantial proof to show
that the lAD-ODES LA had unjustifiably sided against him in the
conduct of the investigation. No such evidence has been
presented as to defeat the presumption of regularity m the
9 perfonnance of the fact-finding investigator's duties. The
assertion, therefore, deserves scant consideration.
Every law has in its favor the presumption of constitutionality,
and to justify its nullification, there must be a clear and
unequivocal breach of the Constitution, not a doubtful and
argumentative one.[39] Petitioner has failed to discharge the burden
of proving the illegality of E.O. 13, which IS indubitably a valid
exercise of the President's continuing authority to reorganize the
Office of the President.
WHEREFORE, premises considered, the petition is hereby
DISMISSED.
SO ORDERED.
9|Page
G.R. No. 167982, August 13, 2008
OFFICE OF THE OMBUDSMAN. PETITIONER, MERCEDITAS DE
SAHAGUN, MANUELA T. WAQUIZ AND RAIDIS J. BASSIG,
RESPONDENTS.*
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule
45 of the Rules of Court assailing the Decision[1] dated April 28,
2005 of the Court of Appeals (CA) in CA-G.R. SP No. 78008
which set aside the Orders dated March 10, 2003 and June 24,
2003 of the petitioner Office of the Ombudsman in OMB-ADM-
0-00-0721.
The material antecedents are as follows:
On November 13, 1992, respondent Raidis J. Bassig, Chief of
the Research and Publications Division of the Intramuros
Administration, submitted a Memorandum to then Intramuros
Administrator Edda V. Henson (Henson) recommending that
Brand Asia, Ltd. be commissioned to produce a video
documentary for a television program, as well implement a
media plan and marketing support services for Intramuros.
On November 17, 1992, the Bids and Awards Committee (BAC)
of the Intramuros Administration, composed of respondent
Merceditas de Sahagun, as Chairman, with respondent Manuela
T. Waquiz and Dominador C. Ferrer, Jr. (Ferrer), as members,
submitted a recommendation to Henson for the approval of the
award of said contract to Brand Asia, Ltd. On the same day,
Henson approved the recommendation and issued a Notice of
Award to Brand Asia, Ltd.
On November 23, 1992, a contract of service to produce a video
documentary on Intramuros for TV program airing was
executed between Henson and Brand Asia, Ltd. On December
1, 1992, a Notice to Proceed was issued to Brand Asia, Ltd.
On June 2, 1993, the BAC, with Augusto P. Rustia (Rustia) as
additional member, recommended to Henson the approval of
the award of contract for print collaterals to Brand Asia, Ltd. On
the same day, Henson approved the recommendation and issued
a Notice of Award/Notice to Proceed to Brand Asia, Ltd.
On June 22, 1993, a contract of services to produce print
collaterals was entered between Henson and Brand Asia, Ltd.
On March 7, 1995, an anonymous complaint was filed with the
Presidential Commission Against Graft and Corruption (PGAC)
against Henson in relation to the contracts entered into with
Brand Asia, Ltd.
On November 30, 1995, Henson was dismissed from the service
by the Office of the President upon recommendation of the
PGAC which found that the contracts were entered into without
the required public bidding and in violation of Section 3 (a) and
(e) of Republic Act (R.A.) No. 3019, or the Anti-Graft and
Corrupt Practices Act.
On August 8, 1996, an anonymous complaint was filed with the
Ombudsman against the BAC in relation to the latter's
participation in the contracts with Brand Asia, Ltd. for which
ADMINLAW CASES
 Henson was dismissed from service.
On September 5, 2000, Fact-Finding Intelligence Bureau (FFIB)
filed criminal and administrative charges against respondents,
along with Ferrer and Rustia, for violation of Section 3 (a) and
(c) of R.A. No. 3019 in relation to Section 1 of Executive Order
No. 302 and grave misconduct, conduct grossly prejudicial to the
best interest of the service and gross violation of Rules and
Regulations pursuant to the Administrative Code of 1987,
docketed as OMB-0-00-1411 and OMB-ADM-0-00-0721,
respectively.[2] OMB-0-00-1411 was dismissed on February 27,
2002 for lack of probable cause.[3]
In his proposed Decision[4] dated June 19, 2002, Graft
Investigation Officer II Joselito P. Fangon recommended the
dismissal of OMB-ADM-0-00-0721.
However, then Ombudsman Simeon V. Marcelo disapproved the
recommendation. In an Order[5] dated March 10, 2003, he held
that there was substantial evidence to hold respondents
administratively liable since the contracts awarded to Brand Asia,
Ltd. failed to go through the required procedure for public
bidding under Executive Order No. 301 dated July 26, 1987.
Respondents and Ferrer were found guilty of grave misconduct
and dismissed from service. Rustia was found guilty of simple
misconduct and suspended for six months without pay.
On March 17, 2003, respondents, along with Rustia, filed a
Motion for Reconsideration.[6]
On June 24, 2003, Ombudsman Marcelo issued an Order[7]
10 partially granting the motion for reconsideration. Respondents
and Ferrer were found guilty of the lesser offense of simple
misconduct and suspended for six months without pay. Rustia's
suspension was reduced to three months.
Dissatisfied, respondents filed a Petition for Review[8] with the
CA assailing the Orders dated March 10, 2003 and June 24, 2003
of the Ombudsman.
On April 28, 2005, the CA rendered a Decision[9] setting aside
the Orders dated March 10, 2003 and June 24, 2003 of the
Ombudsman. The CA held that respondents may no longer be
prosecuted since the complaint was filed more than seven years
after the imputed acts were committed which was beyond the
one year period provided for by Section 20 (5) of Republic Act
(R.A.) No. 6770, otherwise known as "The Ombudsman Act of
1989"; and that the nature of the function of the Ombudsman was
purely recommendatory and it did not have the power to
penalize erring government officials and employees. The CA
relied on the following statement made by the Court in Tapiador
v. Office of the Ombudsman,[10] to wit:
x x x Besides, assuming arguendo, that petitioner [Tapiador] was
administratively liable, the Ombudsman has no authority to
directly dismiss the petitioner from the government service,
more particularly from his position in the BID. Under Section
13, subparagraph 3, of Article XI of the 1987 Constitution, the
Ombudsman can only "recommend" the removal of the
public official or employee found to be at fault, to the
public official concerned.[11] (Emphasis supplied)
Hence, the present petition raising the following issues (1)
whether Section 20 (5) of R.A. No. 6770 prohibits administrative
10 | P a g e
investigations in cases filed more than one year after
commission, and (2) whether the Ombudsman only has
recommendatory, not punitive, powers against erring
government officials and employees.
The Court rules in favor of the petitioner.
The issues in the present case are settled by precedents.
On the first issue, well-entrenched is the rule that administrative
offenses do not prescribe.[12] Administrative offenses by their
very nature pertain to the character of public officers and
employees. In disciplining public officers and employees, the
object sought is not the punishment of the officer or employee
but the improvement of the public service and the preservation
of the public's faith and confidence in our government.[13]
Respondents insist that Section 20 (5) of R.A. No. 6770, to wit:
SEC. 20. Exceptions. - The Office of the Ombudsman may not
conduct the necessary investigation of any administrative act or
omission complained of if it believes that:
xxx
(5) The complaint was filed after one year from the occurrence
of the act or omission complained of. (Emphasis supplied)
proscribes the investigation of any administrative act or omission
if the complaint was filed after one year from the occurrence of
the complained act or omission.
In Melchor v. Gironella,[14] the Court held that the period stated in
Section 20(5) of R.A. No. 6770 does not refer to the prescription
of the offense but to the discretion given to the Ombudsman on
whether it would investigate a particular administrative offense.
The use of the word "may" in the provision is construed as
permissive and operating to confer discretion.[15] Where the
words of a statute are clear, plain and free from ambiguity, they
must be given their literal meaning and applied without
attempted interpretation.[16]
In Filipino v. Macabuhay,[17] the Court interpreted Section 20 (5) of
R.A. No. 6770 in this manner:
Petitioner argues that based on the abovementioned provision
[Section 20(5) of RA 6770)], respondent's complaint is barred by
prescription considering that it was filed more than one year
after the alleged commission of the acts complained of.
Petitioner's argument is without merit.
The use of the word "may" clearly shows that it is directory in
nature and not mandatory as petitioner contends. When used in
a statute, it is permissive only and operates to confer discretion;
while the word "shall" is imperative, operating to impose a duty
which may be enforced. Applying Section 20(5), therefore, it is
discretionary upon the Ombudsman whether or not to
conduct an investigation on a complaint even if it was filed
after one year from the occurrence of the act or omission
complained of. In fine, the complaint is not barred by
prescription.[18] (Emphasis supplied)
The declaration of the CA in its assailed decision that while as a
general rule the word "may" is directory, the negative phrase
"may not" is mandatory in tenor; that a directory word, when
ADMINLAW CASES
 qualified by the word "not," becomes prohibitory and therefore
becomes mandatory in character, is not plausible. It is not
supported by jurisprudence on statutory construction.
As the Court recently held in Office of the Ombudsman v. Court of
Appeals,[19] Section 20 of R.A. No. 6770 has been clarified by
Administrative Order No. 17,[20] which amended Administrative
Order No. 07, otherwise known as the Rules of Procedure of the
Office of the Ombudsman. Section 4, Rule III[21] of the amended
Rules of Procedure of the Office of the Ombudsman reads:
Section 4. Evaluation. - Upon receipt of the complaint, the same
shall be evaluated to determine whether the same may be:
a) dismissed outright for any grounds stated under Section
20 of Republic Act No. 6770, provided, however, that the
dismissal thereof is not mandatory and shall be
discretionary on the part of the Ombudsman or the Deputy
Ombudsman concerned;
b) treated as a grievance/request for assistance which may be
referred to the Public Assistance Bureau, this Office, for
appropriate action under Section 2, Rule IV of this Rules;
c) referred to other disciplinary authorities under paragraph 2,
Section 23, R.A. 6770 for the taking of appropriate
administrative proceedings;
d) referred to the appropriate office/agency or official for the
conduct of further fact-finding investigation; or
11 e) docketed as an administrative case for the purpose of
administrative adjudication by the Office of the Ombudsman.
(Emphasis supplied)
It is, therefore, discretionary upon the Ombudsman whether or
not to conduct an investigation of a complaint even if it was
filed after one year from the occurrence of the act or omission
complained of.
Thus, while the complaint herein was filed only on September 5,
2000, or more than seven years after the commission of the acts
imputed against respondents in November 1992 and June 1993,
it was within the authority of the Ombudsman to conduct the
investigation of the subject complaint.
On the second issue, the authority of the Ombudsman to
determine the administrative liability of a public official or
employee, and to direct and compel the head of the office or
agency concerned to implement the penalty imposed is likewise
settled.
In Ledesma v. Court of Appeals,[22] the Court has ruled that the
statement in Tapiador that made reference to the power of the
Ombudsman to impose an administrative penalty was merely an
obiter dictum and could not be cited as a doctrinal declaration of
this Court, thus:
x x x [A] cursory reading of Tapiador reveals that the main point
of the case was the failure of the complainant therein to present
substantial evidence to prove the charges of the administrative
case. The statement that made reference to the power of the
Ombudsman is, at best, merely an obiter dictum and, as it is
unsupported by sufficient explanation, is susceptible to varying
11 | P a g e
interpretations, as what precisely is before us in this case. Hence,
it cannot be cited as a doctrinal declaration of this Court
nor is it safe from judicial examination.[23] (Emphasis
supplied)
In Estarija v. Ranada,[24] the Court reiterated its pronouncements
in Ledesma and categorically stated:
x x x [T]he Constitution does not restrict the powers of the
Ombudsman in Section 13, Article XI of the 1987 Constitution,
but allows the Legislature to enact a law that would spell out the
powers of the Ombudsman. Through the enactment of Rep. Act
No. 6770, specifically Section 15, par. 3, the lawmakers gave the
Ombudsman such powers to sanction erring officials and
employees, except members of Congress, and the Judiciary. To
conclude, we hold that Sections 15, 21, 22 and 25 of Republic
Act No. 6770 are constitutionally sound. The powers of the
Ombudsman are not merely recommendatory. His office
was given teeth to render this constitutional body not merely
functional but also effective. Thus, we hold that under
Republic Act No. 6770 and the 1987 Constitution, the
Ombudsman has the constitutional power to directly
remove from government service an erring public official
other than a member of Congress and the Judiciary. [25]
(Emphasis supplied)
The power of the Ombudsman to directly impose administrative
sanctions has been repeatedly reiterated in the subsequent cases
of Barillo v. Gervasio,[26] Office of the Ombudsman v. Madriaga,[27] Office
of the Ombudsman v. Court of Appeals,[28] Balbastro v. Junio,[29]
Commission on Audit, Regional Office No. 13, Butuan City v.
Hinampas,[30] Office of the Ombudsman v. Santiago,[31] Office of the
Ombudsman v. Lisondra,[32] and most recently in Deputy Ombudsman
for the Visayas v. Abugan[33] and continues to be the controlling
doctrine.
In fine, it is already well-settled that the Ombudsman's power as
regards the administrative penalty to be imposed on an erring
public officer or employee is not merely recommendatory. The
Ombudsman has the power to directly impose the penalty of
removal, suspension, demotion, fine, censure, or prosecution of
a public officer or employee, other than a member of Congress
and the Judiciary, found to be at fault, within the exercise of its
administrative disciplinary authority as provided in the
Constitution, R.A. No. 6770, as well as jurisprudence. This
power gives the said constitutional office teeth to render it not
merely functional, but also effective.[34]
Thus, the CA committed a reversible error in holding that the
case had already prescribed and that the Ombudsman does not
have the power to penalize erring government officials and
employees.
WHEREFORE, the petition is GRANTED. The Decision
dated April 28, 2005 of the Court of Appeals in CA-G.R. SP No.
78008 is REVERSED and SET ASIDE. The Order dated June
24, 2003 of the Office of the Ombudsman is REINSTATED.
SO ORDERED.
ADMINLAW CASES
 G.R. No. 207791, July 15, 2015
THE CITY OF DAVAO, REPRESENTED BY THE CITY
TREASURER OF DAVAO CITY, PETITIONER, VS. THE
INTESTATE ESTATE OF AMADO S. DALISAY, REPRESENTED BY
SPECIAL ADMINISTRATOR ATTY. NICASIO B. PADERNA,
RESPONDENT.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court assailing the January 24, 2013 Decision[1] and the
May 15, 2013 Resolution[2] of the Court of Appeals (CA), in CA-
G.R. CV No. 01903-MIN, which affirmed the June 6, 2008
Decision of the Regional Trial Court, Branch 17, Davao City
(RTC), ordering the City of Davao to, among others, receive the
amount of P5,000,000.00 as full payment of the redemption
price of the forfeited properties of the Intestate Estate of
Amado S. Dalisay.
The Facts
The Estate of Amado S. Dalisay (the Estate) owned the following
properties, all situated in Davao City:
1. Lot 1, Pcs-11-001298, covered by Transfer Certificate of Title
(TCT) No. T-202211 with Tax Declaration No. E-1-34-10484;
2. Lot 6, Pcs-11-001298, covered by TCT No. T-202215 with
Tax Declaration No. E-1-34-10488;
12
3. Lot 7, Pcs-11-001298, covered by TCT No. T-202216 with
Tax Declaration No. E-1-34-10489;
4. Lot 2, Pcs-11-001298, covered by TCT No. T-202212 with
Tax Declaration No. E-1-34-10492; and
5. Building erected in Lot No. 26-B and covered by Tax
Declaration No. E-1-34-10480.
These properties were advertised for sale at a public auction for
nonpayment of real estate taxes. The public auction was
scheduled on July 19, 2004. No bidders appeared on the date of
the public auction, thus, the aforesaid properties were acquired
by the City Government of Davao (the City) pursuant to Section
263 of Republic Act (R.A.) No. 7160 of the Local Government
Code of 1991 (LGC) which provides:
Section 263. Purchase of Property By the Local Government Units for
Want of Bidder. - In case there is no bidder for the real property
advertised for sale as provided herein, the real property tax and
the related interest and costs of sale, the local treasurer
conducting the sale shall purchase the property in behalf of the
local government unit concerned to satisfy the claim and within
two (2) days thereafter shall make a report of his proceedings
which shall be reflected upon the records of his office. It shall be
the duty of the Registrar of Deeds concerned upon registration
with his office of any such declaration of forfeiture to transfer
the title of the forfeited property to the local government unit
concerned without the necessity of an order from a competent
court.
Within one (1) year from the date of such forfeiture, the
12 | P a g e
taxpayer or any of his representative, may redeem the property
by paying to the local treasurer the full amount of the real
property tax and the related interest and the costs of sale. If the
property is not redeemed as provided herein, the ownership
thereof shall be vested on the local government unit concerned.
On September 13, 2005, or more than a year after the public
auction, the Declarations of Forfeiture for the five (5) properties
were separately issued by the City Treasurer. The common
provisions of the declarations read:
WHEREAS, the delinquent taxpayer or his authorized
representative, has within a period of one (1) year from said
date of Declaration of Forfeiture as herein specified, to
redeem the property sold by paying to the City Treasurer the
full amount of the real property tax and related interest and cost
of sale as authorized under R.A. 7160. If the property is not
redeemed as herein provided, the ownership of the above
described property shall be fully vested to the City Government
of Davao in accordance with Section 263 of R.A. 7160.
NOW, THEREFORE, for and in accordance of the foregoing, I
RODRIGO S. RIOLA, in my capacity as the Acting City
Treasurer of Davao City, and pursuant to the provision of
Section 262 of Republic Act 7160 otherwise known as the Local
Government Code of 1991 hereby DECLARE AS IT
HEREBY DECLARED the above described property
FORFEITED in favor of the City Government of Davao.
EXECUTED in Davao City, Philippines this 13th day of
September 2005.
[Emphases Supplied]
On October 3, 2005, the City caused the annotation of the five
(5) Declarations of Forfeiture on the corresponding TCTs of the
properties.
Subsequently, the Estate inquired from the City Treasurer's
Office regarding the amount of the redemption price of the
properties. On September 11, 2006, the Real Property Tax
Division of the City furnished the Estate copies of the billing
statements containing a handwritten summary of the amount
showing the aggregate total of P4,996,534.67.
Thus, on September 13, 2006, the Estate delivered a written
tender of payment to the City Treasurer and, at the same time,
tendered the amount of P5,000,000.00. The City, however,
refused to accept the same. This constrained the Estate to file
the Notice to Deposit the P5,000,000.00 with the Office of the
Clerk of Court, RTC, at the disposal of the City Treasurer. In
doing so, the Estate was made to pay legal fees amounting to
P75,200.00. An action for redemption, consignation and
damages against the City was consequently filed by the Estate
with the RTC.
For its part, the City admitted the existence of the billing
statements, but it posited that their issuance was not an
admission that the Estate still had the right to redeem the
properties. The period of redemption had long expired on July
19, 2005, a year after the subject properties were acquired by the
City during the public auction for want of a bidder. Hence, its
refusal to accept the tendered amount was valid and for a lawful
cause.
ADMINLAW CASES
 On June 6, 2008, the RTC ruled in favor of the Estate, finding
the latter's evidence as preponderantly acceptable in establishing
its right of redemption. The City was ordered to: 1) receive the
P5,000,000.00 deposited with the Clerk of Court, as full payment
of the redemption price of the forfeited properties; and 2) issue a
certificate of redemption in favor of the Estate. Further, actual
damages and attorneys fees in the amount of P75,200.00 and
P50,000.00, respectively, were awarded in favor of the Estate.[3]
Aggrieved, the City appealed the RTC decision to the CA,
arguing that the one (1) year period should be reckoned from the
date of forfeiture, that is, when the properties of the Estate were
purchased by the City for want of a bidder during the public
auction on July 19, 2004. In the same vein, the RTC erred in
holding that the City was estopped from disclaiming and denying
the erroneous statement made by the City Treasurer when the
Estate was inadvertently informed that the one year redemption
period started from the date of the issued Declaration of
Forfeiture.
To this, the Estate countered that the reckoning date should be
the one stated in the Declarations of Forfeiture which
corresponded to their date of issuance, to wit, on September 13,
2005.
In the assailed decision, the CA affirmed the ruling of the RTC.
It observed that the City had been remiss in its duty to
immediately issue the Declaration of Forfeiture within two (2)
days from purchase of the property as required under Section
263 of the LGC. The CA then explained that "redemption
should be looked upon with favor, and where no injury would
13 follow, a liberal construction will be given to redemption laws,
specifically on the exercise of the right to redeem." In the words
of the CA:
In the case at bench, We have come to the conclusion upon
inquiry into the equities of this case to liberally apply the
redemption provision of the law in favor of the Estate of
Amado Dalisay and give them another opportunity to recover
the properties.
It must be stressed that the delinquent taxpayer may within one
(1) year from the date of such forfeiture, redeem the
property by paying to the local treasurer the full amount of the
real property tax and the related interest and the costs of sale.
The City, by its own inefficiency, belatedly issued the
DECLARATIONS OF FORFEITURE on September 13, 2005.
Such is no fault of the plaintiff-appellee.[4]
[Emphasis and Underscoring in the Original]
As regards the issue on damages, the CA found the award of
attorney's fees proper, in accordance with Article 2208 of the
Civil Code which allowed an award of the said fees and expenses
of litigation, other than judicial costs, when by the act or
omission of one party, compelled the other to litigate and incur
expenses of litigation to protect his interest.[5] In this case, the
City's refusal to accept the Estate's tendered payment for the
redemption of the lots had effectively constrained it to file suit.
Lastly, the actual damages in the amount of P75,200.00 as
consignation fees had been proven with the corresponding
receipt.
Hence, this petition.
13 | P a g e
ASSIGNMENT OF ERRORS:
1. THAT THE HONORABLE COURT ERRED IN HOLDING
THAT THE ONE YEAR REDEMPTION PERIOD BEGINS FROM
THE DATE OF DECLARATION OF FORFEITURE ISSUED BY
THE CITY TREASURER ON SEPTEMBER 13, 2006, INSTEAD OF
JULY 19, 2004, WHEN THE SUBJECT DELINQUENT
PROPERTIES WERE FORFEITED BY THE CITY
GOVERNMENT FOR WANT OF BIDDER DURING THE
PUBLIC AUCTION SALE;
2. THAT THE HONORABLE COURT ERRED IN HOLDING
THAT THE CITY GOVERNMENT IS ESTOPPED FROM
DISCLAIMING AND DENYING THE ERRONEOUS
STATEMENT MADE BY THE CITY TREASURER IN HIS
DECLARATION OF FORFEITURES DATED SEPTEMBER 13,
2006, WHICH INADVERTINTLY (SIC) INFORMED THE
PLAINTIFF THAT THE ONE YEAR REDEMPTION PERIOD
STARTS FROM THE DATE OF DECLARATION;
3. THAT THE HONORABLE COURT ERRED IN HOLDING
THAT THE PROVISION OF SECTION 263 OF R.A. 7160,
OTHERWISE KNOWN AS THE "LOCAL GOVERNMENT CODE
OF 1991" DID NOT EXPRESSLY REPEAL THE PERTINENT
PROVISION OF REDEMPTION UNDER P.D. 464, THE LAW
GOVERNING REAL PROPERTY TAXATION THEN, AND ACT
496, SECTIONS 50 AND 377 GRANTING THE RIGHT OF
REDEMPTION TO BE EXERCISED WITHIN ONE YEAR FROM
THE REGISTRATION OF SAID FORFEITED PROPERTIES IN
THE REGISTER OF DEEDS;
4. THAT THE HONORABLE COURT ERRED IN HOLDING
PUBLIC DEFENDANT-APPELLANT LIABLE TO PAY
PLAINTIFF FOR ACTUAL DAMAGES IN THE AMOUNT OF
P75,200.00 AS CONSIGNATION FEES AND ATTORNEY'S FEES
AMOUNTING TO P50,000.00.[6]
The City argues that no law provides that the one (1) year
redemption period should be counted from the date of the
Declaration of Forfeiture. What the LGC simply provides is that
the period of redemption is "within one (I) year from the date of such
forfeiture." For the City, this phrase means that the effective date
of the forfeiture was July 19, 2004, when the tax delinquent
properties were sold at a public auction and, thus, forfeited in its
favor for want of a bidder, rather than September 13, 2005 or
the date of the issued Declarations of Forfeiture.
Further, and contrary to the observation of the CA, Section 263
of the LGC does not order the City Treasurer to issue a
declaration of forfeiture within two (2) days from the date when
tax delinquent real properties, sold at auction sale, are purchased
by the local government in the absence of a bidder. It merely
directs the local treasurer to make a report of his proceedings
which shall be reflected in the records of his office. In fine, it is
the position of the City that the issuance of the said declarations
of forfeiture had no bearing in the determination of the period
of redemption, inasmuch as the same were only issued for
registration purposes with the Register of Deeds.[7] Here, the
date of issuance of the five (5) declarations of forfeiture on
September 13, 2005 was immaterial as the same was merely
intended to facilitate the transfers of title to the forfeited
properties in favor of the City after the lapse of the redemption
period reckoned from the auction sale held on July 19,2004.
Assuming arguendo that the City Treasurer is mandated by law to
issue a declaration of forfeiture within two (2) days from the
purchase of the properties, the City avers that it should not be
ADMINLAW CASES
 bound by the consequences of the malfeasance of its public
officers. In other words, the City invokes the doctrine that the
principle of estoppel does not operate against the government
for the act of its agents, and that it is never estopped by any
mistake or error on their part.[8]
Position of the Estate
For its part, the Estate argues that the City erred when it
interpreted the subject provision and concluded that "[t]he law
does not say that the one (1) year period of redemption is
counted from the date of 'declaration of forfeiture.'" [9] It
explained that the provision merely states that the redemption
period is counted from "the date of such forfeiture," and the
word "such" before the word "forfeiture" was resorted to in
order to avoid the repetition of the words "declaration of before
the word "forfeiture."[10] This interpretation is supported by the
second paragraph of the same provision which mentions the
phrase, "any such declaration of forfeiture" in connection with
the duty of the Register of Deeds to transfer the title of the
forfeited property to the local government unit sans a court
order. The Estate submits that the subject provision should be
read as follows:
Within one (1) year from the date of declaration of
forfeiture the taxpayer or any of its representative, may redeem
the property by paying to the local treasurer the full amount of
the real property tax and the related interest and costs of sale. If
the property is not redeemed as provided herein, the ownership
thereof shall be fully vested in the local government unit
concerned.[11]
14
[Emphasis Supplied]
The Estate likewise opposes the City's theory that declarations of
forfeiture have no bearing in the determination of the period of
redemption because the same were only issued by the treasurer
for registration purposes with the Register of Deeds. For the
Estate, there is a difference between redemption of property
sold at a public auction and redemption of property purchased
by the local government unit for want of bidder. The former is
governed by Section 261 of the LGC, while the latter is covered
by Section 263 (2) of the same law.
Reply of the City
The City replies that the term "such" as found in the phrase,
"date of such forfeiture," should be construed as referring to the
entire legal process of forfeiture as prescribed in the first
paragraph of Section 263 and not to the singular word,
"declaration," as found in the second sentence of the said
paragraph. More importantly, the operative act of forfeiture is
the act of the City Treasurer, in behalf of the city, in purchasing
the property for lack of a bidder, and not the registration of any
declaration of forfeiture because the said document only
facilitates the transfer of ownership of the property. The City
also makes reference to Section 261 of the LGC, involving the
redemption of tax delinquent properties purchased by the public,
which provides that the redemption of the property is to be
reckoned from the date of the sale. For the City, this rule is
equally applicable in resolving the present case involving Section
263 of the LGC because the distinctions between the said
provisions are too insignificant, for the Court to rule otherwise.
Regardless of whether the property put up for auction was
14 | P a g e
purchased by the public or by the local government for want of
a bidder, the commencement of the period for redemption must
begin on the date of the sale, for the sake of uniformity in the
rules.[12]
The Issues
After a perusal of the arguments presented by the parties, the
Court culled the main issue into this significant question of law:
Whether the one (1) year redemption period of forfeited tax
delinquent properties purchased by the local government
for want of a bidder is reckoned from the date of the
auction or sale or from the date of the issuance of the
declaration of forfeiture.
The Court's Ruling
In its decision, the CA obviously resorted to an interpretation
based solely on the basic rules in interpretation: the liberal
application of redemption laws. It inquired into the "equities of
this case" and preferred to uphold the protection afforded to the
original owner of the property as it is "the policy of the law to aid
rather than defeat the owner's right."[13]
The Court need not belabor the existence of this rule in
jurisprudence. In a long line of cases, the Court has indeed been
copious in its stance to allow the redemption of property where
in doing so, the ends of justice are better realized. Doronila v.
Vasquez[14] allowed redemption in certain cases even after the lapse
of the one-year period in order to promote justice and avoid
injustice. In Tolentino v. Court of Appeals,[15] the policy of the law to
aid rather than defeat the right of redemption was expressed,
stressing that where no injury would ensue, liberal construction of
redemption laws was to be pursued and the exercise of the right
to redemption to be permitted to better serve the ends of justice.
In De los Reyes v. Intermediate Appellate Court,[16] the rule was liberally
interpreted in favor of the original owner of the property to give
him another opportunity, should his fortunes improve, to recover
his property.
Nonetheless, the Court's agreement with the CA decision ends
here. The above rulings now beget a more important question for
the resolution of this case: Does a simplistic application of the
liberal construction of redemption laws provide a just resolution
of this case? The Court answers this question in the negative.
While it is a given that redemption by property owners is looked
upon with favor, it is equally true that the right to redeem
properties remains to be a statutory privilege.[17] Redemption is by
force of law, and the purchaser at public auction is bound to
accept it.[18] Further, the right to redeem property sold as security
for the satisfaction of an unpaid obligation does not exist
preternaturally. Neither is it predicated on proprietary right,
which, after the sale of the property on execution, leaves the
judgment debtor and vests in the purchaser. Instead, it is a bare
statutory privilege to be exercised only by the persons named in
the statute.[19]
In other words, a valid redemption of property must appropriately
be based on the law which is the very source of this substantive
right. It is, therefore, necessary that compliance with the rules set
forth by law and jurisprudence should be shown in order to render
validity to the exercise of this right. Hence, when the Court is
ADMINLAW CASES
 beckoned to rule on this validity, a hasty resort to elementary rules
on construction proves inadequate. Especially so, when there are
deeper underpinnings involved, not only as to the right of the
owner to take back his property, but equally important, as to the
right of the purchaser to acquire the property after deficient
compliance with statutory requirements, including the exercise of
the right within the period prescribed by law.
The Court cannot close its eyes and automatically rule in favor of
the redemptioner at all times. The right acquired by the purchaser
at an execution sale is inchoate and does not become absolute
until after the expiration of the redemption period without the
right of redemption having been exercised. "But inchoate though
it be, it is, like any other right, entitled to protection and must be
respected until extinguished by redemption."[20] Suffice it to say,
the liberal application of redemption laws in favor of the property
owner is not an austere solution to a controversy, where there are
remarkable factors that lead to a more sound and reasonable
interpretation of the law. Here, the proper focus of the CA should
have been the just and fair interpretation of the law, instead of an
automatic and constricted view on its liberal application.
It is without question that Section 263 of the LGC lacks
defmiteness as to the reckoning point for the redemption of tax
delinquent properties. It merely employs the phrase, "within one (I)
year from the date of such forfeiture." On one hand, the City avers that
the period commences from the date of the forfeiture, that is, the
date of the auction. On the other hand, the Estate insists that the
redemption period begins from the date when the declarations of
forfeiture were issued.
15 For the Court, the arguments of the City point toward a more just
and fair resolution of the perceived vagueness in the law.
First. The City's theory that the term "forfeiture," contemplated
in the subject phrase, refers to the date when the tax delinquent
properties were sold at a public auction, holds more logic than the
conjecture of the Estate on the usage of the word "such."
Indeed, Section 263 of the LGC takes into effect because of one
vital factor: the absence of a bidder in a public auction for tax
delinquent properties. Were it not for this fact, this provision
would not come into operation or, at the least, find relevance.
Sections 260 and 261 would have come into play in cases where a
purchaser, other than the local government unit, places a bid on
the property. This is undeniably a distinct feature of Section 263
that cannot be ignored. The absence of the public impels the City
Treasurer to purchase the property in behalf of the city. Reason
would, therefore, dictate that this purchase by the City is the very
forfeiture mandated by the law. The contemplated "forfeiture" in
the provision points to the situation where the local government
ipso facto "forfeits" the property for want of a bidder.
This analysis is ridden with substance that surpasses the
hypothesis of the Estate. The Estate purely speculates that the
term "such" in the phrase "the date of such forfeiture," was only
resorted to in order to avoid the repetition of the words in the text
of the law. It attempts to convince the Court that the second
paragraph of the same provision which mentions the phrase, "any
such declaration of forfeiture," in connection with the duty of the
Register of Deeds to transfer the title of the forfeited property,
shows that the "forfeiture" contemplated by the law is that of the
issuance of the Declaration of Forfeiture. While the Estate has a
15 | P a g e
point in saying that the City may not speciously insist that the law
does not say that the one (1) year period of redemption is counted
from the date of "declaration of forfeiture," this proffered
explanation is far more hallow and unfounded.
As explained above, the better theory that is consistent with the
subject matter of the provision is that forfeiture of tax delinquent
properties transpires no later than the purchase made by the city
due to lack of a bidder from the public. This happens on the date
of the sale, and not upon the issuance of the declaration of
forfeiture.
To rule otherwise would be similar to saying that prior to the
accrual of the local government's right as a purchaser, an
additional requirement of issuing a declaration of forfeiture is
necessary. Not only is this duty unfounded, but it also places the
local government in a vacuum from the time of the auction up to
the time it issues the document. It causes the absurd situation,
where the local government's forfeiture of the property for want
of a bidder becomes an empty and meaningless exercise merely
because the issuance of the declaration of forfeiture came at a
much subsequent time. The precarious effect of this view strips
off the local government of the protection given by law to a
purchaser during and after a public auction. This goes against the
safeguards to which a purchaser is entitled until a valid
redemption of the property ensues because then, it is burdened
with yet another positive act of issuing a document in order to
gain rights. Surely, this is not the intention of Section 263. The
local government's power to acquire tax delinquent properties
cannot be overemphasized at this point.
Second. The CA seemed to have completely disregarded the
ruling in City Mayor v. RCBC (City Mayor)[21] in its quick application
of the liberal rules of statutory construction. True, City Mayor
involved Section 261 of the LGC, instead of Section 263, because
it involved a private individual who was adjudged as the highest
bidder during the public auction. Nevertheless, the said case
passed upon the very issue at bench: the reckoning period of the
redemption period for auctioned tax delinquent properties.
In City Mayor, the property owner and respondent bank filed a
petition for the acceptance of its tender of payment and for the
subsequent issuance of the certificate of redemption, after the
highest bidder during the auction had effected payment of the tax
delinquencies and the issuance and registration of the
corresponding Certificate of Sale of Delinquent Property. The
lower court ruled in favor of the respondent bank on the ground
that "the counting of the one (1) year redemption period of tax
delinquent properties sold at public auction should start from the
date of registration of the certificate of sale or the final deed of
sale in favor of the purchaser" based on Section 78 of Presidential
Decree (P.D.) No. 464.[22]
The Court, however, disagreed with the lower court's position, viz:
However, since the passing of R.A. No. 7160, such is no longer
controlling. The issue of whether or not R.A No. 7160 or the
Local Government Code, repealed P.D. No. 464 or the Real
Property Tax Code has long been laid to rest by this Court.
Jurisdiction thrives to the effect that R.A. No. 7160 repealed P.D.
No. 464. From January 1, 1992 onwards, the proper basis for the
computation of the real property tax payable, including penalties
or interests, if applicable, must be R. A. No. 7160. Its repealing
clause, Section 534, reads:
ADMINLAW CASES
 SECTION 534. Repealing Clause. -
xxxx
(c) The provisions of Sections 2, 3, and 4 of Republic Act No.
1939 regarding hospital fund; Section 3, a (3) and b (2) of Republic
Act No. 5447 regarding the Special Education Fund; Presidential
Decree No. 144 as amended by Presidential Decree Nos. 559 and
1741; Presidential Decree No. 231 as amended; Presidential
Decree No. 436 as amended by Presidential Decree No. 558; and
Presidential Decrees Nos. 381, 436, 464, 477, 526, 632, 752, and 1136
are hereby repealed and rendered of no force and effect.
Inasmuch as the crafter of the Local Government Code clearly
worded the above-cited Section to repeal P.D. No. 464, it is a
clear showing of their legislative intent that R.A. No. 7160 was
to supersede P.D. No. 464. As such, it is apparent that in case of
sale of tax delinquent properties, R.A. No. 7160 is the general
law applicable.
xxx
From the foregoing, the owner of the delinquent real
property or person having legal interest therein, or his
representative, has the right to redeem the property within
one (1) year from the date of sale upon payment of the
delinquent tax and other fees. Verily, the period of
redemption of tax delinquent properties should be counted
not from the date of registration of the certificate of sale, as
previously provided by Section 78 of P.D. No. 464, but
rather on the date of sale of the tax delinquent property, as
16 explicitly provided by Section 261 of R.A. No. 7160.
[Emphases and Underscoring Supplied]
It is worthy to note, however, that City Mayor was ultimately
resolved in favor of respondent bank because it turned out that
petitioner city government enacted an ordinance, which provided
for the procedure in the collection of delinquent taxes on real
properties within its territorial jurisdiction. Section 14 (a)
Paragraph 7 of the said ordinance expressly set the redemption
period within one (1) year from the date of the annotation of the
sale of the property at the proper registry. Being a special law with
limited territorial application, the city ordinance prevailed over
that of the LGC which was, and still is, the general law on the
matter. Consequently, the respondent bank had until February 10,
2005 to redeem the subject properties counted from the date of
registration of the Certificate of Sale of Delinquent Property on
February 10, 2004. Its tender of payment of the subject properties'
tax delinquencies and other fees on June 10, 2004, was then well
within the redemption period.
It is now apparent that the previous rule enunciating the
reckoning period of redemption for tax delinquent properties
from the date of the registration of sale of the property is no
longer controlling. Section 261 now mandates that the owner of
the delinquent real property or person having legal interest
therein, or his representative, has the right to redeem the
property within one (1) year from the date of sale upon
payment of the delinquent tax and other fees.
In the case at bench, considering the fact that neither of the parties
has invoked the existence of an ordinance of similar import, the
general law on the matter finds bearing. In applying the
16 | P a g e
pronouncements in City Mayor to this case, the Court finds no
harm in considering the interpretation of Section 261 which is
emphatic in saying that the redemption period is set "within one
(1) year from the date of sale," as applicable to Section 263. The
usage of the terms "sale" and "forfeiture" in Sections 261 and 263,
respectively, only highlights a distinction in the situations covered
and produces no significant variance. The former refers to the
voluntary purchase made by a bidder in public auction while the
latter points to the divesting of the ownership of a particular
property on account of the breach of a legal duty, without
compensation,[23] for example, the non-payment of tax.
Therefore, in cases covered by these pertinent provisions in the
LGC, the date of the "sale" or "forfeiture" is rightfully the point
in time when the owner is divested of certain attributes of
ownership over the property albeit only until the redemption of
the property. This translates to no other event but to the date of
the public auction. More than the purpose of uniformity and
harmony among provisions of law, the Court finds this conclusion
as consistent with the intention of the law.
Third. At this juncture, the Court considers the peculiar fact
involved in this case: the City Treasurer's belated issuance of the
disputed Declarations of Forfeiture. Clearly, this irregularity had
eventually shaped and brought forth the subject controversy. Had
it not been for the severe delay in the issuance, there would have
been no dispute and the reckoning period of the redemption
period would have been a toss between closer dates, rather than
those claimed, which are years apart, to wit: July 19, 2004 and
September 13, 2005.
The general rule is that the State cannot be put in estoppel by the
mistakes or errors of its officials or agents.[24] Indeed, like all
general rules, this is also subject to exceptions. Estoppel should
not be invoked except in a rare and unusual circumstance. It may
not be invoked where they would operate to defeat the effective
operation of a policy adopted to protect the public. They must be
applied with circumspection and should be applied only in those
special cases where the interests of justice clearly require it.[25]
The Court, however, can only commiserate with the situation of
the state and its lost chance of recovering its property, as it still
sees no reason to depart from the general rule. The following
circumstances became the object of the Court's perplexity:
1. The Estate does not dispute the validity of the notices with
respect to the public auction. This brings the Court to the safe
assumption that there was valid constructive notice as to possible
danger of forfeiture of the properties prior to the auction. The
Estate, with its administrator in the person of Nicasio B. Paderna,
is undoubtedly bound by this. Corollary thereto, the delinquent
status of the properties may not be said to have been surprising
news to the Estate.
2. Just the same, it took the Estate more than one (1) year from
the date of the auction of which it was properly notified, to inquire
from the City Treasurer's Office regarding the amount of the
redemption price due. On the same date of inquiry or on
September 11, 2006, the Estate was furnished a handwritten
summary of the amount due for redemption. It is fair to suppose
that at this point, the Estate became aware that no declaration of
forfeiture had yet been issued by the City Treasurer.
3. Two (2) days after this inquiry, and as if a reaction thereto, the
ADMINLAW CASES
 City Treasurer issued the subject five (5) Declarations of
Forfeiture on September 13, 2006. Now with full confidence on
the said document and its expressed statement that the property
owner had one year from the date of its issuance, within which to
redeem the properties, the Estate lost no time in tendering its
payment for the redemption of the properties.
The delay on the part of the Estate to at least inquire into the
outcome of the auction and its misplaced reliance on a curious
document heightens the belief of the Court that the City may not
be deprived of a right that has long been vested in its favor. The
odd timing in the issuance of the Declarations of Forfeiture and
its very contents which observably benefit the Estate to the core
form a nagging doubt that may not be easily shrugged off. This
hinders the Court from applying the exceptions to the rule on
estoppel, when doing this would result in more impropriety.
It is the City that would suffer an injustice if it were to be bound
by its officer's suspect actions. The policy of enabling local
governments to fully utilize the income potentialities of the real
property tax would be put at a losing end if tax delinquent
properties could be recovered by the sheer expediency of a
document erroneously or, perhaps fraudulently, issued by its
officers. This would place at naught, the essence of redemption as
a statutory privilege; for then, the statutory period for its exercise
may be extended by the indiscretion of scrupulous officers. In
other words, the period would become flexible because
extensions of the period would depend, not just on the sound
discretion of the City Treasurer but on his attitude, work ethics
and worse, temperament.
The Court cannot allow this situation to prevail.
17
In this case, the period to redeem the subject properties of this
case had long expired on July 19, 2005, and since then, the
forfeiture of the properties had become absolute. The failure of
the Estate to validly exercise its right of redemption within the
statutory period had already resulted in the consolidation of
ownership over the properties by the City.
One final word. The resolution of this case does not, in any way,
cloud the glaring misfeasance in office committed by the City
Treasurer. As discussed, this legal battle could not have developed
were it not for the lull of more than a year between the subject
auction and the issuance of the declarations of forfeiture. More
often than not, inordinate delay in the issuance of documents,
whether out of a ministerial or directory function, creates an
injurious effect to the parties concerned. This inefficiency in the
bureaucracy must be thwarted lest the quality of public service in
local governments deteriorate and personal rights suffer. No less
than the Constitution sanctifies the principle that a public office
is a public trust, and enjoins all public officers and employees to
serve with the highest degree of responsibility, integrity, loyalty,
and efficiency.[26] These attributes, by all means, are expected of a
City Treasurer.
WHEREFORE, the assailed January 24, 2013 Decision of the Court of Appeals
and its May 15, 2013 Resolution in C.A.-G.R. CV No. 01903-MIN are
REVERSED and SET ASIDE. No costs.
The action for redemption, consignation and damages filed by respondent Estate
is ordered DISMISSED. SO ORDERED.
17 | P a g e
G.R. No. 72969-70, December 17, 1986
PHILIPPINE GAMEFOWL COMMISSION AND HEE ACUSAR,
PETITIONERS, VS. HON. INTERMEDIATE APPELLATE COURT,
MAYOR CELESTINO E. MARTINEZ, JR., THE SANGGUNIANG
BAYAN OF BOGO (CEBU), AND SANTIAGO SEVILLA,
RESPONDENTS.
DECISION
CRUZ, J.:
This case involves a conflict of jurisdiction between the Philippine
Gamefowl Commission and the municipal government of Bogo,
Cebu, both of which claim the power to issue licenses for the
operation of cockpits in the said town.
The issue arose when Hee Acusar, who was operating the lone
cockpit in Bogo, was ordered to relocate the same pursuant to
P.D. No. 449, the Cockfighting Law of 1974, on the ground that
it was situated in a tertiary commercial zone, a prohibited area.[1]
Although the period of grace for such relocation was extended to
June 11, 1980 by P.D. 1535, Acusar failed to comply with the
requirement, as a result of which the Philippine Constabulary
considered the cockpit phased out.[2] To add to his troubles, the
Court of First Instance of Cebu, in a petition to compel the
municipal mayor to issue Acusar a permit to operate a cockpit,
declared that he had waived his right to a renewal thereof because
of his failure to relocate.[3]
On July 24, 1980, Santiago Sevilla, private respondent herein, was
granted a license to operate a cockpit by Mayor Celestino E.
Martinez by authority of the Sangguniang Bayan of Bogo and with
subsequent approval of the PC Regional Command 7 as required
by law.[4] As only one cockpit is allowed by law in cities or
municipalities with a population of not more than one hundred
thousand,[5] Acusar sued to revoke this license. He failed,
however, first before the PC Recom 7[6] and later before the Court
of First Instance of Cebu.[7] His petition for certiorari challenging
the decision of the lower court was dismissed by this Court.[8]
Nothing daunted, Acusar went to the Philippine Gamefowl
Commission seeking a renewal of his cockpit license and the
cancellation of Sevilla's in what was docketed as PGC Case No.
10. He succeeded initially with the issuance by the PGC on
August 16, 1984, of an interlocutory order allowing him to
temporarily operate his cockpit.[9] This was challenged in two
separate actions[10] filed by Sevilla and the municipal government
of Bogo in the Court of First Instance of Cebu which, on petition
of Acusar, were temporarily restrained by the Intermediate
Appellate Court.[11] This same court also temporarily restrained
the enforcement of the PGC order of August 16, 1984 pending
consideration of the petition to nullify it filed by Sevilla and the
Bogo municipal officials.[12]
On December 6, 1984, the Philippine Gamefowl Commission
issued its resolution on the merits of Acusar's petition and ordered
Mayor Martinez and the Sangguniang Bayan "to issue the
necessary mayor's permit in favor of Hee Acusar" and "to cancel
and/or revoke the mayor's permit in favor of Engr. Santiago A.
Sevilla." The Commission also "RESOLVED to issue the
Registration Certificate of Hee Acusar for the current year 1984
and revoke the Registration Certificate of Engr. Santiago A.
Sevilla."[13]
ADMINLAW CASES

The above-stated resolution was on appeal declared null and void
by the Intermediate Court of Appeals,[14] and its decision is now
before us in a petition for review on certiorari.
We shall first compare the powers vested respectively in the
Philippine Gamefowl Commission and the city and municipal
officials under the applicable laws, to wit, P.D. 1802, P.D. 1802-
A and the Local Government Code.
The pertinent powers of the Philippine Gamefowl Commission
under Section 2 of P.D. 1802, which became effective on January
16, 1981, are the following:
"a) Promulgate and enforce rules and regulations relative to the
holding of cockfight derbies and cockfights in the Philippines
including the frequency sites, conduct and operation of such
derbies and cockfights;
b) Issue licenses for the holding of international derbies;
xxx xxx xxx
d) Fix and periodically revise whenever necessary, subject to the
approval of the Ministry of Finance, the rates of license fees and
other levies that may be imposed on local derbies and cockfights
and international cockfight derbies, cockpit personnel and
employees;
e) To promulgate rules and regulations relative to the holding,
methods, procedures, operations and conduct of cockfighting in
general as well as accreditation of cockpit personnel and
association of cockpit owners, operators and lessees, to elevate
18 the standard of cockfighting;
xxx xxx xxx.”
By contrast, P.D. 1802, as amended by P.D. 1802-A, provides as
follows:
"SECTION 1. Section 4 of Presidential Decree No. 1802 is
hereby amended to read as follows:
'Sec. 4. City and Municipal Mayors with the concurrence of their
respective 'Sanggunians' shall have the authority to license and
regulate regular cockfighting pursuant to the rules and regulations
promulgated by the Commission and subject to its review and
supervision.'"
According to the Local Government Code, the municipal mayor
has the power to "grant licenses and permits in accordance with
existing laws and municipal ordinances and revoke them for
violation of the conditions upon which they have been
granted,"[15] and the Sangguniang Bayan is authorized to "regulate
cockpits, cockfighting and the keeping or training of gamecocks,
subject to existing guidelines promulgated by the Philippine
Gamefowl Commission."[16]
A study of the above-cited powers shows that it is the municipal
mayor with the authorization of the Sangguniang Bayan that has
the primary power to issue licenses for the operation of ordinary
cockpits. Even the regulation of cockpits is vested in the
municipal officials, subject only to the guidelines laid down by the
Philippine Gamefowl Commission. Its power to license is limited
only to international derbies and does not extend to ordinary
cockpits. Over the latter kind of cockpits, it has the power not of
control but only of review and supervision.
18 | P a g e
We have consistently held that supervision means "overseeing or
the power or authority of an officer to see that their subordinate
officers perform their duties. If the latter fail or neglect to fulfill
them, the former may take such action or steps as prescribed by
law to make them perform their duties."[17] Supervision is a lesser
power than control, which connotes "the power of the officer to
alter or modify or set aside what a subordinate had done in the
performance of his duties and to substitute the judgment of the
former for that of the latter."[18] Review, on the other hand, is a
reconsideration or reexamination for purposes of correction. [19]
As thus defined, the power of supervision does not allow the
supervisor to annul the acts of the subordinate, for that comes
under the power of control. What it can do only is to see to it that
the subordinate performs his duties in accordance with law. The
power of review is exercised to determine whether it is necessary
to correct the acts of the subordinate. If such correction is
necessary, it must be done by the authority exercising control over
the subordinate or through the instrumentality of the courts of
justice, unless the subordinate motu proprio corrects himself after
his error is called to his attention by the official exercising the
power of supervision and review over him.
At that, even the power of review vested in the Philippine
Gamefowl Commission by P.D. 1802-A may have been modified
by the Local Government Code, which became effective on
February 14, 1983. Under the Code, the Sangguniang
Panlalawigan is supposed to examine the ordinances, resolutions
and executive orders issued by the municipal government and to
annul the same, but only on one ground, to wit, that it is beyond
the powers of the municipality or ultra vires.[20] Significantly, no
similar authority is conferred in such categorical terms on the
Philippine Gamefowl Commission regarding the licensing and
regulation of cockpits by the municipal government.
The conferment of the power to license and regulate municipal
cockpits in the municipal authorities is in line with the policy of
local autonomy embodied in Article II, Section 10, and Article XI
of the 1973 Constitution. It is also a recognition, as the Court of
Appeals correctly points out, of the superior competence of the
municipal officials in dealing with this local matter with which
they can be expected to be more knowledgeable than the national
officials. Surely, the Philippine Gamefowl Commission cannot
claim to know more than the municipal mayor and the
Sangguniang Bayan of Bogo, Cebu, about the issues being
disputed by the applicants to the cockpit license.
At any rate, assuming that the resolution of the Sangguniang
Bayan authorizing the issuance of a cockpit license to Sevilla was
subject to reversal by the PGC, such action could be justified only
if based upon a proven violation of law by the municipal
officials. It may not be made only for the purpose of substituting
its own discretion for the discretion exercised by the municipal
authorities in determining the applicant to which the lone cockpit
license should be issued.
In the absence of a clear showing of a grave abuse of discretion,
the choice of the municipal authorities should be respected by the
PGC and in any event cannot be replaced by it simply because it
believes another person should have been selected. Stated
otherwise, the PGC cannot directly exercise the power to license
cockpits and in effect usurp the authority directly conferred by
law on the municipal authorities.
ADMINLAW CASES
 If at all, the power to review includes the power to disapprove;
but it does not carry the authority to substitute one's own
preferences for that chosen by the subordinate in the exercise of
its sound discretion. In the instant case, the PGC did not limit
itself to vetoing the choice of Sevilla, assuming he was
disqualified, but directly exercised the authority of replacing him
with its own choice. Assuming Sevilla was really disqualified, the
choice of his replacement still remained with the municipal
authorities, subject only to the review of the PGC.

In ordering the respondent municipal officials to cancel the

mayor's permit in favor of Santiago A. Sevilla and to issue another
one in favor of Acusar, the PGC was exercising not the powers of
mere supervision and review but the power of control, which had
not been conferred upon it.

The other issue raised by the petitioner is easily resolved. It

appearing that they are supported by substantial evidence, we
accept the factual findings of the respondent court that Acusar's
cockpit was within the prohibited area and was therefore correctly
considered phased out when its operator failed to relocate it as
required by law. According to the Court of Appeals, "it is not
controverted that Acusar's cockpit is near a Roman Catholic
church, near the Cebu Roosevelt Memorial College, near
residential dwellings and near a public market." These
circumstances should be more than enough to disqualify Acusar
even under the prior-operator rule he invokes, assuming that rule
was applicable.

Under that rule, preference is given to the actual holder of the

19 permit, but in the instant case Acusar could not be said to be
actually holding the permit at the time it was given to
Sevilla. Acusar had then already forfeited his right to renew it by
reason of his non-compliance with the requirement to relocate.

This is as good an occasion as any to stress the commitment of

the Constitution to the policy of local autonomy which is intended
to provide the needed impetus and encouragement to the
development of our local political subdivisions as "self-reliant
communities." In the words of Jefferson, "Municipal corporations
are the small republics from which the great one derives its
strength." The vitalization of local governments will enable their
inhabitants to fully exploit their resources and, more important,
imbue them with a deepened sense of involvement in public
affairs as members of the body politic. This objective could be
blunted by undue interference by the national government in
purely local affairs which are best resolved by the officials and
inhabitants of such political units. The decision we reach today
conforms not only to the letter of the pertinent laws but also to
the spirit of the Constitution.

WHEREFORE, the petition is dismissed. The decision of the respondent Court

of Appeals dated May 29, 1985, is hereby affirmed in toto, with costs against
petitioner Hee Acusar.

SO ORDERED.

19 | P a g e ADMINLAW CASES
 G.R. No. 74457, March 20, 1987
RESTITUTO YNOT, PETITIONER, VS. INTERMEDIATE
APPELLATE COURT, THE STATION COMMANDER,
INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO
AND THE REGIONAL DIRECTOR, BUREAU OF ANIMAL
INDUSTRY, REGION IV, ILOILO CITY, RESPONDENTS.
DECISION
CRUZ, J.:
The essence of due process is distilled in the immortal cry of
Themistocles to Alcibiades: "Strike — but hear me first!" It is this
cry that the petitioner in effect repeats here as he challenges the
constitutionality of Executive Order No. 626-A.
The said executive order reads in full as follows:
"WHEREAS, the President has given orders prohibiting the
interprovincial movement of carabaos and the slaughtering of
carabaos not complying with the requirements of Executive
Order No. 626 particularly with respect to age;
"WHEREAS, it has been observed that despite such orders the
violators still manage to circumvent the prohibition against
interprovincial movement of carabaos by transporting carabeef
instead; and
"WHEREAS, in order to achieve the purposes and objectives of
Executive Order No. 626 and the prohibition against
interprovincial movement of carabaos, it is necessary to
20 strengthen the said Executive Order and provide for the
disposition of the carabaos and carabeef subject of the violation.
"NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers vested in me
by the Constitution, do hereby promulgate the following:
"SECTION 1. Executive Order No. 626 is hereby amended such
that henceforth, no carabao regardless of age, sex, physical
condition or purpose and no carabeef shall be transported from
one province to another. The carabao or carabeef transported in
violation of this Executive Order as amended shall be subject to
confiscation and forfeiture by the government, to be distributed
to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may see
fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the
case of carabaos.
"SECTION 2. This Executive Order shall take effect
immediately.
"Done in the City of Manila, this 25th day of October, in the year
of Our Lord, nineteen hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines"
20 | P a g e
The petitioner had transported six carabaos in a pump boat from
Masbate to Iloilo on January 13, 1984, when they were confiscated
by the police station commander of Barotac Nuevo, Iloilo, for
violation of the above measure.[1] The petitioner sued for
recovery, and the Regional Trial Court of Iloilo City issued a writ
of replevin upon his filing of a supersedeas bond of P12,000.00. After
considering the merits of the case, the court sustained the
confiscation of the carabaos and, since they could no longer be
produced, ordered the confiscation of the bond. The court also
declined to rule on the constitutionality of the executive order, as
raised by the petitioner, for lack of authority and also for its
presumed validity.[2]
The petitioner appealed the decision to the Intermediate
Appellate Court,[*] [3] which upheld the trial court,[**] and he has
now come before us in this petition for review on certiorari.
The thrust of his petition is that the executive order is
unconstitutional insofar as it authorizes outright confiscation of
the carabao or carabeef being transported across provincial
boundaries. His claim is that the penalty is invalid because it is
imposed without according the owner a right to be heard before
a competent and impartial court as guaranteed by due process. He
complains that the measure should not have been presumed, and
so sustained, as constitutional. There is also a challenge to the
improper exercise of the legislative power by the former President
under Amendment No. 6 of the 1973 Constitution.[4]
While also involving the same executive order, the case of Pesigan
v. Angeles[5] is not applicable here. The question raised there was
the necessity of the previous publication of the measure in the
Official Gazette before it could be considered enforceable. We
imposed the requirement then on the basis of due process of
law. In doing so, however, this Court did not, as contended by
the Solicitor General, impliedly affirm the constitutionality of
Executive Order No. 626-A. That is an entirely different matter.
This Court has declared that while lower courts should observe a
becoming modesty in examining constitutional questions, they are
nonetheless not prevented from resolving the same whenever
warranted, subject only to review by the highest tribunal.[6] We
have jurisdiction under the Constitution to "review, revise,
reverse, modify or affirm on appeal or certiorari, as the law or rules
of court may provide," final judgments and orders of lower courts
in, among others, all cases involving the constitutionality of
certain measures.[7] This simply means that the resolution of such
cases may be made in the first instance by these lower courts.
And while it is true that laws are presumed to be constitutional,
that presumption is not by any means conclusive and in fact may
be rebutted. Indeed, if there be a clear showing of their invalidity,
and of the need to declare them so, then "will be the time to make
the hammer fall, and heavily,"[8] to recall Justice Laurel's trenchant
warning. Stated otherwise, courts should not follow the path of
least resistance by simply presuming the constitutionality of a law
when it is questioned. On the contrary, they should probe the
issue more deeply, to relieve the abscess, paraphrasing another
distinguished jurist,[9] and so heal the wound or excise the
affliction.
Judicial power authorizes this; and when the exercise is demanded,
there should be no shirking of the task for fear of retaliation, or
loss of favor, or popular censure, or any other similar inhibition
ADMINLAW CASES
 unworthy of the bench, especially this Court.
The challenged measure is denominated an executive order but it
is really a presidential decree, promulgating a new rule instead of
merely implementing an existing law. It was issued by President
Marcos not for the purpose of taking care that the laws were
faithfully executed but in the exercise of his legislative authority
under Amendment No. 6. It was provided thereunder that
whenever in his judgment there existed a grave emergency or a
threat or imminence thereof or whenever the legislature failed or
was unable to act adequately on any matter that in his judgment
required immediate action, he could, in order to meet the
exigency, issue decrees, orders or letters of instruction that were
to have the force and effect of law. As there is no showing of any
exigency to justify the exercise of that extraordinary power then,
the petitioner has reason, indeed, to question the validity of the
executive order. Nevertheless, since the determination of the
grounds was supposed to have been made by the President "in his
judgment," a phrase that will lead to protracted discussion not
really necessary at this time, we reserve resolution of this matter
until a more appropriate occasion. For the nonce, we confine
ourselves to the more fundamental question of due process.
It is part of the art of constitution-making that the provisions of
the charter be cast in precise and unmistakable language to avoid
controversies that might arise on their correct
interpretation. That is the ideal. In the case of the due process
clause, however, this rule was deliberately not followed and the
wording was purposely kept ambiguous. In fact, a proposal to
delineate it more clearly was submitted in the Constitutional
Convention of 1934, but it was rejected by Delegate Jose P.
21 Laurel, Chairman of the Committee on the Bill of Rights, who
forcefully argued against it. He was sustained by the body.[10]
The due process clause was kept intentionally vague so it would
remain also conveniently resilient. This was felt necessary because
due process is not, like some provisions of the fundamental law,
an "iron rule" laying down an implacable and immutable
command for all seasons and all persons. Flexibility must be the
best virtue of the guaranty. The very elasticity of the due process
clause was meant to make it adapt easily to every situation,
enlarging or constricting its protection as the changing times and
circumstances may require.
Aware of this, the courts have also hesitated to adopt their own
specific description of due process lest they confine themselves in
a legal straitjacket that will deprive them of the elbow room they
may need to vary the meaning of the clause whenever
indicated. Instead, they have preferred to leave the import of the
protection open-ended, as it were, to be "gradually ascertained by
the process of inclusion and exclusion in the course of the
decision of cases as they arise."[11] Thus, Justice Felix Frankfurter
of the U.S. Supreme Court, for example, would go no farther than
to define due process — and in so doing sums it all up — as
nothing more and nothing less than "the embodiment of the
sporting idea of fair play."[12]
When the barons of England extracted from their sovereign liege
the reluctant promise that the Crown would thenceforth not
proceed against the life, liberty or property of any of its subjects
except by the lawful judgment of his peers or the law of the land,
they thereby won for themselves and their progeny that splendid
guaranty of fairness that is now the hallmark of the free
21 | P a g e
society. The solemn vow that King John made at Runnymede in
1215 has since then resounded through the ages, as a ringing
reminder to all rulers, benevolent or base, that every person, when
confronted by the stern visage of the law, is entitled to have his
say in a fair and open hearing of his cause.
The closed mind has no place in the open society. It is part of the
sporting idea of fair play to hear "the other side" before an opinion
is formed or a decision is made by those who sit in
judgment. Obviously, one side is only one-half of the question;
the other half must also be considered if an impartial verdict is to
be reached based on an informed appreciation of the issues in
contention. It is indispensable that the two sides complement
each other, as unto the bow the arrow, in leading to the correct
ruling after examination of the problem not from one or the other
perspective only but in its totality. A judgment based on less that
this full appraisal, on the pretext that a hearing is unnecessary or
useless, is tainted with the vice of bias or intolerance or ignorance,
or worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and
hearing[13] which, generally speaking, may not be dispensed with
because they are intended as a safeguard against official
arbitrariness. It is a gratifying commentary on our judicial system
that the jurisprudence of this country is rich with applications of
this guaranty as proof of our fealty to the rule of law and the
ancient rudiments of fair play. We have consistently declared that
every person, faced by the awesome power of the State, is entitled
to "the law of the land," which Daniel Webster described almost
two hundred years ago in the famous Dartmouth College Case, [14]
as "the law which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial." It has to be so if
the rights of every person are to be secured beyond the reach of
officials who, out of mistaken zeal or plain arrogance, would
degrade the due process clause into a worn and empty catchword.
This is not to say that notice and hearing are imperative in every
case for, to be sure, there are a number of admitted
exceptions. The conclusive presumption, for example, bars the
admission of contrary evidence as long as such presumption is
based on human experience or there is a rational connection
between the fact proved and the fact ultimately presumed
therefrom.[15] There are instances when the need for expeditious
action will justify omission of these requisites, as in the summary
abatement of a nuisance per se, like a mad dog on the loose, which
may be killed on sight because of the immediate danger it poses
to the safety and lives of the people. Pornographic materials,
contaminated meat and narcotic drugs are inherently pernicious
and may be summarily destroyed. The passport of a person
sought for a criminal offense may be canceled without hearing, to
compel his return to the country he has fled.[16] Filthy restaurants
may be summarily padlocked in the interest of the public health
and bawdy houses to protect the public morals.[17] In such
instances, previous judicial hearing may be omitted without
violation of due process in view of the nature of the property
involved or the urgency of the need to protect the general welfare
from a clear and present danger.
The protection of the general welfare is the particular function of
the police power which both restrains and is restrained by due
process. The police power is simply defined as the power
inherent in the State to regulate liberty and property for the
promotion of the general welfare.[18] By reason of its function, it
ADMINLAW CASES
 extends to all the great public needs and is described as the most
pervasive, the least limitable and the most demanding of the three
inherent powers of the State, far outpacing taxation and eminent
domain. The individual, as a member of society, is hemmed in by
the police power, which affects him even before he is born and
follows him still after he is dead - from the womb to beyond the
tomb - in practically everything he does or owns. Its reach is
virtually limitless. It is a ubiquitous and often unwelcome
intrusion. Even so, as long as the activity or the property has
some relevance to the public welfare, its regulation under the
police power is not only proper but necessary. And the
justification is found in the venerable Latin maxims, Salus populi est
suprema lex and Sic utere tuo ut alienum non laedas, which call for the
subordination of individual interests to the benefit of the greater
number.
It is this power that is now invoked by the government to justify
Executive Order No. 626-A, amending the basic rule in Executive
Order No. 626, prohibiting the slaughter of carabaos except under
certain conditions. The original measure was issued for the
reason, as expressed in one of its Whereases, that "present
conditions demand that the carabaos and the buffaloes be
conserved for the benefit of the small farmers who rely on them
for energy needs." We affirm at the outset the need for such a
measure. In the face of the worsening energy crisis and the
increased dependence of our farms on these traditional beasts of
burden, the government would have been remiss, indeed, if it had
not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio,[19]
where a law regulating the registration, branding and slaughter of
22 large cattle was claimed to be a deprivation of property without
due process of law. The defendant had been convicted
thereunder for having slaughtered his own carabao without the
required permit, and he appealed to the Supreme Court. The
conviction was affirmed. The law was sustained as a valid police
measure to prevent the indiscriminate killing of carabaos, which
were then badly needed by farmers. An epidemic had stricken
many of these animals and the reduction of their number had
resulted in an acute decline in agricultural output, which in turn
had caused an incipient famine. Furthermore, because of the
scarcity of the animals and the consequent increase in their price,
cattle-rustling had spread alarmingly, necessitating more effective
measures for the registration and branding of these animals. The
Court held that the questioned statute was a valid exercise of the
police power and declared in part as follows:
"To justify the State in thus interposing its authority in behalf of
the public, it must appear, first, that the interests of the public
generally, as distinguished from those of a particular class, require
such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. x x x x x.
"From what has been said, we think it is clear that the enactment
of the provisions of the statute under consideration was required
by 'the interests of the public generally, as distinguished from
those of a particular class' and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are
fit for agricultural work or draft purposes was a 'reasonably
necessary' limitation on private ownership, to protect the
community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of
22 | P a g e
momentary gain, or by a desire to enjoy the luxury of animal food,
even when by so doing the productive power of the community
may be measurably and dangerously affected."
In the light of the tests mentioned above, we hold with the Toribio
Case that the carabao, as the poor man's tractor, so to speak, has
a direct relevance to the public welfare and so is a lawful subject
of Executive Order No. 626. The method chosen in the basic
measure is also reasonably necessary for the purpose sought to be
achieved and not unduly oppressive upon individuals, again
following the above-cited doctrine. There is no doubt that by
banning the slaughter of these animals except where they are at
least seven years old if male and eleven years old if female upon
issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and preventing
their improvident depletion.
But while conceding that the amendatory measure has the same
lawful subject as the original executive order, we cannot say with
equal certainty that it complies with the second requirement, viz.,
that there be a lawful method. We note that to strengthen the
original measure, Executive Order No. 626-A imposes an
absolute ban not on the slaughter of the carabaos but on their
movement, providing that "no carabao regardless of age, sex,
physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the
prohibition escapes us. The reasonable connection between the
means employed and the purpose sought to be achieved by the
questioned measure is missing.
We do not see how the prohibition of the interprovincial
transport of carabaos can prevent their indiscriminate slaughter,
considering that they can be killed anywhere, with no less
difficulty in one province than in another. Obviously, retaining
the carabaos in one province will not prevent their slaughter there,
any more than moving them to another province will make it
easier to kill them there. As for the carabeef, the prohibition is
made to apply to it as otherwise, so says executive order, it could
be easily circumvented by simply killing the animal. Perhaps
so. However, if the movement of the live animals for the purpose
of preventing their slaughter cannot be prohibited, it should
follow that there is no reason either to prohibit their transfer as,
not to be flippant, dead meat.
Even if a reasonable relation between the means and the end were
to be assumed, we would still have to reckon with the sanction
that the measure applies for violation of the prohibition. The
penalty is outright confiscation of the carabao or carabeef being
transported, to be meted out by the executive authorities, usually
the police only. In the Toribio Case, the statute was sustained
because the penalty prescribed was fine and imprisonment, to be
imposed by the court after trial and conviction of the
accused. Under the challenged measure, significantly, no such
trial is prescribed, and the property being transported is
immediately impounded by the police and declared, by the
measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the
police station commander, were returned to the petitioner only
after he had filed a complaint for recovery and given a supersedeas
bond of P12,000.00, which was ordered confiscated upon his
failure to produce the carabaos when ordered by the trial
court. The executive order defined the prohibition, convicted the
ADMINLAW CASES
 petitioner and immediately imposed punishment, which was
carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus
denying him the centuriesfold guaranty of elementary fair play.
It has already been remarked that there are occasions when notice
and hearing may be validly dispensed with notwithstanding the
usual requirement for these minimum guarantees of due
process. It is also conceded that summary action may be validly
taken in administrative proceedings as procedural due process is
not necessarily judicial only.[20] In the exceptional cases accepted,
however, there is a justification for the omission of the right to a
previous hearing, to wit, the immediacy of the problem sought to
be corrected and the urgency of the need to correct it.
properties arbitrarily taken. For these reasons, we hereby declare
Executive Order No. 626-A unconstitutional.
We agree with the respondent court, however, that the police
station commander who confiscated the petitioner's carabaos is
not liable in damages for enforcing the executive order in
accordance with its mandate. The law was at that time
presumptively valid, and it was his obligation, as a member of the
police, to enforce it. It would have been impertinent of him, being
a mere subordinate of the President, to declare the executive order
unconstitutional and, on his own responsibility alone, refuse to
execute it. Even the trial court, in fact, and the Court of Appeals
itself did not feel they had the competence, for all their superior
authority, to question the order we now annul.

In the case before us, there was no such pressure of time or action
calling for the petitioner's peremptory treatment. The properties
involved were not even inimical per se as to require their instant
destruction. There certainly was no reason why the offense
prohibited by the executive order should not have been proved
first in a court of justice, with the accused being accorded all the
rights safeguarded to him under the Constitution. Considering
that, as we held in Pesigan v. Angeles,[21] Executive Order No. 626-
A is penal in nature, the violation thereof should have been
pronounced not by the police only but by a court of justice, which
alone would have had the authority to impose the prescribed
penalty, and only after trial and conviction of the accused.
We also mark, on top of all this, the questionable manner of the
disposition of the confiscated property as prescribed in the
questioned executive order. It is there authorized that the seized
23 property shall "be distributed to charitable institutions and other
similar institutions as the Chairman of the National Meat
Inspection Commission may see fit, in the case of carabeef, and to
deserving farmers through dispersal as the Director of Animal
Industry may see fit, in the case of carabaos." (Emphasis
supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous
opportunities for partiality and abuse, and even corruption. One
searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers must
observe when they make their distribution. There is none. Their
options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be
chosen? Only the officers named can supply the answer, they and
they alone may choose the grantee as they see fit, and in their own
exclusive discretion. Definitely, there is here a "roving
commission," a wide and sweeping authority that is not "canalized
within banks that keep it from overflowing," in short, a clearly
profligate and therefore invalid delegation of legislative powers.
The Court notes that if the petitioner had not seen fit to assert
and protect his rights as he saw them, this case would never have
reached us and the taking of his property under the challenged
measure would have become a fait accompli despite its
invalidity. We commend him for his spirit. Without the present
challenge, the matter would have ended in that pump boat in
Masbate and another violation of the Constitution, for all its
obviousness, would have been perpetrated, allowed without
protest, and soon forgotten in the limbo of relinquished rights.
The strength of democracy lies not in the rights it guarantees but
in the courage of the people to invoke them whenever they are
ignored or violated. Rights are but weapons on the wall if, like
expensive tapestry, all they do is embellish and impress. Rights,
as weapons, must be a promise of protection. They become truly
meaningful, and fulfill the role assigned to them in the free society,
if they are kept bright and sharp with use by those who are not
afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared
unconstitutional. Except as affirmed above, the decision of the
Court of Appeals is reversed. The supersedeas bond is cancelled
and the amount thereof is ordered restored to the petitioner. No
costs.
SO ORDERED.

To sum up then, we find that the challenged measure is an invalid

exercise of the police power because the method employed to
conserve the carabaos is not reasonably necessary to the purpose
of the law and, worse, is unduly oppressive. Due process is
violated because the owner of the property confiscated is denied
the right to be heard in his defense and is immediately condemned
and punished. The conferment on the administrative authorities
of the power to adjudge the guilt of the supposed offender is a
clear encroachment on judicial functions and militates against the
doctrine of separation of powers. There is, finally, also an invalid
delegation of legislative powers to the officers mentioned therein
who are granted unlimited discretion in the distribution of the
23 | P a g e ADMINLAW CASES
 G. R. No. L-23825, December 24, 1965 124 Surigao del
Rizal Oct. 3, 1964 BB
Norte
126 Surigao del
EMMANUEL PELAEZ, PETITIONER, VS. THE AUDITOR Tigao Oct. 23, 1964 CC
Sur
GENERAL, RESPONDENT. 127 Tampakan Cotabato Oct. 26, 1964 PD
128 Maco Davao Oct. 29, 1964 BE
DECISION
129 New Corella Davao Oct. 29, 1964 FF
from passing in audit any expenditure of public funds in
CONCEPCION, J.: implementation of said executive orders and/or any
disbursement by said municipalities.
During the period from September 4 to October 29, 1964 the
President of the Philippines, purporting to act pursuant to Petitioner alleges that said executive orders are null and void,
Section 68 of the Revised Administrative Code, issued Executive upon the ground that said Section 68 has been impliedly
Orders Nos, 93 to 121, 124 and 126 to 129, creating thirty-three repealed by Republic Act 2370 and constitutes an undue
(33) municipalities enumerated in the margin.[1] Soon after the delegation of legislative power. Respondent maintains the
date last mentioned, or contrary view and avers that the present action is premature and
on that not all proper parties—referring to the officials of the new
1 Executive Municipality Province Date of Annex political subdivisions in question— have been impleaded.
Order No. Promulgation Subsequently, the mayors of several municipalities adversely
affected by the aforementioned executive orders—because the
93 Zamboanga latter have taken away from the former the barrios composing the
Nilo Sept. 4, 1964 A (original
del Sur
94 Zaraboanga new political subdivision—intervened in the case. Moreover,
Midsalip Sept. 4, 1964 B Petition) Attorneys Enrique M. Fernando and Emma Quisunibing-
del Sur
95
Pitog-o
Zamhoanga
Sept. 4, 1964 C" Fernando were allowed to and did appear as amici curiae.
del Sur
96 Zamboanga
Maruing Sept. 4, 1964 D"
del Sur The third paragraph of Section 3 of Republic Act No. 2370,
97 Zamboanga reads:
Naga Sept. 4, 1964 E"
del Sur
99 Sebaste Antique Sept. 26, 1964 F"
100
Molugan
Misamis
Sept. 26, 1964
G" "Barrios shall not be created or their boundaries altered nor their
Oriental names changed except under the provisions of this Act or by
H"
101 Surigao del
Act of Congress."
Malixi Sept. 28, 1964 H"
Sur
24
Pursuant to the first two (2) paragraphs of the same Section 3:
November 10, 1964, petitioner Emmanuel Pelaez, as Vice-
President of the Philippines and as taxpayer, instituted the "All barrios existing at the time of the passage of this Act shall
present special civil action, for a writ of prohibition with come under the provisions hereof.
preliminary injunction, against the Auditor General, to restrain
him, as well as his representatives and
agents, "Upon petition of a majority of the voters in the areas affected, a
new barrio may be created or the name of an existing one may
be changed by the provincial board of the province, upon
102 Roxas Davao Sept. 28, 1964 I recommendation of the council of the municipality or
103 Magsaysay Davao Sept. 28, 1964 J municipalities in which the proposed, barrio is situated. The
104 Sta. Maria Davao Sept. 28, 1964 K
105 Badiangan Iloilo Sept. 28, 1964
recommendation of the municipal council shall be embodied in a
106 Mina Iloilo Oct. 1, 1964 M resolution approved by at least two-thirds of the entire
107 Andong Lanao del Sur Oct. 1, 1964 N membership of the said council: Provided, however, That no new
108 Sultan Alonto Lanao del Sur Oct. 1, 1964 O barrio may be created if its population is less than five hundred
109 Maguing Lanao del Sur Oct. 1, 1964 P
110 Dianaton Lanao del Sur Oct. 1, 1964 Q
persons.
111 Elpidio Quirino Mt. Province Oct. 1, 1964 E
112 Zamboanga S Hence, since January 1, 1960, when Republic Act No. 2370
Bayog Oct. 1, 1964
del Sur
113 Oriental became effective, barrios may "not be created or their
Gloria Oct. 1, 1964 GG boundaries altered nor their names changed" except by Act of
Mindoro
T (Attached Congress or of the corresponding provincial board "upon
hereto) petition of a majority of the voters in the areas affected" and the
114 Maasin Cotabato Oct. 1, 1964
115 Zamboanga "recommendation of the council of the municipality or
Siayan Oct. 1, 1964 U municipalities in which the proposed barrio is situated."
del Norte
116
Roxas
Zamboanga
Oct. 1, 1964 V Petitioner argues, accordingly: "If the President, under this new
del Norte law, cannot even create a barrio, can he create a municipality
117 Zamboanga
Panganuran
del
Oct. 1, 1964 W which is composed of several barrios, since barrios are units of
118 Kalilangan Bukidnon Oct. 1, 1964 X municipalities?"
119 Lantapan Bukidnon Oct. 1, 1964 Y
120 Zamboanga
Libertad
del Sur
Oct. 1, 1964 Z Respondent answers in the affirmative, upon the theory that a
121 Zamboanga new municipality can be created without creating new barrios,
General Aguinaldo Oct. 1, 1964 AA
del Sur
24 | P a g e ADMINLAW CASES
 such as, by placing old barrios under the jurisdiction of the new
municipality. This theory overlooks, however, the main import
of the petitioner's argument, which is that the statutory denial of
the presidential authority to create a new barrio implies a negation
of the bigger power to create municipalities, each of which
consists of several barrios. The cogency and force of this
argument is too obvious to be denied or even questioned.
Founded upon logic and experience, it cannot be offset except
by a clear manifestation of the intent of Congress to the
contrary, and no such manifestation, subsequent to the passage
of Republic Act No. 2370, has been brought to our attention.
Moreover, section 68 of the Revised Administrative Code, upon
which the disputed executive orders are based, provides :
"The (Governor-General) President of the Philippines may by
executive order define the boundary, or boundaries, of any
province, sub-province, municipality, [township] municipal
district or other political subdivision, and increase or diminish
the territory comprised therein, may divide any province into
one or more subprovinces, separate any political division other
than a province, into such portions as may be required, merge
any of such subdivisions or portions with another, name any
new subdivision so created, and may change the seat of
government within any subdivision to such place therein as the
public welfare may require: Provided, That the authorization of
the (Philippine Legislature) Congress of the Philippines shall first
be obtained whenever the boundary of any province or
subprovince is to be defined or any province is to be divided
into one or more subprovinces. When action by the (Governor-
General) President of the Philippines in accordance herewith
25 makes necessary a change of the territory under the jurisdiction
of any administrative officer or any judicial officer, the
(Governor-General) President of the Philippines, with the
recommendation and advice of the head of the Department
having executive control of such officer, shall redistrict the
territory of the several officers affected and assign such officers
to the new districts so formed.
"Upon the changing of the limits of political divisions in pur-
suance of the foregoing authority, an equitable distribution of
the funds, and obligations of the divisions thereby affected shall
be made in such manner as may be recommended by the
(Insular Auditor) Auditor General and approved by the
(Governor-General) President of the Philippines."
Respondent alleges that the power of the President to create
municipalities under this section does not amount to an undue
delegation of legislative power, relying upon Municipality of
Cardona vs. Municipality of Binangonan (36 Phil. 547), which, he
claims, has settled it. Such claim is untenable, for said case
involved, not the creation of a new municipality, but a mere
transfer of territory— from an already existing municipality
(Cardona) to another municipality (Binangonan), likewise, existing
at the time of and prior to said transfer (See Gov't of the P.I. ex rel.
Municipality of Cardona vs. Municipality of Binangonan [34 Phil.
518, 519-520],—in consequence of the fixing and definition,
pursuant to Act No. 1748, of the common boundaries of two
municipalities.
It is obvious, however, that, whereas the power to fix such
common boundary, in order to avoid Or settle conflicts of
25 | P a g e
jurisdiction between adjoining municipalities, may partake of an
administrative nature—involving, as it does, the adoption of
means and ways to carry into effect the law creating said
municipalities—the authority to create municipal corporations is
essentially legislative in nature. In the language of other courts, it is
"strictly a legislative function" (State ex rel. Higgins vs. Aicklen,
119 S. 425, January 2, 1959) or "solely and exclusively the exercise of
legislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d. 347-
349). As the Supreme Court of Washington has put it (Territory
ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409),
"municipal corporations are purely the creatures of statutes."
Although [1-a] Congress may delegate to another branch of the
government the power to fill in the 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 [2]—and fix a
standard—the limits of which are sufficiently determinate or
determinate—to which the delegate must conform in the
performance of his functions.[2-a] Indeed, without a statutory
declaration of policy, the delegate would, in effect, make or
formulate such 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.[2-b] Hence, he
could thereby arrogate upon himself the power, not only to
make the law, but, also—and this is worse—to unmake it, by
adopting measures inconsistent with the end sought to be
attained by the Act of Congress, thus nullifying the principle of
separation of powers and the system of checks and balances,
and, consequently undermining the very foundation of our Re-
publican system.
Section 68 of the Revised Administrative Code does not meet
these well settled requirements for a valid delegation of the
power to fix the details in the enforcement of a law. It does not
enunciate any policy to be carried out or implemented by the
President. Neither does it give a standard sufficiently precise to
avoid the evil effects above referred to. In this connection, we
do not overlook the fact that, under the last clause of the first
sentence of Section 68, the President—
"* * * may change the seat of the government within any
subdivision to such place therein as the public welfare may require."
It is apparent, however, from the language of this clause, that the
phrase "as the public welfare may require" qualifies, not the
clauses preceding the one just quoted, but only the place to which
the seat of the government may be transferred. This fact
becomes more apparent when we consider that said Section 68
was originally Section 1 of Act No. 1748,[3] which provided, that
"whenever in the judgment of the Governor-General the public
welfare requires, he may, by executive order", effect the changes
enumerated therein (as well as in said Section 68), including the
change of the seat of the government "to such place * * * as the
public interest requires". The opening statement of said Section 1
of Act No. 1748—which was not included in Section 68 of the
Revised Administrative Code—governed the time at which, or
the conditions under which, the powers therein conferred could
be exercised; whereas the last part of the first sentence of said
ADMINLAW CASES
 section referred exclusively to the place to which the seat of the
government was to be transferred.
At any rate, the conclusion would be the same, insofar as the
case at bar is concerned, even if we assumed that the phrase "as
the public welfare may require", in said Section 68, qualifies all
other clauses thereof. It is true that in Calalang vs. William (70
Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had
upheld "public welfare" and "public interest", respectively, as
sufficient standards for a valid delegation of the authority to
execute the law. But, the doctrine laid down in these cases—as
all judicial pronouncements—must be construed in relation to
the specific facts and issues involved therein, outside of which
they do not constitute precedents and have no binding effect.[4]
The law construed in the Calalang case conferred upon the
Director of Public Works, with the approval of the Secretary of
Public Works and Communications, the power to issue rules and
regulations to promote safe transit upon national roads and streets.
Upon the other hand, the Rosenthal case referred to the
authority of the Insular Treasurer, under Act No. 2581, to issue
and cancel certificates or permits for the sale of speculative securities.
Both cases involved grants to admmistraitive officers of powers
related to the exercise of their administrative functions, calling for
the determination of questions of fact.
Such is not the nature of the powers dealt with in section 68. As
above indicated, the creation of municipalities, is not an
administrative function, but one which is essentially and eminently
legislative in character. The question whether or not "public
interest" demands the exercise of such power is not one of fact.
It is purely a legislative question" (Carolina-Virginia Coastal
26 Highway vs. Coastal Turnpike Authority, 74 S.E. 2d., 310-313,
315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-
349). As the Supreme Court of Wisconsin has aptly characterized
it, "the question as to whether incorporation is for the best interest
of the community in any case is emphatically a question of public
policy and statecraft" (In re Village of North Milwaukee, 67 N. W.
1033, 1035-1037).
For this reason, courts of justice have annulled, as constituting
undue delegation of legislative powers, state laws granting the
judicial department the power to determine whether certain
territories should be annexed to a particular municipality (Udall vs.
Severn, supra, 358-359); or vesting in a Commission the right to
determine the plan and frame of government of proposed villages
and what functions shall be exercised by the same, although the
powers and functions of the village are specifically limited by
statute (In re Municipal Charters, 86 Atl. 307-308) or conferring
upon courts the authority to declare a given town or village
incorporated, and designate its meter and bounds, upon petition
of a majority of the taxable inhabitants thereof, setting forth the
area desired to be included in such village (Territory ex rel Kelly vs.
Stewart, 23 Pac. 405-409); or authorizing the territory of a town,
containing a given area and population, to be incorporated as a
town, on certain steps being taken by the inhabitants thereof and
on certain determination by a court and subsequent vote of the
inhabitants in favor thereof, insofar as the court is allowed to
determine whether the lands embraced in the petition "ought
justly" to be included in the village, and whether the interest of
the inhabitants will be promoted by such incorporation, and to
enlarge and diminish the boundaries of the proposed village "as
justice may require" (In re Villages of North Milwaukee, 67 N.W.
26 | P a g e
1035-1037); or creating a Municipal Board of Control which shall
determine whether or not the laying out, construction or opera-
tion of a toll road is in the "public interest" and whether the
requirements of the law had been complied with, in which case
the Board shall enter an order creating a municipal corporation
and fixing the name of the same (Carolina-Virginia Coastal
Highway vs. Coastal Turnpike Authority, 74 S. E. 2d. 310).
Insofar as the validity of a delegation of power by Congress to the
President is concerned, the case of Schechter Poultry Corporation
vs. U. S. (79 L. ed. 1570) is quite relevant to the one at bar. The
Schechter case involved the constitutionality of Section 3 of the
National Industrial Recovery Act authorizing the President of the
United States to approve "codes of fair competition" submitted
to him by one or more trade or industrial associations or
corporations (which "impose no inequitable restrictions on
admission to membership therein and are truly representative,"
provided that such codes are not designed "to promote mono-
polies or to eliminate or oppress small enterprises and will not
operate to discriminate against them, and will tend to effectuate
the policy" of said Act. The Federal Supreme Court held:
"To summarize and conclude upon this point: Sec. 3 of the
Recovery Act is without precedent. It supplies no standards for
any trade, industry or activity. It does not undertake to prescribe
rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of
proscribing [rules of conduct, it authorizes the making of codes
to prescribe them. For that legislative undertaking, Sec. 3 sets up
no standards, aside from the statement of the general aims of
rehabilitation, correction and expansion described in Sec. 1. In
view of the scope of that broad declaration, and cf the nature of
the few restrictions that are imposed, the discretion of the
President in approving or prescribing codes, and thus enacting
laws for the government of trade and industry throughout the
country,, is virtually unfettered. We think that the code-making
authority thus conferred is an unconstitutional delegation of
legislative power."
If the term "unfair competition" is so broad as to vest in the
President a discretion that is "virtually unfettered", and,
consequently, tantamount to a delegation of legislative power, it
is obvious that "public welfare", which has even a broader
connotation, leads to the same result. In fact, if the validity of
the delegation of powers made in Section 68 were upheld, there
would no longer be any legal impediment to a statutory grant of
authority to the President to do anything which, in his opinion,
may be required by public welfare or public interest. Such grant
of authority would be a virtual abdication of the powers of
Congress in favor of the Executive, and would bring about a
total collapse of the democratic system established by our
Constitution, which it is the special duty and privilege of this
Court to uphold.
It may not be amiss to note that the executive orders in question were
issued after the legislative bills for the creation of the municipalities involved
in this case had failed to pass Congress. A better proof of the fact that
the issuance of said executive orders entails the exercise of
purely legislative functions can hardly be given.
Again, Section 10 (1) of Article VII of our fundamental law
ordains:
ADMINLAW CASES
 "The President shall have control of all executive departments,
bureaus or offices, exercise general supervision over all local
governments as may be provided by law, and take care that the
laws be faithfully executed."
The power of control under this provision implies the right of
the President to interfere in the exercise of such discretion as
may be vested by law in the officers of the executive
departments, bureaus, or offices of the national government, as
well as to act in lieu of such officers. This power is denied by the
Constitution to the Executive, insofar as local governments are
concerned. With respect to the latter, the fundamental law
permits him to wield no more authority than that of checking
whether said local governments or the officers thereof perform
their duties as provided by statutory enactments. Hence, the
President cannot interfere with local governments, so long as the
same or its officers act within the scope of their authority. He
may not enact an ordinance which the municipal council has
failed or refused to pass, even if it had thereby violated a duty
imposed thereto by law, although he may see to it that the
corresponding provincial officials take appropriate disciplinary
action therefor. Neither may he veto, set aside or annul an
ordinance passed by said council within the scope of its
jurisdiction, no matter how patently unwise it may be. He may
not even suspend an elective official of a regular municipality or
take any disciplinary action against him, except on appeal from a
decision of the corresponding provincial board.[5]
Upon the other hand, if the President could create a
municipality, he could, in effect, remove any of its officials, by
creating a new municipality and including therein the barrio in
27 which the official concerned resides, for his office would thereby
become vacant.[6] Thus, by merely brandishing the power to
create a new municipality (if he had it), without actually creating
it, he could compel local officials to submit to his dictation,
thereby, in effect, exercising over them the power of control
denied to him by the Constitution.
Then, also, the power of control of the President over executive
departments, bureaus or offices implies no more than the
authority to assume directly the functions thereof or to interfere
in the exercise of discretion by its officials. Manifestly, such control
does not include the authority either to abolish an executive department or
bureaus, or to create a new one. As a consequence, the alleged power
of the President to create municipal corporations would neces-
sarily connote the exercise by him of an authority even greater
than that of control which he has over the executive
departments, bureaus or offices. In other words, Section 68 of
the Revised Administrative Code does not merely fail to comply
with the constitutional mandate above quoted. Instead of giving
the President less power over local governments than that vested
in him over the executive departments, bureaus or offices, it
reverses the process and does the exact opposite, by conferring upon
him more power over municipal corporations than that which he
has over said executive departments, bureaus or offices.
In short, even if it did not entail an undue delegation of
legislative powers, as it certainly does, said Section 68, as part of
the Revised Administrative Code, approved or March 10, 1917,
must be deemed repealed by the subsequent adoption of the
Constitution, in 1935, which is utterly incompatible and
inconsistent with said statutory enactment.[7]
27 | P a g e
There are only two (2) other points left for consideration,
namely, respondent's claim (a) that "not all the proper
parties""—referring to the officers of the newly created
municipalities—"have been impleaded in this case", and (b) that
"the present petition is premature".
As regards the first point, suffice it to say that the records do not
show, and the parties do not claim, that the officers of any of said
municipalities have been appointed or elected and assumed office.
At any rate, the Solicitor-General, who has appeared on behalf of
respondent Auditor General, is the officer authorized by law "to
act and represent the Government of the Philippines, Its offices
and agents, in any official investigation, proceeding or matter
requiring the services of a lawyer" (Section 1661, Revised
Administrative Code), and, in connection with the creation of the
aforementioned municipalities, which involves a political, not
proprietary, function, said local officials, if any, are mere agents or
representatives of the national government. Their interest in the
case at bar has, accordingly, been, in effect, duly represented.[8]
With respect to the second point, respondent alleges that he has
not as yet acted on any of the executive order in question and has
not intimated how he would act in connection therewith. It is
however, a matter of common, public knowledge, subject to
judicial cognizance, that the President has, for many years, issued
executive orders creating" municipal corporations and that the
same have "been organized and in actual operation, thus
indicating, without peradventure of doubt, that the expenditures
incidental thereto have been sanctioned, approved or passed in
audit by the General Auditing Office and its officials. There is no
reason to believe, therefore, that respondent would adopt a
different policy as regards the new municipalities involved in this
case, in the absence of an allegation to such effect, and none has
been made by him.
Wherefore the Executive Orders in question are hereby declared
null and void ab initio and the respondent permanently restrained
from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement
by the municipalities above referred to. It is so ordered.
ADMINLAW CASES
 G. R. No. 17122, February 27, 1922
THE UNITED STATES, PLAINTIFF AND APPELLEE, VS. ANG
TANG HO, DEFENDANT AND APPELLANT.
DECISION
JOHNS, J.:
At its special session of 1919, the Philippine Legislature passed
Act No. 2868, entitled "An Act penalizing the monopoly and
hoarding of, and speculation in, palay, rice, and corn under
extraordinary circumstances, regulating the distribution and sale
thereof, and authorizing the Governor-General, with the consent
of the Council of State, to issue the necessary rules and regulations
therefor, and making an appropriation for this purpose," the
material provisions of which are as follows:
"Section 1. The Governor-General is hereby authorized,
whenever, for any cause, conditions arise resulting in an
extraordinary rise in the price of palay, rice or corn, to issue and
promulgate, with the consent of the Council of State, temporary
rules and emergency measures for carrying out the purposes of
this Act, to wit:
"(a) To prevent the monopoly and hoarding of, and speculation
in, palay, rice or corn.
"(b) To establish and maintain a government control of the
distribution or sale of the commodities referred to or have such
distribution or sale made by the Government itself.
28
"(c) To fix, from time to time, the quantities of palay, rice, or corn
that a company or individual may acquire, and the maximum sale
price that the industrial or merchant may demand.
"(d) * * *
"SEC. 2. It shall be unlawful to destroy, limit, prevent or in any
other manner obstruct the production or milling of palay, rice or
corn for the purpose of raising the prices thereof; to corner or
hoard said products as defined in section three of this Act; * * *"
Section 3 defines what shall constitute a monopoly or hoarding of
palay, rice or corn within the meaning of this Act, but does not
specify the price of rice or define any basis for fixing the price.
"SEC. 4. The violations of any of the provisions of this Act or of the
regulations, orders and decrees promulgated in accordance therewith
shall be punished by a fine of not more than five thousand pesos, or by
imprisonment for not more than two years, or, both, in the discretion of
the court: Provided, That in the case of companies or corporations, the
manager or administrator shall be criminally liable.
"SEC. 7. At any time that the Governor-General, with the consent of the
Council of State, shall consider that the public interest requires the
application of the provisions of this Act, he shall so declare by
proclamation, and any provisions of other laws inconsistent herewith
shall from then on be temporarily suspended.
"Upon the cessation of the reasons for which such proclamation
was issued, the Governor-General, with the consent of the
28 | P a g e
Council of State, shall declare the application of this Act to have
likewise terminated, and all laws temporarily suspended by virtue
of the same shall again take effect, but such termination shall not
prevent the prosecution of any proceedings or cause begun prior
to such termination, nor the filing of any proceedings for an
offense committed during the period covered by the Governor-
General's proclamation." '
August 1, 1919, the Governor-General issued a proclamation
fixing the price at which rice should be sold.
August 8, 1919, a complaint was filed against the defendant, Ang
Tang Ho, charging him with the sale of rice at an excessive price
as follows:
"The undersigned accuses Ang Tang Ho of a violation of
Executive Order No. 53 of the Governor-General of the
Philippines, dated the 1st of August, 1919, in relation with the
provisions of sections 1, 2 and 4 of Act No. 2868, committed as
follows:
"That on or about the 6th day of August, 1919, in the city of
Manila, Philippine Islands, the said Ang Tang Ho, voluntarily,
illegally and criminally sold to Pedro Trinidad, one ganta of rice at
the price of eighty centavos (P.80), which is a price greater than
that fixed by Executive Order No. 53 of the Governor-General
of the Philippines, dated the 1st of August, 1919, under the
authority of section 1 of Act No. 2868. Contrary to law."
Upon this charge, he was tried, found guilty and sentenced to five
months' imprisonment and to pay a fine of P500, from which he
appealed to this court, claiming that the lower court erred in
finding Executive Order No. 53 of 1919, to be of any force and
effect, in finding the accused guilty of the offense charged, and in
imposing the sentence.
The official records show that the Act was to take effect on its
approval; that it was approved July 30, 1919; that the Governor-
General issued his proclamation on the 1st of August, 1919; and
that the law was first published on the 13th of August, 1919; and
that the proclamation itself was first published on the 20th of
August, 1919.
The question here involves an analysis and construction of Act
No. 2868, in so far as it authorizes the Governor-General to fix
the price at which rice should be sold. It will be noted that section
1 authorizes the Governor-General, with the consent of the
Council of State, for any cause resulting in an extraordinary rise in
the price of palay, rice or corn, to issue and promulgate temporary
rules and emergency measures for carrying out the purposes of
the Act. By its very terms, the promulgation of temporary rules
and emergency measures is left to the discretion of the Governor-
General. The Legislature does" not undertake to specify or define
under what conditions or for what reasons the Governor-General
shall issue the proclamation, but says that it may be issued "for
any cause," and leaves the question as to what is "any cause" to
the discretion of the Governor-General. The Act also says: "For
any cause, conditions arise resulting in an extraordinary rise in the
price of palay, rice or corn." The Legislature does not specify or
define what is "an extraordinary rise." That is also left to the
discretion of the Governor-General. The Act also says that the
ADMINLAW CASES
 Governor-General, "with the consent of the Council of State," is
authorized to issue and promulgate "temporary rules and
emergency measures for carrying out the purposes of this Act." It
does not specify or define what is a temporary rule or an
emergency measure, or how long such temporary rules or
emergency measures shall remain in force and effect, or when they
shall take effect. That is to say, the Legislature itself has not in any
manner specified or defined any basis for the order, but has left it
to the sole judgment and discretion of the Governor-General to
say what is or what is not "a cause," and what is or what is not "an
extraordinary rise in the price of rice,” and as to what is a
temporary rule or an emergency measure for the carrying out the
purposes of the Act. Under this state of facts, if the law is valid
and the Governor-General issues a proclamation fixing the
minimum price at which rice should be sold, any dealer who, with
or without notice, sells rice at a higher price, is a criminal. There
may not have been any cause, and the price may not have been
extraordinary, and there may not have been an emergency, but, if
the Governor-General found the existence of such facts and
issued a proclamation, and rice is sold at any higher price, the seller
commits a crime.
By the organic law of the Philippine Islands and the Constitution
of the United States all powers are vested in the Legislative,
Executive and Judiciary. It is the duty of the Legislature to make
the law; of the Executive to execute the law; and of the Judiciary
to construe the law. The Legislature has no authority to execute
or construe the law, the Executive has no authority to make or
construe the law, and the Judiciary has no power to make or
execute the law. Subject to the Constitution only, the power of
each branch is supreme within its own jurisdiction, and it is for
29 the Judiciary only to say when any Act of the Legislature is or is
not constitutional. Assuming, without deciding, that the
Legislature itself has the power to fix the price at which rice is to
be sold, can it delegate that power to another, and, if so, was that
power legally delegated by Act No. 2868? In other words, does
the Act delegate legislative power to the Governor-General? By
the Organic Law,-all legislative power is vested in the Legislature,
and the power conferred upon the Legislature to make laws
cannot be delegated to the Governor-General, or any one else.
The Legislature cannot delegate the legislative power to enact any
law. If Act No. 2868 is a law unto itself and within itself, and it
does nothing more than to authorize the Governor-General to
make rules and regulations to carry the law into effect, then the
Legislature itself created the law. There is no delegation of power
and it is valid. On the other hand, if the Act within itself does not
define a crime, and is not a law, and some legislative act remains
to be done to make it a law or a crime, the doing of which is vested
in the Governor-General, then the Act is a delegation of legislative
power, is unconstitutional and void.
The Supreme Court of the United States in what is known as the
Granger Cases (94 U. S., 183-187; 24 L. ed., 94), first laid down the
rule:
"Railroad companies are engaged in a public employment
affecting the public interest and, under the decision in Munn vs.
I11., ante, 77, are subject to legislative control as to their rates of
fare and freight unless protected by their charters.
"The Illinois statute of Mar. 23, 1874, to establish reasonable
maximum rates of charges for the transportation of freights and
29 | P a g e
passengers on the different railroads of the State is not void as
being repugnant to the Constitution of the United States or to that
of the State."
It was there for the first time held in substance that a railroad was
a public utility, and that, being a public utility, the State had power
to establish reasonable maximum freight and passenger rates. This
was followed by the State of Minnesota in enacting a similar law,
providing for, and empowering, a railroad commission to hear and
determine what was a just and reasonable rate. The
constitutionality of this law was attacked and upheld by the
Supreme Court of Minnesota in a learned and exhaustive opinion
by Justice Mitchell, in the case of State vs. Chicago, Milwaukee &
St. Paul Ry. Co. (38 Minn., 281), in which the court held:
"Regulation of railway tariffs—Conclusiveness of commission's tariffs.—
Under Laws 1887, e. 10, sec. 8, the determination of the railroad
and warehouse commission as to what are equal and reasonable
fares and rates for the transportation of persons and property by
a railway company is conclusive, and, in proceedings by mandamus
to compel compliance with the tariff of rates recommenced and
published by them, no issue can be raised or inquiry had on that
question.
"Same—Constitution—Delegation of power to commission.—The
authority thus given to the commission to determine, in the
exercise of their discretion and judgment, what are equal and
reasonable rates, is not a delegation of legislative power.”
It will be noted that the law creating the railroad commission
expressly provides—
"That all charges by any common carrier for the transportation of
passengers and property shall be equal and reasonable."
With that as a basis for the law, power is then given to the railroad
commission to investigate all the facts, to hear and determine what
is a just and reasonable rate. Even then that law does not make
the violation of the order of the commission a crime. The only
remedy is a civil proceeding. It was there held—
"That the legislature itself has the power to regulate railroad
charges is now too well settled to require either argument or
citation of authority.
"The difference between the power to say what the law shall be,
and the power to adopt rules and regulations, or to investigate and
determine the facts, in order to carry into effect a law already
passed, is apparent. The true distinction is between the delegation
of power to make the law, which necessarily involves a discretion
as to what it shall be, arid the conferring an authority or discretion
to be exercised under and in pursuance of the law.
"The legislature enacts that all freight rates and passenger fares
should be just and reasonable. It had the undoubted power to fix
these rates at whatever it deemed equal and reasonable.
"They have not delegated to the commission any authority or
discretion as to what the law shall be,—which would not be
allowable,—but have merely conferred upon it an authority and
ADMINLAW CASES
 discretion, to be exercised in the execution of the law, and under
and in pursuance of it, which is entirely permissible. The
legislature itself has passed upon the expediency of the law, and
what it shall be. The commission is intrusted with no authority or
discretion upon these questions. It can neither make nor unmake
a single provision of law. It is merely charged with the
administration of the law, and with no other power."
The delegation of legislative power was before the Supreme Court
of Wisconsin in Dowling vs. Lancashire Ins. Co. (92 Wis., 63).
The opinion says:
"The true distinction is between the delegation of power to make
the law, which necessarily involves a discretion as to what it shall
be, and conferring authority or discretion as to its execution, to be
exercised under and in pursuance of the law. The first cannot be
done; to the latter no valid objection can be made.'
"The act, in our judgment, wholly fails to provide definitely and
clearly what the standard policy should contain, so that it could be
put in use as a uniform policy required to take the place of all
others, without the determination of the insurance commissioner
in respect to matters involving the exercise of a legislative
discretion that could not be delegated, and without which the act
could not possibly be put in use as an act in conformity to which
all fire insurance policies were required to be issued.
"The result of all the cases on this subject is that a law must be
complete, in all its terms and provisions, when it leaves the
legislative branch of the government, and nothing must be left to
30 the judgment of the electors or other appointee or delegate of the
legislature, so that, in form and substance, it is a law in all its details
in præsenti, but which may be left to take effect in futuro, if
necessary, upon the ascertainment of any prescribed fact or
event."
The delegation of legislative power was before the Supreme Court
in United States vs. Grimaud (220 U. S., 506; 55 L. ed., 563), where
it was held that the rules and regulations of the Secretary of
Agriculture as to a trespass on government land in a forest reserve
were valid and constitutional. The Act there provided that the
Secretary of Agriculture " * * * may make such rules and
regulations and establish such service as will insure the objects of
such reservations; namely, to regulate their occupancy and use,
and to preserve the forests thereon from destruction; and any
violation of the provisions of this act or such rules and regulations shall be
punished, * * *"
The brief of the United States Solicitor-General says:
"In refusing permits to use a forest reservation for stock grazing,
except upon stated terms or in stated ways, the Secretary of
Agriculture merely asserts and enforces the proprietary right of
the United States over land which it owns. The regulation of the
Secretary, therefore, is not an exercise of legislative, or even of
administrative, power; but is an ordinary and legitimate refusal of
the landowner's authorized agent to allow persons having no right
in the land to use it as they: will. The right of proprietary control
is altogether different from governmental authority."
The opinion says:
30 | P a g e
"From the beginning of the government, various acts have been
passed conferring upon executive officers power to make rules
and regulations,-not for the government of their departments, but
for administering the laws which did govern. None of these
statutes could confer legislative power. But when Congress had
legislated and indicated its will, it could give to those who were to
act under such general provisions 'power to fill up the details' by
the establishment of administrative rules and regulations, the
violation of which could be punished by fine or imprisonment
fixed by Congress, or by penalties fixed by Congress, or measured
by the injury done.
"That 'Congress cannot delegate legislative power is a principle
universally recognized as vital to the integrity and maintenance of
the system of government ordained by the Constitution.'
"If, after the passage of the act and the promulgation of the rule,
the defendants drove and grazed their sheep upon the reserve, in
violation of the regulations, they were making an unlawful use of
the government's property. In doing so they thereby made
themselves liable to the penalty imposed by Congress."
"The subjects as to which the Secretary can regulate are denned.
The lands are set apart as a forest reserve. He is required to make
provision to protect them from depredations and from harmful
uses. He is authorized 'to regulate the occupancy and use and to
preserve the forests from destruction.’ A violation of reasonable
rules regulating the use and occupancy of the property is made a
crime, not by the Secretary, but by Congress."
The above are leading cases in the United States on the question
of delegating legislative power. It will be noted that in the
"Granger Cases," it was held that a railroad company was a public
corporation, and that a railroad was a public utility, and that, for
such reasons, the legislature had the power to fix and determine
just and reasonable rates for freight and passengers.
The Minnesota case held that, so long as the rates were just and
reasonable, the legislature could delegate the power to ascertain
the facts and determine from the facts what were just and
reasonable rates, and that in vesting the commission with such
power was not a delegation of legislative power.
The Wisconsin case was a civil action founded upon a "Wisconsin
standard policy of fire insurance," and the court held that "the act,
* * * wholly fails to provide definitely and clearly what the
standard policy should contain, so that it could be put in use as a
uniform policy required to take the place of all others, without the
determination of the insurance commissioner in respect to
matters involving the exercise of a legislative discretion that could
not be delegated."
The case of the United States Supreme Court, supra, dealt with
rules and regulations which were promulgated by the Secretary of
Agriculture for Government land in the forest reserve.
These decisions hold that the legislature only can enact a law, and
that it cannot delegate its legislative authority.
ADMINLAW CASES
 The line of cleavage between what is and what is not a delegation
of legislative power is pointed out and clearly defined. As the
Supreme Court of Wisconsin says:
"That no part of the legislative power can be delegated by the
legislature to any other department of the government, executive
or judicial, is a fundamental principle in constitutional law,
essential to the integrity and maintenance of the system of
government established by the constitution.
"Where an act is clothed with all the forms of law, and is complete
in and of itself, it may be provided that it shall become operative
only upon some certain act or event, or, in like manner, that its
operation shall be suspended.
"The legislature cannot delegate its power to make a law, but it
can make a law to delegate a power to determine some fact or
state of things upon which the law makes, or intends to make, its
own action to depend."
The Village of Little Chute enacted an ordinance which provides:
"All saloons in said village shall be closed at 11 o'clock P. M. each
day and remain closed until 5 o'clock on the following morning,
unless by special permission of the president.''
Construing it in 136 Wis., 526; 128 A. S. R., 1100,[1] the Supreme
Court of that State says:
31 "We regard the ordinance as void for two reasons: First, because
it attempts to confer arbitrary power upon an executive officer,
and allows him, in executing the ordinance, to make unjust and
groundless discriminations among persons similarly situated;
second, because the power to regulate saloons is a law-making
power vested in the village board, which cannot be delegated. A
legislative body cannot delegate to a mere administrative officer
power to make a law, but it can, make a law with provisions that
it shall go into effect or be suspended in its operation upon the
ascertainment of a fact or state of facts by an administrative officer
or board. In the present case the ordinance by its terms gives
power to the president to decide arbitrarily, and in the exercise of
his own discretion, when a saloon shall close. This is an attempt
to vest legislative discretion in him, and cannot be sustained."
The legal principle involved there is squarely in point here.
It must be conceded that, after the passage of Act No. 2868, and
before any rules and regulations were promulgated by the
Governor-General, a dealer in rice could sell it at any price, even
at a peso per "ganta," and that he would not commit a crime,
because there would be no law fixing the price of rice, and the sale
of it at any price would not be a crime. That is to say, in the
absence of a proclamation, it was not a crime to sell rice at any
price. Hence, it must follow that, if the defendant committed a
crime, it was because the Governor-General issued the
proclamation. There was no act of the Legislature making it a
crime to sell rice at any price, and without the proclamation, the
sale of it at any price was not a crime.
The Executive Order[1] provides:
31 | P a g e
"(5) The maximum selling price of palay, rice or corn is hereby fixed, for the time
being as follows:
"In Manila—
"Palay at P6.75 per sack of 57 1/2kilos, or 29 centavos per ganta.
"Rice at P15 per sack of 57 1/2kilos, or 63 centavos per ganta.
"Corn at P8 per sack of 57 1/2 kilos, or 34 centavos per ganta.
"In the provinces producing palay, rice and corn, the maximum
price shall be the Manila price less the cost of transportation from
the source of supply and necessary handling expenses to the place
of sale, to be determined by the provincial treasurers or their
deputies.
"In provinces, obtaining their supplies from Manila or other
producing provinces, the maximum price shall be the authorized
price at the place of supply or the Manila price as the case may be,
plus the transportation cost, from the place of supply and the
necessary handling expenses, to the place of-sale, to be
determined by the provincial treasurers or their deputies.
"(6) Provincial treasurers and their deputies are hereby directed to
communicate with, and execute all instructions emanating from
the Director of Commerce and Industry, for the most effective
and proper enforcement of the above regulations in their
respective localities."
The law says that the Governor-General may fix "the maximum
sale price that the industrial or merchant may demand."
The law is a general law and not a local or special law.
The proclamation undertakes to fix one price for rice in Manila
and other and different prices in other and different provinces in
the Philippine Islands, and delegates the power to determine the
other and different prices to provincial treasurers and their
deputies. Here, then, you would have a, delegation of legislative
power to the Governor-General, and a delegation by him of that
power to provincial treasurers and their deputies, who "are hereby
directed to communicate with, and execute all instructions
emanating from the Director of Commerce and Industry, for the
most effective and proper enforcement of the above regulations
in their respective localities." The issuance of the proclamation by
the Governor-General was the exercise of the delegation of a
delegated power, and was even a sub-delegation of that power.
Assuming that it is valid, Act No. 2868 is a general law and does
not authorize the Governor-General to fix one price of rice in
Manila and another price in Iloilo. It only purports to authorize
him to fix the price of rice in the Philippine Islands under a law,
which is general and uniform, and not local or special. Under the
terms of the law, the price of rice fixed in the proclamation must
be the same all over the Islands. There cannot be one price at
Manila and another at Iloilo. Again, it is a matter of common
knowledge, and of which this court will take judicial notice, that
there are many kinds of rice with different and corresponding
market values, and that there is a wide range in the price, which
varies with the grade and quality. Act No. 2868 makes no
ADMINLAW CASES
 distinction in price for the grade or quality of the rice, and the
proclamation, upon which the defendant was tried and convicted,
fixes the selling price of rice in Manila "at P15 per sack of 571/2
kilos, or 63 centavos per ganta,” and is uniform as to all grades of
rice, and says nothing about grade or quality. Again, it will be
noted that the law is confined to palay, rice and corn. They are
products of the Philippine Islands. Hemp, tobacco, cocoanut,
chickens, eggs, and many other things are also products. Any law
which singles out palay, rice or corn from the numerous other
products of the Islands is not general or uniform, but is a local or
special law. If such a law is valid, then by the same principle, the
Governor-General could be authorized by proclamation to fix the
price of meat, eggs, chickens, cocoanut, hemp, and tobacco, or
any other product of the Islands. In the very nature of things, all
of that class of laws should be general and uniform. Otherwise,
there would be an unjust discrimination of property rights, which,
under the law, must be equal and uniform. Act No. 2868 is
nothing more than a floating law, which, in the discretion and by
a proclamation of the Governor-General, makes it a floating
crime to sell rice at a price in excess of the proclamation, without
regard to grade or quality.
When Act No. 2868 is analyzed, it is the violation of the
proclamation of the Governor-General which constitutes the
crime. Without that proclamation, it was no crime to sell rice at
any price. In other words, the Legislature left it to the sole
discretion of the Governor-General to say what was and what was
not "any cause" for enforcing the act, and what was and what was
not "an extraordinary rise in the price of palay, rice or corn," and
under certain undefined conditions to fix the price at which rice
should be sold, without regard to grade or quality, also to say
32 whether a proclamation should be issued, if so, when, and whether
or not the law should be enforced, how long it should be enforced,
and when the law should be suspended. The Legislature did not
specify or define what was "any cause," or what was "an
extraordinary rise in the price of rice, palay or corn." Neither did
it specify or define the conditions upon which the proclamation
should be issued. In the absence of the proclamation no crime was
committed. The alleged sale was made a crime, if at all, because
the Governor-General issued the proclamation. The act or
proclamation does not say anything about the different grades or
qualities of rice, and the defendant is charged with the sale "of one
ganta of rice at the price of eighty centavos (P0.80) which is a price
greater than that fixed by Executive Order No. 53."
We are clearly of the opinion and hold that Act No, 2868, in so
far as it undertakes to authorize the Governor-General in his
discretion to issue a proclamation, fixing the price of rice, and to
make the sale of rice in violation of the proclamation a crime, is
unconstitutional and void.
It may be urged that there was an extraordinary rise in the price
of rice and profiteering, which worked a severe hardship on the
poorer classes, and that an emergency existed, but the question
here presented is the constitutionality of a particular portion of a
statute, and none of such matters is an argument for, or against,
its constitutionality.
The Constitution is something solid, permanent and substantial.
Its stability protects the life, liberty and property rights of the rich
and the poor alike, and that protection ought not to change with
the wind or any emergency condition. The fundamental question
32 | P a g e
involved in this case is the right of the people of the Philippine
Islands to be and live under a republican form of government. We
make the broad statement that no state or nation, living under a
republican form of government, under the terms and conditions
specified in Act No. 2868, has ever enacted a law delegating the
power to any one, to fix the price at which rice should be sold.
That power can never be delegated under a republican form of
government.
In the fixing of the price at which the defendant should sell his
rice, the law was not dealing with government property. It was
dealing with private property and private rights, which are sacred
under the Constitution. If this law should be sustained, upon the
same principle and for the same reason, the Legislature could
authorize the Governor-General to fix the price of every product
or commodity in the Philippine Islands, and empower him to
make it a crime to sell any product at any other or different price.
It may be said that this was a war measure, and that for such
reason the provision of the Constitution should be suspended.
But the stubborn fact remains that at all times the judicial power
was in full force and effect, and that while that power was in force
and effect, such a provision of the Constitution could not be, and
was not, suspended even in times of war. It may be claimed that
during the war, the United States Government undertook to, and
did, fix the price at which wheat and flour should be bought arid
sold, and that is true. There, the United States had declared war,
and at the time was at war with other nations, and it was a war
measure, but it is also true that in doing so, and as a part of the
same act, the United States commandeered all the wheat and flour,
and took possession of it, either actual or constructive, and the
government itself became the owner of the wheat and flour, and
fixed the price to be paid for it. That is not this case. Here, the
rice sold was the personal and private property of the defendant,
who sold it to one of his customers. The government had not
bought and did not claim to own the rice, or have any interest in
it, and at the time of the alleged sale, it was the personal, private
property of the defendant. It may be that the law was passed in
the interest of the public, but the members of this court have
taken a solemn oath to uphold and defend the Constitution, and
it ought not to be construed to meet the changing winds or
emergency conditions. Again, we say that no state or nation under
a republican form of government ever enacted a law authorizing
any executive, under the conditions stated, to fix the price at
which a private person would sell his own rice, and make the
broad statement that no decision of any court, on principle or by
analogy, will ever be found which sustains the constitutionality of
that particular portion of Act No. 2868 here in question. By the
terms of the Organic Act, subject only to constitutional
limitations, the power to legislate and enact laws is vested
exclusively in the Legislature, which is elected by a direct vote of the
people of the Philippine Islands. As to the question here involved, the
authority of the Governor-General to fix the maximum price at which
palay, rice and, corn may be sold in the manner and under the conditions
stated is a delegation of legislative power in violation of the organic law.
This opinion is confined to the particular question here involved, which
is the right of the Governor-General, upon the terms and conditions
stated in the Act, to fix the price of rice and make it a crime to sell it at a
higher price, and which holds that portion of the Act unconstitutional. It
does not decide or undertake to construe the constitutionality of any of
the remaining portions of the Act. The judgment of the lower court is
reversed, and the defendant discharged. So ordered.
ADMINLAW CASES
 G.R. No. 160367, December 18, 2009
EVELYN S. CABUNGCAL, ELVIRA J. CANLAS, MARIANITA A. BULANAN,
REMEDIOS S. DE JESUS, AND NUNILON J. MABINI, PETITIONERS, VS.
SONIA R. LORENZO, IN HER CAPACITY AS MUNICIPAL MAYOR OF SAN
ISIDRO, NUEVA ECIJA, CECILIO DE GUZMAN, VICE MAYOR, CESARIO
LOPEZ, JR., EMILIO PACSON, BONIFACIO CACERES, JR., NAPOLEON
OCAMPO, MARIO CRUZ, PRISCILA REYES, ROLANDO ESQUIVEL, AND
CRISENCIANO CABLAO IN THEIR CAPACITY AS MEMBERS OF THE
SANGGUNIANG BAYAN OF SAN ISIDRO, NUEVA ECIJA, AND EDUARDO N.
JOSON IV, VICE GOVERNOR, BELLA AURORA A. DULAY, BENJAMIN V.
MORALES, CHRISTOPHER L. VILLAREAL, JOSE T. DEL MUNDO, SOLITA
C. SANTOS, RENATO C. TOMAS, JOSE BERNARDO V. YANGO, IRENEO S.
DE LEON, NATHANIEL B. BOTE, RUDY J. DE LEON, RODOLFO M.
LOPEZ, MA. LOURDES C. LAHOM, AND JOSE FRANCIS STEVEN M.
DIZON, IN THEIR CAPACITY AS MEMBERS OF THE SANGGUNIANG
PANLALAWIGAN OF THE PROVINCE OF NUEVA ECIJA, RESPONDENTS.
DECISION
DEL CASTILLO, J.:
As a rule, judicial intervention is allowed only after exhaustion of
administrative remedies. This principle goes hand-in-hand with
the doctrine of primary jurisdiction, which precludes courts from
resolving, in the first instance, controversies falling under the
jurisdiction of administrative agencies. Courts recognize that
administrative agencies are better equipped to settle factual
issues within their specific field of expertise because of their
special skills and technical knowledge. For this reason, a
premature invocation of the court's judicial power is often struck
down, unless it can be shown that the case falls under any of the
applicable exceptions.
Assailed in this Petition for Review on Certiorari[1] under Rule 45
of the Rules of Court are the March 20, 2003 Decision[2] of the
33 Court of Appeals (CA) dismissing petitioners' petition for lack of
merit and its October 6, 2003 Resolution[3] denying the motion
for reconsideration.
Factual Antecedents
On July 9, 2001, the Sangguniang Bayan of San Isidro, Nueva
Ecija, issued Resolution No. 27 s. 2001[4] declaring the
reorganization of all offices of the municipal government. On
July 23, 2001, the Resolution was approved by the Sangguniang
Panlalawigan via Resolution No. 154 s. 2001.[5]
Thereafter, on November 12, 2001, the Sangguniang Bayan passed
Resolution No. 80 s. 2001,[6] approving and adopting the
proposed new staffing pattern of the municipal government. On
November 26, 2001, the Sangguniang Panlalawigan approved the
same through Resolution No. 299 s. 2001.[7]
On December 21, 2001, the Municipal Mayor of San Isidro,
Nueva Ecija, herein respondent Sonia R. Lorenzo, issued a
memorandum[8] informing all employees of the municipal
government that, pursuant to the reorganization, all positions
were deemed vacant and that all employees must file their
respective applications for the newly created positions listed in
the approved staffing pattern on or before January 10, 2002.
Otherwise, they would not be considered for any of the newly
created positions.
Proceedings before the Court of Appeals
Instead of submitting their respective applications, petitioners,
on January 17, 2002, filed with the CA a Petition for Prohibition
33 | P a g e
and Mandamus with application for issuance of Writ of
Preliminary Injunction and Restraining Order.[9] They alleged
that they were permanent employees of the Rural Health Unit of
the Municipality of San Isidro, Nueva Ecija, with the
corresponding salary grade and date of employment:[10]
Name Position Salary Date of employment
Grade
Evelyn S. Cabungcal Dentist II 16 April 4, 1983
Elvira J. Canlas Nurse III 16 December 19, 1978
Marianita A. Bulanan Midwife III 11 May 21, 1981
Remedios S. De Jesus Dental Aide 4 June 6, 1989
Nunilon J. Mabini Sanitation 6 January 2, 1990
Inspector I
Respondents Sonia R. Lorenzo, Cecilio De Guzman, Cesario
Lopez, Jr., Emilio Pacson, Bonifacio Caceres, Jr., Napoleon
Ocampo, Mario Cruz, Priscila Reyes, Rolando Esquivel, and
Crisenciano Cablao were sued in their capacity as Mayor, as Vice
Mayor, and as members of the Sangguniang Bayan respectively, of
San Isidro, Nueva Ecija. On the other hand, respondents Eduardo
N. Joson IV, Bella Aurora A. Dulay, Benjamin V. Morales,
Christopher L. Villareal, Jose T. Del Mundo, Solita C. Santos,
Renato C. Tomas, Jose Bernardo V. Yango, Ireneo S. De Leon,
Nathaniel B. Bote, Rudy J. De Leon, Rodolfo M. Lopez, Ma.
Lourdes C. Lahom, and Jose Francis Steven M. Dizon were sued
in their capacity as Vice Governor and as members of the
Sangguniang Panlalawigan, respectively.
Petitioners sought to prohibit respondents from implementing
the reorganization of the municipal government of San Isidro,
Nueva Ecija, under Resolution Nos. 27 and 80 s. 2001 of the
Sangguniang Bayan. They likewise prayed for the nullification of said
Resolutions.
While the case was pending, respondent Mayor Sonia R. Lorenzo
issued a letter terminating the services of those who did not re-
apply as well as those who were not selected for the new positions
effective April 21, 2002.[11]
On March 20, 2003, the CA rendered a Decision dismissing the
petition for lack of merit. It ruled:
Going through the arguments of the parties, we find respondents'
contentions to be more in line with existing laws and
jurisprudence. It cannot be denied that indeed, petitioners'
severance from employment is a sad tale to tell; however,
petitioners' allegation of grave abuse of discretion on the part of
public respondents particularly Mayor Lorenzo, can hardly be
justified. The assailed acts of respondents are clearly authorized
under Section 76 of the Local Government Code of 1991 as
quoted above.
x x x x
Culled from the records of the case, the reorganization of the
municipal government of San Isidro yielded an organization
structure suitable for a 4th class municipality, which created
savings in an estimated amount of more or less Four Million pesos
(P4,000,000.00), which can be used for implementation of other
local projects for delivery of basic services and additional benefits
for its employees. As shown by the respondents, the original
plantilla x x x of one hundred and thirty one (131) [positions] has
ADMINLAW CASES
 been trimmed down to eighty-eight (88) [positions] under the new
staffing pattern. Thus, We find plausible the [claim] of
respondents about budgetary [savings], comparing the old with
new staffing pattern, in that:
Prior to the reorganization, this LGU had a budget appropriation
of P18,322,933.00 for personal services [including enterprise
workers] leaving a measly sum of [sic] P4,127,703.00 as revolving
fund for the whole year. With the advent of the new staffing
pattern, more tha[n] P7,000,000.00 can be channeled by this LGU
for its plans and programs. Under Section 325 of the Local
Government Code, LGU's are limited by law to appropriate only
forty five percent [45%] in case of first to third class LGU's or
fifty five percent [55%] in case of fourth to fifth class
municipalities of their annual income for personal services. The
LGU of San Isidro being a fourth class municipality has certainly
exceeded the 55% appropriation limit under the Local
Government Code because for the year 2000 alone,
[P16,787,961.00, or roughly 78% of its annual income of
P22,450,636.00, have already been allocated to personal services.
That certainly is] way above the ceiling allowed by Section 325 of
the Local Government Code.
xxxx
Verily, there was no bad faith on the part of respondents when
they chose to follow the recommendations of the management
committee, [to create] a new staffing pattern [thereby generating
savings] to provide more basic services [and] livelihood projects x
x x.
34
x x x x
Valid reasons had been shown by respondents which support the
reorganization of the municipal government of San Isidro. No
personal or political motives having been shown to be involved in
this strongly assailed reorganization of the Municipality of San
Isidro, petitioners, therefore, had miserably failed to show and
prove to this Court that respondents violated R.A. No. 7305
(Magna Carta of Health Workers).
We must point out that good faith is presumed. It is incumbent
upon the petitioners to prove that the reorganization being
implemented in the Municipality of San Isidro is tainted with bad
faith. Absent any showing that respondents acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in
the passage and implementation of Resolution Nos. 27 and 80,
this petition must fail.
Finally, respondents were correct when they stated that the
extraordinary writ of mandamus is not applicable in this case
because the act being sought by petitioners to be done is
discretionary and not a ministerial duty. In other words,
mandamus lies only to compel the performance, x x x of a
ministerial duty, but not to compel the performance of a
discretionary duty. Since grave abuse of discretion is not evident
in this case, the exceptional remedy of mandamus is unavailable.
x x x It shall strengthen the merit and rewards system, integrate all
WHEREFORE, in view of all the foregoing and finding that the assailed
Resolution No. 27 dated July 9, 2001 and Resolution No. 80 dated November 12,
2001 were not issued by respondents with grave abuse of discretion amounting to
lack or excess of jurisdiction, the instant appeal [sic] is DENIED DUE COURSE
34 | P a g e
and, accordingly, DISMISSED for lack of merit. The validity of the assailed
resolutions, being in accordance with law and jurisprudence, is UPHELD.
SO ORDERED.[12]
Petitioners moved for a reconsideration[13] which was denied by
the CA in its October 6, 2003 Resolution.
Hence, petitioners availed of this recourse.
Petitioners' Arguments
Petitioners contend that the March 20, 2003 Decision and
October 6, 2003 Resolution of the CA were not in accordance
with Republic Act (RA) No. 6656, otherwise known as "An Act
to Protect the Security of Tenure of Civil Service Officers and
Employees in the Implementation of Government
Reorganization", specifically Section 2[14] thereof and RA 7305,
otherwise known as the "Magna Carta of Health Workers".
Respondents' Argument
Respondents, for their part, argue that petitioners' separation
from service was a result of a valid reorganization done in
accordance with law and in good faith.
Both parties filed their memoranda.[15] Thereafter, in a
Resolution[16] dated August 6, 2008, we required the parties to
submit supplemental memoranda discussing therein their
respective positions on the issue of jurisdiction.
Issues
1) Whether petitioners' automatic resort to the Court of Appeals
is proper.
2) Whether the case falls under the exceptions to the rule on
exhaustion of administrative remedies.
Our Ruling
Petitioners' recourse should
have been with the Civil Service
Commission and not with the
Court of Appeals
Section 2 (1) and Section 3, Article IX-B of the Constitution
provide that:
Section 2. (1) The civil service embraces all branches,
subdivisions, instrumentalities and agencies of the Government,
including government-owned or controlled corporations with
original charters.
Section 3. The Civil Service Commission, as the central personnel
agency of the Government, shall establish a career service and
adopt measures to promote morale, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the civil service.
human resources development programs for all levels and ranks,
and institutionalize a management climate conducive to public
accountability. It shall submit to the President and the Congress
an annual report on its personnel programs.
ADMINLAW CASES
 Corollary thereto, Section 4 of CSC Memorandum Circular No.
19-99, states that:
Section 4. Jurisdiction of the Civil Service Commission. -- The Civil Service
Commission shall hear and decide administrative cases instituted by, or
brought before it, directly or on appeal, including contested
appointments, and shall review decisions and actions of its offices and of
the agencies attached to it.
Except as otherwise provided by the Constitution or by law, the Civil
Service Commission shall have the final authority to pass upon the
removal, separation and suspension of all officers and employees
in the civil service and upon all matters relating to the conduct,
discipline and efficiency of such officers and employees. (Emphasis
supplied)
Pursuant to the foregoing provisions, the CSC, as the central personnel
agency of the Government, has jurisdiction over disputes involving the
removal and separation of all employees of government branches,
subdivisions, instrumentalities and agencies, including government-
owned or controlled corporations with original charters. Simply put, it is
the sole arbiter of controversies relating to the civil service.[17]
In this case, petitioners are former local government employees whose
services were terminated due to the reorganization of the municipal
government under Resolution Nos. 27 and 80 of the Sangguniang Bayan of
San Isidro, Nueva Ecija. Considering that they belong to the civil service,
the CSC has jurisdiction over their separation from office.
Even the laws upon which petitioners anchor their claim vest jurisdiction
upon the CSC. Under RA 6656 and RA 7305, which were cited by the
petitioners in their petition, it is the CSC which determines whether an
35 employee's dismissal or separation from office was carried out in
violation of the law or without due process. Accordingly, it is also the
CSC which has the power to reinstate or reappoint an unlawfully
dismissed or terminated employee. Quoted hereunder are Section 9 of
RA 6656 and Section 8 of RA 7305:
SECTION 9. All officers and employees who are found by the Civil
Service Commission to have been separated in violation of the
provisions of this Act, shall be ordered reinstated or reappointed as
the case may be without loss of seniority and shall be entitled to full
pay for the period of separation. Unless also separated for cause, all
officers and employees, who have been separated pursuant to
reorganization shall, if entitled thereto, be paid the appropriate separation
pay and retirement and other benefits under existing laws within ninety
(90) days from the date of the effectivity of their separation or from the
date of the receipt of the resolution of their appeals as the case may be:
Provided, That application for clearance has been filed and no action
thereon has been made by the corresponding department or agency.
Those who are not entitled to said benefits shall be paid a separation
gratuity in the amount equivalent to one (1) month salary for every year
of service. Such separation pay and retirement benefits shall have priority
of payment out of the savings of the department or agency
concerned. (Emphasis supplied)
SECTION 8. Security of Tenure. -- In case of regular employment
of public health workers, their services shall not be terminated
except for cause provided by law and after due process: Provided,
That if a public health worker is found by the Civil Service
Commission to be unjustly dismissed from work, he/she shall
be entitled to reinstatement without loss of seniority rights and to
his/her back wages with twelve percent (12%) interest computed
from the time his/her compensation was withheld from him/her
up to the time of reinstatement. (Emphasis supplied)
35 | P a g e
All told, we hold that it is the CSC which has jurisdiction over
appeals from personnel actions taken by respondents against
petitioners as a result of reorganization. Consequently,
petitioners' resort to the CA was premature. The jurisdiction lies
with the CSC and not with the appellate court.
The case does not fall under any
of the exceptions to the rule on
exhaustion of administrative
remedies
The rule on exhaustion of administrative remedies provides that
a party must exhaust all administrative remedies to give the
administrative agency an opportunity to decide the matter and to
prevent unnecessary and premature resort to the courts. [18] This,
however, is not an ironclad rule as it admits of exceptions,[19] viz:
1. when there is a violation of due process;
2. when the issue involved is purely a legal question;
3. when the administrative action is patently illegal amounting to
lack or excess of jurisdiction;
4. when there is estoppel on the part of the administrative
agency concerned;
5. when there is irreparable injury;
6. when the respondent is a department secretary whose acts as
an alter ego of the President bears the implied and assumed
approval of the latter;
7. when to require exhaustion of administrative remedies would
be unreasonable;
8. when it would amount to a nullification of a claim;
9. when the subject matter is a private land in land case
proceedings;
10. when the rule does not provide a plain, speedy and adequate
remedy; and
11. when there are circumstances indicating the urgency of
judicial intervention.
The instant case does not fall under any of the exceptions.
Petitioners' filing of a petition for mandamus and prohibition
with the CA was premature. It bears stressing that the remedies
of mandamus and prohibition may be availed of only when there
is no appeal or any other plain, speedy and adequate remedy in
the ordinary course of law.[20] Moreover, being extraordinary
remedies, resort may be had only in cases of extreme necessity
where the ordinary forms of procedure are powerless to afford
relief.[21]
Thus, instead of immediately filing a petition with the CA,
petitioners should have first brought the matter to the CSC
which has primary jurisdiction over the case.[22] Thus, we find
that the CA correctly dismissed the petition but not the grounds
cited in support thereof. The CA should have dismissed the
petition for non-exhaustion of administrative remedies.[23]
Considering our above findings, we find no cogent reason to
resolve the other issues raised by the petitioners in their petition.
WHEREFORE, the instant petition is DENIED. The March 20, 2003 Decision of the
Court of Appeals dismissing the petition and its October 6, 2003 Resolution denying the
motion for reconsideration are AFFIRMED but on the ground that petitioners failed to
exhaust the administrative remedies available to them.
SO ORDERED.
ADMINLAW CASES
 G.R. No. 186487, August 15, 2011
ROSITO BAGUNU, PETITIONER, VS. SPOUSES FRANCISCO
AGGABAO & ROSENDA ACERIT, RESPONDENTS.
RESOLUTION
BRION, J.:
We resolve the motion for reconsideration[1] filed by Rosito
Bagunu (petitioner) to reverse our April 13, 2009 Resolution[2]
which denied his petition for review on certiorari for lack of
merit.
FACTUAL ANTECEDENTS
R.L.O. Claim No. 937/DENR Case No. 5177
The present controversy stemmed from a protest filed by the
spouses Francisco Aggabao and Rosenda Acerit (respondents)
against the petitioner’s free patent application over a parcel of
unregistered land located in Caniogan, Sto. Tomas, Isabela
(subject land), pending before the Department of Environment
and Natural Resources, Region II, Tuguegarao City, Cagayan
(DENR Regional Office).
The subject land was previously owned by Marcos Binag, who
later sold it (first sale) to Felicisimo Bautista (Bautista). In 1959,
Bautista, in turn, sold the subject land (second sale) to Atty.
Samson Binag.
36 On December 12, 1961, Atty. Binag applied for a free patent[3]
over the subject land with the Bureau of Lands (now Lands
Management Bureau).[4] On November 24, 1987, Atty. Binag
sold the subject land (third sale) to the petitioner,[5] who
substituted for Atty. Binag as the free patent applicant. The
parties’ deed of sale states that the land sold to the petitioner is
the same lot subject of Atty. Binag’s pending free patent
application.[6]
The deeds evidencing the successive sale of the subject land, the
Bureau of Lands’ survey,[7] and the free patent applications
uniformly identified the subject land as Lot 322. The deeds
covering the second and third sale also uniformly identified the
boundaries of the subject land.[8]
On December 28, 1992, the respondents filed a protest against
the petitioner’s free patent application. The respondents asserted
ownership over Lot 322 based on the Deeds of Extrajudicial
Settlement with Sale, dated June 23, 1971 and April 15, 1979,
executed in their favor by the heirs of one Rafael Bautista. [9]
The Office of the Regional Executive Director of the DENR
conducted an ocular inspection and formal investigation. The
DENR Regional Office found out that the petitioner actually
occupies and cultivates “the area in dispute including the area
purchased by [the respondents].”[10]
On July 10, 1998, the DENR Regional Office ruled that the
petitioner wrongfully included Lot 322 in his free patent
application since this lot belongs to the respondents. The DENR
Regional Office ordered:
36 | P a g e
1. [The respondents to] file their appropriate public land
application covering Lot No. 322, Pls-541-D xxx;
2. [The petitioner’s free patent application] be amended by
excluding Lot No. 322, Pls-541-D, as included in Lot No.
258;
3. [A] relocation survey xxx to determine the exact area as
indicated in [the parties’] respective technical description
of x x x Lot Nos. 258 and 322, Pls-541-D.[11]
The petitioner moved for reconsideration. The DENR Regional
Office denied the motion ruling that in determining the identity
of a lot, the boundaries – and not the lot number assigned to it -
are controlling. Since the boundaries indicated in the deed of sale
in the petitioner’s favor correspond to the boundaries of Lot
258, what the petitioner acquired was Lot 258, notwithstanding
the erroneous description of the lot sold as Lot 322.[12]
On appeal, the DENR Secretary affirmed[13] the ruling of the
DENR Regional Office. After noting the differences in the
boundaries stated in the parties’ respective Deeds of Sale, the
DENR Secretary concluded that the land claimed by the
petitioner is, in fact, distinct from that claimed by the
respondents. The DENR Secretary ruled that based on the
parties’ respective deeds of sale, the Subdivision Plan of the lot
sold to the petitioner and Atty. Binag’s affidavit - claiming that
the designation of Lot 322 in the Deed of Sale in the petitioner’s
favor is erroneous - what the petitioner really acquired was Lot
258 and not Lot 322.[14] The petitioner appealed to the Court of
Appeals (CA).
COURT OF APPEALS’ RULING
The CA affirmed the ruling of the DENR Secretary. Applying
the doctrine of primary jurisdiction, the CA ruled that since
questions on the identity of a land require a technical
determination by the appropriate administrative body, the
findings of fact of the DENR Regional Office, as affirmed by
the DENR Secretary, are entitled to great respect, if not
finality.[15] The petitioner assails this ruling before the Court.
Civil Case No. 751
In the meantime, on November 22, 1994 (or during the
pendency of the respondents’ protest), Atty. Binag filed a
complaint for reformation of instruments, covering the second
and third sale, against Bautista and the petitioner (the civil case)
with the Cabagan, Isabela Regional Trial Court (RTC). Atty.
Binag alleged that while the deeds evidencing the successive sale
of the subject land correctly identified the boundaries of the land
sold, the deeds, nevertheless, erroneously identified the subject
land as Lot 322, instead of Lot 258.[16]
On December 9, 1994, the petitioner and Bautista filed a motion
to dismiss with the RTC, citing the pendency of the land protest
before the Bureau of Lands. The RTC held in abeyance its
resolution on the motion to dismiss.[17]
After obtaining a favorable ruling from the DENR Regional
Office, the respondents joined Atty. Binag in the civil case by
ADMINLAW CASES
 filing a complaint-in-intervention against the petitioner. The
complaint-in-intervention captioned the respondents’ causes of
action as one for Quieting of Title, Reivindicacion and
Damages.[18] The respondents alleged that the petitioner’s claim
over Lot 322 is a cloud on their title and ownership of Lot 322.
The respondents also alleged that they were in peaceful,
continuous, public and adverse possession of Lot 322 from the
time they fully acquired it in 1979 until sometime in August of
1992, when the petitioner, through stealth and strategy, ejected
them from Lot 322 after transferring his possession from Lot
258.[19] The respondents asked the RTC to declare them as
owners of Lot 322.
After the CA affirmed the DENR Secretary’s favorable
resolution on the respondents’ protest, the respondents asked
the RTC to suspend the civil case or, alternatively, to adopt the
DENR Secretary’s ruling.[20] In their prayer, the respondents
asked the RTC to:
1. [Adopt] the findings of the DENR as affirmed by the
Court of Appeals xxx thus, the cause of action xxx for
reformation of contracts be granted;
2. [Order the petitioner] to vacate Lot 322 xxx and his
[Free Patent Application] be amended to exclude Lot
322 xxx.
3. [Set the case] for hearing to receive evidence on the
claim of the [respondents] for damages[.]
37 THE PETITION
The petitioner argues that the CA erred in affirming the DENR
Secretary’s jurisdiction to resolve the parties’ conflicting claims
of ownership over Lot 322, notwithstanding that the same issue is
pending with the RTC. By ruling that the petitioner bought Lot
258 (and not Lot 322) from Atty. Binag and for adjudicating Lot
322 to the respondents, the DENR effectively reformed
contracts and determined claims of ownership over a real
property – matters beyond the DENR’s competence to
determine.
The petitioner faults the CA for applying the doctrine of primary
jurisdiction since the issue of who has a better right over Lot 322
does not involve the “specialized technical expertise” of the
DENR. On the contrary, the issue involves interpretation of
contracts, appreciation of evidence and the application of the
pertinent Civil Code provisions, which are matters within the
competence of the courts.
The petitioner claims that the DENR Secretary’s factual finding,
as affirmed by the CA, is contrary to the evidence. The
petitioner asserts that the Deed of Sale in his favor clearly
identified the property sold as Lot 322, which was the same land
Atty. Binag identified in his free patent application; that the area
of Lot 322, as previously determined in a survey caused by the
vendor himself (Atty. Binag), tallies with the area stated in the
deed in his favor; that he has been in possession of Lot 322 since
1987, when it was sold to him; and that his present possession
and cultivation of Lot 322 were confirmed by the DENR
Regional Office during its ocular investigation.
37 | P a g e
The petitioner also invites our attention to the incredulity of the
respondents’ claim of ownership over Lot 322, based on Atty. Binag’s
testimony during the hearing on the respondents’ protest. According to
the petitioner, the respondents could not have expressed interest in
buying Lot 322 from Atty. Binag had they already acquired Lot 322
from the heirs of one Rafael Bautista. The petitioner adds that as early
as 1979, the respondents were already aware of Atty. Binag’s free patent
application over Lot 322. Yet, they filed their protest to the free patent
application only in 1992 – when the petitioner had already substituted
Atty. Binag. The petitioner claims that the respondents’ inaction is
inconsistent with their claim of ownership.
Lastly, the petitioner contests the adjudication of Lot 322 in the
respondents’ favor by claiming that the respondents presented no
sufficient evidence to prove their (or their predecessor-in-interest’s)
title.
In our April 13, 2009 Resolution, we denied the petition for failure to
sufficiently show any reversible error in the assailed CA Decision and
for raising substantially factual issues. The petitioner moved for
reconsideration, confining his arguments to the issue of jurisdiction and
the consequent applicability of the primary jurisdiction doctrine.
THE RULING
We deny the motion for reconsideration.
Questions of fact generally barred under Rule 45
The main thrust of the petitioner’s arguments refers to the
alleged error of the DENR and the CA in identifying the parcel of
land that the petitioner bought – an error that adversely affected
his right to apply for a free patent over the subject land. In his
motion for reconsideration, the petitioner apparently took a cue
from our April 13, 2009 Resolution, denying his petition, since
his present motion limitedly argues against the DENR’s
jurisdiction and the CA’s application of the doctrine of primary
jurisdiction.
The petitioner correctly recognized the settled rule that
questions of fact are generally barred under a Rule 45 petition. In
the present case, the identity of Lots 258 and 322 is a central
factual issue. The determination of the identity of these lots
involves the task of delineating their actual boundaries in
accordance with the parties’ respective deeds of sale and survey
plan, among others. While there are instances where the Court
departs from the general rule on the reviewable issues under
Rule 45, the petitioner did not even attempt to show that his
case falls within the recognized exceptions.[21] On top of this
legal reality, the findings and decision of the Director of Lands[22]
on questions of fact, when approved by the DENR Secretary,
are generally conclusive on the courts,[23] and even on this Court,
when these factual findings are affirmed by the appellate court.
We shall consequently confine our discussions to the petitioner’s
twin legal issues.
The determination of the identity of a
public land is within the DENR’s exclusive
jurisdiction to manage and dispose of lands
of the public domain
The petitioner insists that under the law[24] actions incapable of
pecuniary estimation, to which a suit for reformation of
contracts belong, and those involving ownership of real property
fall within the exclusive jurisdiction of the Regional Trial Court.
ADMINLAW CASES
 Since these actions are already pending before the RTC, the
DENR Secretary overstepped his authority in excluding Lot 322
from the petitioner’s free patent application and ordering the
respondents to apply for a free patent over the same lot.
In an action for reformation of contract, the court determines
whether the parties’ written agreement reflects their true
intention.[25] In the present case, this intention refers to the
identity of the land covered by the second and third sale. On the
other hand, in a reivindicatory action, the court resolves the issue
of ownership of real property and the plaintiff’s entitlement to
recover its full possession. In this action, the plaintiff is required
to prove not only his ownership, but also the identity of the real
property he seeks to recover.[26]
While these actions ordinarily fall within the exclusive
jurisdiction of the RTC, the court’s jurisdiction to resolve
controversies involving ownership of real property extends only
to private lands. In the present case, neither party has asserted
private ownership over Lot 322. The respondents acknowledged
the public character of Lot 322 by mainly relying on the
administrative findings of the DENR in their complaint-in-
intervention, instead of asserting their own private ownership of
the property. For his part, the petitioner’s act of applying for a
free patent with the Bureau of Lands is an acknowledgment that
the land covered by his application is a public land [27] whose
management and disposition belong to the DENR Secretary,
with the assistance of the Bureau of Lands. Section 4, Chapter 1,
Title XIV of Executive Order No. 292[28] reads:
Section 4. Powers and Functions. - The Department [of
38 Environment and Natural Resources] shall:
xxx
(4) Exercise supervision and control over forest lands, alienable
and disposable public lands, mineral resources and, in the
process of exercising such control, impose appropriate taxes,
fees, charges, rentals and any such form of levy and collect such
revenues for the exploration, development, utilization or
gathering of such resources;
xxx
(15) Exercise exclusive jurisdiction on the management and
disposition of all lands of the public domain and serve as the
sole agency responsible for classification, sub-classification,
surveying and titling of lands in consultation with appropriate
agencies[.] (Underscoring supplied.)
Under Section 14(f) of Executive Order No. 192,[29] the Director
of the Lands Management Bureau has the duty, among others, to
assist the DENR Secretary in carrying out the provisions of
Commonwealth Act No. 141 (C.A. No. 141)[30] by having direct
executive control of the survey, classification, lease, sale or any
other forms of concession or disposition and management of the
lands of the public domain.
As the CA correctly pointed out, the present case stemmed from
the protest filed by the respondents against the petitioner’s free
patent application. In resolving this protest, the DENR, through
38 | P a g e
the Bureau of Lands, had to resolve the issue of identity of the lot
claimed by both parties. This issue of identity of the land requires
a technical determination by the Bureau of Lands, as the
administrative agency with direct control over the disposition and
management of lands of the public domain. The DENR, on the
other hand, in the exercise of its jurisdiction to manage and
dispose of public lands, must likewise determine the applicant’s
entitlement (or lack of it) to a free patent. (Incidentally, the DENR
Regional Office still has to determine the respondents’
entitlement to the issuance of a free patent[31] in their favor since
it merely ordered the exclusion of Lot 322 from the petitioner’s
own application.) Thus, it is the DENR which determines the
respective rights of rival claimants to alienable and disposable
public lands; courts have no jurisdiction to intrude on matters
properly falling within the powers of the DENR Secretary and the
Director of Lands,[32] unless grave abuse of discretion exists.
After the DENR assumed jurisdiction over Lot 322, pursuant to
its mandate, the RTC must defer the exercise of its jurisdiction on
related issues on the same matter properly within its
jurisdiction,[33] such as the distinct cause of action for reformation
of contracts involving the same property. Note that the contracts
refer to the same property, identified as “Lot 322,” - which the
DENR Regional Office, DENR Secretary and the CA found to
actually pertain to Lot 258. When an administrative agency or
body is conferred quasi-judicial functions, all controversies
relating to the subject matter pertaining to its specialization are
deemed to be included within its jurisdiction since the law does
not sanction a split of jurisdiction[34] –
The argument that only courts of justice can adjudicate claims
resoluble under the provisions of the Civil Code is out of step
with the fast-changing times. There are hundreds of
administrative bodies now performing this function by virtue of
a valid authorization from the legislature. This quasi-judicial
function, as it is called, is exercised by them as an incident of the
principal power entrusted to them of regulating certain activities
falling under their particular expertise.[35]
The DENR has primary jurisdiction to
resolve conflicting claims of title over public lands
The petitioner argues that the CA erred in applying the doctrine
of primary jurisdiction, claiming that the issue (of who has a
better right over Lot 322) does not require the “specialized
technical expertise” of the DENR. He posits that the issue, in
fact, involves interpretation of contracts, appreciation of evidence
and application of the pertinent Civil Code provisions, which are all
within the competence of regular courts.
We disagree.
Under the doctrine of primary jurisdiction, courts must refrain from
determining a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to its resolution by the
latter, where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience and services of
the administrative tribunal to determine technical and intricate
matters of fact[36]–
In recent years, it has been the jurisprudential trend to apply [the
doctrine of primary jurisdiction] to cases involving matters that
demand the special competence of administrative agencies[. It
ADMINLAW CASES
 may occur that the Court has jurisdiction to take cognizance of a
particular case, which means that the matter involved is also
judicial in character. However, if the case is such that its
determination requires the expertise, specialized skills and
knowledge of the proper administrative bodies because technical
matters or intricate questions of facts are involved, then relief
must first be obtained in an administrative proceeding before a
remedy will be supplied by the courts even though the matter is
within the proper jurisdiction of a court. This is the doctrine of
primary jurisdiction.] It applies “where a claim is originally
cognizable in the courts, and comes into play whenever enforcement
of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence of an
administrative body, in such case the judicial process is suspended pending
referral of such issues to the administrative body for its view.”[37]
The application of the doctrine of primary jurisdiction, however,
does not call for the dismissal of the case below. It need only be
suspended until after the matters within the competence of [the
Lands Management Bureau] are threshed out and determined.
Thereby, the principal purpose behind the doctrine of primary
jurisdiction is salutarily served.[38] (Emphases added.)
The resolution of conflicting claims of ownership over real
property is within the regular courts’ area of competence and,
concededly, this issue is judicial in character. However, regular
courts would have no power to conclusively resolve this issue of
ownership given the public character of the land, since under C.A.
No. 141, in relation to Executive Order No. 192,[39] the
disposition and management of public lands fall within the
exclusive jurisdiction of the Director of Lands, subject to review
39 by the DENR Secretary.[40]
While the powers given to the DENR, through the Bureau of
Lands, to alienate and dispose of public land do not divest regular
courts of jurisdiction over possessory actions instituted by occupants
or applicants (to protect their respective possessions and
occupations),[41] the respondents’ complaint-in-intervention does
not simply raise the issue of possession – whether de jure or de facto
– but likewise raised the issue of ownership as basis to recover
possession. Particularly, the respondents prayed for declaration of
ownership of Lot 322. Ineluctably, the RTC would have to defer
its ruling on the respondents’ reivindicatory action pending final
determination by the DENR, through the Lands Management
Bureau, of the respondents’ entitlement to a free patent, following
the doctrine of primary jurisdiction.
Undoubtedly, the DENR Secretary’s exclusion of Lot 322 from
the petitioner’s free patent application and his consequent
directive for the respondents to apply for the same lot are within
the DENR Secretary’s exercise of sound administrative discretion.
In the oft-cited case of Vicente Villaflor, etc. v. CA, et al,[42] which
involves the decisions of the Director of Lands and the then
Minister of Natural Resources, we stressed that the rationale
underlying the doctrine of primary jurisdiction applies to
questions on the identity of the disputed public land since this
matter requires a technical determination by the Bureau of Lands.
Since this issue precludes prior judicial determination, the courts
must stand aside even when they apparently have statutory power
to proceed, in recognition of the primary jurisdiction of the
administrative agency.
WHEREFORE, we hereby DENY the motion for reconsideration. No costs.
SO ORDERED.
39 | P a g e
G.R. No. 180388, January 18, 2011
GREGORIO R. VIGILAR, SECRETARY OF THE DEPARTMENT OF
PUBLIC WORKS AND HIGHWAYS (DPWH), DPWH
UNDERSECRETARIES TEODORO E. ENCARNACION AND
EDMUNDO E. ENCARNACION AND EDMUNDO V. MIR, DPWH
ASSISTANT SECRETARY JOEL L. ALTEA, DPWH REGIONAL
DIRECTOR VICENTE B. LOPEZ, DPWH DISTRICT ENGINEER
ANGELITO M. TWAÑO, FELIX A. DESIERTO OF THE
TECHNICAL WORKING GROUP VALIDATION AND AUDITING
TEAM, AND LEONARDO ALVARO, ROMEO N. SUPAN,
VICTORINO C. SANTOS OF THE DPWH PAMPANGA 2ND
ENGINEERING DISTRICT, PETITIONERS, VS. ARNULFO D.
AQUINO, RESPONDENT.
DECISION
SERENO, J.:
Before the Court is a Petition for Review on Certiorari [1] under
Rule 45 of the Rules of Court, assailing the Decision [2] of the
Court of Appeals in C.A.-G.R. CV No. 82268, dated 25
September 2006.
The antecedent facts are as follows:
On 19 June 1992, petitioner Angelito M. Twaño, then Officer-
in-Charge (OIC)-District Engineer of the Department of Public
Works and Highways (DPWH) 2nd Engineering District of
Pampanga sent an Invitation to Bid to respondent Arnulfo D.
Aquino, the owner of A.D. Aquino Construction and Supplies.
The bidding was for the construction of a dike by bulldozing a
part of the Porac River at Barangay Ascomo-Pulungmasle,
Guagua, Pampanga.
Subsequently, on 7 July 1992, the project was awarded to
respondent, and a "Contract of Agreement" was thereafter
executed between him and concerned petitioners for the amount
of PhP1,873,790.69, to cover the project cost.
By 9 July 1992, the project was duly completed by respondent,
who was then issued a Certificate of Project Completion dated
16 July 1992. The certificate was signed by Romeo M. Yumul,
the Project Engineer; as well as petitioner Romeo N. Supan,
Chief of the Construction Section, and by petitioner Twaño.
Respondent Aquino, however, claimed that PhP1,262,696.20
was still due him, but petitioners refused to pay the amount. He
thus filed a Complaint [3] for the collection of sum of money
with damages before the Regional Trial Court of Guagua,
Pampanga. The complaint was docketed as Civil Case No. 3137.
Petitioners, for their part, set up the defense [4] that the
Complaint was a suit against the state; that respondent failed to
exhaust administrative remedies; and that the "Contract of
Agreement" covering the project was void for violating
Presidential Decree No. 1445, absent the proper appropriation
and the Certificate of Availability of Funds. [5]
On 28 November 2003, the lower court ruled in favor of
respondent, to wit:
WHEREFORE, premises considered, defendant Department
of Public Works and Highways is hereby ordered to pay the
plaintiff Arnulfo D. Aquino the following:
ADMINLAW CASES
 1. PhP1,873,790.69, Philippine Currency, representing actual
amount for the completion of the project done by the
plaintiff;
2. PhP50,000.00 as attorney's fee and
3. Cost of this suit.
SO ORDERED. [6]
It is to be noted that respondent was only asking for
PhP1,262,696.20; the award in paragraph 1 above, however,
conforms to the entire contract amount.
On appeal, the Court of Appeals reversed and set aside the
Decision of the lower court and disposed as follows:
WHEREFORE, premises considered, the appeal is
GRANTED. The "CONTRACT AGREEMENT" entered into
between the plaintiff-appellee's construction company, which he
represented, and the government, through the Department of
Public Works and Highway (DPWH) - Pampanga 2nd
Engineering District, is declared null and void ab initio.
The assailed decision of the court a quo is hereby REVERSED
AND SET ASIDE.
In line with the pronouncement in Department of Health vs.
C.V. Canchela & Associates, Architects,[7] the Commission
on Audit (COA) is hereby ordered to determine and ascertain
with dispatch, on a quantum meruit basis, the total obligation due
to the plaintiff-appellee for his undertaking in implementing the
40 subject contract of public works, and to allow payment thereof,
subject to COA Rules and Regulations, upon the completion of
the said determination.
No pronouncement as to costs.
SO ORDERED. [8]
Dissatisfied with the Decision of the Court of Appeals,
petitioners are now before this Court, seeking a reversal of the
appellate court's Decision and a dismissal of the Complaint in
Civil Case No. G-3137. The Petition raises the following issues:
1. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN HOLDING THAT THE DOCTRINE OF
NON-SUABILITY OF THE STATE HAS NO
APPLICATION IN THIS CASE.
2. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN NOT DISMISSING THE COMPLAINT
FOR FAILURE OF RESPONDENT TO EXHAUST
ALL ADMINISTRATIVE REMEDIES.
3. WHETHER OR NOT THE COURT OF APPEALS
ERRED IN ORDERING THE COA TO ALLOW
PAYMENT TO RESPONDENT ON A QUANTUM
MERUIT BASIS DESPITE THE LATTER'S FAILURE
TO COMPLY WITH THE REQUIREMENTS OF
PRESIDENTIAL DECREE NO. 1445.
40 | P a g e
After a judicious review of the case, the Court finds the Petition
to be without merit.
Firstly, petitioners claim that the Complaint filed by respondent
before the Regional Trial Court was done without exhausting
administrative remedies. Petitioners aver that respondent should
have first filed a claim before the Commission on Audit (COA)
before going to the courts. However, it has been established that
the doctrine of exhaustion of administrative remedies and the
doctrine of primary jurisdiction are not ironclad rules. In Republic
of the Philippines v. Lacap, [9] this Court enumerated the numerous
exceptions to these rules, namely: (a) where there is estoppel on
the part of the party invoking the doctrine; (b) where the
challenged administrative act is patently illegal, amounting to
lack of jurisdiction; (c) where there is unreasonable delay or
official inaction that will irretrievably prejudice the complainant;
(d) where the amount involved is relatively so small as to make
the rule impractical and oppressive; (e) where the question
involved is purely legal and will ultimately have to be decided by
the courts of justice; (f) where judicial intervention is urgent; (g)
where the application of the doctrine may cause great and
irreparable damage; (h) where the controverted acts violate due
process; (i) where the issue of non-exhaustion of administrative
remedies has been rendered moot; (j) where there is no other
plain, speedy and adequate remedy; (k) where strong public
interest is involved; and (l) in quo warranto proceedings. In the
present case, conditions (c) and (e) are present.
The government project contracted out to respondent was
completed almost two decades ago. To delay the proceedings by
remanding the case to the relevant government office or agency
will definitely prejudice respondent. More importantly, the issues
in the present case involve the validity and the enforceability of
the "Contract of Agreement" entered into by the parties. These
are questions purely of law and clearly beyond the expertise of
the Commission on Audit or the DPWH. In Lacap, this Court
said:
... It does not involve an examination of the probative value of
the evidence presented by the parties. There is a question of law
when the doubt or difference arises as to what the law is on a
certain state of facts, and not as to the truth or the falsehood of
alleged facts. Said question at best could be resolved only
tentatively by the administrative authorities. The final decision
on the matter rests not with them but with the courts of
justice. Exhaustion of administrative remedies does not
apply, because nothing of an administrative nature is to be
or can be done. The issue does not require technical
knowledge and experience but one that would involve the
interpretation and application of law. (Emphasis supplied.)
Secondly, in ordering the payment of the obligation due
respondent on a quantum meruit basis, the Court of Appeals
correctly relied on Royal Trust Corporation v. COA,[10] Eslao v.
COA,[11] Melchor v. COA, [12] EPG Construction Company v.
Vigilar,[13] and Department of Health v. C.V. Canchela & Associates,
Architects. [14] All these cases involved government projects
undertaken in violation of the relevant laws, rules and regulations
covering public bidding, budget appropriations, and release of
funds for the projects. Consistently in these cases, this Court has
held that the contracts were void for failing to meet the
ADMINLAW CASES
 requirements mandated by law; public interest and equity,
however, dictate that the contractor should be compensated for
services rendered and work done.
Specifically, C.V. Canchela & Associates is similar to the case at bar,
in that the contracts involved in both cases failed to comply with
the relevant provisions of Presidential Decree No. 1445 and the
Revised Administrative Code of 1987. Nevertheless, "(t)he
illegality of the subject Agreements proceeds, it bears emphasis,
from an express declaration or prohibition by law, not from any
intrinsic illegality. As such, the Agreements are not illegal per se,
and the party claiming thereunder may recover what had been
paid or delivered." [15]
The government project involved in this case, the construction of
a dike, was completed way back on 9 July 1992. For almost two
decades, the public and the government benefitted from the work
done by respondent. Thus, the Court of Appeals was correct in
applying Eslao to the present case. In Eslao, this Court stated:
particular instance, the State's immunity from suit.
To be sure, this Court -- as the staunch guardian of the
citizens' rights and welfare -- cannot sanction an injustice so
patent on its face, and allow itself to be an instrument in the
perpetration thereof. Justice and equity sternly demand that
the State's cloak of invincibility against suit be shred in this
particular instance, and that petitioners-contractors be duly
compensated -- on the basis of quantum meruit -- for
construction done on the public works housing project.
(Emphasis supplied.)
WHEREFORE, in view of the foregoing, the Petition is
DENIED for lack of merit. The assailed Decision of the Court
of Appeals in CA-G.R. No. 82268 dated 25 September 2006 is
AFFIRMED.
SO ORDERED.

...the Court finds that the contractor should be duly

compensated for services rendered, which were for the benefit
of the general public. To deny the payment to the contractor
of the two buildings which are almost fully completed and
presently occupied by the university would be to allow the
government to unjustly enrich itself at the expense of
another. Justice and equity demand compensation on the
basis of quantum meruit. (Emphasis supplied.)

Neither can petitioners escape the obligation to compensate

41 respondent for services rendered and work done by invoking the
state's immunity from suit. This Court has long established in
Ministerio v. CFI of Cebu, [16] and recently reiterated in Heirs of
Pidacan v. ATO, [17] that the doctrine of governmental immunity
from suit cannot serve as an instrument for perpetrating an
injustice to a citizen. As this Court enunciated in EPG
Construction: [18]

To our mind, it would be the apex of injustice and highly

inequitable to defeat respondent's right to be duly
compensated for actual work performed and services
rendered, where both the government and the public have
for years received and accepted benefits from the project and
reaped the fruits of respondent's honest toil and labor.

... ... ...

Under these circumstances, respondent may not validly invoke the

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

... ... ...

Although the Amigable and Ministerio cases generously tackled the

issue of the State's immunity from suit vis a vis the payment of just
compensation for expropriated property, this Court nonetheless
finds the doctrine enunciated in the aforementioned cases
applicable to the instant controversy, considering that the ends
of justice would be subverted if we were to uphold, in this
41 | P a g e ADMINLAW CASES
 G.R. No. 120567, March 20, 1998
PHILIPPINE AIRLINES, INC., PETITIONER, VS., NATIONAL
LABOR RELATIONS COMMISSION, FERDINAND PINEDA AND
GODOFREDO CABLING, RESPONDENTS.
DECISION
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC),
even without a complaint for illegal dismissal filed before
the labor arbiter, entertain an action for injunction and
issue such writ enjoining petitioner Philippine Airlines,
Inc. from enforcing its Orders of dismissal against private
respondents, and ordering petitioner to reinstate the
private respondents to their previous positions?
This is the pivotal issue presented before us in this
petition for certiorari under Rule 65 of the Revised Rules
of Court which seeks the nullification of the injunctive
writ dated April 3,1995 issued by the NLRC and the
Order denying petitioner's motion for reconsideration on
the ground that the said Orders were issued in excess of
jurisdiction.
Private respondents are flight stewards of the petitioner.
Both were dismissed from the service for their alleged
involvement in the April 3, 1993 currency smuggling in
Hong Kong.
42
Aggrieved by said dismissal, private respondents filed
with the NLRC a petition[1] for injunction praying that:
"I. Upon filing of this Petition, a temporary restraining
order be issued, prohibiting respondents (petitioner
herein) from effecting or enforcing the Decision dated
Feb. 22, 1995, or to reinstate petitioners temporarily
while a hearing on the propriety of the issuance of a writ
of preliminary injunction is being undertaken;
"II. After hearing, a writ of preliminary mandatory
injunction be issued ordering respondent to reinstate
petitioners to their former positions pending the hearing
of this case, or, prohibiting respondent from enforcing its
Decision dated February 22,1995 while this case is
pending adjudication;
"III. After hearing, that the writ of preliminary injunction
as to the reliefs sought for be made permanent, that
petitioners be awarded full backwages, moral damages
of PHP 500,000.00 each and exemplary damages of
PHP 500,000.00 each, attorney’s fees equivalent to ten
percent of whatever amount is awarded, and the costs of
suit."
On April 3, 1995, the NLRC issued a temporary
mandatory injunction[2] enjoining petitioner to cease and
desist from enforcing its February 22, 1995
Memorandum of dismissal. In granting the writ, the
NLRC considered the following facts, to wit:
42 | P a g e
“x x x that almost two (2) years ago, i.e. on April 15,
1993, the petitioners were instructed to attend an
investigation by respondent’s ‘Security and Fraud
Prevention Sub-Department’ regarding an April 3, 1993
incident in Hongkong at which Joseph Abaca,
respondent’s Avionics Mechanic in Hongkong ‘was
intercepted by the Hongkong Airport Police at Gate 05
xxx the ramp area of the Kai Tak International Airport
while xxx about to exit said gate carrying a xxx bag said
to contain some 2.5 million pesos in Philippine
Currencies. That at the Police Station, Mr. Abaca
claimed that he just found said plastic bag at the Skybed
Section of the arrival flight PR300/03 April 93,’ where
petitioners served as flight stewards of said flight PR300;
x x the petitioners sought ‘a more detailed account of
what this HKG incident is all about’; but instead, the
petitioners were administratively charged, ‘a hearing’ on
which ‘did not push through’ until almost two (2) years
after, i.e. ‘on January 20, 1995 xxx where a confrontation
between Mr. Abaca and petitioners herein was
compulsorily arranged by the respondent’s disciplinary
board’ at which hearing, Abaca was made to identify
petitioners as co-conspirators; that despite the fact that
the procedure of identification adopted by respondent’s
Disciplinary Board was anomalous ‘as there was no one
else in the line-up (which could not be called one) but
petitioners xxx Joseph Abaca still had difficulty in
identifying petitioner Pineda as his co-conspirator, and
as to petitioner Cabling, he was implicated and pointed
by Abaca only after respondent’s Atty. Cabatuando
pressed the former to identify petitioner Cabling as co-
conspirator’; that with the hearing reset to January 25,
1995, ‘Mr. Joseph Abaca finally gave exculpating
statements to the board in that he cleared petitioners
from any participation or from being the owners of the
currencies, and at which hearing Mr. Joseph Abaca
volunteered the information that the real owner of said
money was one who frequented his headquarters in
Hongkong to which information, the Disciplinary Board
Chairman, Mr. Ismael Khan,’ opined ‘for the need for
another hearing to go to the bottom of the incident’; that
from said statement, it appeared ‘that Mr. Joseph Abaca
was the courier, and had another mechanic in Manila
who hid the currency at the plane’s skybed for Abaca to
retrieve in Hongkong, which findings of how the money
was found was previously confirmed by Mr. Joseph
Abaca himself when he was first investigated by the
Hongkong authorities’; that just as petitioners ‘thought
that they were already fully cleared of the charges, as
they no longer received any summons/notices on the
intended ‘additional hearings’ mandated by the
Disciplinary Board,’ they were surprised to receive ‘on
February 23, 1995 xxx a Memorandum dated February
22, 1995’ terminating their services for alleged violation
of respondent’s Code of Discipline ‘effective
immediately’; that sometime xxx first week of March,
1995, petitioner Pineda received another Memorandum
from respondent Mr. Juan Paraiso, advising him of his
termination effective February 3, 1995, likewise for
violation of respondent’s Code of Discipline; x x x"
ADMINLAW CASES
 In support of the issuance of the writ of temporary
injunction, the NLRC adopted the view that: (1) private
respondents cannot be validly dismissed on the strength
of petitioner's Code of Discipline which was declared
illegal by this Court in the case of PAL, Inc. vs. NLRC,
(G.R. No. 85985), promulgated August 13, 1993, for the
reason that it was formulated by the petitioner without
the participation of its employees as required in R.A.
6715, amending Article 211 of the Labor Code; (2) the
whimsical, baseless and premature dismissals of private
respondents which "caused them grave and irreparable
injury" is enjoinable as private respondents are left "with
no speedy and adequate remedy at law'"except the
issuance of a temporary mandatory injunction; (3) the
NLRC is empowered under Article 218 (e) of the Labor
Code not only to restrain any actual or threatened
commission of any or all prohibited or unlawful acts but
also to require the performance of a particular act in any
labor dispute, which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any
party; and (4) the temporary mandatory power of the
NLRC was recognized by this Court in the case of
Chemo-Technicshe Mfg., Inc. Employees Union,DFA,
et.al. vs. Chemo-Technische Mfg., Inc. [G.R. No.
107031, January 25,1993].
On May 4,1995, petitioner moved for reconsideration[3]
arguing that the NLRC erred:
1. …in granting a temporary injunction order when it has
43 no jurisdiction to issue an injunction or restraining
order since this may be issued only under Article
218 of the Labor Code if the case involves or arises
from labor disputes;
2. …in granting a temporary injunction order when the
termination of private respondents have long been
carried out;
3. ..in ordering the reinstatement of private respondents
on the basis of their mere allegations, in violation of
PAL's right to due process;
4. ..in arrogating unto itself management prerogative to
discipline its employees and divesting the labor arbiter
of its original and exclusive jurisdiction over illegal
dismissal cases;
5. ..in suspending the effects of termination when such
action is exclusively within the jurisdiction of the
Secretary of Labor;
6. ..in issuing the temporary injunction in the
absence of any irreparable or substantial injury to
both private respondents.
On May 31,1995, the NLRC denied petitioner's motion
for reconsideration, ruling:
“The respondent (now petitioner), for one, cannot
validly claim that we cannot exercise our injunctive
power under Article 218 (e) of the Labor Code on the
pretext that what we have here is not a labor dispute
as long as it concedes that as defined by law, a”(l)
43 | P a g e
‘Labor Dispute’ includes any controversy or matter
concerning terms or conditions of employment.” . If
security of tenure, which has been breached by
respondent and which, precisely, is sought to be
protected by our temporary mandatory injunction (the
core of controversy in this case) is not a “term or
condition of employment”, what then is?
xxx xxx xxx
Anent respondent’s second argument x x x, Article
218 (e) of the Labor Code x x x empowered the
Commission not only to issue a prohibitory
injunction, but a mandatory (“to require the
performance”) one as well. Besides, as earlier
discussed, we already exercised (on August
23,1991) this temporary mandatory injunctive power
in the case of “Chemo-Technische Mfg., Inc.
Employees Union-DFA et.al. vs. Chemo-Technishe
Mfg., Inc., et. al.” (supra) and effectively enjoined
one (1) month old dismissals by Chemo-Technische
and that our aforesaid mandatory exercise of
injunctive power, when questioned through a
petition for certiorari, was sustained by the Third
Division of the Supreme court per its Resolution
dated January 25,1993.
xxx xxx xxx
Respondent’s fourth argument that petitioner's
remedy for their dismissals is 'to file an illegal
dismissal case against PAL which cases are within
the original and exclusive jurisdiction of the Labor
Arbiter' is ignorant. In requiring as a condition for the
issuance of a 'temporary or permanent injunction'- '(4)
That complainant has no adequate remedy at law;'
Article 218 (e) of the Labor Code clearly envisioned
adequacy , and not plain availability of a remedy at
law as an alternative bar to the issuance of an
injunction. An illegal dismissal suit (which takes, on
its expeditious side, three (3) years before it can be
disposed of) while available as a remedy under
Article 217 (a) of the Labor Code, is certainly not an
'adequate; remedy at law. Ergo, it cannot, as an
alternative remedy, bar our exercise of that
injunctive power given us by Article 218 (e) of the
Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which
empowers this Commission 'to require the performance
of a particular act' (such as our requiring respondent 'to
cease and desist from enforcing' its whimsical
memoranda of dismissals and 'instead to reinstate
petitioners to their respective position held prior to their
subject dismissals') in 'any labor dispute which, if not xxx
performed forthwith, may cause grave and irreparable
damage to any party'] stands as the sole 'adequate
remedy at law' for petitioners here.
Finally, the respondent, in its sixth argument claims that
even if its acts of dismissing petitioners 'may be great,
still the same is capable of compensation', and that
consequently, 'injunction need not be issued where
adequate compensation at law could be obtained'.
ADMINLAW CASES
 Actually, what respondent PAL argues here is that we
need not interfere in its whimsical dismissals of
petitioners as, after all, it can pay the latter its
backwages. x x x
But just the same, we have to stress that Article 279
does not speak alone of backwages as an obtainable
relief for illegal dismissal; that reinstatement as well is
the concern of said law, enforceable when necessary,
through Article 218 (e) of the Labor Code (without need
of an illegal dismissal suit under Article 217 (a) of the
Code) if such whimsical and capricious act of illegal
dismissal will 'cause grave or irreparable injury to a
party'. x x x " [4]
Hence, the present recourse.
Generally, injunction is a preservative remedy for the
protection of one's substantive rights or interest. It is not
a cause of action in itself but merely a provisional
remedy, an adjunct to a main suit. It is resorted to only
when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any
standard of compensation. The application of the
injunctive writ rests upon the existence of an emergency
or of a special reason before the main case be regularly
heard. The essential conditions for granting such
temporary injunctive relief are that the complaint alleges
facts which appear to be sufficient to constitute a proper
basis for injunction and that on the entire showing from
44 the contending parties, the injunction is reasonably
necessary to protect the legal rights of the plaintiff
pending the litigation.[5] Injunction is also a special
equitable relief granted only in cases where there is no
plain, adequate and complete remedy at law.[6]
In labor cases, Article 218 of the Labor Code empowers
the NLRC-
"(e) To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor
dispute which, if not restrained or performed forthwith,
may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such
party; x x x." (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1,
Rule XI of the New Rules of Procedure of the NLRC,
pertinently provides as follows:
"Section 1. Injunction in Ordinary Labor Dispute.-A
preliminary injunction or a restraining order may be
granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article 218
of the Labor Code, as amended, when it is established
on the bases of the sworn allegations in the petition that
the acts complained of, involving or arising from any
labor dispute before the Commission, which, if not
restrained or performed forthwith, may cause grave or
44 | P a g e
irreparable damage to any party or render ineffectual
any decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by
the Labor Arbiters only as an incident to the cases
pending before them in order to preserve the rights of
the parties during the pendency of the case, but
excluding labor disputes involving strikes or lockout. [7]
(Emphasis Ours)
From the foregoing provisions of law, the power of the
NLRC to issue an injunctive writ originates from "any
labor dispute" upon application by a party thereof,
which application if not granted "may cause grave or
irreparable damage to any party or render ineffectual
any decision in favor of such party."
The term "labor dispute" is defined as "any controversy
or matter concerning terms and conditions of
employment or the association or representation of
persons in negotiating, fixing, maintaining, changing, or
arranging the terms and conditions of employment
regardless of whether or not the disputants stand in the
proximate relation of employers and employees."[8]
The term "controversy" is likewise defined as "a litigated
question; adversary proceeding in a court of law; a
civil action or suit, either at law or in equity; a
justiciable dispute."[9]
A "justiciable controversy" is "one involving an active
antagonistic assertion of a legal right on one side and a
denial thereof on the other concerning a real, and not a
mere theoretical question or issue."[10]
Taking into account the foregoing definitions, it is an
essential requirement that there must first be a labor
dispute between the contending parties before the labor
arbiter. In the present case, there is no labor dispute
between the petitioner and private respondents as there
has yet been no complaint for illegal dismissal filed with
the labor arbiter by the private respondents against the
petitioner.
The petition for injunction directly filed before the NLRC
is in reality an action for illegal dismissal. This is clear
from the allegations in the petition which prays for:
reinstatement of private respondents; award of full
backwages, moral and exemplary damages; and
attorney's fees. As such, the petition should have been
filed with the labor arbiter who has the original and
exclusive jurisdiction to hear and decide the following
cases involving all workers, whether agricultural or non-
agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
ADMINLAW CASES
 (3) If accompanied with a claim for reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;
(4) Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations;
(5) Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts; and
(6) Except claims for employees compensation, social
security, medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P 5,000.00), whether or not accompanied with a
claim for reinstatement.[11]
The jurisdiction conferred by the foregoing legal
provision to the labor arbiter is both original and
exclusive, meaning, no other officer or tribunal can take
cognizance of, hear and decide any of the cases therein
enumerated. The only exceptions are where the
Secretary of Labor and Employment or the NLRC
exercises the power of compulsory arbitration, or the
parties agree to submit the matter to voluntary arbitration
pursuant to Article 263 (g) of the Labor Code, the
pertinent portions of which reads:
45 "(g) When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike
or lockout as specified in the assumption or certification
order. If one has already taken place at the time of
assumption or certification, all striking or locked out
employees shall immediately resume operations and
readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the
assistance of law enforcement agencies to ensure
compliance with this provision as well as with such
orders as he may issue to enforce the same.
xxxxxxxxx"
On the other hand, the NLRC shall have exclusive
appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code.
In short, the jurisdiction of the NLRC in illegal dismissal
cases is appellate in nature and, therefore, it cannot
entertain the private respondents' petition for injunction
which challenges the dismissal orders of petitioner.
Article 218(e) of the Labor Code does not provide
blanket authority to the NLRC or any of its divisions to
issue writs of injunction, considering that Section 1 of
45 | P a g e
Rule XI of the New Rules of Procedure of the NLRC
makes injunction only an ancillary remedy in ordinary
labor disputes"[12]
Thus, the NLRC exceeded its jurisdiction when it issued
the assailed Order granting private respondents' petition
for injunction and ordering the petitioner to reinstate
private respondents.
The argument of the NLRC in its assailed Order that to
file an illegal dismissal suit with the labor arbiter is not an
"adequate" remedy since it takes three (3) years before
it can be disposed of, is patently erroneous. An
"adequate" remedy at law has been defined as one "that
affords relief with reference to the matter in controversy,
and which is appropriate to the particular circumstances
of the case."[13] It is a remedy which is equally beneficial,
speedy and sufficient which will promptly relieve the
petitioner from the injurious effects of the acts
complained of.[14]
Under the Labor Code, the ordinary and proper recourse
of an illegally dismissed employee is to file a complaint
for illegal dismissal with the labor arbiter.[15] In the case
at bar, private respondents disregarded this rule and
directly went to the NLRC through a petition for
injunction praying that petitioner be enjoined from
enforcing its dismissal orders. In Lamb vs. Phipps,[16] we
ruled that if the remedy is specifically provided by law, it
is presumed to be adequate. Moreover, the preliminary
mandatory injunction prayed for by the private
respondents in their petition before the NLRC can also
be entertained by the labor arbiter who, as shown
earlier, has the ancillary power to issue preliminary
injunctions or restraining orders as an incident in the
cases pending before him in order to preserve the rights
of the parties during the pendency of the case.[17]
Furthermore, an examination of private respondents'
petition for injunction reveals that it has no basis since
there is no showing of any urgency or irreparable injury
which the private respondents might suffer. An injury is
considered irreparable if it is of such constant and
frequent recurrence that no fair and reasonable redress
can be had therefor in a court of law,[18] or where there is
no standard by which their amount can be measured
with reasonable accuracy, that is, it is not susceptible of
mathematical computation. It is considered irreparable
injury when it cannot be adequately compensated in
damages due to the nature of the injury itself or the
nature of the right or property injured or when there
exists no certain pecuniary standard for the
measurement of damages.[19]
In the case at bar, the alleged injury which private
respondents stand to suffer by reason of their alleged
illegal dismissal can be adequately compensated and
therefore, there exists no "irreparable injury," as defined
above which would necessitate the issuance of the
injunction sought for. Article 279 of the Labor Code
ADMINLAW CASES
 provides that an employee who is unjustly dismissed
from employment shall be entitled to reinstatement,
without loss of seniority rights and other privileges, and
to the payment of full backwages, inclusive of
allowances, and to other benefits or their monetary
equivalent computed from the time his compensation
was withheld from him up to the time of his actual
reinstatement.

The ruling of the NLRC that the Supreme Court upheld

its power to issue temporary mandatory injunction orders
in the case of Chemo-Technische Mfg., Inc. Employees
Union-DFA, et.al. vs. Chemo-Technische Mfg., Inc.
et.al., docketed as G.R. No. 107031, is misleading. As
correctly argued by the petitioner, no such
pronouncement was made by this Court in said case. On
January 25,1993, we issued a Minute Resolution in the
subject case stating as follows:

"Considering the allegations contained, the issues raised

and the arguments adduced in the petition for certiorari ,
as well as the comments of both public and private
respondents thereon, and the reply of the petitioners to
private respondent's motion to dismiss the petition, the
Court Resolved to DENY the same for being premature."

It is clear from the above resolution that we did not in

anyway sustain the action of the NLRC in issuing such
temporary mandatory injunction but rather we dismissed
the petition as the NLRC had yet to rule upon the motion
46 for reconsideration filed by peitioner. Thus, the minute
resolution denying the petition for being prematurely
filed.

Finally, an injunction, as an extraordinary remedy, is not

favored in labor law considering that it generally has not
proved to be an effective means of settling labor
disputes.[20] It has been the policy of the State to
encourage the parties to use the non-judicial process of
negotiation and compromise, mediation and
arbitration.[21] Thus, injunctions may be issued only in
cases of extreme necessity based on legal grounds
clearly established, after due consultations or hearing
and when all efforts at conciliation are exhausted which
factors, however, are clearly absent in the present case.

WHEREFORE, the petition is hereby GRANTED. The

assailed Orders dated April 3,1995 and May 31,1995,
issued by the National Labor Relations Commission
(First Division), in NLRC NCR IC No. 000563-95, are
hereby REVERSED and SET ASIDE.

SO ORDERED.

46 | P a g e ADMINLAW CASES
 G.R. No. 129742, September 16, 1998
TERESITA G. FABIAN PETITIONER, VS. HON. ANIANO A.
DESIERTO, IN HIS CAPACITY AS OMBUDSMAN; HON. JESUS F.
GUERRERO, IN HIS CAPACITY AS DEPUTY OMBUDSMAN FOR
LUZON; AND NESTOR V. AGUSTIN RESPONDENTS.
DECISION
REGALADO, J:
Petitioner has appealed to us by certiorari under Rule 45 of the
Rules of Court from the "Joint Order" issued by public
respondents on June 18, 1997 in OMB-Adm. Case No. 0-95-
0411 which granted the motion for reconsideration of and
absolved private respondents from administrative charges for
inter alia grave misconduct committed by him as then Assistant
Regional Director, Region IV-A, Department of Public Works
and Highways (DPWH).
I decisions of the Office of the Ombudsman may be appealed to
It appears from the statement and counter-statement of facts of
the parties that petitioner Teresita G. Fabian was the major
stockholder and president of PROMAT Construction
Development Corporation (PROMAT) which was engaged in
the construction business. Private respondents Nestor V.
Agustin was the incumbent District Engineering District
(FMED) when he allegedly committed the offenses for which he
was administratively charged in the Office in the office of the
Ombudsman.
47
Promat participated in the bidding for government construction
project including those under the FMED, and private
respondent, reportedly taking advantage of his official position,
inveigled petitioner into an amorous relationship. Their affair
lasted for some time, in the course of which private respondents
gifted PROMAT with public works contracts and interceded for
it in problems concerning the same in his office.
Later, misunderstanding and unpleasant incidents developed
between the parties and when petitioner tried to terminate their
relationship, private respondent refused and resisted her
attempts to do so to the extent of employing acts of harassment,
intimidation and threats. She eventually filed the aforementioned
administrative case against him in a letter-complaint dated July
24, 1995.
The said complaint sought the dismissal of private respondent
for violation of Section 19, Republic Act No. 6770
(Ombudsman Act of 1989) and Section 36 of Presidential
Decree No. 807 (Civil Service Decree), with an ancillary prayer
for his preventive suspension. For purposes of this case, the
charges referred to may be subsumed under the category of
oppression, misconduct, and disgraceful or immoral conduct.
On January 31, 1996, Graft Investigator Eduardo R. Benitez
issued a resolution finding private respondents guilty of grave
misconduct and ordering his dismissal from the service with
forfeiture of all benefits under the law. His resolution bore the
approval of Director Napoleon Baldrias and Assistant
Ombudsman Abelardo Aportadera of their office.
47 | P a g e
Herein respondent Ombudsman, in an Order dated February 26,
1996, approved the aforesaid resolution with modifications, by
finding private respondent guilty of misconduct and meting out
the penalty of suspension without pay for one year. After private
respondent moved for reconsideration, respondent Ombudsman
discovered that the former's new counsel had been his
"classmate and close associate" hence he inhibited himself. The
case was transferred to respondent Deputy Ombudsman Jesus F.
Guerrero who, in the now challenged Joint Order of June 18,
1997, set aside the February 26, 1997 Order of respondent
Ombudsman and exonerated private respondents from the
administrative charges.
II
In the present appeal, petitioner argues that Section 27 of
Republic Act No. 6770 (Ombudsman Act of 1989)[1] pertinently
provides that -
In all administrative diciplinary cases, orders, directives or
the Supreme Court by filing a petition for certiorari within ten
(10) days from receipt of the written notice of the order,
directive or decision or denial of the motion for reconsideration
in accordance with Rule 45 of the Rules of Court. (Emphasis
supplied)
However, she points out that under Section 7, Rule III of
Administrative Order No. 07 (Rules of Procedure of the office
of the Ombudsman),[2] when a respondent is absolved of the
charges in an administrative proceeding decision of the
ombudsman is final and unappealable. She accordingly submits
that the office of the ombudsman has no authority under the law
to restrict, in the manner provided in its aforesaid Rules, the
right of appeal allowed by Republic Act No. 6770, nor to limit
the power of review of this Court. Because of the aforecited
provision in those Rules of Procedure, she claims that she found
it "necessary to take an alternative recourse under Rule 65 of the
Rules of Court, because of the doubt it creates on the availability
of appeals under Rule 45 of the Rules of Court.
Respondents filed their respective comments and rejoined that
the Office of the Ombudsman is empowered by the
Constitution and the law to promulgate its own rules of
procedure. Section 13(8), Article XI of the 1987 Constitution
provides, among others, that the Office of the Ombudsman can
"(p)romulgate its rules of procedure and exercise such other
powers or perform such functions or duties as may be provided
by law."
Republic Act No. 6770 duly implements the Constitutional
mandate with these relevant provisions:
Sec. 14. Restrictions. - x x x No court shall hear any appeal or
application for remedy against the decision or findings of the
Ombudsman except the Supreme Court on pure question on
law.
xxx
Sec. 18. Rules of Procedure. - (1) The Office of the Ombudsman
shall promulgate its own rules of procedure for the effective
exercise or performance of its powers, functions, and duties.
ADMINLAW CASES
 xxx
Sec. 23. Formal Investigation. - (1) Administrative investigations by
the Office of the Ombudsman shall be in accordance with its
rules of procedure and consistent with the due process. x x x
xxx
Sec. 27. Effectivity and Finality of Decisions. - All provisionary orders
at the Office of the Ombudsman are immediately effective and
executory.
A motion for reconsideration of any order, directive or decision
of the Office of the Ombudsman must be filed within five (5)
days after receipt of written notice shall be entertained only on
any of the following grounds:
xxx
Findings of fact by the Office of the Ombudsman when
supported by substantial evidence are conclusive. Any order,
directive or decision imposing the penalty of public censure or
reprimand, suspension of not more than one month salary shall
be final and unappealable.
In all administrative disciplinary cases, orders, directives or
decisions of the Office of the Ombudsman may be appealed to
the Supreme Court by filing a petition for certiorari within ten
(10) days from receipt of the written notice of the order,
directive or decision or denial of the motion for reconsideration
in accordance with Rule 45 of the Rules of Court.
48
The above rules may be amended or modified by the Office of
the Ombudsman as the interest of justice may require.
Respondents consequently contend that, on the foregoing
constitutional and statutory authority, petitioner cannot assail the
validity of the rules of procedure formulated by the Office of the
Ombudsman governing the conduct of proceeding before it,
including those with respect to the availabity or non-avalability
of appeal in administrative cases. Such as Section 7, Rule III of
Administrative Order No.07.
Respondents also question the propriety of petitioner's
proposition that, although she definitely prefaced her petition by
categorizing the same as "an appeal by certiorari under Rule 45
of the Rules of Court," she makes the aforequoted ambivalent
statement which in effect asks that, should the remedy under
Rule 45 be unavailable, her petition be treated in the alternative
as an original action for certiorari under Rule 65. The parties
thereafter engage in a discussion of the differences between a
petition for review on certiorari under Rule 45 and a special civil
action of certiorari under Rule 65.
Ultimately, they also attempt to review and rationalize the
decision of this Court applying Section 27 of Republic Act No.
6770 vis-à-vis Section 7, Rule III of Administrative Order No. 07.
As correctly pointed out by public respondents, Ocampo IV vs.
Ombudsman, et al.[3] and Young vs. Office of the Ombudsman, et al.[4]
were original actions for certiorari under Rule 65. Yabut vs. Office
of the Ombudsman, et al.[5] was commenced by a petition for review
on certiorari under Rule 45. Then came Cruz, Jr. vs. People, et al.,[6]
Olivas vs. Office of the Ombudsman, et al., [7] Olivarez vs. Sandiganbayan,
48 | P a g e
et al.,[8] and Jao, et al. vs. Vasquez,[9] which were for certiorari,
prohibition and/or mandamus under Rule 65. Alba vs. Nitorreda,
et al.[10] was initiated by a pleading unlikely denominated as an
"Appeal/Petition for Certiorari and/or Prohibition," with a
prayer for ancillary remedies, and ultimately followed by
Constantino vs. Hon. Ombudsman Aniano Desierto, et al.[11] which was
a special civil action for certiorari.
Considering, however the view that this Court now takes of the
case at bar and the issues therein which will shortly be explained,
it refrains from preemptively resolving the controverted points
raised by the parties on the nature and propriety of application
of the writ of certiorari when used as a mode of appeal or as the
basis of a special original action, and whether or not they may be
resorted to concurrently or alternatively, obvious though the
answers thereto appear to be. Besides, some seemingly obiter
statements in Yabuts and Alba could bear reexamination and
clarification. Hence, we will merely observe and lay down the
rule at this juncture that Section 27 of Republic Act No. 6770 is
involved only whenever an appeal by certiorari under Rule 45 is
taken from a decision in an administrative diciplinary action. It
cannot be taken into account where an original action for
certiorari under Rule 65 is resorted to as a remedy for judicial
review, such as from an incident in a criminal action.
III
After respondents' separate comments had been filed, the Court
was intrigued by the fact, which does appear to have been
seriously considered before, that the administrative liability of a
public official could fall under the jurisdiction of both the Civil
Service Commission and the Office of the Ombudsman. Thus,
the offenses imputed to herein private respondent were based on
both Section 19 of Republic Act. No. 6770 and Section 36 of
Presidential Decree No. 807. Yet, pursuant to the amendment of
section 9, Batas Pambansa Blg. 129 by Republic Act No. 7902,
all adjudications by Civil Service Commission in administrative
disciplinary cases were made appealable to the Court of Appeals
effective March 18, 1995, while those of the Office of the
Ombudsman are appealable to this Court.
It could thus be possible that in the same administrative case
involving two respondents, the proceedings against one could
eventually have been elevated to the Court of Appeals, while the
other may have found its way to the Ombudsman from which it
is sought to be brought to this Court. Yet systematic and
efficient case management would dictate the consolidation of
those cases in the Court of Appeals, both for expediency and to
avoid possible conflicting decisions.
Then there is the consideration that Section 30, Article VI of the
1987 Constitution provides that "(n)o law shall be passed
increasing the appellate indiction of the Supreme Court as
provided in this Constitution without its advice and consent,"
and that Republic Act No. 6770, with its challenged Section 27,
took effect on November 17, 1989, obviously in spite of that
constitutional grounds must be raised by a party to the case,
neither of whom did so in this case, but that is not an inflexible
rule, as we shall explain.
Since the constitution is intended fort the observance of the
judiciary and other departments of the government and the
judges are sworn to support its provisions, the courts are not at
ADMINLAW CASES
 liberty to overlook or disregard its commands or countenance
evasions thereof. When it is clear that a statute trangresses the
authority vested in a legislative body, it is the duty of the courts
to declare that the constitution, and not the statute, governs in a
case before them for judgement.[12]
Thus, while courts will not ordinarily pass upon constitutional
questions which are not raised in the pleadings,[13] the rule has
been recognized to admit of certain exceptions. It does not
preclude a court from inquiring into its own jurisdiction or
compel it to enter a judgement that it lacks jurisdiction to enter.
If a statute on which a court's jurisdiction in a proceeding
depends is unconstitutional, the court has no jurisdiction in the
proceeding, and since it may determine whether or not it has
jurisdiction, it necessarily follows that it may inquire into the
constitutionality of the statute.[14]
Constitutional question, not raised in the regular and orderly
procedure in the trial are ordinarily rejected unless the
jurisdiction of the court below or that of the appellate court is
involved in which case it may be raised at any time or on the
court's own motion.[15] The Court ex mero motu may take
cognizance of lack of jurisdiction at any point in the case where
the fact is developed.[16] The court has a clearly recognized right
to determine its own jurisdiction in any proceeding.[17]
The foregoing authorities notwithstanding, the Court believed
that the parties hereto should be further heard on this
constitutional question. Correspondingly, the following
resolution was issued on May 14, 1998, the material parts stating
as follows:
49 The Court observes that the present petition, from the very
allegations thereof, is "an appeal by certiorari under Rule 45 of
the Rules of Court from the 'Joint Order (Re: Motion for
Reconsideration)' issued in OMB-Adm. Case No. 0-95-0411,
entitled 'Teresita G. Fabian vs. Engr. Nestor V. Agustin, Asst.
Regional Director, Region IV-A, EDSA, Quezon City,' which
absolved the latter from the administrative charges for grave
misconduct, among other."
It is further averred therein that the present appeal to this Court
is allowed under Section 27 of the Ombudsman Act of 1987
(R.A. No. 6770) and, pursuant thereto, the Office of the
Ombudsman issued its Rules of Procedure, Section 7 whereof is
assailed by petitioner in this proceeding. It will be recalled that
R.A. No. 6770 was enacted on November 17, 1989, with Section
27 thereof pertinently providing that all administrative
diciplinary cases, orders, directives or decisions of the Office of
the Ombudsman may be appealed to this Court in accordance
with Rule 45 of the Rules of Court.
The Court notes, however, that neither the petition nor the two
comments thereon took into account or discussed the validity of
the aforestated Section 27 of R.A. No. 8770 in light of the
provisions of Section 30, Article VI of the 1987 Constitution
that "(n)o law shall be passed increasing the appellate jurisdiction
of the Supreme Court as provided in this Constitution without
its advise and consent."
The Court also invites the attention of the parties to its relevant
ruling in First Lepanto Ceramics, Inc. vs. The Court of Appeals ,
et al. (G.R. No. 110571, October 7, 1994, 237 SCRA 519) and
the provisions of its former Circular No. 1-95,as now
49 | P a g e
substantially reproduced in Rule 43 of the 1997 revision of the
Rules of Civil Procedure.
In view of the fact that the appellate jurisdiction of the Court is
invoked and involved and in this case, and the foregoing legal
consideration appear to impugn the constitutionality and validity
of the grant of said appellate jurisdiction to it, the Court deems it
necessary that the parties be heard thereon and the issue be first
resolved before conducting further proceedings in this appellate
review.
ACCORDINGLY, the Court Resolved to require the parties to
Submit their position and arguments on the matter subject of
this resolution by filing their corresponding pleadings within ten
(10) days from notice hereof.
IV
The records do not show that the Office of the Solicitor General
has complied with such requirement, hence the Court dispenses
with any submission it should have presented. On the other
hand, petitioner espouses the theory that the provision in
Section 27 of Republic Act No. 6770 which authorizes an appeal
by certiorari to this Court of the aforementioned adjudications
of the Ombudsman is not violative of Section 30, Article VI of
the Constitution. She claims that what is proscribed is the
passage of law "increasing" the appellate jurisdiction of this
Court "as provided in this Constitution," and such appellate
jurisdiction includes "all cases in which only an error or question
of law is involved." Since Section 5(2)(e), Article VIII of the
Constitution authorizes this Court to review, revise, reverse,
modify, or affirm on appeal or certiorari the aforesaid final
judgement or orders "as the law or the Rules of Court may
provide," said Section 27 does not increase this Court may
provide," said section 27 does not increase this Court's appellate
jurisdiction since, by providing that the mode of appeal shall be
by petition for certiorari under Rule 45, then what may be raised
therein are only questions of law of which this Court already has
of which this Court already has jurisdiction.
We are not impressed by this discourse. It overlooks the fact
that by jurisprudential developments over the years, this Court
has allowed appeals by certiorari under Rule 45 in a substantial
number of cases and instances even if questions of fact are
directly involved and have to be resolved by the appellate
court.[18] Also, the very provision cited by petitioner specifies
that the appellate jurisdiction of this Court contemplated therein
is to be exercised over "final judgements and orders of lower
courts," that is, the courts composing the integrated judicial
system. It does not include the quasi-judicial bodies or agencies,
hence whenever the legislature intends that the decisions or
resolutions of the quasi-judicial agency shall be reviewable by the
Supreme Court or the Court of Appeals, a specific provision to
that effect is included in the law creating that quasi-judicial
agency and, for that matter, any special statutory court. No such
provision on appellate procedure is required for the regular
courts of the integrated judicial system because they are what are
referred to and already provided for in Section 5, Article VIII of
the Constitution.
Apropos to the foregoing, and as correctly observed by private
respondent, the revised Rules of Civil Procedure [19] preclude
appeals from quasi-judicial agencies to the Supreme Court via a
ADMINLAW CASES
 petition for review on certiorari under Rule 45. In the 1997
Rules of Civil Procedure, Section 1 Rule 45, on "Appeal by
Certiorari to the Supreme Court," explicitly states:
SECTION 1 . Filing of petition with Supreme Court. - A person
desiring to appeal by certiorari from a judgement or final order
or Resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other court whenever authorized by law, may file
with the Supreme Court a verified petition for review on
certiorari. The petition shall raise only question of law which
must be distinctly set forth. (Italics ours).
This differs from the former Rule 45 of the 1964 Rules of Court
which made mention only of the Court of Appeals, and had to
be adopted in statutes creating and providing for appeals from
certain administrative or quasi-judicial agencies, whenever the
purpose was to restrict the scope of the appeal to questions of
law. That intended limitation on appellate review, as we have just
discussed, was not fully subserved by recourse to the former
Rule 45 but, then, at that time there was no uniform rule on
appeals from quasi-judicial agencies.
Under the present Rule 45, appeals may be brought through a
petition for review on certiorari but only from judgments and
final orders of the courts enumerated in Section 1 thereof.
Appeals from judgments and final orders of quasi-judicial
agencies[20] are now required to be brought to the Court of
Appeals on a verified petition for review, under the requirements
and conditions in Rule 43 which was precisely formulated and
adopted to provide for a uniform rule of appellate procedure for
quasi-judicial agencies .[21]
It is suggested, however, that the provisions of Rule 43 should
50
apply only to "ordinary" quasi-judicial agencies, but not to the
Office of the Ombudsman which is a "high constitutional body."
We see no reason for this distinction for, if hierarchical rank
should be a criterion, that proposition thereby disregards the fact
that Rule 43 even includes the Office of the President and the
Civil Service Commission, although the latter is even an
independent constitutional commission, unlike the Office of the
Ombudsman which is a constitutionally-mandated but statutorily
created body.
Regarding the misgiving that the review of the decision of the
Office of the Ombudsman by the Court of Appeals would cover
questions of law, of fact or of both, we do not perceive that as
an objectionable feature. After all, factual controversies are
usually involved in administrative disciplinary actions, just like
those coming from the Civil Service, Commission, and the Court
of Appeals as a trier of fact is better prepared than this Court to
resolve the same. On the other hand, we cannot have this
situation covered by Rule 45 since it now applies only to appeals
from the regular courts. Neither can we place it under Rule 65
since the review therein is limited to jurisdictional questions. *
The submission that because this Court has taken cognizance of
cases involving Section 27 of Republic Act No. 6770, that fact
may be viewed as "acquiescence" or "acceptance" by it of the
appellate jurisdiction contemplated in said Section 27, is
unfortunately too tenuous. The jurisdiction of a court is not of
acquiescence as a matter of fact but an issue of conferment as a
matter of law. Besides, we have already discussed the cases
referred to, including the inaccuracies of some statements
therein, and we have pointed out the instances when Rule 45 is
50 | P a g e
involved, hence covered by Section 27 of Republic Act No. 6770
now under discussion, and when that provision would not apply
if it is a judicial review under Rule 65.
Private respondent invokes the rule that courts generally avoid
having to decide a constitutional question, especially when the
case can be decided on other grounds. As a general proposition
that is correct. Here, however, there is an actual case susceptible
of judicial determination. Also, the constitutional question, at the
instance of this Court, was raised by the proper parties, although
there was even no need for that because the Court can rule on
the matter sua sponte when its appellate jurisdiction is involved.
The constitutional question was timely raised, although it could
even be raised any time likewise by reason of the jurisdictional
issue confronting the Court. Finally, the resolution of the
constitutional issue here is obviously necessary for the resolution
of the present case. [22]
It is, however, suggested that this case could also be decided on
other grounds, short of passing upon; the constitutional
question. We appreciate the ratiocination of private respondent
but regret that we must reject the same. That private respondent
could be absolved of the charge because the decision
exonerating him is final and unappealable assumes that Section
7, Rule III of Administrative Order No. 07 is valid, but that is
precisely one of the issues here. The prevailing rule that the
Court should not interfere with the discretion of the
Ombudsman in prosecuting or dismissing a complaint is not
applicable in this administrative case, as earlier explained. That
two decisions rendered by this Court supposedly imply the
validity of the aforementioned Section 7 of Rule III is precisely
under review here because of some statements therein somewhat
at odds with settled rules and the decisions of this Court on the
same issues, hence to invoke the same would be to beg the
question.
V
Taking all the foregoing circumstances in their true legal roles
and effects, therefore, Section 27 of Republic Act No. 6770
cannot validly authorize an appeal to this Court from decisions of
the Office of the Ombudsman in administrative disciplinary
cases. It consequently violates the proscription in Section 30,
Article VI of the Constitution against a law which increases the
Appellate jurisdiction of this Court. No countervailing argument
has been cogently presented to justify such disregard of the
constitutional prohibition which, as correctly explained in First
Leparto Ceramics, Inc. vs. The Court of Appeals, el al. [23] was intended
to give this Court a measure of control over cases placed under
its appellate Jurisdiction. Otherwise, the indiscriminate
enactment of legislation enlarging its appellate jurisdiction would
unnecessarily burden the Court [24]
We perforce have to likewise reject the supposed inconsistency
of the ruling in First Lepanto Ceramics and some statements in
Yabut and Alba, not only because of the difference in the factual
settings, but also because those isolated cryptic statements in
Yabut and Alba should best be clarified in the adjudication on
the merits of this case. By way of anticipation, that will have to
be undertaken by the proper court of competent jurisdiction.
Furthermore in addition to our preceding discussion on whether
Section 27 of Republic Act No. 6770 expanded the jurisdiction
ADMINLAW CASES
 of this Court without its advice and consent, private
respondent's position paper correctly yields the legislative
background of Republic Act No. 6770. On September 26, 1989,
the Conference Committee Report on S.B. No. 453 and H.B.
No. 13646, setting forth the new version of what would later be
Republic Act No. 6770, was approved on second reading by the
House of Representatives.[25] The Senate was informed of the
approval of the final version of the Act on October 2, 1989 [26]
and the same was thereafter enacted into law by President
Aquino on November 17, 1989.
Submitted with said position paper is an excerpt showing that
the Senate, in the deliberations on the procedure for appeal from
the Office of the Ombudsman to this Court, was aware of the
provisions of Section 30, Article III of the Constitution. It also
reveals that Senator Edgardo Angara, as a co-author and the
principal sponsor of S.B. No. 543 admitted that the said
provision will expand this Court's jurisdiction, and that the
Committee on Justice and Human Rights had not consulted this
Court on the matter, thus:
INTERPELLATION OF SENATOR SHAHANI
xxx
Thereafter, with reference to Section 22(4) which provides that
the decisions of the Office of the Ombudsman may be appealed
to the Supreme Court, in reply to Senator Shahani's query
whether the Supreme Court would agree to such provision in the
light of Section 30, Article VI of the Constitution which requires
its advice and concurrence in laws increasing its appellate
51 jurisdiction, Senator Angara informed that the Committee has
not yet consulted the Supreme Court regarding the matter. He
agreed that the provision will expand the Supreme Court's
jurisdiction by allowing appeals through petitions for review,
adding that they should be appeals on certiorari.[27]
There is no showing that even up to its enactment, Republic Act
No. 6770 was ever referred to this Court for its advice and
consent .[28]
VI
As a consequence of our ratiocination that Section 27 of Republic
Act No. 6770 should be struck down as unconstitutional, and in
line with the regulatory philosophy adopted in appeals from quasi-
judicial agencies in the 1997 Revised Rules of Civil Procedure,
appeals from decisions of the Office of the Ombudsman in
administrative disciplinary cases should be taken to the Court of
Appeals under the provisions of Rule 43.
There is an intimation in the pleadings, however, that said Section
27 refers to appellate jurisdiction which, being substantive in
nature, cannot be disregarded by this Court under its rule-making
power, especially if it results in a diminution, increase or
modification of substantive rights. Obviously, however, where the
law is procedural in essence and purpose, the foregoing
consideration would not pose a proscriptive issue against the
exercise of the rule-making power of this Court. This brings to
fore the question of whether Section 27 of Republic Act No. 6770
is substantive or procedural.
51 | P a g e
It will be noted that no definitive line can be drawn between those
rules or statutes which are procedural, hence within the scope of
this Court's rule-making power, and those which are substantive.
In fact, a particular rule may be procedural in one context and
substantive in another.[29] It is admitted that what is procedural
and what is substantive is frequently a question of great
difficulty.[30] It is not, however, an insurmountable problem if a
rational and pragmatic approach is taken within the context of our
own procedural and jurisdictional system.
In determining whether a rule prescribed by the Supreme Court,
for the practice and procedure of the lower courts, abridges,
enlarges, or modifies any substantive right, the test is whether the
rule really regulates procedure, that is, the judicial process for enforcing
rights and duties recognized by substantive law and for justly
administering remedy and redress for a disregard or infraction of
them.[31] If the rule takes away a vested right, it is not procedural.
If the rule creates a right such as the right to appeal, it may be
classified as a substantive matter; but if it operates as a means o
implementing an existing right then the rule deals merely with procedure.[32]
In the situation under consideration, a transfer by the Supreme
Court, in the exercise of its rule-making power, of pending cases
involving a review of decisions of the Office of the Ombudsman
in administrative disciplinary actions to the Court of Appeals
which shall now be vested with exclusive appellate jurisdiction
thereover, relates to procedure only.[33] This is so because it is not
the right to appeal of an aggrieved party which is affected by the
law. That right has been preserved. Only the procedure by which the
appeal is to be made or decided has been changed. The rationale
for this is that litigant has a vested right in a particular remedy,
which may be changed by substitution without impairing vested
rights, hence he can have none in rules of procedure which relate
to the remedy.[34]
Furthermore, it cannot be said that transfer of appellate
jurisdiction to the Court of Appeals in this case is an act of
creating a new right of appeal because such power of the Supreme
Court to transfer appeals to subordinate appellate courts is purely
a procedural and not a substantive power. Neither can we
consider such transfer as impairing a vested right because the
parties have still a remedy and still a competent tribunal to
administer that remedy.[35]
Thus, it has been generally held that rules or statutes involving a
transfer of cases from one court to another, are procedural and
remedial merely and that, as such, they are applicable to actions
pending at the time the statute went into effect[36] or, in the case
at bar, when its invalidity was declared. Accordingly, even from
the standpoint of jurisdiction ex hypothesi the validity of the transfer
of appeals in said cases to the Court of Appeals can be sustained.
WHEREFORE, Section 27 of Republic Act No. 6770 (Ombudsman Act of
1989), together with Section 7, Rule III of Administrative Order No. 07 (Rules of
Procedure of the Office of the Ombudsman), and any other provision of law or
issuance implementing the aforesaid Act and insofar as they provide for appeals in
administrative disciplinary cases from the Office of the Ombudsman to the
Supreme Court, are hereby declared INVALID and of no further force and effect.
The instant petition is hereby referred and transferred to the Court of Appeals for
final disposition, with said petition to be considered by the Court of Appeals pro
hac vice as a petition for review under Rule 43, without prejudice to its requiring the
parties to submit such amended or supplemental pleadings and additional
documents or records as it may deem necessary and proper.
SO ORDERED.
ADMINLAW CASES
 G.R. No. 169042, October 05, 2011
ERDITO QUARTO, PETITIONER, VS. THE HONORABLE
OMBUDSMAN SIMEON MARCELO, CHIEF SPECIAL
PROSECUTOR DENNIS VILLA IGNACIO, LUISITO M. TABLAN,
RAUL B. BORILLO, AND LUIS A. GAYYA, RESPONDENTS.
DECISION
BRION, J.:
Before the Court is a petition for certiorari and mandamus[1] filed
by Erdito Quarto (petitioner) assailing the Ombudsman's January
7, 2004[2] and November 4, 2004[3] resolutions which granted
Luisito M. Tablan, Raul B. Borillo, and Luis A. Gayya
(collectively, respondents) immunity from prosecution, resulting in
the respondents' exclusion from the criminal informations filed
before the Sandiganbayan. The petitioner seeks to nullify the
immunity granted to the respondents, and to compel the
Ombudsman to include them as accused in the informations for
estafa through falsification of public documents[4] and for
violation of Section 3(e), Republic Act (RA) No. 3019.[5]
FACTUAL ANTECEDENTS
The petitioner is the Chief of the Central Equipment and Spare
Parts Division (CESPD),[6] Bureau of Equipment (BOE),
Department of Public Works and Highways (DPWH), Port
Area, Manila. As CESPD Chief, he is also the Head of the
Special Inspectorate Team (SIT) of the DPWH.[7] The
respondents are members of the SIT.[8]
52
On January 9, 2002, DPWH Secretary Simeon Datumanong
created a committee to investigate alleged anomalous
transactions involving the repairs and/or purchase of spare parts
of DPWH service vehicles in 2001.[9] On January 17, 2002, the
committee designated the DPWH Internal Audit Service (IAS)
as its Technical Working Group to conduct the actual
investigation.[10]
In the course of its investigation, the DPWH-IAS[11] learned that
the emergency repairs and/or purchase of spare parts of DPWH
service vehicles basically undergo the following documentary
process:
I. Determination of repairs and/or spare parts needed
a. The end-user requesting repair brings the service vehicle
to the Motorpool Section, CESPD for initial inspection
and preparation of Job Order; and
b. Based on the Job Order, the SIT conducts a pre-repair
inspection (to determine the necessity of repair and
whether the repair is emergency in nature) and prepares
a Pre-Repair Inspection Report, with a recommendation
for its approval by the CESPD Chief.
II. Preparation and Approval of Requisition for Supplies and/or
Equipment with accompanying documents (Job Order and Pre-
Inspection Report)
52 | P a g e
a. The Procurement Section, Administrative Manpower
Management Service (AMMS) prepares the Requisition
for Supplies and Equipment (RSE), the Canvass
Quotation of three Suppliers, the Certificate of
Emergency Purchase, and the Certificate of Fair Wear
and Tear;
b. The end-user signs the RSE with the recommending
approval of the concerned head of office; and
c. The AMMS Director approves the RSE.
III. Repair of Vehicles
a. The end-user selects the repair shop/auto supply from
accredited establishments;
b. The selected repair shop/auto supply repairs the service
vehicle and issues the corresponding sales invoice
and/or official receipt;
c. The end-user accepts the repair and executes a
Certificate of Acceptance;
d. The SIT conducts a post-repair inspection (to check if
the vehicle was repaired and whether the repair
conformed to specifications) and prepares a Post-Repair
Inspection Report, with a recommendation for its
approval by the CESPD Chief. The Motorpool and the
end-user would prepare the Report of Waste Materials
also for the signature of the CESPD Chief; and
e. The Assets and Supply Management and Control
Division recommends payment of the expense/s
incurred.
The processing of the payment of claims for
reimbursement follows the above process.
Based on this procedure, the DPWH-IAS discovered
that from March to December 2001, several emergency
repairs and/or purchase of spare parts of hundreds of
DPWH service vehicles, which were approved and paid
by the government, did not actually take place, resulting
in government losses of approximately P143 million for
this ten-month period alone.[12]
Thus, Atty. Irene D. Ofilada of the DPWH-IAS filed
before the Office of the Ombudsman[13] a Complaint-
Affidavit[14] and a Supplemental Complaint-Affidavit[15]
charging several high-ranking DPWH officials and
employees - including the petitioner, the respondents,
and other private individuals who purportedly benefited
from the anomalous transactions - with Plunder, Money
Laundering, Malversation, and violations of RA No.
3019 and the Administrative Code.[16]
ADMINLAW CASES
 Atty. Ofilada imputed the following acts to the
petitioner:
With dishonesty and grave misconduct, [the petitioner] x x x
approved four (4) job orders for [the] repairs [and/or]
purchase of spare parts of [the vehicle assigned to Atty. Ofilada,]
noted the certificate of urgency of said repairs [and/or]
purchase[,] concurred with both the pre-repair and post
repair inspection reports thereon, participated in the
accomplishment of the supporting Requisition for Supplies and
Equipment (RSE) x x x[,] and participated in the approval of the
disbursement voucher authorizing payment of said repairs as
necessary and lawful [even if said vehicle was never referred to
the Motorpool Section, CESPD for repair].
The documents relating to [this vehicle] were filed within a
period of one month (between September to October 2001)
[and] were used to authorize the payment of said non existent
ghost repairs to the damage and prejudice of the [DPWH.] [17]
(emphases ours)
On the other hand, Atty. Ofilada charged the respondents with
the following:
With dishonesty and grave misconduct, [respondents] as
members of the [SIT] xxx accomplished and signed Pre-
Repair Inspection and Post Repair Inspection Reports in
support of the four job orders [and made] it appear that the
vehicle was inspected prior and after the alleged repair
[although they knew that the vehicle was never turned over
53 for inspection]. The accomplishment of the Pre-Repair and
Post-Repair Inspection Report[s] led to the preparation of the
Request for Supplies and Equipment which was the basis of the
preparation of the disbursement vouchers ultimately authorizing
the payment of the said repairs thru reimbursement scheme to
the damage and prejudice of the DPWH.
x x x the [P]re-[R]epair and [P]ost-[R]epair [I]nspection [R]eports
of the [SIT] xxx are fictitious and falsified as no actual inspection
could have transpired[.][18] (emphasis ours)
The petitioner denied the allegations against him, claiming that
he merely relied on his subordinates when he signed the job
orders and the inspection reports.[19] In contrast, the respondents
admitted the existence of irregularities in the repairs and/or
purchase of spare parts of DPWH service vehicles, and offered
to testify and to provide evidence against the DPWH officials
and employees involved in the anomaly in exchange for their
immunity from prosecution. The respondents submitted:
5.2 x x x since we assumed our duties as members of the SIT xxx,
we observed that [the] DPWH vehicles were being sent to the
repair shop in violation of the prescribed guidelines governing the
emergency repair of a service vehicle. In most instances,
service vehicles are immediately brought to a car repair shop
of the end-user's choice without bringing it first to the
[Motorpool Section, CESPD, BOE] for the preparation of
the required job order by [Gayya] of the Motorpool Section
and the pre-repair inspection to be conducted by the SIT.
After the purported repairs are done, SIT members are made
to sign a post-repair inspection report which already
53 | P a g e
includes a typed-in recommendation for the payment of
repairs, and the signature of the Head of the [SIT] indicating
his alleged concurrence with the findings of the SIT despite
the absence of an actual inspection. The post-repair inspection
report is accompanied by the following attachments, to wit: a) a
falsified job order signed by the head of the [SIT] and the Chief
of the Motorpool Section x x x [and] e) an empty or falsified [p]re-
repair inspection report[.]
5.3 Initially[,] we tried to curb the above anomalous practices
being perpetrated by suppliers and officials of the DPWH x x x
[by making] known [our] objections to the questionable job orders
for the proposed repairs of DPWH service vehicles[,] thus:
a. On July, 9, 1999, [Tablan] wrote the Head of the SIT a
memorandum x x x stating that the job orders for
[several identified vehicles] x x x violated the
prohibition against splitting of job orders x x x. [Tablan
recommended for public bidding the proposed repairs
for the said vehicles].
b. In connection with the job orders involving [several
identified vehicles] x x x Tablan and Borillo wrote the
Head of the SIT a Memorandum x x x recommending
that the whereabouts of the end-user be verified, and
the service vehicle be re-inspected and/or disposed of.
c. Since the July 9, 1999 Memorandum was returned to x
x x Tablan without any action being undertaken by the
SIT Chief, [Tablan and Borillo] reiterated the
recommendation for the public bidding of the
proposed repairs described therein[.]
6. In our attempts to perform our sworn duties, however, we
incurred the displeasure of the suppliers, the head of [SIT] and
other officials of the DPWH who threatened various
administrative sanctions against us if we should not accede to
their wishes. x x x
7. In addition to the foregoing, there are other factors which
conspired to prevent us from properly performing our duties.
For one, the DPWH processes an average of 3,000 repairs per
calendar year. Given the staggering number and extent of
repairs, including the volume of paperwork, it was practically
impossible for [us] to implement the rules which proved too
tedious under the circumstance. As such, a "short-cut" of the
rules was necessary to accommodate the demands of the end-
user, the suppliers, our superiors, and other executives of the
DPWH. x x x
8. The anomalous practices of the DPWH executives and
suppliers in the purported repair of DPWH service vehicles were
indeed more widespread and rampant in the year 2001. As a
precautionary measure, we took the initiative of photocopying
these sets of falsified documents as they were presented to us
before we affixed our respective signatures thereon. We grouped
these documents into Sets A and B[.]
xxxx
ADMINLAW CASES
 11. x x x That the service vehicle x x x has not been actually
inspected by [Tablan and Borillo] is attested to by the pre and post
repair inspection reports initially bearing the signature of the head
of the SIT as concurring official without the required signatures
of Borillo and Tablan. More importantly, these DPWH officials
did not bother, in a majority of cases, to "cover their tracks" when
they prepared and signed the pre and post repair inspection
reports on the same dates. Based on proper procedure, a post
repair inspection report is to be accomplished only after the
preparation and approval of the Job Order, pre-repair inspection
report, RSE, Cash Invoice and Acceptance by the end-user. In this
case, the RSE, Cash Invoice and Certificate of Acceptance are
dated much later than the post-repair inspection report. Since xxx
there was no actual pre-repair and post-repair inspection
conducted, the foregoing sample instances paved the way for the
"ghost repairs" of DPWH service vehicles, to the detriment and
prejudice of the government.
12. Because of the anomalous transactions, the joke circulating
around the DPWH is that we are actually the directors of the
DPWH since we are the "last to sign," so to speak. That the
signature[s] of the [respondent] SIT members are merely pro
forma is all the more pronounced in a sample set consisting of a
number of pre-repair inspection reports for a particular month in
2001. The pre-repair inspection reports of the service vehicles
indicated therein are empty of any findings and bear the signature
of the head of the SIT as concurring official. All the foregoing
documents above detailed negate the convenient excuse
proffered by DPWH executives that they sign the
documents only after the SIT had inspected the service
vehicle and prepared the pre and post repair inspection
54 reports.
xxxx
14.1 xxx the above examples are only a representative sampling
of the extent of the anomalous transactions involving DPWH
service vehicles which can be considered "ghost repairs." There
are more instances wherein [we] are willing to testify to in
exchange for immunity from prosecution.[20] (emphases ours)
After conducting preliminary investigation, the Ombudsman
filed with the Sandiganbayan[21] several informations charging a
number of DPWH officials and employees with plunder,[22]
estafa through falsification of official/commercial documents
and violation of Section 3(e), RA No. 3019. On the other hand,
the Ombudsman granted the respondents' request for immunity
in exchange for their testimonies and cooperation in the
prosecution of the cases filed.
The petitioner initially filed a certiorari petition with the
Sandiganbayan, questioning the Ombudsman's grant of
immunity in the respondents' favor. The Sandiganbayan,
however, dismissed the petition for lack of jurisdiction and
advised the petitioner to instead question the Ombudsman's
actions before this Court.[23] Hence, this present petition.
THE PETITION
The petitioner argues that the Ombudsman should have
included the respondents in the informations since it was their
inspection reports that actually paved the way for the
54 | P a g e
commission of the alleged irregularities.[24] The petitioner asserts
that the respondents' criminal complicity clearly appears since
"no repair could have started" and "no payment for repairs,
ghost or not," could have been made without the respondents'
pre-repair and post-repair inspection reports. By excluding the
respondents in the informations, the Ombudsman is engaged in
"selective prosecution" which is a clear case of grave abuse of
discretion.
The petitioner claims that before the Ombudsman may avail of
the respondents as state witnesses, they must be included first in
the informations filed with the court. Thereafter, the
Ombudsman can ask the court for their discharge so that they
can be utilized as state witnesses under the conditions laid down
in Section 17, Rule 119 of the Rules of Court since the court has
the "sole province" to determine whether these conditions exist.
These conditions require, inter alia, that there should be "absolute
necessity" for the testimony of the proposed witness and that
he/she should not appear to be the "most guilty." The petitioner
claims that the respondents failed to comply with these
conditions as the Ombudsman's "evidence," which became the
basis of the informations subsequently filed, shows that the
respondents' testimony is not absolutely necessary; in fact, the
manner of the respondents' participation proves that they are the
"most guilty" in the premises.
THE COMMENTS OF THE OMBUDSMAN AND THE
RESPONDENTS
The Ombudsman counters that RA No. 6770 (the Ombudsman
Act of 1989) expressly grants him the power to grant immunity
from prosecution to witnesses. Given this power, the
Ombudsman asserts that Section 17, Rule 119 of the Rules of
Court, which presupposes that the witness is originally included
in the information, is inapplicable to the present case since the
decision on whom to prosecute is an executive, not a judicial,
prerogative.[25]
The Ombudsman invokes this Court's policy of non-interference
in the Ombudsman's exercise of his discretion in matters
involving his investigatory and prosecutorial powers.[26] The
petitioner's claim that the respondents are the "most guilty" is a
matter of defense which the petitioner may raise not in this
proceeding, but in the trial proper.[27]
On the other hand, the respondents submit that the
Ombudsman has ample discretion in determining who should be
included in the information on the basis of his finding of
probable cause. The courts can only interfere in the
Ombudsman's exercise of his discretion in case of a clear
showing of grave abuse of discretion, which the petitioner failed
to establish.[28]
THE PETITIONER'S REPLY[29]
While conceding that the Ombudsman has the power and the
discretion to grant immunity to the respondents, the petitioner
asserts that this power must be exercised within the confines of
Section 17, Rule 119 of the Rules of Court which requires, inter
alia, that the proposed witness must not appear to be the "most
ADMINLAW CASES
 guilty." By ignoring this provision and extending immunity to
the respondents whose false reports ultimately led to the
payment for supposed repairs, and who are, thus, the "real
culprits,"[30] the Ombudsman gravely abused his discretion - a
fatal defect correctible by certiorari.
Amplifying on the respondents' "guilt," the petitioner cites the
DPWH's decision in an administrative case which the Civil
Service Commission affirmed, finding the respondents guilty of
dishonesty and grave misconduct involving the same set of
facts.[31]
OUR RULING
We dismiss the petition on two grounds: first, the petitioner did
not avail of the remedies available to him before filing this
present petition; and, second, within the context of the Court's
policy of non-interference with the Ombudsman's exercise of his
investigatory and prosecutory powers, the petitioner failed to
establish that the grant of immunity to the respondents was
attended by grave abuse of discretion.
I. The petitioner did not exhaust remedies available in the
ordinary course of law
As extraordinary writs, both Sections 1 (certiorari) and 3
(mandamus), Rule 65 of the Rules of Court require, as a pre-
condition for these remedies, that there be no other plain,
speedy and adequate remedy in the ordinary course of law. In
the present case, the petitioner has not shown that he moved for
a reconsideration of the assailed resolutions based substantially
55 on the same grounds stated in this present petition.[32] Neither
did the petitioner file a motion for the inclusion of the
respondents in the informations before filing the present
petition.[33] These are adequate remedies that the petitioner chose
to forego; he bypassed these remedies and proceeded to seek
recourse through the present petition.[34]
Similarly, the petitioner has not shown that he filed the present
petition with this Court within the sixty-day reglementary
period[35] from notice of the assailed Ombudsman's
resolutions. He did not do so, of course, since he initially and
erroneously filed a certiorari petition with the Sandiganbayan. We
remind the petitioner that the remedy from the Ombudsman's
orders or resolutions in criminal cases is to file a petition for
certiorari under Rule 65[36] with this Court.[37]
The petition likewise fails even on the merits.
II. The respondents' exclusion in the informations
is grounded on the Ombudsman's grant of immunity
Mandamus is the proper remedy to compel the performance of a
ministerial duty imposed by law upon the respondent.[38] In
matters involving the exercise of judgment and discretion,
mandamus may only be resorted to, to compel the respondent to
take action; it cannot be used to direct the manner or the
particular way discretion is to be exercised.[39]
In the exercise of his investigatory and prosecutorial powers, the
Ombudsman is generally no different from an ordinary
prosecutor in determining who must be charged.[40] He also
enjoys the same latitude of discretion in determining what
55 | P a g e
constitutes sufficient evidence to support a finding of probable
cause (that must be established for the filing of an information in
court)[41] and the degree of participation of those involved or the
lack thereof. His findings and conclusions on these matters are
not ordinarily subject to review by the courts except when he
gravely abuses his discretion,[42] i.e., when his action amounts to
an evasion of a positive duty or a virtual refusal to perform a
duty enjoined by law, or when he acts outside the contemplation
of law.[43]
If, on the basis of the same evidence, the Ombudsman
arbitrarily excludes from an indictment some individuals while
impleading all others, the remedy of mandamus lies[44] since he is
duty-bound, as a rule, to include in the information all persons
who appear responsible for the offense involved.[45]
Citing the cases of Guiao v. Figueroa[46] and Castro, Jr., et al. v.
Castañeda and Liceralde,[47] the petitioner argues for the inclusion
of the respondents in the criminal informations, pointing out
that the respondents accomplished the inspection reports that
allegedly set in motion the documentary process in the repair of
the DPWH vehicles; these reports led to the payment by the
government and the consequent losses.
In Guiao and Castro, we ruled that mandamus lies to compel a
prosecutor who refuses (i) to include in the information certain
persons, whose participation in the commission of a crime
clearly appears, and (ii) to follow the proper procedure for the
discharge of these persons in order that they may be utilized as
prosecution witnesses.
These cited cases, however, did not take place in the same
setting as the present case as they were actions by the public
prosecutor, not by the Ombudsman. In the present case, the
Ombudsman granted the respondents immunity from
prosecution pursuant to RA No. 6770 which specifically
empowers the Ombudsman to grant immunity "in any hearing,
inquiry or proceeding being conducted by the Ombudsman or under its
authority, in the performance or in the furtherance of its constitutional
functions and statutory objectives." The pertinent provision - Section
17 of this law - provides:
Sec. 17. Immunities. - x x x.
Under such terms and conditions as it may determine, taking
into account the pertinent provisions of the Rules of Court,
the Ombudsman may grant immunity from criminal prosecution
to any person whose testimony or whose possession and
production of documents or other evidence may be necessary to
determine the truth in any hearing, inquiry or proceeding being
conducted by the Ombudsman or under its authority, in the
performance or in the furtherance of its constitutional functions
and statutory objectives. The immunity granted under this and
the immediately preceding paragraph shall not exempt the
witness from criminal prosecution for perjury or false testimony
nor shall he be exempt from demotion or removal from office.
[emphasis ours]
To briefly outline the rationale for this provision, among the most
important powers of the State is the power to compel testimony
from its residents; this power enables the government to secure
vital information necessary to carry out its myriad functions.[48]
This power though is not absolute. The constitutionally-enshrined
ADMINLAW CASES
 right against compulsory self-incrimination is a leading exception.
The state's power to compel testimony and the production of a
person's private books and papers run against a solid
constitutional wall when the person under compulsion is himself
sought to be penalized. In balancing between state interests and
individual rights in this situation, the principles of free
government favor the individual to whom the state must yield.[49]
A state response to the constitutional exception to its vast powers,
especially in the field of ordinary criminal prosecution and in law
enforcement and administration, is the use of an immunity
statute.[50] Immunity statutes seek a rational accommodation
between the imperatives of an individual's constitutional right
against self-incrimination[51] (considered the fount from which all
statutes granting immunity emanate[52]) and the legitimate
governmental interest in securing testimony.[53] By voluntarily
offering to give information on the commission of a crime and to
testify against the culprits, a person opens himself to investigation
and prosecution if he himself had participated in the criminal act.
To secure his testimony without exposing him to the risk of
prosecution, the law recognizes that the witness can be given
immunity from prosecution.[54] In this manner, the state interest
is satisfied while respecting the individual's constitutional right
against self-incrimination.
III. Nature of the power to grant immunity
The power to grant immunity from prosecution is essentially a
legislative prerogative.[55] The exclusive power of Congress to
define crimes and their nature and to provide for their punishment
concomitantly carries the power to immunize certain persons
56 from prosecution to facilitate the attainment of state interests,
among them, the solution and prosecution of crimes with high
political, social and economic impact.[56] In the exercise of this
power, Congress possesses broad discretion and can lay down the
conditions and the extent of the immunity to be granted.[57]
Early on, legislations granting immunity from prosecution were
few.[58] However, their number escalated with the increase of the
need to secure vital information in the course and for purposes of
prosecution. These statutes[59] considered not only the importance
of the testimony sought, but also the unique character of some
offenses and of some situations where the criminal participants
themselves are in the best position to give useful testimony.[60] RA
No. 6770 or the Ombudsman Act of 1989 was formulated along
these lines and reasoning with the vision of making the
Ombudsman the protector of the people against inept, abusive
and corrupt government officers and employees.[61] Congress saw
it fit to grant the Ombudsman the power to directly confer
immunity to enable his office to effectively carry out its
constitutional and statutory mandate of ensuring effective
accountability in the public service.[62]
IV. Considerations in the grant of immunity
While the legislature is the source of the power to grant immunity,
the authority to implement is lodged elsewhere. The authority to
choose the individual to whom immunity would be granted is a
constituent part of the process and is essentially an executive
function. Mapa, Jr. v. Sandiganbayan[63] is instructive on this point:
The decision to grant immunity from prosecution forms a
constituent part of the prosecution process. It is essentially a
56 | P a g e
tactical decision to forego prosecution of a person for
government to achieve a higher objective. It is a deliberate
renunciation of the right of the State to prosecute all who appear
to be guilty of having committed a crime. Its justification lies in
the particular need of the State to obtain the conviction of the
more guilty criminals who, otherwise, will probably elude the
long arm of the law. Whether or not the delicate power
should be exercised, who should be extended the privilege,
the timing of its grant, are questions addressed solely to the
sound judgment of the prosecution. The power to
prosecute includes the right to determine who shall be
prosecuted and the corollary right to decide whom not to
prosecute. In reviewing the exercise of prosecutorial discretion
in these areas, the jurisdiction of the respondent court is limited.
For the business of a court of justice is to be an impartial
tribunal, and not to get involved with the success or failure of
the prosecution to prosecute. Every now and then, the
prosecution may err in the selection of its strategies, but such
errors are not for neutral courts to rectify, any more than courts
should correct the blunders of the defense. [emphasis ours]
RA No. 6770 fully recognizes this prosecutory prerogative by
empowering the Ombudsman to grant immunity, subject to
"such terms and conditions" as he may determine. The only
textual limitation imposed by law on this authority is the need to
take "into account the pertinent provisions of the Rules of
Court," - i.e., Section 17, Rule 119 of the Rules of Court.[64] This
provision requires that:
(a) There is absolute necessity for the testimony of the accused
whose discharge is requested;
(b) There is no other direct evidence available for the proper
prosecution of the offense committed, except the testimony of
said accused;
(c) The testimony of said accused can be substantially
corroborated in its material points;
(d) Said accused does not appear to be the most guilty; and
(e) Said accused has not at any time been convicted of any
offense involving moral turpitude.
This Rule is itself unique as, without detracting from the
executive nature of the power to prosecute and the power to
grant immunity, it clarifies that in cases already filed with the
courts,[65] the prosecution merely makes a proposal and initiates
the process of granting immunity to an accused-witness in order
to utilize him as a witness against his co-accused.[66] As we
explained in Webb v. De Leon[67] in the context of the Witness
Protection, Security and Benefit Act:
The right to prosecute vests the prosecutor with a wide range of
discretion -- the discretion of whether, what and whom to charge,
the exercise of which depends on a smorgasbord of factors which
are best appreciated by prosecutors. We thus hold that it is not
constitutionally impermissible for Congress to enact R.A. No.
6981 vesting in the Department of Justice the power to determine
who can qualify as a witness in the program and who shall be
granted immunity from prosecution. Section 9 of Rule 119 does
not support the proposition that the power to choose who shall
be a state witness is an inherent judicial prerogative. Under this
provision, the court is given the power to discharge a state
witness only because it has already acquired jurisdiction
ADMINLAW CASES
 over the crime and the accused. The discharge of an accused
is part of the exercise of jurisdiction but is not a recognition
of an inherent judicial function. [emphasis ours]
Thus, it is the trial court that determines whether the
prosecution's preliminary assessment of the accused-witness'
qualifications to be a state witness satisfies the procedural
norms.[68] This relationship is in reality a symbiotic one as the
trial court, by the very nature of its role in the administration of
justice,[69] largely exercises its prerogative based on the
prosecutor's findings and evaluation. On this point, the Court's
pronouncement in the 1918 case of United States v. Abanzado[70] is
still very much relevant:
A trial judge cannot be expected or required to inform himself
with absolute certainty at the very outset of the trial as to
everything which may be developed in the course of the trial in
regard to the guilty participation of the accused in the
commission of the crime charged in the complaint. If that were
practicable or possible there would be little need for the
formality of a trial. He must rely in large part upon the
suggestions and the information furnished by the prosecuting
officer in coming to his conclusions as to the "necessity for the
testimony of the accused whose discharge is requested"; as to the
availability or nonavailability of other direct or corroborative
evidence; as to which of the accused is "most guilty," and the
like.
Notably, this cited case also observes that the Rules-provided
guidelines are mere express declarations of the conditions which
57 the courts ought to have in mind in exercising their sound
discretion in granting the prosecution's motion for the discharge
of an accused.[71] In other words, these guidelines are necessarily
implied in the discretion granted to the courts.
RA No. 6770 recognizes that these same principles should apply
when the Ombudsman directly grants immunity to a witness. The
same consideration - to achieve the greater and higher purpose of
securing the conviction of the most guilty and the greatest number
among the accused[72] - is involved whether the grant is secured
by the public prosecutor with active court intervention, or by the
Ombudsman. If there is any distinction at all between the public
prosecutor and the Ombudsman in this endeavor, it is in the
specificity of and the higher priority given by law to the
Ombudsman's purpose and objective - to focus on offenses
committed by public officers and employees to ensure
accountability in the public service. This accounts for the
Ombudsman's unique power to grant immunity by itself and even
prior to the filing of information in court, a power that the public
prosecutor himself generally does not enjoy.[73]
V. Extent of judicial review of a bestowed immunity
An immunity statute does not, and cannot, rule out a review by
this Court of the Ombudsman's exercise of discretion. Like all
other officials under our constitutional scheme of government, all
their acts must adhere to the Constitution.[74] The parameters of
our review, however, are narrow. In the first place, what we review
are executive acts of a constitutionally independent
Ombudsman.[75] Also, we undertake the review given the
underlying reality that this Court is not a trier of facts. Since the
determination of the requirements under Section 17, Rule 119 of
57 | P a g e
the Rules of Court is highly factual in nature, the Court must, thus,
generally defer to the judgment of the Ombudsman who is in a
better position (than the Sandiganbayan or the defense) to know
the relative strength and/or weakness of the evidence presently in
his possession and the kind, tenor and source of testimony he
needs to enable him to prove his case.[76] It should not be
forgotten, too, that the grant of immunity effectively but
conditionally results in the extinction of the criminal liability the
accused-witnesses might have incurred, as defined in the terms of
the grant.[77] This point is no less important as the grant directly
affects the individual and enforces his right against self-
incrimination. These dynamics should constantly remind us that
we must tread softly, but not any less critically, in our review of
the Ombudsman's grant of immunity.
From the point of view of the Court's own operations, we are
circumscribed by the nature of the review powers granted to us
under the Constitution and the Rules of Court. We rule on the
basis of a petition for certiorari under Rule 65 and address mainly
the Ombudsman's exercise of discretion. Our room for
intervention only occurs when a clear and grave abuse of the
exercise of discretion is shown. Necessarily, this limitation
similarly reflects on the petitioner who comes to us on the
allegation of grave abuse of discretion; the petitioner himself is
bound to clearly and convincingly establish that the
Ombudsman gravely abused his discretion in granting
immunity in order to fully establish his case.[78]
As a last observation, we note the unique wording of the grant of
the power of immunity to the Ombudsman. It is not without
significance that the law encompassed (and appears to have
pointedly not separated) the consideration of Section 17, Rule 119
of the Rules of Court within the broader context of "such terms
and conditions as the Ombudsman may determine." This
deliberate statutory wording, to our mind, indicates the intent to
define the role of Section 17, Rule 119 in the Ombudsman's
exercise of discretion. It suggests a broad grant of discretion that
allows the Ombudsman's consideration of factors other than
those outlined under Section 17, Rule 119; the wording creates the
opening for the invocation, when proper, of the constitutional and
statutory intents behind the establishment of the Ombudsman.
Based on these considerations, we shall now proceed to determine
whether the petitioner has clearly and convincingly shown that the
Ombudsman gravely abused his discretion in granting immunity
to the respondents.
Va. Absolute necessity for testimony of the respondents
Under the factual and legal situation before us, we find that the
petitioner miserably failed to clearly and convincingly establish
that the Ombudsman gravely abused his discretion in granting
immunity to the respondents. While he claims that both
conditions (a) and (d) of Section 17, Rule 119 of the Rules of
Court are absent, we observe his utter lack of argument addressing
the "absolute necessity" of the respondents' testimony. In fact, the
petitioner simply concluded that the requirement of "absolute
necessity" does not exist based on the Ombudsman's "evidence,"
without even attempting to explain how he arrived at this
conclusion.
We note in this regard that the respondents' proposed testimony
tends to counteract the petitioner's personal defense of good faith
ADMINLAW CASES
 (i.e., that he had no actual participation and merely relied on his
subordinates) in approving the job orders and in his concurrence
with the inspection reports. In their Joint Counter-Affidavit, the
respondents narrated the accused DPWH officials/employees'
flagrant disregard of the proper procedure and the guidelines in
the repair of DPWH service vehicles which culminated in losses
to the government. Particularly telling is the respondents'
statement that a number of pre-repair inspection reports for a
particular month in 2001 bear the petitioner's signature despite the
fact that these reports are not supported by findings from the
respondents as SIT members.[79] This kind of statement cannot
but impact on how the Ombudsman viewed the question of
"absolute necessity" of the respondents' testimony since this
testimony meets the defense of good faith head-on to prove the
prosecution's allegations. Under these circumstances, we cannot
preempt, foreclose, nor replace with our own the Ombudsman's
position on this point as it is clearly not without basis.
Vb. The respondents do not appear to be the "most guilty"
Similarly, far from concluding that the respondents are the "most
guilty," we find that the circumstances surrounding the
preparation of the inspection reports can significantly lessen the
degree of the respondents' criminal complicity in defrauding the
government. Again, this is a matter that the Ombudsman, in the
exercise of his discretion, could not have avoided when he
considered the grant of immunity to the respondents.
We note, too, that while the petitioner incessantly harped on the
respondents' role in the preparation of the inspection reports, yet,
as head of the SIT, he was eerily silent on the circumstances
58 surrounding this preparation, particularly on the respondents'
explanation that they tried "to curb the anomalous practices"[80] in
the DPWH. We are aware, of course, that the present petition
merely questions the immunity granted to the respondents and
their consequent exclusion from the informations; it does not
assail the finding of probable cause against the petitioner himself.
This current reality may explain the petitioner's silence on the
respondents' assertions; the respondents' allegations, too, still
have to be proven during the trial. However, these considerations
are not sufficient to save the petitioner from the necessity of
controverting the respondents' allegations, even for the limited
purpose of the present petition, since his counter-assertion on this
basic ground (that the respondents bear the most guilt) is essential
and critical to the viability of his petition.
In considering the respondents' possible degree of guilt, we are
keenly aware of their admission that they resorted to a "short-
cut"[81] in the procedure to be observed in the repairs and/or
purchase of emergency parts of DPWH service vehicles. To our
mind, however, this admission does not necessarily result in
making the respondents the "most guilty" in the premises; not
even a semblance of being the "most guilty" can be deduced
therefrom.
In sum, the character of the respondents' involvement vis-à-vis the
crimes filed against the DPWH officials/employees, coupled with
the substance of the respondents' disclosures, compels this Court
to take a dim view of the position that the Ombudsman gravely
abused his discretion in granting immunity to the respondents.
The better view is that the Ombudsman simply saw the higher
value of utilizing the respondents themselves as witnesses instead
of prosecuting them in order to fully establish and strengthen its
58 | P a g e
case against those mainly responsible for the criminal act, as
indicated by the available evidence.
VI. The respondents' administrative liability has no bearing
at all on the immunity granted to the respondents
The fact that the respondents had previously been found
administratively liable, based on the same set of facts, does not
necessarily make them the "most guilty." An administrative case
is altogether different from a criminal case, such that the
disposition in the former does not necessarily result in the same
disposition for the latter, although both may arise from the same
set of facts.[82] The most that we can read from the finding of
liability is that the respondents have been found to be
administratively guilty by substantial evidence - the quantum of proof
required in an administrative proceeding. The requirement of the
Revised Rules of Criminal Procedure (which RA No. 6770
adopted by reference) that the proposed witness should not
appear to be the "most guilty" is obviously in line with the
character[83] and purpose[84] of a criminal proceeding, and the much
stricter standards[85] observed in these cases. They are standards
entirely different from those applicable in administrative
proceedings.
VII. The policy of non-interference with the
Ombudsman's investigatory and prosecutory
powers cautions a stay of judicial hand
The Constitution and RA No. 6770 have endowed the Office of
the Ombudsman with a wide latitude of investigatory and
prosecutory powers, freed, to the extent possible within our
governmental system and structure, from legislative, executive, or
judicial intervention, and insulated from outside pressure and
improper influence.[86] Consistent with this purpose and subject
to the command of paragraph 2, Section 1, Article VIII of the
1987 Constitution,[87] the Court reiterates its policy of non-
interference with the Ombudsman's exercise of his investigatory
and prosecutory powers (among them, the power to grant
immunity to witnesses[88]), and respects the initiative and
independence inherent in the Ombudsman who, "beholden to no
one, acts as the champion of the people and the preserver of the
integrity of the public service."[89] Ocampo IV v. Ombudsman[90] best
explains the reason behind this policy:
The rule is based not only upon respect for the investigatory and
prosecutory powers granted by the Constitution to the Office of
the Ombudsman but upon practicality as well. Otherwise, the
functions of the courts will be grievously hampered by
innumerable petitions assailing the dismissal of investigatory
proceedings conducted by the Office of the Ombudsman with
regard to complaints filed before it, in much the same way that
the courts would be extremely swamped if they could be
compelled to review the exercise of discretion on the part of the
fiscals or prosecuting attorneys each time they decide to file an
information in court or dismiss a complaint by a private
complainant.
Following this policy, we deem it neither appropriate nor
advisable to interfere with the Ombudsman's grant of immunity
to the respondents, particularly in this case, where the petitioner
has not clearly and convincingly shown the grave abuse of
discretion that would call for our intervention.
WHEREFORE, the petition is hereby DISMISSED. Costs against the
petitioner. SO ORDERED.
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