BPI LEASING CORPORATION, petitioner, vs.

THE HONORABLE
COURT OF APPEALS, COURT OF TAX APPEAL AND
COMMISSIONER OF INTERNAL REVENUE, respondents.

DECISION
AZCUNA, J.:

The present petition for review on certiorari assails the decision of the
[1]

Court of Appeals in CA-G.R. SP No. 38223 and its subsequent

resolution denying the motion for reconsideration. The assailed decision and
[2]

resolution affirmed the decision of the Court of Tax Appeals (CTA) which
denied petitioner BPI Leasing Corporations (BLC) claim for tax refund in CTA
Case No. 4252.
The facts are not disputed.
BLC is a corporation engaged in the business of leasing properties. For [3]

the calendar year 1986, BLC paid the Commissioner of Internal Revenue
(CIR) a total of P1,139,041.49 representing 4% contractors percentage tax
then imposed by Section 205 of the National Internal Revenue Code (NIRC),
based on its gross rentals from equipment leasing for the said year amounting
to P27,783,725.42. [4]

On November 10, 1986, the CIR issued Revenue Regulation 19-86.

Section 6.2 thereof provided that finance and leasing companies registered
under Republic Act 5980 shall be subject to gross receipt tax of 5%-3%-1% on
actual income earned. This means that companies registered under Republic
Act 5980, such as BLC, are not liable for contractors percentage tax under
Section 205 but are, instead, subject to gross receipts tax under Section 260
(now Section 122) of the NIRC. Since BLC had earlier paid the
aforementioned contractors percentage tax, it re-computed its tax liabilities
under the gross receipts tax and arrived at the amount of P361,924.44.
On April 11, 1988, BLC filed a claim for a refund with the CIR for the
amount of P777,117.05, representing the difference between
the P1,139,041.49 it had paid as contractors percentage tax and P361,924.44
it should have paid for gross receipts tax. Four days later, to stop the running
[5]

of the prescriptive period for refunds, petitioner filed a petition for review with
the CTA. [6]

In a decision dated May 13, 1994, the CTA dismissed the petition and
[7]

denied BLCs claim of refund. The CTA held that Revenue Regulation 19-86,
as amended, may only be applied prospectively such that it only covers all
leases written on or after January 1, 1987, as stated under Section 7 of said
revenue regulation:

Section 7. Effectivity These regulations shall take effect on January 1, 1987 and shall
be applicable to all leases written on or after the said date.

The CTA ruled that, since BLCs rental income was all received prior to
1986, it follows that this was derived from lease transactions prior to January
1, 1987, and hence, not covered by the revenue regulation.
A motion for reconsideration of the CTAs decision was filed, but was
denied in a resolution dated July 26, 1995. BLC then appealed the case to
[8]

the Court of Appeals, which issued the aforementioned assailed decision and
resolution. Hence, the present petition.
[9]

In seeking to reverse the denial of its claim for tax refund, BLC submits
that the Court of Appeals and the CTA erred in not ruling that Revenue
Regulation 19-86 may be applied retroactively so as to allow BLCs claim for a
refund of P777,117.05.
Respondents, on the other hand, maintain that the provision on the date of
effectivity of Revenue Regulation 19-86 is clear and unequivocal, leaving no
room for interpretation on its prospective application. In addition, respondents
argue that the petition should be dismissed on the ground that the
Verification/Certification of Non-Forum Shopping was signed by the counsel of
record and not by BLC, through a duly authorized representative, in violation
of Supreme Court Circular 28-91.
In a resolution dated March 29, 2000, the petition was given due course
[10]

and the Court required the parties to file their respective Memoranda. Upon
submission of the Memoranda, the issues in this case were delineated, as
follows:[11]

WHETHER THE INSTANT PETITION FOR REVIEW ON CERTIORARI

SUBSTANTIALLY COMPLIES WITH SUPREME COURT CIRCULAR 28-91.

WHETHER REVENUE REGULATION 19-86, AS AMENDED, IS LEGISLATIVE

OR INTERPRETATIVE IN NATURE.

WHETHER REVENUE REGULATION 19-86, AS AMENDED, IS PROSPECTIVE

OR RETROACTIVE IN ITS APPLICATION.

WHETHER PETITIONER, AS FOUND BY THE COURT OF APPEALS, FAILED

TO MEET THE QUANTUM OF EVIDENCE REQUIRED IN REFUND CASES.
WHETHER PETITIONER, AS FOUND BY THE COURT OF APPEALS, IS
ESTOPPED FROM CLAIMING ITS PRESENT REFUND.

As to the first issue, the Court agrees with respondents contention that the
petition should be dismissed outright for failure to comply with Supreme Court
Circular 28-91, now incorporated as Section 2 of Rule 42 of the Rules of
Court. The records plainly show, and this has not been denied by BLC, that
the certification was executed by counsel who has not been shown to have
specific authority to sign the same for BLC.
In BA Savings Bank v. Sia, it was held that the certificate of non-forum
[12]

shopping may be signed, for and on behalf of a corporation, by a specifically

authorized lawyer who has personal knowledge of the facts required to be
disclosed in such document. This ruling, however, does not mean that any
lawyer, acting on behalf of the corporation he is representing, may routinely
sign a certification of non-forum shopping. The Court emphasizes that the
lawyer must be specifically authorized in order validly to sign the certification.
Corporations have no powers except those expressly conferred upon them
by the Corporation Code and those that are implied by or are incidental to its
existence. These powers are exercised through their board of directors and/or
duly authorized officers and agents. Hence, physical acts, like the signing of
documents, can be performed only by natural persons duly authorized for the
purpose by corporate bylaws or by specific act of the board of directors. [13]

The records are bereft of the authority of BLCs counsel to institute the
present petition and to sign the certification of non-forum shopping. While said
counsel may be the counsel of record for BLC, the representation does not
vest upon him the authority to execute the certification on behalf of his
client. There must be a resolution issued by the board of directors that
specifically authorizes him to institute the petition and execute the certification,
for it is only then that his actions can be legally binding upon BLC.
BLC however insists that there was substantial compliance with SC
Circular No. 28-91 because the verification/certification was issued by a
counsel who had full personal knowledge that no other petition or action has
been filed or is pending before any other tribunal. According to BLC, said
counsels law firm has handled this case from the very beginning and could
very well attest and/or certify to the absence of an instituted or pending case
involving the same or similar issues.
The argument of substantial compliance deserves no merit, given the
Courts ruling in Mendigorin v. Cabantog: [14]
The CA held that there was substantial compliance with the Rules of Court, citing
Dimagiba vs. Montalvo, Jr. [202 SCRA 641] to the effect that a lawyer who assumes
responsibility for a client's cause has the duty to know the entire history of the case,
especially if any litigation is commenced. This view, however, no longer holds
authoritative value in the light of Digital Microwave Corporation vs. CA [328 SCRA
286], where it was held that the reason the certification against forum shopping is
required to be accomplished by petitioner himself is that only the petitioner himself
has actual knowledge of whether or not he has initiated similar actions or proceedings
in other courts or tribunals. Even counsel of record may be unaware of such fact. To
our mind, this view is more in accord with the intent and purpose of Revised Circular
No. 28-91.

Clearly, therefore, the present petition lacks the proper certification as

strictly required by jurisprudence and the Rules of Court.
Even if the Court were to ignore the aforesaid procedural infirmity, a
perusal of the arguments raised in the petition indicates that a resolution on
the merits would nevertheless yield the same outcome.
BLC attempts to convince the Court that Revenue Regulation 19-86 is
legislative rather than interpretative in character and hence, should retroact to
the date of effectivity of the law it seeks to interpret.
Administrative issuances may be distinguished according to their nature
and substance: legislative and interpretative. A legislative rule is in the matter
of subordinate legislation, designed to implement a primary legislation by
providing the details thereof. An interpretative rule, on the other hand, is
designed to provide guidelines to the law which the administrative agency is in
charge of enforcing. [15]

The Court finds the questioned revenue regulation to be legislative in

nature. Section 1 of Revenue Regulation 19-86 plainly states that it was
promulgated pursuant to Section 277 of the NIRC. Section 277 (now Section
244) is an express grant of authority to the Secretary of Finance to promulgate
all needful rules and regulations for the effective enforcement of the provisions
of the NIRC. In Paper Industries Corporation of the Philippines v. Court of
Appeals, the Court recognized that the application of Section 277 calls for
[16]

none other than the exercise of quasi-legislative or rule-making

authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was
issued pursuant to the rule-making power of the Secretary of Finance, thus
making it legislative, and not interpretative as alleged by BLC.
BLC further posits that, assuming the revenue regulation is legislative in
nature, it is invalid for want of due process as no prior notice, publication and
public hearing attended the issuance thereof. To support its view, BLC
cited CIR v. Fortune Tobacco, et al., wherein the Court nullified a revenue
[17]

memorandum circular which reclassified certain cigarettes and subjected

them to a higher tax rate, holding it invalid for lack of notice, publication and
public hearing.
The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v.
Michel J. Lhuillier Pawnshop, Inc., is that when an administrative rule goes
[18]

beyond merely providing for the means that can facilitate or render less
cumbersome the implementation of the law and substantially increases the
burden of those governed, it behooves the agency to accord at least to
those directly affected a chance to be heard and, thereafter, to be duly
informed, before the issuance is given the force and effect of
law. In Lhuillier and Fortune Tobacco, the Court invalidated the revenue
memoranda concerned because the same increased the tax liabilities of the
affected taxpayers without affording them due process. In this case, Revenue
Regulation 19-86 would be beneficial to the taxpayers as they are subjected
to lesser taxes. Petitioner, in fact, is invoking Revenue Regulation 19-86 as
the very basis of its claim for refund. If it were invalid, then petitioner all the
more has no right to a refund.
After upholding the validity of Revenue Regulation 19-86, the Court now
resolves whether its application should be prospective or retroactive.
The principle is well entrenched that statutes, including administrative
rules and regulations, operate prospectively only, unless the legislative intent
to the contrary is manifest by express terms or by necessary implication. In [19]

the present case, there is no indication that the revenue regulation may
operate retroactively. Furthermore, there is an express provision stating that it
shall take effect on January 1, 1987, and that it shall be applicable to all
leases written on or after the said date. Being clear on its prospective
application, it must be given its literal meaning and applied without further
interpretation. Thus, BLC is not in a position to invoke the provisions of
[20]

Revenue Regulation 19-86 for lease rentals it received prior to January 1,

1987.
It is also apt to add that tax refunds are in the nature of tax exemptions. As
such, these are regarded as in derogation of sovereign authority and are to be
strictly construed against the person or entity claiming the exemption. The
burden of proof is upon him who claims the exemption and he must be able to
justify his claim by the clearest grant under Constitutional or statutory law, and
he cannot be permitted to rely upon vague implications. Nothing that BLC
[21]

has raised justifies a tax refund.

 It is not necessary to rule on the remaining issues.
WHEREFORE, the petition for review is hereby DENIED, and the assailed
decision and resolution of the Court of Appeals are AFFIRMED. No
pronouncement as to costs.
SO ORDERED.

BPI V. CA; G.R. No. 127624 November 18, 2003

PARTIES:
BPI LEASING CORPORATION – petitioner,
THE HONORABLE COURT OF APPEALS, COURT OF TAX APPEAL AND
COMMISSIONER OF
INTERNAL REVENUE – respondents.

PONENTE: AZCUNA, J.:

FACTS:
For the calendar year 1986, BPI Leasing Corporation, Inc. (BLC) paid the Commissioner of
Internal Revenue (CIR) a total of P1,139,041.49 representing 4% "contractor’s percentage tax"
then imposed by Section 205 of the National Internal Revenue Code (NIRC), based on its gross
rentals from equipment leasing for the said year amounting to P27,783,725.42.

On November 10, 1986, the CIR issued RR 19-86. Section 6.2 thereof provided that finance and
leasing companies registered under Republic Act 5980 shall be subject to gross receipt tax of
5%-3%-1% on actual income earned. This means that companies registered under Republic Act
5980, such as BLC, are not liable for "contractor’s percentage tax" under Section 205 but are,
instead, subject to "gross receipts tax" under Section 260 (now Section 122) of the NIRC. Since
BLC had earlier paid the aforementioned "contractor’s percentage tax," it re-computed its tax
liabilities under the "gross receipts tax" and arrived at the amount of P361,924.44. BLC filed a
claim for a refund with the CIR for the amount of P777,117.05, representing the difference
between the P1,139,041.49 it had paid as "contractor’s percentage tax" and P361,924.44 it
should have paid for "gross receipts tax."

The CTA dismissed the petition and denied BLC’s claim of refund and held that RR 19-86, may
only be applied prospectively such that it only covers all leases written on or after January 1,
1987. The CTA ruled that, since BLC’s rental income was all received prior to 1986, it follows
that this was derived from lease transactions prior to January 1, 1987, and hence, not covered
by the RR.

A motion for reconsideration of the CTA’s decision was filed, but was denied. BLC then
appealed the case to the Court of Appeals. BLC submits that the Court of Appeals and the CTA
erred in not ruling that RR 19-86 may be applied retroactively so as to allow BLC’s claim for a
refund of P777,117.05.
Respondents, on the other hand, maintain that the provision on the date of effectivity of RR 19-
86 is clear and unequivocal, leaving no room for interpretation on its prospective application.

ISSUES:
WON RR 19-86 is legislative or interpretative in nature.
WON RR 19-86 is prospective or retroactive in nature.
WON BPI failed to meet the quantum of evidence required in refund cases.

RULE:
1ST ISSUE – BLC attempts to convince the Court that RR 19-86 is legislative rather than
interpretative in character and hence, should retroact to the date of effectivity of the law
it seeks to interpret. A legislative rule is in the matter of subordinate legislation, designed
to implement a primary legislation by providing the details thereof. An interpretative rule,
on the other hand, is designed to provide guidelines to the law which the administrative
agency is in charge of enforcing. The Court finds the questioned RR to be legislative in
nature. Section 1 of RR 19-86 plainly states that it was promulgated pursuant to Section
277 of the NIRC (now Section 244), an express grant of authority to the Secretary of
Finance to promulgate all needful rules and regulations for the effective enforcement of
the provisions of the NIRC. Verily, it cannot be disputed that RR 19-86 was issued
pursuant to the rule-making power of the Secretary of Finance, thus making it legislative,
and not interpretative as alleged by BLC.

BLC further posits that, it is invalid for want of due process as no prior notice, publication
and public hearing attended the issuance thereof. To support its view, BLC cited CIR v.
Fortune Tobacco, et al., wherein the Court nullified a revenue memorandum circular
which reclassified certain cigarettes and subjected them to a higher tax rate, holding it
invalid for lack of notice, publication and public hearing. In this case, RR 19-86 would be
beneficial to the taxpayers as they are subjected to lesser taxes. Petitioner, in fact, is
invoking RR 19-86 as the very basis of its claim for refund. If it were invalid, then
petitioner all the more has no right to a refund.

2ND ISSUE – The Court now resolves whether its application should be prospective or
retroactive. Statutes, including administrative rules and regulations, operate
prospectively only, unless the legislative intent to the contrary is manifest by express
terms or by necessary implication. In the present case, there is no indication that the RR
may operate retroactively. Furthermore, there is an express provision stating that it "shall
take effect on January 1, 1987," and that it "shall be applicable to all leases written on or
after the said date." Thus, BLC is not in a position to invoke the provisions of RR 19-86
for lease rentals it received prior to January 1, 1987.

3RD ISSUE – Tax refunds are in the nature of tax exemptions. As such, these are to be
strictly construed against the person or entity claiming the exemption. The burden of
proof is upon him who claims the exemption and he must be able to justify his claim by
the clearest grant under Constitutional or statutory law, and he cannot be permitted to
rely upon vague implications. Nothing that BLC has raised justifies a tax refund.

WHEREFORE, the petition for review is hereby DENIED, and the assailed decision and
resolution of the Court of Appeals are AFFIRMED. No pronouncement as to costs.

SO ORDERED.
PRINCIPLES INVOLVED: Legislative or Interpretive nature of Statute
Prospective or Retroactive effect of Ordinances

SECOND DIVISION

THE BOARD OF G.R. No. 170463

TRUSTEES

OF THE GOVERNMENT
SERVICE INSURANCE Present:
SYSTEM and

WINSTON F. GARCIA, in
CARPIO, J., Chairperson,
his capacity
NACHURA,
as GSIS President and
General Manager,
PERALTA,
Petitioners,
ABAD, and

MENDOZA, JJ.
- versus -

Promulgated:
ALBERT M. VELASCO and
MARIO I. MOLINA,
February 2, 2011
Respondents.

x--------------------------------------------------x

DECISION
CARPIO, J.:

The Case

This is a petition for review1 of the 24 September 2004 Decision2 and the 7 October
2005 Order3 of the Regional Trial Court of Manila, Branch 19 (trial court), in Civil
Case No. 03-108389. In its 24 September 2004 Decision, the trial court granted
respondents Albert M. Velasco4 and Mario I. Molinas5 (respondents) petition for
prohibition. In its 7 October 2005 Order, the trial court denied petitioners Board of
Trustees of the Government Service Insurance System (GSIS) and Winston F. Garcias
(petitioners) motion for reconsideration.

The Facts

On 23 May 2002, petitioners charged respondents administratively with grave

misconduct and placed them under preventive suspension for 90 days.6 Respondents
were charged for their alleged participation in the demonstration held by some GSIS
employees denouncing the alleged corruption in the GSIS and calling for the ouster of
its president and general manager, petitioner Winston F. Garcia.7

In a letter dated 4 April 2003, respondent Mario I. Molina (respondent Molina)

requested GSIS Senior Vice President Concepcion L. Madarang (SVP Madarang) for
the implementation of his step increment.8 On 22 April 2003, SVP Madarangdenied
the request citing GSIS Board Resolution No. 372 (Resolution No. 372) 9 issued by
petitioner Board of Trustees of the GSIS (petitioner GSIS Board) which approved the
new GSIS salary structure, its implementing rules and regulations, and the adoption of
the supplemental guidelines on step increment and promotion.10 The pertinent
provision of Resolution No. 372 provides:
 A. Step Increment

xxxx

III. Specific Rules:

x x xx

3. The step increment adjustment of an employee who is on preventive

suspension shall be withheld until such time that a decision on the case has
been rendered. x x x x

Respondents also asked that they be allowed to avail of the employee privileges under
GSIS Board Resolution No. 306 (Resolution No. 306) approving Christmas raffle
benefits for all GSIS officials and employees effective year 2002.11Respondents
request was again denied because of their pending administrative case.

On 27 August 2003, petitioner GSIS Board issued Board Resolution No. 197
(Resolution No. 197) approving the following policy recommendations:

B. On the disqualification from promotion of an employee with a pending

administrative case

To adopt the policy that an employee with pending administrative case shall be
disqualified from the following during the pendency of the case:

a) Promotion;

b) Step Increment;

c) Performance-Based Bonus; and

d) Other benefits and privileges.

On 14 November 2003, respondents filed before the trial court a petition for
prohibition with prayer for a writ of preliminary injunction.12 Respondents claimed
that they were denied the benefits which GSIS employees were entitled under
Resolution No. 306. Respondents also sought to restrain and prohibit petitioners from
implementing Resolution Nos. 197 and 372. Respondents claimed that the denial of
the employee benefits due them on the ground of their pending administrative cases
violates their right to be presumed innocent and that they are being punished without
hearing. Respondent Molina also added that he had already earned his right to the step
increment before Resolution No. 372 was enacted. Respondents also argued that the
three resolutions were ineffective because they were not registered with the University
of the Philippines (UP) Law Center pursuant to the Revised Administrative Code of
1987.13

On 24 November 2003, petitioners filed their comment with motion to dismiss and
opposition.14 On 2 December 2003, respondents filed their opposition to the motion to
dismiss.15 On 5 December 2003, petitioners filed their reply.16

On 16 January 2004, the trial court denied petitioners motion to dismiss and granted
respondents prayer for a writ of preliminary injunction.17

Petitioners filed a motion for reconsideration.18 In its 26 February 2004 Order, the
trial court denied petitioners motion.19

In its 24 September 2004 Decision, the trial court granted respondents petition for
prohibition. The dispositive portion of the 24 September 2004 Decision provides:

WHEREFORE, the petition is GRANTED and respondents Board Resolution

No. 197 of August 27, 2003 and No. 372 of November 21, 2000 are hereby
declared null and void. The writ of preliminary injunction issued by this Court
is hereby made permanent.

SO ORDERED.20
Petitioners filed a motion for reconsideration. In its 7 October 2005 Order, the trial
court denied petitioners motion.

Hence, this petition.

The Ruling of the Trial Court

On the issue of jurisdiction, the trial court said it can take cognizance of the petition
because the territorial area referred to in Section 4, Rule 65 of the Rules of Court does
not necessarily delimit to a particular locality but rather to the judicial region where
the office or agency is situated so that the prohibitive writ can be enforced.

On the merits of the case, the trial court ruled that respondents were entitled to all
employee benefits as provided under the law by reason of their employment.
According to the trial court, to deny respondents these employee benefits for the
reason alone that they have pending administrative cases is unjustified since it would
deprive them of what is legally due them without due process of law, inflict
punishment on them without hearing, and violate their right to be presumed innocent.

The trial court also found that the assailed resolutions were not registered with the UP
Law Center, per certification of the Office of the National Administrative Register
(ONAR).21 Since they were not registered, the trial court declared that the assailed
resolutions have not become effective citing Sections 3 and 4, Chapter 2, Book 7 of
the Revised Administrative Code of 1987.22
 The Issues

Petitioners raise the following issues:

Whether the jurisdiction over the subject matter of Civil Case No. 03-108389
(Velasco, et al. vs. The Board of Trustees of GSIS, et al., RTC-Manila, Branch
19) lies with the Civil Service Commission (CSC) and not with the Regional
Trial Court of Manila, Branch 19.

II

Whether a Special Civil Action for Prohibition against the GSIS Board or its
President and General Manager exercising quasi-legislative and administrative
functions in Pasay City is outside the territorial jurisdiction of RTC-Manila,
Branch 19.

III

Whether internal rules and regulations need not require publication with the
Office of the National [Administrative] Register for their effectivity, contrary
to the conclusion of the RTC-Manila, Branch 19.

IV

Whether a regulation, which disqualifies government employees who have

pending administrative cases from the grant of step increment and Christmas
raffle benefits is unconstitutional.

V
 Whether the nullification of GSIS Board Resolutions is beyond an action for
prohibition, and a writ of preliminary injunction cannot be made permanent
without a decision ordering the issuance of a writ of prohibition.23

The Ruling of the Court

The petition is partly meritorious.

Petitioners argue that the Civil Service Commission (CSC), not the trial court, has
jurisdiction over Civil Case No. 03-108389 because it involves claims of employee
benefits. Petitioners point out that the trial court should have dismissed the case for
lack of jurisdiction.

Sections 2 and 4, Rule 65 of the Rules of Court provide:

Sec. 2. Petition for Prohibition. - When the proceedings of any tribunal,

corporation, board, officer or person, whether exercising judicial, quasi-judicial
or ministerial functions, are without or in excess of its jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, and there
is no appeal or any other plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be
rendered commanding the respondent to desist from further proceedings
in the action or matter specified therein, or otherwise granting such
incidental reliefs as law and justice may require.

Sec. 4. Where petition filed. - The petition may be filed not later than sixty (60)
days from notice of the judgment, order or resolution sought to be assailed in
the Supreme Court or, if it related to acts or omissions of a lower court or of
 a corporation, board, officer or person in the Regional Trial Court
exercising jurisdiction over the territorial area as defined by the Supreme
Court. It may also be filed in the Court of Appeals whether or not the same is
in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, and
unless otherwise provided by law or these Rules, the petition shall be filed in
and cognizable only by the Court of Appeals. (Emphasis supplied)

Civil Case No. 03-108389 is a petition for prohibition with prayer for the issuance of a
writ of preliminary injunction. Respondents prayed that the trial court declare all acts
emanating from Resolution Nos. 372, 197, and 306 void and to prohibit petitioners
from further enforcing the said resolutions.24 Therefore, the trial court, not the CSC,
has jurisdiction over respondents petition for prohibition.

Petitioners also claim that the petition for prohibition was filed in the wrong territorial
jurisdiction because the acts sought to be prohibited are the acts of petitioners who
hold their principal office in Pasay City, while the petition for prohibition was filed in
Manila.

Section 18 of Batas Pambansa Blg. 129 (BP 129)25 provides:

SEC. 18. Authority to define territory appurtenant to each branch. - The

Supreme Court shall define the territory over which a branch of the
Regional Trial Court shall exercise its authority. The territory thus
defined shall be deemed to be the territorial area of the branch concerned
for purposes of determining the venue of all suits, proceedings or actions,
whether civil or criminal, as well as determining the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts over which
 the said branch may exercise appellate jurisdiction. The power herein granted
shall be exercised with a view to making the courts readily accessible to the
people of the different parts of the region and making attendance of litigants
and witnesses as inexpensive as possible. (Emphasis supplied)

In line with this, the Supreme Court issued Administrative Order No. 3 26 defining the
territorial jurisdiction of the regional trial courts in the National Capital Judicial
Region, as follows:

a. Branches I to LXXXII, inclusive, with seats at Manila over the City of

Manila only.

b. Branches LXXXIII to CVII, inclusive, with seats at Quezon City over

Quezon City only.

c. Branches CVIII to CXIX, inclusive, with seats at Pasay City over Pasay City
only.

xxxx

The petition for prohibition filed by respondents is a special civil action which may be
filed in the Supreme Court, the Court of Appeals, the Sandiganbayan or the regional
trial court, as the case may be.27 It is also a personal action because it does not affect
the title to, or possession of real property, or interest therein. Thus, it may be
commenced and tried where the plaintiff or any of the principal plaintiffs resides, or
where the defendant or any of the principal defendants resides, at the election of the
plaintiff.28 Since respondent Velasco, plaintiff before the trial court, is a resident of
the City of Manila,29 the petition could properly be filed in the City of Manila.30 The
choice of venue is sanctioned by Section 2, Rule 4 of the Rules of Court.
Moreover, Section 21(1) of BP 129 provides:

Sec. 21. Original jurisdiction in other cases. - Regional Trial Courts shall
exercise original jurisdiction:

(1) In the issuance of writs

of certiorari, prohibition, mandamus, quo warranto, habeas
corpus and injunction, which may be enforced in any part of their
respective regions; x x x (Emphasis supplied)

Since the National Capital Judicial Region is comprised of the cities of Manila,
Quezon, Pasay, Caloocan, Malabon,Mandaluyong, Makati, Pasig, Marikina, Paraaque,
Las Pias, Muntinlupa, and Valenzuela and the municipalities of Navotas, San Juan,
Pateros, and Taguig, a writ of prohibition issued by the regional trial court sitting in
the City of Manila, is enforceable in Pasay City. Clearly, the RTC did not err when it
took cognizance of respondents petition for prohibition because it had jurisdiction
over the action and the venue was properly laid before it.

Petitioners also argue that Resolution Nos. 372, 197, and 306 need not be filed with
the UP Law Center ONAR since they are, at most, regulations which are merely
internal in nature regulating only the personnel of the GSIS and not the public.

Not all rules and regulations adopted by every government agency are to be filed with
the UP Law Center. Only those of general or of permanent character are to be filed.
According to the UP Law Centers guidelines for receiving and publication of rules
and regulations, interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the Administrative agency and not the public, need
not be filed with the UP Law Center.
Resolution No. 372 was about the new GSIS salary structure, Resolution No. 306 was
about the authority to pay the 2002 Christmas Package, and Resolution No. 197 was
about the GSIS merit selection and promotion plan. Clearly, the assailed resolutions
pertained only to internal rules meant to regulate the personnel of the GSIS. There
was no need for the publication or filing of these resolutions with the UP Law Center.

Petitioners insist that petitioner GSIS Board has the power to issue the assailed
resolutions. According to petitioners, it was within the power of petitioner GSIS
Board to disqualify respondents for step increment and from receiving GSIS benefits
from the time formal administrative charges were filed against them until the cases are
resolved.

The Court notes that the trial court only declared Resolution Nos. 197 and 372 void.
The trial court made no ruling on Resolution No. 306 and respondents did not appeal
this matter. Therefore, we will limit our discussion to Resolution Nos. 197 and 372,
particularly to the effects of preventive suspension on the grant of step increment
because this was what respondents raised before the trial court.

First, entitlement to step increment depends on the rules relative to the grant of such
benefit. In point are Section 1(b), Rule II and Section 2, Rule III of Joint Circular No.
1, series of 1990, which provide:

Rule II. Selection Criteria

Section 1. Step increments shall be granted to all deserving officials and

employees x x x

(b) Length of Service For those who have rendered continuous satisfactory
service in a particular position for at least three (3) years.

Rule III. Step Increments

xxxx
 Section 2. Length of Service A one (1) step increment shall be granted officials
and employees for every three (3) years of continuous satisfactory service in
the position. Years of service in the position shall include the following:

(a) Those rendered before the position was reclassified to a position title with a
lower or the same salary grade allocation; and

(b) Those rendered before the incumbent was transferred to another position
within the same agency or to another agency without a change in position title
and salary grade allocation.

In the initial implementation of step increments in 1990, an incumbent shall be

granted step increments equivalent to one (1) step for every three (3) years of
continuous satisfactory service in a given position occupied as of January 1,
1990.

A grant of step increment on the basis of length of service requires that an employee
must have rendered at least three years of continuous and satisfactory service in the
same position to which he is an incumbent.31 To determine whether service is
continuous, it is necessary to define what actual service is.32 Actual service refers to
the period of continuous service since the appointment of the official or employee
concerned, including the period or periods covered by any previously approved leave
with pay.33

Second, while there are no specific rules on the effects of preventive suspension on
step increment, we can refer to the CSC rules and rulings on the effects of the penalty
of suspension and approved vacation leaves without pay on the grant of step
increment for guidance.
Section 56(d), Rule IV of the Uniform Rules on Administrative Cases in the Civil
Service provides:

Section 56. Duration and effect of administrative penalties. - The following

rules shall govern in the imposition of administrative penalties: x x x

(d) The penalty of suspension shall result in the temporary cessation of work
for a period not exceeding one (1) year.

Suspension of one day or more shall be considered a gap in the continuity of

service. During the period of suspension, respondent shall not be entitled to all
money benefits including leave credits.

If an employee is suspended as a penalty, it effectively interrupts the continuity of his

government service at the commencement of the service of the said suspension. This
is because a person under penalty of suspension is not rendering actual service. The
suspension will undoubtedly be considered a gap in the continuity of the service for
purposes of the computation of the three year period in the grant of step
increment.34 However, this does not mean that the employee will only be entitled to
the step increment after completing another three years of continuous satisfactory
service reckoned from the time the employee has fully served the penalty of
suspension.35 The CSC has taken this to mean that the computation of the three year
period requirement will only be extended by the number of days that the employee
was under suspension.36 In other words, the grant of step increment will only be
delayed by the same number of days that the employee was under suspension.

This is akin to the status of an employee who incurred vacation leave without pay for
purposes of the grant of step increment.37 Employees who were on approved vacation
leave without pay enjoy the liberal application of the rule on the grant of step
increment under Section 60 of CSC Memorandum Circular No. 41, series of 1998,
which provides:
 Section 60. Effect of vacation leave without pay on the grant of length of
service step increment. - For purposes of computing the length of service for
the grant of step increment, approved vacation leave without pay for an
aggregate of fifteen (15) days shall not interrupt the continuity of the three-year
service requirement for the grant of step increment. However, if the total
number of authorized vacation leave without pay included within the three-year
period exceeds fifteen (15) days, the grant of one-step increment will only be
delayed for the same number of days that an official or employee was
absent without pay. (Emphasis supplied)

Third, on preventive suspension, Sections 51 and 52, Chapter 7, Subtitle A, Title I,

Book V of the Revised Administrative Code of 1987 provide:

SEC. 51. Preventive Suspension. - The proper disciplining authority may preventively suspend
any subordinate officer or employee under his authority pending an investigation, if the charge
against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect
in the performance of duty, or if there are reasons to believe that the respondent is guilty of
charges which would warrant his removal from the service.

SEC. 52. Lifting of Preventive Suspension. Pending Administrative

Investigation. - When the administrative case against the officer or
employee under preventive suspension is not finally decided by the
disciplining authority within the period of ninety (90) days after the date of
suspension of the respondent who is not a presidential appointee, the
respondent shall be automatically reinstated in the service: Provided, That
when the delay in the disposition of the case is due to the fault, negligence or
petition of the respondent, the period of delay shall not be counted in
computing the period of suspension herein provided. (Emphasis supplied)

Preventive suspension pending investigation is not a penalty.38 It is a measure

intended to enable the disciplining authority to investigate charges against respondent
by preventing the latter from intimidating or in any way influencing witnesses against
him.39 If the investigation is not finished and a decision is not rendered within that
period, the suspension will be lifted and the respondent will automatically be
reinstated.
Therefore, on the matter of step increment, if an employee who was suspended as a
penalty will be treated like an employee on approved vacation leave without
pay,40 then it is only fair and reasonable to apply the same rules to an employee who
was preventively suspended, more so considering that preventive suspension is not a
penalty. If an employee is preventively suspended, the employee is not rendering
actual service and this will also effectively interrupt the continuity of his government
service. Consequently, an employee who was preventively suspended will still be
entitled to step increment after serving the time of his preventive suspension even if
the pending administrative case against him has not yet been resolved or dismissed.
The grant of step increment will only be delayed for the same number of days, which
must not exceed 90 days, that an official or employee was serving the preventive
suspension.

Fourth, the trial court was correct in declaring that respondents had the right to be
presumed innocent until proven guilty. This means that an employee who has a
pending administrative case filed against him is given the benefit of the doubt and is
considered innocent until the contrary is proven.41

In this case, respondents were placed under preventive suspension for 90 days
beginning on 23 May 2002. Their preventive suspension ended on 21 August 2002.
Therefore, after serving the period of their preventive suspension and without the
administrative case being finally resolved, respondents should have been reinstated
and, after serving the same number of days of their suspension, entitled to the grant of
step increment.

On a final note, social legislation like the circular on the grant of step increment,
being remedial in character, should be liberally construed and administered in favor of
the persons to be benefited. The liberal approach aims to achieve humanitarian
purposes of the law in order that the efficiency, security and well-being of government
employees may be enhanced.42

WHEREFORE, we DENY the petition. We AFFIRM with MODIFICATION the

24 September 2004 Decision and the 7 October 2005 Order of the Regional Trial
Court of Manila, Branch 19 in Civil Case No. 03-108389. We DECLARE the
assailed provisions on step increment in GSIS Board Resolution Nos. 197 and
372 VOID. We MODIFY the 24 September 2004 Decision of the Regional Trial
Court of Manila, Branch 19 and rule that GSIS Board Resolution Nos. 197, 306 and
372 need not be filed with the University of the Philippines Law Center.

SO ORDERED.

GSIS vs. Velasco

APRIL 26, 2012 ~ VBDIAZ

GSIS vs. Velasco and Molina

GR. No. 170463
Feb. 2, 2011
FACTS: Petitioners charged respondents administratively with grave misconduct and
placed them under preventive suspension for 90 days, for their alleged participation in
a demonstration held by GSIS employees. In a letter, respondent Molina requested the
GSIS Senior Vice President for the implementation of his step increment. The SVP
denied the request citing GSIS Board Resolution No. 372 issued by petitioner GSIS
Board which approved the new GSIS salary structure, its implementing rules and
regulations, and the adoption of the supplemental guidelines on step increment and
promotion.
Respondents also asked that they be allowed to avail of the employee privileges under
GSIS Board Resolution No. 306 approving Christmas raffle benefits for all GSIS
officials and employees. Respondents’ request was again denied because of their
pending administrative case.
Later, petitioner GSIS Board issued Resolution No. 197 approving the following
policy recommendations:
B. On the disqualification from promotion of an employee with a pending
administrative case
To adopt the policy that an employee with pending administrative case shall be
disqualified from the following during the pendency of the case:

a) Promotion;

b) Step Increment;

xx

Respondents filed before the trial court a petition for prohibition with prayer for a
writ of preliminary injunction (Civil Case No. 03-108389). Respondents claimed
that they were denied the benefits which GSIS employees were entitled under
Resolution No. 306. Respondents also sought to restrain and prohibit petitioners from
implementing Resolution Nos. 197 and 372.
The trial court granted respondents’ petition for prohibition. Petitioners filed an MR.
The trial court denied petitioners’ motion, hence, this petition.

ISSUE:
1. 1. Whether the jurisdiction over the subject matter of Civil Case No. 03-
108389 (lies with the CSC and not with the RTC of Manila, Branch 19.
2. 2. Whether a Special Civil Action for Prohibition against the GSIS Board or
its President and General Manager exercising quasi-legislative and administrative
functions in Pasay City is outside the territorial jurisdiction of RTC-Manila,
Branch 19.
HELD: WHEREFORE, we DENY the petition
Petitioners argue that the CSC, not the trial court, has jurisdiction over Civil Case No.
03-108389 because it involves claims of employee benefits. Petitioners point out that
the trial court should have dismissed the case for lack of jurisdiction.

Sections 2 and 4, Rule 65 of the Rules of Court provide:

Sec. 2. Petition for Prohibition. – When the proceedings of any tribunal, corporation,
board, officer or person, whether exercising judicial, quasi-judicial or ministerial
functions, are without or in excess of its jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered commanding the respondent to
desist from further proceedings in the action or matter specified therein, or
otherwise granting such incidental reliefs as law and justice may require.
Sec. 4. Where petition filed. – The petition may be filed not later than sixty (60) days
from notice of the judgment, order or resolution sought to be assailed in the SC or, if
it related to acts or omissions of a lower court or of a corporation, board, officer
or person in the RTC exercising jurisdiction over the territorial area as defined
by the SC. It may also be filed in the CA whether or not the same is in aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If it
involves the acts or omissions of a quasi-judicial agency, and unless otherwise
provided by law or these Rules, the petition shall be filed in and cognizable only by
the CA. (Emphasis supplied)
Civil Case No. 03-108389 is a petition for prohibition with prayer for the issuance of a
writ of preliminary injunction. Respondents prayed that the trial court declare all acts
emanating from Resolution Nos. 372, 197, and 306 void and to prohibit petitioners
from further enforcing the said resolutions. Therefore, the trial court, not the CSC, has
jurisdiction over respondents’ petition for prohibition.

1. Petitioners also claim that the petition for prohibition was filed in the wrong
territorial jurisdiction because the acts sought to be prohibited are the acts of
petitioners who hold their principal office in Pasay City, while the petition for
prohibition was filed in Manila.
Section 18 of BP 129 provides:
SEC. 18. Authority to define territory appurtenant to each branch. – The Supreme
Court shall define the territory over which a branch of the RTC shall exercise its
authority. The territory thus defined shall be deemed to be the territorial area of
the branch concerned for purposes of determining the venue of all suits,
proceedings or actions, whether civil or criminal, as well as determining the
MeTCs, MTCs, and MCTCs over which the said branch may exercise appellate
jurisdiction. The power herein granted shall be exercised with a view to making the
courts readily accessible to the people of the different parts of the region and making
attendance of litigants and witnesses as inexpensive as possible. (Emphasis supplied)
In line with this, the SC issued Administrative Order No. 3 defining the territorial
jurisdiction of the RTCs in the National Capital Judicial Region, as follows:

a. Branches I to LXXXII, inclusive, with seats at Manila – over the City of Manila
only.

b. Branches LXXXIII to CVII, inclusive, with seats at Quezon City – over Quezon
City only.

c. Branches CVIII to CXIX, inclusive, with seats at Pasay City – over Pasay City
only.

xx

The petition for prohibition filed by respondents is a special civil action which may be
filed in the SC, the CA, the Sandiganbayan or the RTC, as the case may be. It is also a
personal action because it does not affect the title to, or possession of real property, or
interest therein. Thus, it may be commenced and tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the principal defendants
resides, at the election of the plaintiff. Since respondent Velasco, plaintiff before the
trial court, is a resident of the City of Manila, the petition could properly be filed in
the City of Manila. The choice of venue is sanctioned by Section 2, Rule 4 of the
Rules of Court.

Moreover, Section 21(1) of BP 129 provides:

Sec. 21. Original jurisdiction in other cases. – RTCs shall exercise original
jurisdiction:
(1) In the issuance of writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, which may be enforced in any part of
their respective regions; x x x (Emphasis supplied)
Since the National Capital Judicial Region is comprised of the cities of Manila,
Quezon, Pasay, Caloocan, Malabon, Mandaluyong, Makati, Pasig, Marikina,
Parañaque, Las Piñas, Muntinlupa, and Valenzuela and the municipalities of Navotas,
San Juan, Pateros, and Taguig, a writ of prohibition issued by the RTC sitting in the
City of Manila, is enforceable in Pasay City. Clearly, the RTC did not err when it took
cognizance of respondents’ petition for prohibition because it had jurisdiction over the
action and the venue was properly laid before it.

BOARD OF TRUSTEES OF GSIS v. VELASCO

Feb. 2, 2011 | Carpio, J. | Jurisdiction of RTC (prohibition and injunction)

Digester: Santos, Ihna

SUMMARY: This is a petition for review of the decision and order of the RTC of Manila Branch 19 in a Civil Case
wherein the trial court granted respondents Velasco and Molina’s petition for prohibition of 2 GSIS Board Resolution.
The petitioners are assailing the jurisdiction of the RTC of Manila over the case, arguing that it is the CSC who has the
jurisdiction and that the petition for prohibition was filed in the wrong territorial jurisdiction. The SC held that it is the
RTC, not the CSC, who has jurisdiction since the case at hand is a petition for prohibition with prayer for the issuance
of a writ of preliminary injunction, and not merely a case involving claims of employee benefits.

DOCTRINE:

A petition for prohibition, such as the one filed by respondents in this case, is a special civil action which may be filed in
the Supreme Court, the Court of Appeals, the Sandiganbayan or the Regional Trial Court, as the case may be. It is also a
personal action because it does not affect the title to, or possession of real property, or interest therein. Thus, it may be
commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, at the election of the plaintiff.
FACTS:

 May 23, 2002 – Petitioners (Board of Trustees of GSIS and Winston Garcia, GSIS President and General Manager)
charged respondents (Albert Velasco and Mario Molina) administratively with grave misconduct and placed them
under preventive suspension for 90 days for their alleged participation in the demonstration held by some GSIS
employees denouncing the alleged corruption in the GSIS and calling for the ouster of Garcia.
 In a letter (2003), Molina requested GSIS Senior Vice President Concepcion Madarang for the implementation of
his step increment. Madarang denied the request citing the GSIS Board Resolution No. 372, which approved the
new GSIS salary structure, its implementing rules and regulations, and the adoption of the supplemental guidelines
on step increment and promotion. Under the specific rules of the said resolution, the step increment adjustment of
an employee who is on preventive suspension shall be withheld until such time that a decision on the case has been
rendered.
 Respondents also asked that they be allowed to avail of the employee privileges under GSIS Board Resolution No.
306 approving Christmas raffle benefits for all GSIS officials and employees effective year 2002, but their request
was again denied because of their pending administrative case.
 August 27, 2003 – GSIS Board issued Resolution No. 197, adopting the policy that an employee with pending
administrative case shall be disqualified from the following during the pendency of the case: a) promotion;
 b) step
increment;
 c) performance-based bonus; and
 d) other benefits and privileges.
 Respondents filed before the trial court a petition for prohibition with a prayer for a writ of preliminary injunction.
They sought to restrain and prohibit petitioners from implementing Resolution Nos. 197 and 372. Respondents
claimed that the denial of the employee benefits due them on the ground of their pending administrative cases
violates their right to be presumed innocent and that they are being punished without hearing. They also argued that
the resolutions were ineffective because they were not registered with the UP Law Center pursuant to the Revised
Administrative Code of 1987.
 Petitioners filed their comment with motion to dismiss and opposition. Respondents filed their opposition to the
motion to dismiss. The trial court denied petitioners’ motion to dismiss and granted respondents’ prayer for a writ
of preliminary injunction. Petitioners filed an MR but this was denied by the trial court.
 In its Sept. 24, 2004 decision, the trial court granted respondents’ petition for prohibition and declared the GSIS
Board Resolution Nos. 197 and 372 null and void. The writ of preliminary injunction issued earlier was also made
permanent.
 Petitioners filed an MR but the trial court again denied this. Hence, this petition.

RULING: Petition denied. RTC decision affirmed with modification (provisions of GSIS Resolution on step increment
declared void and the 3 GSIS Board Resolutions need not be filed with the UP Law Center).

Whether the RTC of Manila has jurisdiction over this Civil Case – YES.

On Civil Service Commission’s Jurisdiction

 Petitioners: The CSC, not the trial court, has jurisdiction over the case because it involves claims of employee
benefits.
 SC: The case at hand is a petition for prohibition with prayer for the issuance of a writ of preliminary
injunction. Respondents prayed that the trial court declare all acts emanating from Resolution Nos. 372, 197, and
306 void and to prohibit petitioners from further enforcing the said resolutions. Therefore, the trial court, not the
CSC, has jurisdiction over respondents petition for prohibition.
 Rule 65, ROC:
Sec. 2. Petition for Prohibition. - When the proceedings of any tribunal, corporation, board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions, are without or in excess of its jurisdiction, or with grave abuse of discretion amounting
 to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise
granting such incidental reliefs as law and justice may require.

Sec. 4. Where petition filed. - The petition may be filed not later than sixty (60) days from notice of the judgment, order or resolution
sought to be assailed in the Supreme Court or, if it related to acts or omissions of a lower court or of a corporation, board, officer or
person in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be
filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, and unless otherwise provided by law or these Rules, the petition
shall be filed in and cognizable only by the Court of Appeals.

On territorial jurisdiction

 Petitioners: The petition for prohibition was filed in the wrong territorial jurisdiction because the acts sought to be
prohibited are the acts of petitioners who hold their principal office in Pasay City, while the petition for prohibition
was filed in Manila.
 SC: The petition for prohibition filed by respondents is a special civil action which may be filed in the
Supreme Court, the Court of Appeals, the Sandiganbayan or the regional trial court, as the case may be. It
is also a personal action because it does not affect the title to, or possession of real property, or interest
therein. Thus, it may be commenced and tried where the plaintiff or any of the principal plaintiffs resides,
or where the defendant or any of the principal defendants resides, at the election of the plaintiff. Since
respondent Velasco, plaintiff before the trial court, is a resident of the City of Manila, the petition could properly be
filed in the City of Manila. The choice of venue is sanctioned by Section 2, Rule 4 of the Rules of Court.
o Rule 4, Section 2, ROC. Venue of personal actions. — All other actions may be commenced and tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant
where he may be found, at the election of the plaintiff.
 Sec. 18 of BP 129: Authority to define territory appurtenant to each branch. - The Supreme Court shall
define the territory over which a branch of the Regional Trial Court shall exercise its authority. The
territory thus defined shall be deemed to be the territorial area of the branch concerned for purposes of
determining the venue of all suits, proceedings or actions, whether civil or criminal, as well as determining
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts over which the said
branch may exercise appellate jurisdiction. The power herein granted shall be exercised with a view to making the
courts readily accessible to the people of the different parts of the region and making attendance of litigants and
witnesses as inexpensive as possible.
 Sec. 21 of BP 129: Original jurisdiction in other cases. - Regional Trial Courts shall exercise original jurisdiction:

(1) In the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction,
which may be enforced in any part of their respective regions;
 SC: Since the National Capital Judicial Region is comprised of the cities of Manila, Quezon, Pasay, Caloocan,
Malabon, Mandaluyong, Makati, Pasig, Marikina, Paraaque, Las Pias, Muntinlupa, and Valenzuela and the
municipalities of Navotas, San Juan, Pateros, and Taguig, a writ of prohibition issued by the regional trial court
sitting in the City of Manila, is enforceable in Pasay City. Clearly, the RTC did not err when it took cognizance of
respondents petition for prohibition because it had jurisdiction over the action and the venue was properly laid
before it.

NOTES: [Other issues discussed]

 On filing the GSIS Board Resolutions with the UP Law Center

Not all rules and regulations adopted by every government agency are to be filed with the UP Law Center. Only
those of general or of permanent character are to be filed. According to the UP Law Center’s guidelines for
receiving and publication of rules and regulations, interpretative regulations and those merely internal in nature, that
 is, regulating only the personnel of the Administrative agency and not the public, need not be filed with the UP Law
Center.
Since the assailed resolutions pertained only to internal rules meant to regulate the personnel of the GSIS, there was
no need for the publication or filing of these resolutions with the UP Law Center.

 On entitlement to step increment

Entitlement to step increment depends on the rules relative to the grant of such benefit. Based on Section 1(b) of
Rule II of Joint Circular No. 1, series of 1990, a grant of step increment on the basis of length of service requires
that an employee must have rendered at least three years of continuous and satisfactory service in the same position
to which he is an incumbent.
Also, while there are no specific rules on the effects of preventive suspension on step increment, we can refer to the
CSC rules and rulings on the effects of the penalty of suspension and approved vacation leaves without pay on the
grant of step increment for guidance. Section 56(d), Rule IV of the Uniform Rules on Administrative Cases in the
Civil Service provides that the penalty of suspension shall result in the temporary cessation of work for a period not
exceeding 1 year. The CSC has taken this to mean that the grant of step increment will only be delayed by the same
number of days that the employee was under suspension. Similarly, since preventive suspension pending
investigation is not a penalty, the grant of step increment will only be delayed for the same number of days, which
must not exceed 90 days, that an official or employee was serving the preventive suspension.
In addition, the trial court was correct in declaring that respondents had the right to be presumed innocent until
proven guilty. This means that an employee who has a pending administrative case filed against him is given the
benefit of the doubt and is considered innocent until the contrary is proven. In this case, respondents were placed
under preventive suspension for 90 days beginning on 23 May 2002. Their preventive suspension ended on 21
August 2002. Therefore, after serving the period of their preventive suspension and without the administrative case
being finally resolved, respondents should have been reinstated and, after serving the same number of days of their
suspension, entitled to the grant of step increment.

TOPIC: ADMINISTRATIVE JURISDICTION

G.R. No. 170463. February 2, 2011.*

THE BOARD OF TRUSTEES OF THE GOVERNMENT SERVICE INSURANCE SYSTEM and WINSTON F. GARCIA, in his capacity as
GSIS President and General Manager, petitioners, vs. ALBERT M. VELASCO and MARIO I. MOLINA, respondents.

FACTS:

On May 2002, Petitioners charged the respondents with administrative case for grave misconduct for their alleged participation
and in the demonstration held by some GSIS employees to denounce the alleged corruption within the agency and to oust its
president Winston Garcia. The Board placed the respondents under preventive suspension for 90 days.

On April 2003, respondent Molina requested for a step increment but it was denied because he did not pass the qualifications
mentioned in the Board Resolution. The respondents filed a petition for prohibition with prayer for writ of preliminary
injunction claiming that they were denied of their benefits as employees of GSIS due to their pending administrative case.
Respondents also argued that the subject resolutions were ineffective because they were not registered with the UP Law
Center pursuant to the Revised Administrative Code of 1987.

The trial court granted the petition and declared the subject Board Resolution null and void.

ISSUE:

1. WON GSIS Board Resolution needs to be filed with UP Law Center

 2. WON a Special Civil action for Prohibition against GSIS Board – who is exercising quasi legislative and administrative
function – is within the jurisdiction of RTC

HELD:

1. NO

Not all rules and regulations adopted by every government agency are to be filed with the UP Law Center. Only those of general
or of permanent character are to be filed. According to the UP Law Center’s guidelines for receiving and publication of rules and
regulations, “interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the
Administrative agency and not the public,” need not be filed with the UP Law Center

Resolution No. 372 was about the new GSIS salary structure, Resolution No. 306 was about the authority to pay the 2002
Christmas Package, and Resolution No. 197 was about the GSIS merit selection and promotion plan. Clearly, the assailed
resolutions pertained only to internal rules meant to regulate the personnel of the GSIS. There was no need for the publication
or filing of these resolutions with the UP Law Center.

2. YES

The petition for prohibition filed by respondents is a special civil action which may be filed in the Supreme Court, the Court of
Appeals, the Sandiganbayan or the regional trial court, as the case may be. It is also a personal action because it does not affect
the title to, or possession of real property, or interest therein. It may comment and be tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at the election of the
plaintiff. Since respondent Velasco is a resident of the City of Manila, the petition could properly be filed in the City of Manila.