Union Bank vs CA Facts: Private respondents are controlling stockholders of the EYCO Corporations, jointly filed with the

SEC a Petition for the Declaration of Suspension of Payment[s], Formation and Appointment of Rehabilitation Receiver/Committee, Approval of Rehabilitation Plan with Alternative Prayer for Liquidation and Dissolution of Corporations . Upon finding the above petition to be sufficient in form and substance, the SEC Hearing directed the suspension of all actions, claims and proceedings against private respondents pending before any court, tribunal, office, board and/or commission. The creditors of the respondents, convened including herein petitioners, for the purpose of deciding their options in the event that private respondents invoke the provisions of Presidential Decree No. 902-A, as amended. An agreement was signed between the creditors. However, without notifying the members of the consortium, petitioner, however, decided to break away from the group by suing private respondents in the regular courts. Aside from commencing suits in the regular courts, petitioner also opposed private respondents petition for suspension of payments in the SEC by filing a Motion to Dismiss. It contended that the SEC has no jurisdiction over such petition on the ground that the inclusion of the Yutingcos in the petition cannot be allowed since the authority and power of the Commission under the virtue of law applies only to corporations, partnership[s] and other forms of associations, and not to individual petitioners who are not clearly covered by P.D. 902-A as amended . According to petitioner, what should have been applied instead was the provision on suspension of payments under the Insolvency Law, which mandated the filing of the petition in the Regional Trial Court and not in the SEC. Finally, petitioner disputed private respondents recourse to suspension of payments alleging that the latter prejudiced their creditors by fraudulently disposing of corporate properties within the 30-day period prior to the filing of such petition. SEC issued an order to create a MANCOM which would handle the interest of creditors. Petitioners filed a motion to dismiss against the SEC. It imputed grave abuse of discretion on the part of the SEC Hearing Panel in precipitately issuing the suspension order and in prematurely directing the creation of the Mancom. Petitioner lamented that these actions of the panel deprived it of due process by effectively rendering moot and academic its Motion to Dismiss which allegedly presented a prejudicial question to the propriety of creating a Mancom.

The Court of Appeals First Division finally rendered its assailed decision, granting intervention of the seven (7) creditor banks while dismissing the petition for failure to exhaust administrative remedies and forum-shopping. Nothing in the said decision, however, indicates that the appellate court squarely confronted the issue of jurisdiction raised earlier by petitioner. Issues: 1. 2. Whether the SEC can validly acquire jurisdiction over a petition for suspension of payments WON petitioner failed to exhaust administrative remedies in taking direct recourse to the Court of Appeals

Ruling;

1.

SC ruled that SEC s jurisdiction on matters of suspension of payments is confined only to those initiated by corporations, partnerships or associations. The Court, however, does not subscribe to the theory espoused by petitioner that the case filed by private respondents should be dismissed outright in its entirety. The reason is that while it is true that the SEC cannot acquire jurisdiction over an individual filing a petition for suspension of payments together with a corporate entity, a closer scrutiny of Chung Ka Bio and MPPI does not in any manner suggest, even tangentially, that a petition as the one at bar must be dismissed likewise with respect to the corporate co-petitioner. The result, therefore, is that the petition with respect to EYCO shall subsist and may be validly acted upon by the SEC. The Yutingcos, on the other hand, shall be dropped from the petition and be required to pursue their remedies in the regular courts of competent jurisdiction Equally weak is petitioner s challenge on the Court of Appeals decision dismissing its petition for certiorari for failure to exhaust administrative remedies. Its complaint that the SEC Hearing Panel was acting without jurisdiction in conducting proceedings relative to private respondents petition and for rendering moot and academic its Motion to Dismiss does not justify the procedural short-cut it took to the appellate court. In this case, petitioner was actually not without remedy to correct what it perceived and supposed was an erroneous assumption of jurisdiction by the SEC without having recourse immediately to the Court of Appeals. However, they did not appeal to SEC, but rather directed themselves to the CA.

2.

Painaga vs. Cortes Facts: Petitioner purchased from Bonifacio Merendad a parcel of corn and pasture land with improvements thereon situated at Antique in 1962 with an area of 60,000 square meters more or less. He has since then been in possession thereof. Private respondent, claiming that the northern portion of said parcel of land is included in his OCT, caused a technical survey of said portion over the vehement opposition and objection of petitioner. Petitioner thereafter filed with the District Officer, Bureau of Lands, San Jose, Antique a protest under oath, praying that the original certificate of title issued in private respondent's favor be annulled on the ground of fraud. An investigation was forthwith commenced by the District Land Officer. Petitioner filed in the CFI of Capiz, an action for Injunction with Preliminary Prohibitory Injunction with Damages against respondents. He alleged in the main that since he filed the protest with the District Land Office, private respondent, personally and with the aid of his agents who are notorious in the community for their violent temper, had for several times attempted and were still attempting to oust him from the area in controversy by means of force, violence and intimidation. He therefore prayed that a writ of preliminary prohibitive injunction be issued against private respondent as defendant therein and his agents; that said injunctive writ be made permanent after trial and that private respondents be adjudged liable to him for actual and moral damages and expenses of litigation. RTC dismissed the case due to prematurity. The petitioner admitted that he had filed a protest with the Bureau of Lands, which protest was still pending investigation, petitioner had "no cause of action for filing a complaint in court unless the administrative remedies provided by law shall have been exhausted." Issue: What is the proper application of the doctrine of exhaustion of administrative remedies? Ruling: Petition granted.

Whatever decision the trial court may render in Civil Case No. 1539 will not encroach on the primary jurisdiction of the Bureau of Lands over the question of who between petitioner and private respondent is entitled to the ownership of the land in question. Thus, the principle of exhaustion of administrative remedies does not find application in the case at bar. The order dated January 22, 1979 is annulled and set aside. Civil Case No. 1539 of the former Court of First Instance of Antique is reinstated. The successor Regional Trial Court is directed to proceed with the disposition of the case with deliberate dispatch.

DARAB vs CA Facts: On March 10, 1993 private respondents filed a complaint with the Provincial Agrarian Reform Adjudicator (PARAD) at Teresa, Rizal, praying that they be maintained in the peaceful possession and cultivation of a portion, consisting of 12 hectares, of the land in question. private respondents alleged that they are farmworkers and occupant-tillers of the land in question; that the land is an [sic] agricultural land; that they had invested efforts and money in cultivating and planting it with various fruit trees and root crops; that on March 4, 1993 the portion of the land they were cultivating had been bulldozed at the instance of Federico Balanon and other individuals acting in behalf of the petitioner BSB Construction, as a result of which the improvements made by them on the land were destroyed. For this reason private respondents asked the PARAD for an order restraining the herein petitioners from further bulldozing the property and maintain them in the peaceful possession of the land. On the same date the complaint was filed, the Provincial Adjudicator issued an order enjoining the BSB Construction and all persons representing it to cease and desist from undertaking any further bulldozing and development activities on the property under litigation or from committing such other acts tending to disturb the status quo. petitioners filed a complaint with the Department of Agrarian Reform Adjudication Board (DARAB) in which they sought the nullification of the restraining order issued by the PARAD. They alleged that the land in question is not an agricultural, but residential, the herein respondents are not tenant-farmers but mere squatters; and officials of the DAR, had conspired with each other and acted maliciously in issuing the restraining order without regard to its consequences, without first hearing the herein petitioners. DARAB issued a status quo order. BSB Construction who is one of the registered owners of the land in question, then filed the petition for certiorari in this case (CA-G.R. SP No. 31179), contending that the land is not covered by the Comprehensive Agrarian Reform Law and, therefore, the complaint filed in the DARAB is not within the latter's jurisdiction. CA dismissed the motion. DARAB was charged with disrespect of Court. However, the DARAB should have left the correction of alleged abuse of legal process to this Court instead of issuing the order in question. the Court of Appeals ruled that the petitioners cited no authority for their stand and reiterated that to uphold the

petitioners arguments could only result in the subversion of orderly administration of justice. The petitioners then filed the instant petition wherein they assert that the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction Issue: WON DARAB can issue Status quo order? Ruling: Petition was denied It indisputably follows that all actions pursued under the exclusive original jurisdiction of the DAR, in accordance with 50 of R.A. No. 6657, must be commenced in the PARAD of the province where the property is located and that the DARAB only has appellate jurisdiction to review the PARADs orders, decisions and other dispositions. Consequently, the DARAB was not possessed of jurisdiction to take cognizance of the case. Neither may the DARAB now claim that it issued the SQO in aid of its appellate jurisdiction, since it recognized, as an original complaint, the BEA Case. Needless to state, the DARAB was without authority to issue the status quo order much less the warrant of arrest. Its action was a clear violation of its DARAB Revised Rules. Any suggestion that it has unfettered discretion to suspend its own rules is unacceptable. For one, DARAB should have set the example or observance of orderly procedure, as stated by the Court of Appeals; for another, it would render its own Revised Rules of Procedure uncertain and whose permanence would be dependent upon the instability of the whims and caprices of the DARAB.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

Until the year 1995, the basis for collection of real estate taxes in the City of Manila was the old, year-1979, real estate market values. Mrs. Lourdes Laderas, the newly appointed City Assessor of Manila, received Memorandum Circular No. 04-95 dated March 20, 1995, from the Bureau of Local Government Finance, Department of Finance. This memorandum relates to the failure of most of the cities and municipalities of Metropolitan Manila, including the City of Manila, to conduct the general revision of real property. For this purpose, Mrs. Laderas embarked in a working dialogue with the Office of the City Mayor and the City Council for the completion of the task. After obtaining the necessary funds from the City Council, the City Assessor began the process of general revision based on the updated fair market values of the real properties. In the year 1995, the increase in valuation of real properties compared to the year1979 market values ranges from 600% to 3,330%, but the City Assessor's office initially fixed the general average of increase to 1,700%. Mrs. Laderas felt that the increase may have adverse reactions from the public, hence, she ended up reducing the increase in the valuation of real properties to 1,020%. In September 1995, the City Assessor's Office submitted the proposed schedule of fair market values to the City Council for its appropriate action. The Council acting on the proposed schedule, conducted public hearings as required by law. The proposed ordinance was subjected to the regular process in the enactment of ordinances pursuant to the City Charter of Manila. The first reading was held on September 12, 1995, the second on October 28, 1995, and the third on December 12, 1995. In between these dates, public hearings on the general revision, which included the schedule of values of real properties, were had, viz.; on September 28, 1995, October 5, 12 and 19, 1995 and November 27 and 29, 1995. The proposed ordinance with the schedule of fair market values of real properties was published in the Manila Standard on October 28, 1995, and the Balita on November 1, 1995. On December 12, 1995, the City Council enacted Manila Ordinance No. 7894, entitled: "An Ordinance Prescribed as the Revised Schedule of Fair Market Values of Real Properties the City of Manila." The ordinance was approved by the City Mayor on December 27, 1995, and made effective on Jan. 01, 1996. Thereafter, notices of the revised assessments were distributed to the real 3 property owners of Manila pursuant to Sec. 223 of R.A. 7160. With the implementation of Manila Ordinance No. 7894, the tax on the land owned by the petitioner was increased by five hundred eighty percent (580%). With

G.R. No. 127139 February 19, 1999 JAIME C. LOPEZ, petitioner, vs. CITY OF MANILA and HON. BENJAMIN A.G. VEGA, Presiding Judge, RTC, Manila, Branch 39, respondent. QUISUMBING, J.: This petition for review on certiorari, assails the Order 1 of the Regional Trial Court of Manila, Branch 39, promulgated on October 24, 1996, dismissing Civil Case No. 96-77510 which sought the declaration of nullity of City of Manila Ordinance No. 7894, fled by petitioner Jaime C. Lopez. The facts as found by the trial court are as follows: Sec. 219 of Republic Act 7160 (R.A. 7160) or the Local Government Code of 1991 requires the conduct of the general revision of real property as follows: General Revision of Assessment 2 and Property Classification The provincial, city or municipal assessor shall undertake a general revision of real property assessments within two (2) years after the effectivity of this Code and every three (3) years thereafter. Although R.A. 7160 took effect on January 1, 1992, the revision of real property assessments prescribed therein was not yet enforced in the City of Manila. However, the process of real property valuation had already been started and done by the former city assessor. In 1992, the schedule of real property values in the city was prepared and submitted to the City Council of Manila, but for unknown reason, was not acted upon. Nevertheless, despite the inaction of the City Council, there was a continuous update of the fair market values of the real properties within the city.

respect to the improvement on petitioner's property, the tax increased by two hundred fifty percent (250%). As a consequence of these increases, petitioner Jaime C. Lopez, filed on March 18, 1996, a special proceeding for the declaration of nullity of the City of Manila Ordinance No. 7894 with preliminary injunction and prayer for temporary restraining order (TRO). The petition alleged that Manila Ordinance No. 7894 appears to be "unjust, excessive, oppressive or confiscatory." The case was originally raffled to the Regional Trial Court of Manila, Branch 5, which issued the TRO on April 10, 1996. On the same date, Manila Ordinance No. 7905 4 took effect, reducing by fifty 5 percent (50%) the assessment levels (depending on the use of property, e.g., residential, commercial) for the computation of tax due. The new ordinance amended the assessment levels provided by Section 74, 6 paragraph (A) of Manila Ordinance No. 7794. Moreover, Section 2 of Manila Ordinance No. 7905 7 provides that the amendment embodied therein shall take effect retroactively to January 1, 1996. The same provision indicates the, maximum realty tax increases, as follows: Sec. 2 . . . Provided, however, that the tax increase on residential lands and improvements shall in no case exceed by two hundred percent (200%) of the levied thereon in calendar year 1995 and the tax increase on commercial and industrial land, building and other structures shall not exceed by three hundred percent (300%) of the tax imposed thereon in calendar year 1995; Provided further, that the tax on all lands and improvements shall in no case be lower than tax imposed thereon in calendar year 1995. As a result, Manila Ordinance No. 7905 reduced the tax increase of petitioner's residential land to one hundred fifty-five percent (155%), while the tax increase for residential improvement was eighty-two percent (82%). The maximum tax increase on classified commercial estates is three hundred percent (300%) but the tax increase on commercial land was only, two hundred eighty-eight percent (288%), and seventy-two percent (72%) on commercial portion of the improvement. On April 12, 1996, respondent filed a motion for inhibition of the presiding judge of RTC, Branch 5, alleging that Judge Amelia Andrade had shown "markedly indulgent attitude towards the petitioner." Hence, Judge Andrade inhibited herself and

directed the forwarding of the case record to the Clerk of Court for its re-raffle to another branch of the court. Despite the amendment brought about by Manila Ordinance No. 7905, the controversy proceeded and the case was re-raffled to Branch 39 of the court which acted on the motions submitted by the parties for resolution, viz.: 1) application for preliminary injunction by the petitioner, and 2) motion to dismiss by the respondent. The reason relied upon by the City of Manila for the dismissal of the petition was for failure of the petitioner to exhaust administrative remedies. On May 9, 1996, the court directed the issuance of a writ of injunction and denied, in the meanwhile, the motion to dismiss by the respondent. The reason for the denial of the respondent's motion to dismiss was not detailed to avoid a repetition of the unfortunate situation in RTC-Manila, Branch 5, wherein the counsel for the respondent assumed bias on the part of Judge Andrade. On May 22, 1996, the respondent filed the instant motion for reconsideration on the denial of its motion to dismiss. The movant-respondent aside from reiterating the basic ground alleged in its motion to dismiss underscored the additional premise, which is the happening of a supervising event, i.e., the enactment and approval of the City Mayor of Manila Ordinance No. 7905. On October 24, 1996, the trial court granted the motion to dismiss filed by the respondent. The dismissal order was justified by petitioner's failure to exhaust the administrative remedies and that the petition had become moot and academic when Manila Ordinance No. 7894 was repealed by Manila Ordinance No. 7905. Notwithstanding, the trial court likewise revolved all other interlocking issues. The dispositive portion of the trial court's order is as follows: WHEREFORE, finding the motion dated May 19, 1996 filed by the here in respondent on May 22, 1996 sufficiently well-taken, the order dated May 9, 1996 is hereby set aside. Let the petition filed by the herein petitioner on March 8, 1996 be, as it is, hereby DISMISSED. The order of preliminary injunction dated May 9, 1996, is also set aside and the writ of injunction likewise issued pursuant thereto, dissolved. SO ORDERED.
8

The petitioner filed a motion for reconsideration, but it was denied for lack of merit.

Hence, the petitioner now comes before this Court raising in his petition the following issues: I DID THE RESPONDENT TRIAL COURT IN CIVIL CASE NO. 96-77510 ERR IN HOLDING THAT THE PETITIONER FAILED TO EXHAUST ALL ADMINISTRATIVE REMEDIES, AND THEREFORE, THE PETITION OUGHT TO BE DISMISSED? AND; II DID THE RESPONDENT COURT ERR IN FAILING TO CORRECTLY APPLY SECTIONS 212 AND 221 OF THE LOCAL GOVERNMENT CODE OF 1991? Petitioner contends that when the trial court ruled that it has jurisdiction over the case, the question of whether he needs to resort to the exhaustion of administrative remedies becomes moot and academic. He claims that resort to administrative remedies on constitutionality of law merely permissive as provided by Sec. 187 of R.A. 7160, viz.: . . . Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal. . . . (emphasis supplied) Petitioner further asserts that the question of the constitutionality of the city ordinance may be raised on appeal, either to the Secretary of Justice or the Regional Trial Court, both having concurrent jurisdiction over the case, in accordance with Batas Pambansa Blg. 129. He states that at the time he instituted this complaint, it was premature to resort to the remedies provided by R.A. 7160 because he has not received the formal notice of assessment yet, hence, he could not be expected to pay under protest and elevate the exorbitant assessment to the Board of Assessment Appeals. On the other hand, respondent argues that the adjustment of the fair market values of real properties in the City of Manila was long overdue, being updated only after fifteen (15) years. According to the respondent, petitioner filed the case, merely to take advantage of the situation to gain political mileage and help advance his mayoralty bid. As a general rule, where the law provides for the remedies against the action of an administrative board, body, or officer, relief to courts can be sought only after

exhausting all remedies provided. The reason rests upon the presumption that the administrative body, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Therefore, where a remedy is available within the administrative machinery, this should be resorted to before resort can be made to the courts, not only to give the administrative agency the opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to courts. 9 This rule, however, admits certain exceptions. 10 With regard to question on the legality of a tax ordinance, the remedies available to the taxpayers are provided under Section 187, 226, and 252 of R.A. 7160. Sec. 187 of R.A. 7160 provides, that the taxpayer may question the constitutionality or legality of tax ordinance on appeal within thirty (30) days from effectivity thereof, to the Secretary of Justice. The petitioner after finding that his assessment is unjust, confiscatory, or excessive, must have brought the case before the Secretary of Justice for question of legality or constitutionality of the city ordinance. Under Section 226 of R.A. 7160, an owner of real property who in not satisfied with the assessment of his property may, within sixty (60) days from notice of 11 assessment, appeal to the Board of Assessment Appeals. Should the taxpayers question the excessiveness of the amount of tax, he must first pay the amount due, in accordance with Section 252 of R.A. 7160. Then, he must request the annotation of the phrase "paid under protest" and accordingly appeal to the Board of Assessment Appeals by filing a petition under oath together with copies of the tax declarations and affidavits or documents to support his appeal. 12 The rule is well-settled that courts will not interfere in matters which addressed to the sound discretion of government agencies entrusted with the regulations of activities coming under the special technical knowledge and training of such 13 agencies. Furthermore, the crux of petitioner's cause of action is the determination of whether or not the tax is excessive, oppressive or confiscatory. This issue is essentially a question of fact and thereby, precludes this Court from reviewing the same. 14 We have carefully scrutinized the record of this case and we found no cogent reason to depart from the findings made by the trial court on this point. As correctly found by the trial court, the petition does not fall under any of the exceptions to excuse compliance with the rule on exhaustion of administrative remedies, to wit: One of the reasons for the doctrine of exhaustion is the separation of powers which enjoins upon the judiciary a becoming

policy of non-interference with matters coming primarily within the competence of other department. . . . There are however a number of instances when the doctrine may be dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are: (1) when the question raised is purely legal, (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when the claim involved is small; (6) when irreparable damage will be suffered, (7) when there is no other plain, speedy and adequate remedy, (8) when strong public interest is involved; (9) when the subject of controversy is private land; and (10) in quowarranto proceeding (citation omitted). In the court's opinion, however, the instant petition does not fall within any of the exceptions above mentioned. . . . . . . Instant petition involves not only questions of law but more importantly the questions of facts which therefore needed the reception of evidence contrary to the position of the respondent before the hearing of its motion for reconsideration Now, on the second exception on the rule of exhaustion of administrative remedies, supra, there: is no showing that administrative bodies, viz., The Secretary of Justice, the City Treasurer, Board of Assessment Appeals, and the Central Board of Assessment Appeals are in estoppel. On the third exception, it does not appear that Ordinance No. 7894 or the amendatory Ordinance No. 7905 are patently illegal. Re the fourth exception, in the light of circumstances as pointed elsewhere herein, the matter does not need a compelling judicial intervention. On the fifth exception, the claim of the petitioner is not small. Re the sixth exception, the court does not see any irreparable damage that the petitioner will suffer if he had paid or will pay under protest as per the ordinance. He could always ask for a refund of the excess amount he paid under protest or be credited thereof if the administrative bodies mentioned in the law (R.A. 7180 15) will find that his position is meritorious. Re the seventh exception, the court is of the opinion that administrative relief provided for in the law are plain, speedy and adequate. On the eight exception, while the controversy involves public interest, judicial intervention as the petitioner would like this court to do should

be avoided as demonstrated herein below in the discussion of the third issue. The ninth and tenth exception obviously are not 16 applicable in the instant case. Proceeding to the second issue, petitioner contends that the respondent court failed to apply correctly Sections 212 and 221 of R.A. 7160. The pertinent provisions are set forth below: Sec. 212. Preparation of Schedule of Fair Market Values Before any general revision of property assessment is made pursuant to the provisions of this Title, there shall be prepared a schedule of fair market values by the provincial, city and the municipal assessors of the municipalities within the Metropolitan Manila Area for the different classes of real property situated in their respective local government units [LGU] for enactment by ordinance of the sanggunian concerned. The schedule of fair market values shall be published in a newspaper of general circulation in the province, city or municipality concerned, or in the absence thereof, shall be posted in the provincial capitol, city or municipal hall and in two other conspicuous public places therein. Sec. 221. Date of Effectivity of Assessment of Reassessment All assessments or reassessments made after the first (1st) day of January of any year shall take effect on the first (1st) day of January of the succeeding year: Provided, however, That the reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great and sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or to any other abnormal causes, shall be made within ninety (90) days from the date any such cause or causes occurred, and shall take effect at the beginning of the quarter next following assessment. The petitioner claims that the effectivity date of Manila Ordinance No. 7894 and the schedule of the fair market values is January 1, 1996. He contends that Sec. 212 of the R.A. 7160 prohibits the general revision of real property assessment before the approval of the schedule of the fair market values. Thus, the alleged revision of real property assessment in 1995 is illegal. Based on the evidence presented by the parties, the steps to be followed for the mandatory conduct of General Revision of Real Property assessments, pursuant to the provision of Sec. 219, of R.A. No. 7160 are as follows:

1. The preparation of Schedule of Fair Market Values. 2. The enactment of Ordinances: a) levying an annual "ad valorem" tax on real property and an additional tax accruing to the SEF. b) fixing the assessment levels to be applied to the market values of real properties; c) providing necessary appropriation to defray expenses incident to general revision of real property assessments; and d) adopting the Schedule of Fair Market Values prepared by the assessors. 17 The preparation of fair market values as a preliminary step in the conduct of general revision was set forth in Section 212 of R.A. 7160, to wit: (1) The city or municipal assessor shall prepare a schedule of fair market values for the different classes of real property situated in their respective Local Government Units for the enactment of an ordinance by the sanggunian concerned. (2) The schedule of fair market values shall be published in a newspaper of general circulation in the province, city or municipality concerned or the posting in the provincial capitol or other places as required by law. It was clear from the records that Mrs. Lourdes Laderas, the incumbent City Assessor, prepared the fair market values of real properties and in preparation thereof, she considered the fair market values prepared in the calendar year 1992. Upon that basis, the City Assessor's Office updated the schedule for the year 1995. In fact, the initial schedule of fair market values of real properties showed an increase in real estate costs, which rages from 600% 3,330 % over the values determined in the year 1979. However, after a careful study on the movement of prices, Mrs. Laderas eventually lowered the average increase to 1,020%. Thereafter, the proposed ordinance with the schedule of the fair market values of real properties was published in the Manila Standard on October 28, 1995 and Balita on

November 1, 1995. Under the circumstances of this case, was compliance with the requirement provided under Sec. 212 of R.A. 7160. Thereafter, on January 1, 1996, the Sanggunian approved Manila Ordinance No. 7894. The schedule of values of real properties in the City of Manila, which formed an integral part of the ordinance, was likewise approved on the same date. When Manila Ordinance No. 7894 took effect on January 1, 1996, the existing assessment levels to be multiplied by the market value of the property in computing the assessed value (taxable value) subject to tax were those enumerated in Section 74 paragraph (A) of Manila Ordinance Number 7794. Coming down to specifics, we find it desirable to lay down the procedure in computing the real property tax. With the introduction of assessment levels, tax rates could be maintained, although tax payments can be made either higher or lower depending on their percentage (assessment level) applied to the fair market value of property to derive its assessed value which is subject to tax. Moreover, classes and values of real properties can be given proper consideration, like assigning lower assessment levels to residential properties and higher levels to properties used in business. 19 The procedural steps in computing the real property tax are as follows: 1) Ascertain the assessment level of the property 2) Multiply the market value by the applicable assessment level of the property 3) Find the tax rate which corresponds to the class (use) of the property and multiply the assessed value by the applicable tax 20 rates. For easy reference, the computation of real property tax is cited below: Market Value P x x x Multiplied by Assessment Level (x %) Assessed Value P x x x Multiplied by Rate of Tax (x %)

18

Real Property Tax P x x ===== On April 10, 1996, Manila Ordinance No. 7905 was enacted and approved to take effect, retroactively to January 1, 1996. As a result of this new ordinance, the assessment levels applicable to the market values of real properties were lowered into half. A comparative evaluation between the old and the new assessment levels is as follows: Assessment Levels Ordinance 7794 Ordinance 7905 Over Not Over Old New

500,000.00 750,000.00 25% 12.5% 750,000.00 1,000,000.00 30% 15% 1,000,000.00 2,000,000.00 35% 17.5% 2,000,000.00 5,000,000.00 40% 20% 5,000,000.00 10,000,000.00 50% 25% 10,000,000.00 60% 30% (b) Commercial/IndustriaI Fair Market Value

300,000.00 30% 15% 300,000.00 500,000.00 35% 17.5% (1) On Lands: Class Residential 20% 10% Commercial 50% 25% Industrial 50% 25% (2) On Buildings and other structures: (a) Residential Fair Market Value 500,000.00 750,000.00 40% 20% 750,000.00 1,000,000.00 50% 25% 1,000,000.00 2,000,000.00 60% 30% 2,000,000.00 5,000,000.00 70% 35% 5,000,000.00 10,000,000.00 75% 37.5% 10,000,000.00 80% 40% (3) On Machineries: Class P 175,000.00 0% 0% 175,000.00 P 300,000.00 10% 5% 300,000.00 500,000.00 20% 10% Residential 50% 25% Commercial 80% 40% Industrial 66% 40%

Over Not Over

(4) On special classes The assessment levels for all lands, buildings, machineries and other improvements shall be as follows: Actual Use Cultural 15% 7.5% Scientific 15% 7.5% Hospital 15% 7.5% Local Water Districts 15% 7.5% GOCC engaged in the supply and and distribution of water and/or degeneration and transmission of electric power 10% 5% Despite the favorable outcome of Manila Ordinance No. 7905, the petitioner insists that since it was approved on April 10, 1996, it cannot be implemented in the year 1996. Using Section 221 of R.A. 7160 as basis for his argument, petitioner claims that the assessments or reassessments made after the first (1st) day of January of any year shall take effect on the first (1st) day of January of the succeeding year. Contrarily, the trial court viewed that Manila Ordinance No. 7905 affects the resulting tax imposed on the market values of real properties as specified in Manila Ordinance No. 7894. Therefore, this supervening circumstance has rendered the petition, moot and academic, for failure of the petitioner to amend his cause of action. The trial court said: A mere cursory reading of his petition that he questioned fair market values and the assessment levels and the resulting tax based thereon as imposed by Ordinance No. 7894. The petitioner, however, failed to amend his petition. Thus, it is clear that the petition has become moot and academic. As correctly stated by the respondent, the facts, viz., the tax rates on level prescribed by Ordinance 7894 upon which the petition was anchored no longer exist because the tax rates in Ordinance No. 7894 have been

amended, otherwise, impliedly repealed by Ordinance No. 7905. If only for this, the petition could be dismissed but this court followed the advice of the Supreme Court in the case of National Housing Authority vs. Court of Appeals, et. al. (121 SCRA 777) that the case may be decided in its totality resolving all interlocking issues in order to render justice to all concerned and end litigation once and for all. 21 Although, we are in full accord with the ruling of the trial court, it is likewise necessary to stress that Manila Ordinance No. 7905 is favorable to the taxpayers when it specifically states that the reduced assessment levels shall be applied retroactively to January 1, 1996. The reduced assessment levels multiplied by the schedule of fair market values of real properties, provided by Manila Ordinance No. 7894, resulted to decrease in taxes. To that extent, the ordinance is likewise, a social legislation intended to soften the impact of the tremendous increase in the value of the real properties subject to tax. The lower taxes will ease, in part, the economic predicament of the low and middle-income groups of taxpayers. In enacting this ordinance, the due process of law was considered by the City of Manila so that the increase in realty tax will not amount to the confiscation of the property. WHEREFORE, the instant petition is hereby DENIED, and the assailed Order of Regional Trial Court of Manila, Branch 39 in Civil Case No. 96-77510 is hereby AFFIRMED. COSTS against the petitioner. SO ORDERED.

G.R. No. 97903. August 24, 1998 ELMER F. ESPINA, Petitioner, vs. COURT OF APPEALS, NATIONAL ELECTRIFICATION ADMINISTRATION, ROMMEL L. MANIKAN, LEYTE IV ELECTRIC COOPERATIVE, INC., BOARD OF DIRECTORS OF LEYTE IV ELECTRIC COOPERATIVE, INC., and MIGUEL COTIAMCO, Respondents. DECISION MENDOZA, J.: This is a petition seeking review of the decision of the Court of Appeals, dated March 15, 1991, which dismissed the petition for certiorari filed by herein petitioner and affirmed the order of the National Electrification Administration (NEA), dated October 1, 1990, declaring private respondent Miguel Cotiamco a bonafide member of the Leyte IV Electric Cooperative (LEYECO IV) and therefore qualified to be a director of said cooperative. The facts are as follows: Petitioner Elmer Espina and private respondent Miguel Cotiamco were candidates for director of respondent Leyte IV Electric Cooperative (LEYECO IV), representing 1 the Baybay South District. On May 23, 1990, petitioner Elmer Espina filed with the LEYECO IV District Election Committee (DECOM) a petition to disqualify private respondent Miguel Cotiamco 2 on the ground that respondent was not a bonafide member of the LEYECO IV. The DECOM endorsed the petition to the National Electrification Administration on May 26, 1990.3 On May 27, 1990, the election for the position of director of the LEYECO IV, Baybay South District was held. The results of the election showed that Cotiamco garnered 636 votes against Espinas 599 votes. Accordingly, private respondent Cotiamco was proclaimed winner by the DECOM and sworn in as member of the board on June 6, 1990.4 On June 27, 1990, the NEA remanded the petition for disqualification filed by petitioner Espina to the DECOM for proper disposition on the ground that the latter 5 had original jurisdiction over the case.

After hearing, the DECOM rendered a decision on July 28, 1990 disqualifying private respondent Cotiamco.6Consequently, petitioner Espina took his oath and assumed 7 office. However, private respondent Cotiamco appealed to the NEA which on October 1, 1990 reversed the DECOM and declared private respondent duly elected director of 8 LEYECO IV, Baybay South District. The NEA found that, contrary to petitioners claim, private respondent Miguel Cotiamco was a bonafide member of the LEYECO 9 IV. On October 23, 1990, petitioner Espina in turn filed with the Court of Appeals a petition for certiorari and prohibition with an urgent prayer for the issuance of a temporary restraining order and a writ of preliminary and permanent injunction.10 Private respondent Cotiamco moved to dismiss the petition on the ground of lack of jurisdiction of the Court of Appeals, failure of petitioner to exhaust administrative remedies, and lack of merit of the petition.11 In a decision rendered on March 15, 1991, the Court of Appeals upheld the order of the NEA.12 It held that the doctrine of exhaustion of administrative remedies was inapplicable to the case at bar; that the NEA did not commit grave abuse of discretion; that the order of the NEA dated October 1, 1990 was issued in the exercise of its power of supervision and control over electric cooperatives; and, that the findings of the NEA were supported by substantial evidence.13 Hence, this petition. Petitioner contends: I. RESPONDENT COURT OF APPEALS AND NEA ERRED IN HOLDING AND FINDING THAT MIGUEL COTIAMCO IS A MEMBER OF THE COOPERATIVE AND IS ELIGIBLE FOR CANDIDATE [sic] TO THE POSITION OF MEMBER OF THE BOARD OF DIRECTORS, LEYECO IV. II. RESPONDENT COURT OF APPEALS ERRED IN HOLDING AND FINDING THAT RESPONDENT NEAS LETTER-ORDER (ANNEX G) WAS ISSUED IN ACCORDANCE WITH LAW, RULES AND REGULATIONS. IN FACT, THE SAID LETTER-ORDER WAS ISSUED IN GROSS VIOLATION OF PETITIONERS RIGHT TO DUE PROCESS.
14

Respondents justify the decision of the NEA to take cognizance of the case and dispose of it as a valid exercise of its appellate jurisdiction and power of supervision and control over electric cooperatives. Moreover, they contend that the present petition for review should be dismissed for failure of petitioner Espina to exhaust administrative remedies. The present petition is well taken. Private respondents contentions have no merit. The rule of exhaustion of administrative remedies is not absolute but admits of exceptions. One of these exceptions is when only a question of law is involved and nothing of an administrative nature is to be done or can be done.15 In this case, the issue whether private respondent Cotiamco is a member of the cooperative is one which calls for the interpretation and application of both the law creating the NEA and the by-laws of the LEYECO IV. Consequently, the Court of Appeals correctly assumed jurisdiction over the case. However, we hold that the appellate court erred in upholding the NEAs decision and ruling that the said agency did not commit grave abuse of discretion in declaring private respondent Cotiamco a bonafide member of the LEYECO IV and therefore qualified to run for a seat in the board of directors on the basis of the following facts:16 a) That membership No. 166 had long been approved by the LEYECO IV Board of Directors on October 30, 1977; b) That the LEYECO IV Consumers Index bears the entry Carmen-Miguel Cotiamco using the same membership number; c) That Miguel Cotiamco had been using the aforementioned membership number in all his dealings/transactions with the electric cooperative; d) That the LEYECO IV Board and Management allowed him to use the same membership number when he availed of separate metering on November 16, 1987 per Meter No. 65026129 and which fact can be gleaned from the entries of the Consumers Index thereafter separately issued in his favor; e) That it was he who used the said membership number and not Carmen Cotiamco in the District Elections for Baybay South District in 1987 per ballot No. 000219 entry No. 951 of the Voters Masterlist; f) That his name as bonafide member of the electric cooperative appeared in both the 1987 and 1990 Masterlist of Voters for Baybay South District.

and on the principle of estoppel:17 Furthermore, the principle of estoppel now lies as against the LEYECO IV Board and Management with respect to the issue of his [Miguel Cotiamcos] membership with the electric cooperative. Section 21 of P.D. No. 269 (Charter of the NEA) provides: SEC. 21. Members. - Each incorporator of a cooperative shall be a member thereof, but no other person may become a member thereof unless such other person agrees to use services furnished by the cooperative when made available by it. Membership in a cooperative shall not be transferable, except as provided in the by-laws. The by-laws may prescribe additional qualifications and limitations with respect to membership. (underlining ours) Thus, the law clearly requires that for a person other than an incorporator to be a member of the cooperative, he must agree to use the services furnished by the cooperative and he must have such other qualifications as may be prescribed by the by-laws of the cooperative. In this case, the by-laws of the LEYECO IV requires not only that one agrees to purchase electric energy but that one must apply for 18 membership in the cooperative. Thus, the by-laws states: SECTION 1. Requirements for membership. Any person, firm, association, corporation or body politic or subdivision thereof will become member of LEYTE IV ELECTRIC COOPERATIVE, INC. hereinafter called the Cooperative), provided that he or it has first: (a) Made a written application for membership therein; (b) Agreed to purchase from the Cooperative electric energy as hereinafter specified; (c) Agreed to comply with and be bound by the articles of incorporation and by laws of the Cooperative and any rules and regulations adopted by the board; and (d) Paid the Membership fee hereinafter specified. Provided, however, that no person, firm, corporation or body politic shall became a member unless and until he or it has been accepted for membership by the board. No membership in the Cooperative shall be transferable, except as provided in these bylaws.

The word board is used herein to refer to the board of directors. SECTION 2. Membership Certificates. Membership in the Cooperative shall be evidenced by a membership certificate which shall be in such form and shall contain such provisions as shall be determined by the board. Such certificate shall be signed by the President and by the Secretary of the Cooperative and the corporate seal shall be affixed thereto. No membership certificate shall be issued for less than the membership fee fixed in these bylaws, nor until such membership fee has been fully paid for. In case a certificate is lost, destroyed or mutilated a new certificate may be issued therefor upon such uniform terms and indemnity to the Cooperative as the board may prescribe. Private respondent Cotiamco did not meet these requirements. In fact, he has no certificate to show as evidence of membership in the cooperative. The fact that he purchased electric energy using Membership Certificate No. 166 does not prove he is a member of the cooperative. The membership certificate in question is not his but that of his sister-in-law Carmen Cotiamco. The Manager of the Member Service Department of LEYECO IV certified that Miguel Cotiamco is not a member of the cooperative. His certification states:19 LEYTE IV ELECTRIC COOPERATIVE, INC. Hilongos, Leyte CERTIFICATION TO WHOM IT MAY CONCERN:

On the other hand, said manager certified that the registered member is actually Carmen Cotiamco, Miguels sister-in-law, thus:20 LEYTE IV ELECTRIC COOPERATIVE, INC. Hilongos, Leyte CERTIFICATION TO WHOM IT MAY CONCERN: THIS IS TO CERTIFY that Mrs. Carmen Cotiamco is the registered member of Leyeco IV under membership #166which was approved by the Board of Directors on October 30, 1997. Evidencing her membership is the issuance of Official Receipt No. 000287 issued on October 24, 1997. Hilongos, Leyte, May 23, 1990. (SGD.) ROMULO LACERNA Member Services Department Manager (underlining ours)

This is to certify that one Miguel Cotiamco of 30 de Deciembre St., Baybay, Leyte is an industrial consumer of the Cooperative as of November 11, 1987. It is certified further that nothing on record showed the membership of Miguel Cotiamco to (sic) the Cooperative. Issued this 3rd day of July, 1990 at Hilongos, Leyte. (SGD.) ROMULO L. LACERNA Manager, Member Services Dept. (underlining ours)

He also certified that there is nothing on record which showed a separate membership of private respondent Miguel Cotiamco, thus:21 CERTIFICATION TO WHOM IT MAY CONCERN: THIS IS TO CERTIFY that records of this office show that CARMEN-MIGUEL COTIAMCO is a member-consumer bearing membership number 166 since August 18, 1981. It is further certified that Miguel Cotiamco become an industrial consumer since November 16, 1987 using the same membership number.

Nothing on record showed a separate membership of Miguel Cotiamco. Issued this 6th day of June, 1990 at Hilongos, Leyte. (SGD.) ROMULO L. LACERNA Manager, Member Services Department Nor can there be a joint membership of private respondent Miguel Cotiamco and his sister-in-law Carmen, as the by-laws allow joint membership only in the case of husband and wife. Thus, the by-laws provides in Article I, 3&4 that: Section 3. Joint Membership. A husband and wife may apply for a joint membership and, subject to their compliance with the requirements set forth in Section 1 of this Article, may be accepted for such membership. The term member as used in these bylaws shall be deemed to include a husband and wife holding a joint membership and any provisions relating to the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership. Without limiting the generality of the foregoing, the effect of the hereinafter specified actions by or in respect of the holders of a joint membership shall be as follows: (a) The presence at a meeting of either or both shall be regarded as the presence of one member and shall constitute a joint waiver of notice of the meeting; (b) The vote of either separately or both jointly shall constitute one joint vote; (c) A waiver of notice signed by either or both shall constitute a joint waiver; (d) Notice to either shall constitute notice to both; (e) Expulsion of either shall terminate the joint membership; (f) Withdrawal of either terminate the joint membership; (g) Either but not both may be elected or appointed as an officer or board member, provided that both meet the qualifications for such office. SECTION 4. Conversion of Membership. (a) A Membership may be converted to a joint membership upon the written request of the holder thereof and the agreement by such holder and his or her spouse to comply with the articles of incorporation, by-laws and rules and regulations adopted by the board. The outstanding membership certificates shall be

surrendered, and shall be reissued by the Cooperative in such manner as shall indicate the changed membership status. (b) Upon the death of either spouse who is a party to the joint membership, such membership shall be held solely by the survivor. The outstanding membership certificate shall be surrendered, and shall be reissued in such manner as shall indicate the changed membership status, provided, however, that the estate of the deceased shall not be released from any debts due to the Cooperative. Nevertheless, the NEA and the Court of Appeals held that having allowed private respondent Cotiamco to exercise the membership rights of Carmen Cotiamco to vote in the district elections of 1987 and 1990, the cooperative could no longer deny his membership under the principle of estoppel. But, as petitioner points out, he was not privy to any arrangement that private respondent and the LEYECO IV might have and thus the doctrine of estoppel cannot be invoked against himself. It may be added that the doctrine cannot be used to disregard the provisions of law, in this case, the provision of P.D. No. 269, 24 which requires membership in the cooperative as a condition for membership in the board of directors. It states: Sec. 24. Board of Directors.- (a) The business of a cooperative shall be managed by a board of not less than five directors, each of whom shall be a member of the cooperative or of another which is a member thereof. . . . The ruling of the NEA that private respondent is a bonafide member of the cooperative and for that reason was qualified to be a director contravenes both the provisions of P.D. No. 269 and the by-laws of the LEYECO IV. It was error for the Court of Appeals to affirm such ruling of the NEA which was clearly rendered with grave abuse of discretion. Petitioners contention that he was denied due process is, however, untenable. As the NEA and the Court of Appeals found, petitioner filed an opposition to private respondent Cotiamcos Motion for Issuance of Restraining Order Against Espina in the NEA, thus belying petitioners claim that he did not know that the decision of the DECOM had been appealed to the NEA. Consequently, he cannot claim lack of notice. It is settled that what the law prohibits is not the absence of previous notice but the absolute absence thereof and lack of an opportunity to be heard.22 Under 48(17) of the LEYECO IV Election Code, votes cast for a candidate who has been disqualified are considered stray votes. Although at the time the election in this case was held private respondent had not been declared to be disqualified, there is no reason why this provision cannot be applied to this case and the votes

cast for him considered stray so as to declare petitioner the winner. After all, the petition for disqualification of private respondent was filed before the election. At all events, this case is now moot and academic as the term of office of director expired on June 26, 1993, pursuant to Art. IV, 2 of the by-laws of LEYECO IV. WHEREFORE, petition is DISMISSED for being moot and academic. SO ORDERED. Melo and Martinez, JJ., concur.