Administrative Law
Dean Carlota
VII. EXTENT OF JUDICIAL REVIEW
A. THE LAW-FACT DISTINCTION
DAUAN V SECRETARY
G.R. No. L-19547
REGALA; January 31, 1967
FACTS
-Jose Aquino originally applied for homestead
patent over 14.25 hectares of public land in
Bambang, Sto. Domingo, Nueva Vizcaya. Upon his
death, Aquino was succeeded by his children who
sold their rights to the land to the present
appellee, Serapio Dauan. Dauan himself filed an
application for a homestead of the land, but there
is considerable dispute as to whether this
application was approved by the Director of Lands.
-Dauan subsequently sold his rights to various
portions of the homestead to the appellants1
without securing the approval of the Secretary of
Agriculture and Natural Resources. Both parties
took the view that, if Dauan's application had been
approved, then the transfer of rights to appellants
must be approved by the Secretary; otherwise, no
such approval was necessary. The basis of
contention of both parties is the provision of the
Public Land Act (Com. Act No. 141)2:
1
1/2 of the land to appellant Simon Ilarde, 4 hectares to
appellant Lord Calangan, and 3 hectares to appellant
Basilia Tomas. Calangan and Tomas in turn sold their
rights to some part of the land to Santos Baysa.
2
"Sec. 20. If at any time after the approval of the
application and before the patent is issued, the applicant
shall prove to the satisfaction of the Director of Lands that
he has complied with all requirements of the law, but can
not continue with his homestead, through no fault of his
own, and there is a bona fide purchaser for the rights and
improvements of the applicant on the land, and that the
conveyance is not made for purposes of speculation, then
the applicant, with the previous approval of the Secretary
of Agriculture and Commerce, may transfer his rights to
the land and improvements to any person legally qualified
to apply for a homestead, and immediately after such
transfer, the purchaser shall file a homestead application
to the land so acquired and shall succeed the original
homesteader in his rights and obligations beginning with
the date of the approval of said application of the
purchaser. Any person who his so transferred his rights
may again apply for a new homestead. Every transfer
made without the previous approval of the Secretary of
Agriculture and Commerce shall be null and void and shall
result in the cancellation of the entry and the refusal of
A2010
-The dispute arose when Dauan asked Bureau of
Lands to cancel the application for free patents
which appellants filed, covering the portions of the
homestead sold to them. Dauan questioned the
validity of the sales, claiming that the agreement
was that of a loan and that at any rate the
supposed sales were void for having been made
without the prior approval of the Secretary of
Agriculture and Natural Resources.
-appellants maintained that their agreement with
the Dauan was that of a sale and, that as the
homestead application of Dauan himself had not
been approved by the Director of Lands, no
approval by the Secretary of the subsequent sales
to them was necessary.
-The Director of Lands held the transactions to be
sales and sustained their validity on a finding that
the homestead application of Dauan had not been
approved. The Secretary of Agriculture and Natural
Resources affirmed on appeal.
-Dauan did not appeal to the President. Instead, he
filed this petition for certiorari in CFI Nueva
Vizcaya, charging that both Director of Lands, and
Secretary gravely abused their discretion in finding
that his application had not been approved and,
consequently, in ruling that prior approval of the
transfers to them was not required. CFI granted
Dauan's petition. Respondent’s MFR was denied.
Hence, this appeal.
ISSUES
1. WON this petition for certiorari should be
entertained.
2. WON lower court properly concluded that
Dauan's application for a homestead had been
approved
HELD
1. YES.
While the rule of exhaustion of administrative
remedies would indeed require an appeal to be
taken to the President before resort to the courts
can be made, it is equally true that the rule is not
without exception. For instance, the rule does not
apply where the question in dispute is purely a
legal one, and nothing of an administrative nature
is to be or can be done.
-Here the question was whether from the evidence
submitted by the parties it could fairly be
concluded that Dauan's homestead application
the patent."
148
had been granted. Were the matter a simple
process of ascertaining from the records whether
the application had been granted, we would agree
with appellants that it is a question of fact. But
precisely because the records of the Bureau of
Lands had been destroyed during the war that
circumstantial evidence had to be introduced and
it is a rule now settled that the conclusion drawn
from the facts is a conclusion of law which the
courts may review.
2. YES.
-There are circumstances strongly favoring the
inference that Dauan's application had been
granted. In disregarding them and in insisting
instead on the presentation of the records or
reconstituted records to prove the grant of
Dauan's application, respondent land officials
acted in excess of jurisdiction since circumstantial
evidence is admitted to prove the grant of official
sanction. (see Garcia vs. Valera, 88 Phil. 472
Reasoning
a. In 1936 a Decision (re: contest by one Escobedo
against Dauan’s application), the Director of Lands
made a statement from which it may fairly be
inferred that Dauan had been allowed to enter the
land and that his application had been granted.
[Sec13 of the Public Land Act: entry is allowed only
after the approval of the application.]
b. “wheras clauses” in documents entitled
"Transfer of Homestead Rights"
c. If Dauan's application had not been approved
then he obviously had no right to transfer to the
respondents
d. Dauan had all qualifications prescribed by the
statute and the presumption is that in the
performance of his duty, the Director granted
Dauan's application.
SC held that the conveyances to the appellants,
which were admittedly made without the previous
approval of the Secretary of Agriculture and
Natural Resources, are void and, consequently,
that appellants return the possession of the land in
question to the Dauan upon the return to them of
the purchase price they had paid to the Dauan.
-A transfer of rights without the previous approval
of the Secretary of Agriculture and Natural
Resources "shall result in the cancellation of the
entry and the refusal of the patent" of Dauan but
the cancellation is not automatic and as long as
the Government has not chosen to act, the rights
of Dauan must stand.
Administrative Law
Dean Carlota
DE LOS REYES VDA. DE SANTIAGO V
REYES
107 PHIL 210
LABRADOR; February 29, 1960
FACTS
- Victorio Santiago was a driver of an autocalesa
belonging to respondent and was last seen
operating said autocalesa at 9:00 in the evening of
September 26, 1955.
- In the morning of September 27, 1955, his dead
body was found in Tayabas, Quezon obviously a
victim of murder by persons who were at large and
whose identities were not known.
- A stipulation of facts was submitted by the
parties.
- There was a specific instruction given by the
respondent to the deceased to follow the route
prescribed by the Public Service Commission. In
the case of jeep driven by the deceased, its route
is within Manila and suburbs;
- In case the driver goes beyond the route
prescribed by the Public Service Commission, a
fine of P50.00 is imposed which is paid by the
respondent. However, in case of the traffic
violations especially speeding, it is the driver who
pays.
- The Commission found on the question as to
whether or not the death of Victoriano Santiago
arose out of and was occasioned in the court of his
employment that the drivers act in deviating from
the route prescribed for his observance constituted
a positive factor in bringing about his own demise.
It found that the deceased willfully violated public
service rules and regulations and the instructions
of his employer in undertaking a trip too far
beyond the limits of the line in which his jeepney
was authorized to operate.
- Associate Commissioner Nieves Baens del
Rosario dissented from the opinion of the majority:
In connection with the “arising out of and in the
course of employment” requirement in relation to
the presumptions in favor of the employee, Larson
makes this comment – “The burden of proving his
cases beyond speculation and conjecture is on the
claimant. He is aided in some jurisdiction by
presumptions that help to supply the minimum
evidence necessary to support an award, and
which shift the burden to the defendant when
some connection of the injury with the work has
been prove.”
A2010
- And in this jurisdiction where such presumptions
in favor of the employee are provided in our
Workmen's Compensation Act, the Supreme Court
in the Batangas Transportation case ruled: Our
position is that once it is proved that the employee
died in the course of the employment, the legal
presumption in the contrary, is that the claim
comes within the provisions of the compensation
law. In other words, that accident arose out of the
workmen's employment.
- Another presumption created in favor of the
employee and which is more specific than the all
embracing presumption that the claim comes
within the provisions of `the Act' is that one
provided in sub-section 3 of Section 44. It reads:
`3. That the injury was not occasioned by the
willful intention of the injured employee to bring
about the injury or death of himself or of another.'
- Travellers Insurance Company vs. Cardillo: `The
evidence necessary to overcome the presumption
then must do more than create doubt or set up
non-compensable alternative explanations of the
accident. It must be `evidence such as a
reasonable mind must accept as adequate to
support a conclusion.'
ISSUE
WON respondent erred in denying petitioner’s
claim
HELD
YES.
- Batangas Transportation case: `It is not unfair;
the employer has the means and the facilities to
know the cause; and should not be allowed to
profit by concealing it. Nay, he should take active
steps to ascertain the cause of the murder; not
just continue its operations unmolested.'
- Travellers Insurance Co.: `The death of the
employee usually deprives the dependent of his
best witness - the employee himself - and,
especially where the accident is unwitnessed,
some latitude should be given the claimant.
- Hence, presumptions or inference that an
unwitnessed death arose out of the employment
are allowed in some jurisdictions, where the
employer provides no contrary proof, and when
last seen deceased was working or had properly
recessed.
- The respondent employer has not provided any
contrary proof, and Santiago when he was last
seen doing his regular work of driving . .
149
- There is no question that immediately before
leaving Manila the deceased was engaged in his
employment. The presumption is that he
performed his duties legally and in accordance
with the rules and regulations, because that was
his regular obligation.
- Inasmuch as the law established the presumption
that the deceased followed the law and
regulations, it was incumbent upon respondent to
prove that he did otherwise, or that he failed to
comply with the regulations. In other words it was
incumbent upon the respondent herein to prove
that the deceased voluntarily went out of his route
and drove his jeepney towards the province of
Quezon, not that the deceased voluntarily went to
that province thereby going beyond the route
provided for the vehicle that he was driving.
Petitioners claim that the deceased voluntarily
went out of his ordinary route. Petitioners also
have the obligation to prove this fact, this being an
affirmative allegation. They failed to do so.
ABOITIZ SHIPPING CORP V PEPITO
18 SCRA 1028
SANCHEZ; December 17, 1966
FACTS
- Between the night of November 30 and the early
morning of December 1, 1961, Demetrio Pepito, a
crew member of M/V P. Aboitiz, disappeared while
said vessel was on voyage.
- December 26, 1961 – Aboitiz received from
respondent Vivencia Ando Pepito a letter dated
December 12, 1961 which notified them that
Demetrio was presumed dead.
- January 12, 1962 - Vivencia Ando Pepito, for
herself and in behalf of her children, filed with the
DOLE Regional Office in Cebu City a notice and
claim for compensation, asking for death benefits,
and stating that Demetrio died while the vessel
Aboitiz was en route to Tandag from Surigao.
- Aboitiz Shipping received the letter on February
16 and sent a letter dated February 17. They
claimed that Demetrio disappeared while off duty
when the vessel was near Bucas Grande Island
while the ship was in navigation on a calm sea and
good weather. They did not know whether he
jumped or swam ashore.
- March 21, 1962 - The Regional Administrator,
without a hearing, issued an award for death
benefits to respondents, planted upon the ground
Administrative Law
Dean Carlota
that the right to compensation of the claimant has
not been controverted by respondent within the
period provided for by law.
- Aboitiz appealed which was not granted by the
Commission.
ISSUE
WON the ruling of the Commission was correct
HELD
NO
Ratio Non-controversion in compensation cases,
as in the case of pleadings in ordinary civil cases,
simply means admission of facts, not conclusions
of law.
Reasoning The purported controversion filed on
February 16, 1962-was made beyond the periods
set forth in the law and the rules and regulations
of the Workmen's Compensation Commission,
namely, 14 days from the date of accident or 10
days from knowledge thereof.
- By Section 2 Rule 7 of the Rules of the
Workmen's Compensation Commission, “All the
general rules of procedure in the Courts of First
Instance shall be suppletory to the Rules of the
Workmen's Compensation Commission but the
commission shall not be bound by the technical
rules of procedure.”
- This claim was filed on Jan 12, 1962, barely 42
days after the event took place. At that time, no
presumption existed that Demetrio Pepito was
dead. The boat was not lost. This opens up a
number of possibilities, as nothing is certain and
nobody knows what has happened to him. He
could have transferred to another vessel or
watercraft. He could even have swam to safety. Or
he could have died. Or worse, he could have taken
his own life. Legal implications, such as right to
compensation, succession, legal status of the wife,
are so important that courts should not easily be
carried to the conclusion that the man is dead.
The result is that death cannot be taken as a fact.
- The mere failure to controvert the statement that
Demetrio Pepito is believed to be "dead" or
"deceased" because he "was lost" or was
"reported missing", does not import an admission
that the man is actually dead, but that he was just
lost or missing. Aboitiz Shipping's non-
controversion admits but the fact that Demetrio
Pepito was lost or missing, but certainly is not an
admission of the actual fact of death.
- Aboitiz Shipping was directed to pay
compensation without inquiry into the fact and
A2010
circumstances of death. This trenches upon
petitioner's right to due process enshrined in
Section 1 (1) of Article III of the Constitution that
"No person shall be deprived of life, liberty, or
property without due process of law." The award
having been made before petitioner was given an
opportunity to be heard on the debatable fact and
circumstances of death, that award has no leg to
stand on.
Disposition The appealed decision is set aside
and the record is ordered returned to the
Workmen's Compensation Commission with
instructions 1. To hold a hearing, with notice to the
parties, to determine (a) whether Demetrio Pepito
is alive; or (b) whether he should be presumed
dead, under the provisions of paragraph 3, Article
391 of the Civil Code; and (c) the circumstances of
death if it be found or presumed that he died; and
2. To render judgment accordingly.
B. QUESTION OF LAW
ORTUA v ENCARNACION
G.R. No. 39919
MALCOLM; JAN 30 1934
FACTS
- Public Land Law, Act No. 2874: the purchaser of a
tract of public agricultural land shall be a citizen of
lawful age of the Philippine Islands or of the United
States.
-Ortua filed for an application with the Bureau of
Lands for the purchase of a tract of public land in
Camarines Sur. Following an investigation
conducted by the Bureau of Lands, Ortua's
application was rejected, because the Dir of Lands
concluded that he was a Chinese citizen (Ortua
was said to have demonstrated that he had
forfeited his Philippine citizenship -- since he
voluntarily applied for a landing certificate of
residence which is only given to Chinese persons,
and when he applied for the registration of a boat,
it was denied on the ground that the appellant was
a Chinese citizen, and Ortua submitted to the
ruling.)
-Ortua sought issuance of a writ of mandamus
against the Sec of Agriculture and Commerce and
the Director of Lands to compel them to give due
course to his sales application. Demurrers
interposed to the complaint by the respondents
150
were sustained in the trial court, and on the failure
of the petitioner further to amend his complaint,
the action was dismissed
ISSUE
1. WON the decision of Dir of Lands is subject to
review by the court
2. Whether Ortua is a Chinese or Filipino citizen
HELD
1. YES
- Any action of the Dir of Lands which is based
upon a misconstruction of the law can be
corrected by the courts
-A decision rendered by the Dir of Lands and
approved by the Sec of Agriculture and Commerce,
upon a question of fact is conclusive and not
subject to be reviewed by the courts, in the
absence of a showing that such decision was
rendered in consequence of fraud, imposition, or
mistake, other than error of judgment in
estimating the value or effect of evidence,
regardless of whether or not it is consistent with
the preponderance of the evidence, so long as
there is some evidence upon which the finding in
question could be made. However, so much of the
decision of the Dir of Lands as relates to a
question of law is in no sense conclusive upon the
courts, but is subject to review.
2.Flipino
There has been no implied renunciation of
citizenship, because the petitioner has been
domiciled in these Islands except for a short period
during his infancy when he temporarily sojourned
in China for study. On the contrary, he states that
he has always considered himself to be a Filipino,
and that he has elected to remain as a Philippine
citizen.
MEJIA VDA DE ALFAFARA v MAPA
50 OG No. 6 2507
BAUTISTA ANGELO; May 28, 1954
FACTS:
- SUMMARY: Petitioner Clotilde Mejia Vda de
Alfafara and respondents Benita Compana et al
filed separately with the Bureau of Lands an
application claiming as homestead lot no. 741 of
the Carcar cadastre. The bureau rendered a
decision in favor of petitioner. Respondents
appealed to the Secretary of Agriculture and
Administrative Law
Dean Carlota
Natural Resources. Secretary Mapa reversed the
decision. Mejia’s MR having been denied, she filed
petition for certiorari with TC, which dismissed it.
She went to CA, which certified it to SC as it
involves questions of law.
- DETAILS: By virtue of an application filed by
Maximo Alfafara, the Bureau of Forestry granted
him permit on Feb 1, 1923, by virtue of which he
was authorized to construct and maintain a
fishbond withn lot No. 741 of the Carcar cadastre.
He constructed fishpond dikes, but these were
destroyed by the flood which occurred in the same
year. In 1926, he abandoned the idea of
converting the land into a fishpond and instead
decided to convert it into a rice field.
- Alfafara entered into an agreement with
respondents whereby the latter would convert the
and into a rice field on condition that they would
take for themselves the harvests for the first three
years, and thereafter the crop would be divided
share and share alike (50-50) between them and
Alfafara.
- In 1930, Alfafara ceded his rights and interests to
his son Catalino, who continued improving the
same. Catalino filed a homestead application
therefore in his name, while at the same time
continuing the same agreement with respondents.
- Upon the death of Catalino in 1945, the
respondents began asserting their own right over
the land and refused to give the share
corresponding to Catalino to his widow, petitioner
Mejia.
- The Bureau of Lands found, not only from the
evidence presented, but also from ocular
inspection, that the land had been under the
rightful possession of Maximo Alfafara since 1923.
It ruled in favor of petitioner.
- the Secretary of Agriculture and Natural
Resources reversed the decision of the Bureau of
Lands. It held that the land covered by the
application was still within the forest zone when
applied for and as such, the Bureau of Lands had
no jurisdiction to dispose of said land under the
provisions of the Public Land Law. He also held
that inasmuch as the Alfafaras have not
established any right to the land at the time they
entered into the contract with respondents to work
on the land on a share basis, the relation of
landlord and cropper between them did not legally
exist and as such did not produce any legal effect.
The secretary held that an actual occupant of an
agricultural land is given preferential right thereto
(in favor of respondents)
A2010
ISSUE:
WON The Secretary of Agriculture and Natural
Resources abused his discretion in reversing the
decision of the Director of Lands
HELD
YES
- There are two questions that need to be
resolved:
1. Has the petitioner or any of her predecessors-in-
interest acquired any right to the land under the
provisions of the Public Land Law? To this, the
secretary ruled they did not. SC upheld such
finding, stating that it appears that the land was
released from the forest zone only on Aug 10
1949, and the permit granted to Maximo to
possess the land for purposes of homestead was in
1923. Catalino’s application was filed in 1930.
2. What is the legal effect of the contractual
relation of landlord and tenant existing between
the Alfafaras and the respondents? The secretary
ruled there was no legal effect inasmuch as the
petitioners have not established any right to the
land. The SC disagrees. Maximo has acted in good
faith honestly believing that his possession of the
land was legal and was given to him under and by
virtue of the authority of law. It cannot be disputed
that when Maximo entered into a contract with
respondents, both Alfafara and the respondents
have acted in good faith in the honest belief that
what they were doing was legal and in pursuance
of the permit granted to Alfafara. Such contract
has produced as a necessary consequence the
relation of landlord and tenant. The act of
respondents in claiming the land as their own upon
the death of Catalino cannot be regarded as basis
for the grant of public land.
- Ortua v Singson Encarnacion: a decision rendered
by the Director of Lands and approved by the
Secretary of Agriculture and Natural Resources
upon a question of fact is conclusive and not
subject to be reviewed by the courts, in the
absence of a showing that such decision was
rendered in consequence of fraud, imposition or
mistake, other than error of judgment in
estimating the value or effect of evidence.
- this doctrine does not apply to this case because
the decision has not been approved but has been
revoked by the Secretary. The philosophy behind
this rule is that if the decision of the Director of
Lands on a question of fact is concurred in by the
Secretary, it becomes conclusive upon the courts
151
upon the theory that the subject has been
thoroughly weighed and discussed and it must be
given faith and credit, but not so when there is
disagreement.
- even if there is unanimity in the decision, the
doctrine would still not apply if the conclusions
drawn by the Secretary from the facts found are
erroneous or not warranted by law. These
conclusions can still be the subject of judicial
review. These are questions of law that are
referred to the court to determine. As stated in
Ortua: “It certainly was not intended by the
legislative body to remove the jurisdiction of
courts all right to review decisions of the Bureau of
Lands, for to do so would be to attempt something
which could not be done legally…. Any action of
the Director of Lands which is based upon a
misconstruction of the law can be corrected by the
courts.”
Disposition Decision of Secretary reversed.
PARAS, disenting
- the question is after the land was declared
available for homestead purposes by certification
of the Director of Forestry in 1949, orlong after the
permit of Maximo had been cancelled, whether the
Alfafaras should be preferred to tose who actually
worked on the land. After the cancellation of his
permit, Maximo ceased to have any right or
authority to continue holding the land.
PEOPLE V SANTOS
63 PHIL 300
VILLA-REAL; AUG.15, 1936
FACTS
-An information was filed against Augusto Santos
for his alleged violation of Sec. 28 of Fish and
Game Administrative Order no.2. Said Admin.
Order prohibits boats licensed under Act No.4003
from fishing, loitering or anchoring within 3 kms of
the shore line of islands and reservations over
which jurisdiction is exercised by naval or military
authorities of the US. It also contained a
conditional clause: “Provided that, boats not
subject to license under Act No. 4003 may fish
only upon receiving written permission from the
SAC.”
- The administrative order was issued by the
Secretary of Agriculture and Commerce (SAC) by
virtue of the authority vested upon it by Sec. 4 of
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Dean Carlota
Act No.4003, which reads: “The SAC shall from
time to time issue such instructions, orders, rules
and regulations consistent with this Act, as may be
necessary and proper to carry into effect the
provisions thereof and for the conduct of
proceedings arising under such provisions.”
- During trial, counsel for accused requested that
the case be transferred to the CFI of Cavite, where
the preliminary investigation was conducted. The
CFI of Cavite dismissed the case on the ground of
lack of jurisdiction, hence this appeal.
ISSUE
WON accused can be held criminally liable for
violation of said Aministrative Order
HELD
NO. The information should be dismissed.
Reasoning Act no.4003 which grants the SAC
authority to issue orders, rules and regulations
contains no provisions similar to the conditional
clause of Sec.28 of A.O. No.2, the conditional
clause therefore supplies a defect in the law,
extending it.
- The conditional clause constitutes not only an
excess of the regulatory power conferred upon the
SAC by Act No. 4003 but also an exercise of
legislative powers which he does not have.
Therefore, said conditional clause is null and void
and without effect.
Disposition the information filed against Santos is
DISMISSED.
JAPANESE WAR NOTES CLAIMANTS
ASSOCIATION OF THE PHILIPPINES,
INC. v SEC
G.R. No. L-8987
LABRADOR; May 23, 1957
FACTS
- On August 25, 1954 the SEC Commissioner
issued an order requiring Japanese War Notes
Claimants and its President, Mr. Abcede, to show
cause why it should not be proceeded against for
making misrepresentations to the public about the
need of registering and depositing Japanese war
notes, with a view to their probable redemption as
contemplated in Senate Bill No. 163 and in Senate
Concurrent Resolution No. 14, for otherwise they
would be valueless.
A2010
- At the investigation that was conducted in
connection with the above order, the petitioner
tried to show that there were no
misrepresentations made by them in their
publications and that the mistake made by them
was made in good faith as it was later retracted
and rectified. They also stated that they longed
and hoped that the war notes would be redeemed;
that they are sincere and honest in their activities;
and that they are entitled to their beliefs.
- After the investigation, in which it was disclosed
that the petitioner claimed the right to continue in
the above-mentioned activities, the Commissioner
found that according to its articles the petitioner
has the privilege to work for the redemption of the
war notes of its members alone, but that it can not
offer its services to the public for a valuable
consideration, because there is nothing definite
and tangible about the redemption of the war
notes and its success is speculative; that any
authority given to offer services can easily
degenerate into a racket; that under its articles of
incorporation the petitioner is a civic and non-
stock corporation and should not engage in
business for profit; that it has received war notes
for deposit, upon payment of fees, without
authority in its articles to do so; that it had
previously been ordered to desist from collecting
fees for those registering the war notes, but
notwithstanding this prohibition it has, done so in
the guise of service fees. Hence the Commissioner
ordered:
(1) That the Association stop immediately the
registration of Japanese War Notes, receiving the
same for deposit, and charging fees therefor. It is
not, however, prohibited from admitting members,
with the corresponding rights and obligations as
such.
(2) That the Association desist forthwith from
accepting and collecting fees for reparation claims
for civilians casualties and other injuries, as it is
not authorized so to do under its articles of
incorporation.
ISSUES
1. WON SEC erred in finding that petitioner made
misrepresentations to the public so as to induce
holders of war notes to register them with
petitioner.
2. WON SEC erred in ordering the petitioner to stop
the registration of Japanese war notes, receiving
same for deposit and charging fees therefore.
152
3. WON the SEC erred in ordering petitioner to
desist from accepting and collecting fees for
reparation claims for civilian casualties and
injuries.
HELD
1. We are not permitted to examine the
correctness of the first contention as the same
involves questions of fact; only questions of law
may be raised in this case for review (sec 2, Rule
43 ROC).
2. NO.
In support of the second contention it is claimed
that the order was beside the issue investigated.
While it may be true that the issue which started
the investigation has been the misrepresentations
made to the public by the petitioner herein, the
order is based on the findings of fact made in the
course of the investigation and the prohibition
stated in the order aims at the eradication of the
source of the evil of misrepresentation that was
the subject of the investigation. It can not be said,
therefore, that the resultant order is not germane
or related to the subject-matter of the
investigation.
It is also argued that the registration of war notes
and the collection of fees therefor is not prohibited
by the corporation law and the authority of the
petitioner to engage therein is implied from its
articles of incorporation. We do not find any merit
in the contention. The articles authorize collection
of fees from members; but they do not authorize
the corporation to engage in the business of
registering and accepting war notes for deposit
and collecting fees from such services.
3. NO.
That the association has authority to accept and
collect fees for reparation claims for civilian
casualties and other injuries is beyond any of the
powers of the association as embodied in its
articles and have absolutely no relation to the
avowed purpose of the association to work for the
redemption of war notes.
The order of the Securities and Exchange was
evidently promulgated under the authority of
section 1 (b) of RA 1143 which reads:
(b) To penalize any violation of or non-compliance
with any terms of conditions of any certificate,
license, or permit issued by the Commission or of
any order, decision, ruling or regulation thereof...
Disposition The order sought to be re viewed is
hereby affirmed.
Administrative Law
Dean Carlota
YSMAEL v CIR
G.R. NO. 14280
CONCEPCION; May 30 1960
FACTS
On November 27, 1957, the petitioning Union, filed
a petition praying for the aforesaid certification,
upon the ground that it is a labor organization
composed of all the salesmen working for the
Ysmael Steel Manufacturing Co.,; that there are in
the Company two (2) other labor unions, namely,
the Ysmael Steel Labor Organization (PAFLU), the
membership of which is composed mainly of
manual factory workers (non-supervisors), and the
Ysmael Steel Employees Union, the membership of
which is composed of supervisors, non-supervisors
who are technical employees, office non-technical
employees and clerical factory workers, and that
the members of petitioning Union are not included
in or represented by any of said two (2) unions in
their collective bargaining agreement with the
Company, for the economic factors affecting the
members of petitioning Union are different and
they constitute a separate and distinct union for an
appropriate bargaining unit. The Company filed an
answer objecting to the petition upon several
grounds, which were, in effect, overruled by the
Court in the order appealed from.
ISSUE
WON members of petitioning Union do not
constitute a majority of its salesmen or
commission agents (as argued by the Company
and contrary to the findings of the lower court)
HELD
NO
This argument of the company is contrary to the
above quoted findings of fact of the lower court,
which, admittedly, are borne out by Exhibit C, a list
of the salesmen or agents affiliated to petitioning
Union. Hence, said findings may not be disturbed
in this proceeding for review by certiorari. Besides,
although the Company now says that said list,
Exhibit C, is not correct, the fact is that, in its
answer, filed with the lower court, it merely
averred that it is "not certain" that the members of
petitioning Union constitute a majority of the
salesmen or commission agents of said Company.
At any rate, the record shows that the same had
twenty (20) salesmen or commission agents when
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this case was instituted; that, at the time of the
hearing in the lower court, there were only
fourteen (14) of them working for the Company;
and that, with the exception of one (1) of them,
the remaining thirteen (13) salesmen or
commission agents are members of petitioning
Union, and there is no accuracy of the finding to
this effect in the order appealed from simply
because only three (3) of these salesmen or
agents appeared at the aforementioned hearing.
Apart from the fact they were not required to be
present at said hearing, the reluctance of
employees or agents to do anything that may
antagonize the employer, or may give occasion for
antagonism, is readily understandable.
O'LEARY vs. BROWN-PACIFIC-
MAXON, INC. (BPM)
340 U.S. 504
FRANKFURTER, J. (1951 February
26)
FACTS
- BPM, a contractor engaged in construction work
for the US Navy in Guam, maintained for its
employees a recreation center adjoining a channel
so dangerous that swimming was forbidden and
signs to that effect were erected. Employee John
VALAK was spending the afternoon at the center
when he noticed two men, standing on the reefs
beyond the channel, signaling for help. In
attempting to swim the channel to rescue the
men, VALAK drowned.
- As a result, a claim was filed by VALAK’s
dependent mother under.the Longshoremen's and
Harbor Workers' Compensation Act. Deputy
Commissioner O’LEARY allowed the claim, finding
as "fact" that "at the time of his drowning and
death [VALAK] was using the recreational
facilities… and such participation by the deceased
was an incident of his employment, and that his
drowning and death arose… in the course of said
employment." The District Court sustained
O’LEARY’s award. CA reversed, holding that "[t]he
lethal currents were not a part of the recreational
facilities… and the swimming in them for the
rescue of the unknown man was not recreation. It
was an act… not in the course of Valak's
employment.”
ISSUE
153
WON O’LEARY properly awarded the subject death
benefit
HELD
YES.
- The Longshoremen's Act authorizes payment of
compensation for "death arising… in the course of
employment." CA entertained the view that this
standard precluded injuries incurred in an attempt
to rescue persons not known to be in the
employer's service, undertaken in forbidden
waters outside the employer's premises. We think
this is too restricted an interpretation of the Act. It
is not necessary that the employee be
engaged at the time of the injury in activity
of benefit to his employer. All that is
required is that the "obligations or
conditions" of employment create the "zone
of special danger" out of which the injury
arose. A reasonable rescue attempt may be one
of the risks of the employment, and so covered by
the statute.
- O’LEARY treated the question whether the
particular rescue attempt described by the
evidence was one of the class covered by the Act
as a question of "fact." Here, “fact” does not
connote a simple, external, physical event as to
which there is conflicting testimony. The
conclusion concerns a combination of happenings
and the inferences drawn from them. The
inferences presuppose applicable standards for
assessing the external facts. Yet the standards are
not of such a nature as to be appropriate for
judicial ascertainment as "questions of law."
- Both sides conceded that the scope of judicial
review of such findings of fact is governed by the
Administrative Procedure Act. The standard,
therefore, is that the findings are to be
accepted unless they are unsupported by
substantial evidence on the record
considered as a whole. We are satisfied that the
record supports the Deputy Commissioner's
finding. The pertinent evidence is consistent and
credible. From it O’LEARY could rationally infer
that VALAK acted reasonably in attempting the
rescue, and that his death may fairly be
attributable to the risks of the employment.
Disposition Reversed.
MINTON, with whom JACKSON and BURTON
join, dissenting
- There must be some connection between the
death and the employment. It is undisputed that
Administrative Law
Dean Carlota
the deceased, at the time he met his death, was
outside the recreational area in the performance of
a voluntary act of attempted rescue of someone
unknown to the record. There can be no inference
of liability here unless liability follows from the
mere relationship of employer and employee. The
attempt to rescue did not arise in the course of
VALAK’s employment. The only relation his
employment had with the attempted rescue and
the following death was that his employment put
him in Guam.
O'KEEFFE v SMITH ASSOCIATES
380 U.S. 359
PER CURIAM; March 29, 1965
FACTS
Ecker was an employee of a government
contractor at a defense base in Korea drowned
during a Saturday outing. His employer considered
all employees to be in the course of regular
occupation from the time they left the United
States until they returned, and expected
employees to seek recreation away from the job
site. On stipulated facts the Deputy Commissioner,
Bureau of Employees' Compensation, found that
death arose out of and in the course of
employment, and awarded damages pursuant to
the Longshoremen's and Harbor Workers'
Compensation Act. The District Court affirmed the
award, which the Court of Appeals reversed.
ISSUE
WON the death arose out of and in the course of
employment
HELD
- Since the Act provides that the Deputy
Commissioner's order may be set aside by a
reviewing court only if not in accordance with law
and since the Deputy Commissioner correctly
applied the standard of O'Leary v. Brown-Pacific-
Maxon, Inc. that the conditions of employment
create the "zone of special danger" out of which
the injury arose, his holding cannot be said to be
irrational or without substantial evidence and
should be upheld.
- The petition for writ of certiorari is granted and
the judgment of the Court of Appeals is reversed.
Section 2 (2) of the Act, 33 U.S.C. 902 (2) (1958
ed.), provides workmen's compensation for any
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"accidental injury or death arising out of and in the
course of employment." Section 19 (a), 33 U.S.C.
919 (a) (1958 ed.), provides for the filing of a
"claim for compensation" and specifies that "the
deputy commissioner shall have full power and
authority to hear and determine all questions in
respect of such claim." Section 20 (a), 33 U.S.C.
920 (a) (1958 ed.), provides that "[i]n any
proceeding for the enforcement of a claim for
compensation under this chapter it shall be
presumed, in the absence of substantial evidence
to the contrary . . . [t]hat the claim comes within
the provisions of this chapter." Finally, 21 (b), 33
U.S.C. 921 (b) (1958 ed.), provides that the Deputy
Commissioner's compensation order may be
suspended and set aside by a reviewing court only
"[i]f not in accordance with law."
- In cases decided both before and after the
passage of the Administrative Procedure Act, 60
Stat. 237, as amended, 5 U.S.C. 1001 et seq.
(1958 ed.), the Court has held that the foregoing
statutory provisions limit the scope of judicial
review of the Deputy Commissioner's
determination that a "particular injury arose out of
and in the course of employment." Cardillo v.
Liberty Mutual Ins. Co.,; O'Leary v. Brown-Pacific-
Maxon, Inc.
- "It matters not that the basic facts from which
the Deputy Commissioner draws this inference are
undisputed rather than controverted. . . . It is
likewise immaterial that the facts permit the
drawing of diverse inferences. The Deputy
Commissioner alone is charged with the duty of
initially selecting the inference which seems most
reasonable and his choice, if otherwise
sustainable, may not be disturbed by a reviewing
court. . . . Moreover, the fact that the inference of
the type here made by the Deputy Commissioner
involves an application of a broad statutory term
or phrase to a specific set of facts gives rise to no
greater scope of judicial review. . . ." Cardillo v.
Liberty Mutual Ins. Co..
- The rule of judicial review has therefore emerged
that the inferences drawn by the Deputy
Commissioner are to be accepted unless they are
irrational or "unsupported by substantial evidence
on the record . . . as a whole." O'Leary v. Brown-
Pacific-Maxon, Inc.
C. QUESTION OF FACT
154
GONZALES v VICTORY LABOR UNION
(VlCLU)
30 SCRA 47
MAKALINTAL, J.: October 31, 1969
FACTS:
- Gonzalez was engaged in trawl fishing, and
among his employees were Julian Beltran, Severino
Apawan, Ponciano Sayan, Quirico Mendez and
Virgilio Baes ? all of them working in petitioner's
fishing boat, the M/L Emiliana. On March 31, 1962
the Acting Prosecutor of the Court of Industrial
Relations filed a complaint against petitioner,
charging him with unfair labor practice in
dismissing said employees without just cause but
by reason of their membership in VICLU and
thereby interfering and coercing them in the
exercise of their right to self-organization.
- Gonzales admitted in his answer that the
complainants, except Virgilio Baes, were his
employees, but denied that he dismissed them for
their union affiliation, and alleged that their
dismissal was for cause, they having been found to
have connived with each other in pilfering the
catch of the fishing boat and selling the same to
the public for their personal benefit. Petitioner
further denied that he had knowledge, prior to the
filing of the complaint, of the complainants'
membership in the labor union.
- After trial, the court below held herein petitioner
guilty of unfair labor practice, ordered him to
cease and desist from the acts complained of and
directed the reinstatement of the complainants
with back wages from the date of their dismissal.
Petitioner filed a motion for reconsideration before
the Court en banc, but the motion was denied in a
minute resolution with extended dissent.
ISSUE
WON the employees were dismissed for cause
(pilferage)
HELD
YES
- There are other evidence, besides the testimony
of private respondents, which cannot be lightly
dismissed without arbitrarily closing the door to a
judicious discharge of the power of review within
the limits set down by the rule.
1. First of all, there is the membership slip signed
by complainants when they allegedly affiliated to
the Victory Labor Union. The slip is likewise signed
Administrative Law
Dean Carlota
by the union president, Atty. Loreto G. Campos,
and bears the handwritten date in ink, "Nov. 15,
1951." Attorney Campos categorically affirmed on
the witness stand the correctness of the date thus
written, and said that the actual signing was done
in the morning of that day. Yet the log book of the
M/L Emiliana shows that the whole day of
November 15, 1961 the boat was out fishing in the
sea off Bohol. Between the entries in a log book,
which is required by law to be kept by every
master or captain of a registrable vessel, and a
membership slip such as that signed by
respondents, the first is undoubtedly more reliable.
2. The complaint for unfair labor practice named
Virgilio Baes as one of the five complainants, all
members of VICLU. According to Attorney Campos,
when examined at the trial, Baes was not a
member of the union at all, had not signed any
membership paper, and was included in the
complaint only through inadvertence. His inclusion
certainly does not speak well of Attorney Campos'
credibility as witness, particularly in the light of his
other testimony that before he prepared the
complaint, as president and lawyer of the union,
he investigated the complainants one by one, and
that there was a preliminary hearing of the case by
the prosecutor of the Court.
3. Petitioner was never officially notified that
respondents were members of the Victory Labor
Union. No demand for check-off deductions from
their wages was ever served upon him. In fact,
respondents themselves said that from November
15, 1961, up to the time of their dismissal from
employment on February 7, 1962, they did not pay
any monthly union dues. And although all the crew
members of the M/L Emiliana were supposedly
affiliated to VICLU, no attempt whatsoever was
made by the latter to secure a collective
bargaining agreement or at least a certification
election.
4. It was not only respondents who were dismissed
by petitioner but also the captain of the vessel
himself, Ernesto Baroc, who was not a member of
the union and whose dismissal was for complicity
in the pilferage of the catch of the M/L Emiliana.
- The foregoing circumstances, objective as they
are, lend strong support to the testimony of
petitioner Gonzales and of his witness Felipe Jubay,
to the effect that they had received evidence,
consisting of reports from different sources, that
whenever the boat arrived at Cebu after a fishing
trip respondents would sell fish at very cheap
prices; that Gonzales investigated them one by
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one and was convinced of their guilt; that he was
not yet through with the investigation, but they
failed to return after February 7, 1962; and that he
did not know they were members of any labor
union.
- The said decision was rendered by an almost
evenly divided court and that the division was
precisely on the facts as borne out by the
evidence. In such a situation the Court feels called
upon to go over the record and, in order to
determine the substantiality of the evidence,
consider it not only in its quantitative but also in
its qualitative aspects. For to be substantial,
evidence must first at all be credible.
- In regarding the substantiality of evidence, one
must consider not only the quantitative aspect but
also the qualitative aspect.
SUARNABA v WORKMEN’S
COMPENSATION COMMISSION
(CLAVECILLA RADIO SYSTEM)
GR No. L-42337
SANTOS; October 9, 1978
FACTS
- the assailed order disallows the claim for death
benefits and reimbursement of medical expenses
on the ground that Suarnaba failed to submit
sufficient proof that she is the widow of the
deceased
- it appears that Rosita Suarnaba filed a claim as
the widow of Ireneo Suarnaba, an employee of
Clavecilla Radio System. This claim was awarded
by the Regional Office of the Labor Dept. Upon
review, the Comission sustained the
compensability of the claim but found the
evidence submitted to prove that she was the
widow insufficient, and barred her from recovering
any benefits. The commission ordered the Radio
System to pay the WCC Fund instead.
- the counsel for Suarnaba claims that marriage
may be proven by parol evidence only, and
submitted an affidavit to the effect that Rosita and
Ireneo were married in the Catholic Church of Sta.
Barbara, Iloilo City, as shown in the marriage
registry, attested by Fr. Samandra per Certificate
of Marriage which was made an integral part of her
affidavit because she lost her Marriage Contract
during the Japanese Occupation
- Rosita also submitted a witness, who executed an
affidavit to the effect that he knows personally
155
Rosita to be the wife of Ireneo, and that the former
has been collecting the latter’s salary during his
lifetime
ISSUE
WON the WCC erred in disallowing the claim for
death benefits and reimbursement of medical
expenses
HELD
YES.
Ratio Substantial evidence, and nothing more, is
required to support a claim for Workmen's
Compensation.
Reasoning records show that the Radio System,
through its Gen. Mgr. Padua, stated in the
“Employers Report of Accident and Sickness” that
Rosita is the wife and one of the dependents of the
deceased Ireneo. In view of this admission of
Rosita’s status as the legal wife, the same may be
considered as duly established without the need
for further proof, since the Employer's Report
serves as Answer
- the parish certificate was proof of the
solemnization of the marriage. There was enough
evidence to prove that Rosita was the wife of
Ireneo, thus she should have been entitled to the
death benefits.
- it appears that WCC, with a little exercise of
common sense and circumspection, should have
realized that Rosita, who filed the claim for
benefits as a result of the death of Ireneo, was his
legal wife and dependent. The Commission as a
quasi-judicial body is invested with broad powers
to hear and decide claims for compensation under
the Workmen's Compensation Act
-Under its Rules “The hearing, investigation and
determination of any question or controversy in
workmen's compensation cases shall be without
regard to technicalities, legal forms and technical
rules on evidence. Substantial evidence, whenever
necessary, shall be sufficient to support a decision,
order or award.” WCC disregarded this rule by
negligently failing to consider the several pieces of
evidence extant in the record of this case which
clearly establish the marital status of Rosita.
- while it conceded that the parish certificate is a
proof of the solemnization of marriage, it
nevertheless considered the same as insufficient
to prove that Rosita is the legal wife and insisted
that the proof required is the “original of the
marriage contract or the marriage certificate duly
issued by the Local Civil Registrar of the place
Administrative Law
Dean Carlota
where the marriage was solemnized “ and in the
absence thereof, “an affdavit of the claimant and
at least three witnesses to the marriage and
cohabitation.” WCC was, in effect, insisting that
the legal relationship be established by a
conclusive evidence of marriage. It was thus bent
on denying any claim for compensation filed by a
widow who, through no fault of her own, cannot
produce the primary evidence of marriage or
secure three witnesses to the marriage. This is
clearly violative of the fundamental precept
enshrined in the aforequoted rule of the WCC
ACTING COMMISSIONER OF
CUSTOMS v MANILA ELECTRIC CO
77 SCRA 469
FERNANDO; June 30, 1977
FACTS
- Manila Electric Co claims that it is exempt from
the special import tax not only by virtue of Section
6 of Republic Act No. 1394, which exempts from
said tax equipment and spare parts for use in
industries, but also under Paragraph 9, Part Two,
of its franchise, which expressly exempts its
insulators from all taxes of whatever kind and
nature.
Paragraph 9: The grantee shall be liable to pay
the same taxes upon its real estate, buildings,
plant (not including poles, wires, transformers,
and insulators), machinery and personal
property as other persons are or may be
hereafter required by law to pay.
Part Two: the right to build and maintain in the
City of Manila and its suburbs a plant for the
conveying and furnishing of electric current for
light, heat, and power, and to charge for the
same, the grantee shall pay to the City of Manila
two and one-half per centum of the gross
earnings received from the business under this
franchise in the city and its suburbs: ... and shall
be in lieu of all taxes and assessments of
whatsoever nature, and by whatsoever authority
upon the privileges, earnings, income, franchise,
and poles, wires, transformers, and insulators of
the grantee, from which taxes and assessments
the grantee is hereby expressly exempted.
- It noted that the above "exempts it from all
taxes of whatever nature, and by whatever
authority, with respect to its insulators in
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consideration for the payment of the percentage
tax on its gross earnings."
- Acting Commissioner of Customs did not exempt
Manila Electric from paying taxes
- Court Of Tax Appeals Decision reversed decision
of Acting Commissioner in that
> insulating oils are mineral oils of high di-
electrics strength and high flash point employed
in circuit breakers, switches, transformers and
other electric apparatus. An oil with a flash point
of 285F and fire point of 310F is considered safe.
A clean, well- refined oil will have a minimum
dielectric of 22,000 volts, but the presence of a
slow as 0.01% water will reduce the di-electric
strength drastically. The insulating oils,
therefore, cannot be stored for long periods
because of the danger of absorbing moisture.
Impurities such as acids or alkalies also detract
from the strength of the oil. Since insulating oils
are used for cooling as well as for insulating, the
viscosity should be low enough for free
circulation, and they should not gum. (Materials
Handbook by George J. Brady)
> There is no question that insulating oils of the
type imported by petitioner are 'used for cooling
as well as for insulating,' and when used in oil
circuit breakers, they are 'required to maintain
insulation between the contacts inside the tank
and the tank itself.'
- The contention pressed in support of the petition
of Acting Commissioner of Customs is that as a tax
exemption is to be construed strictly, the decision
of the Court of Tax Appeals, which assumed that
insulating oil can be considered as insulators must
be reversed and set aside.
ISSUES
1. WON finding of fact of Court of Tax Appeals can
be validly assailed in a petition for review in SC
2. WON Manila Electric Co is exempt from paying
taxes
HELD
1. NO
Doctrine No other conclusion is possible in view
of the well-settled principle that this Court is
bound by the finding of facts of the Court of Tax
Appeals, only questions of law being open to it for
determination (Balbas v. Domingo). As stated in
another decision, 'only errors of law, and not
rulings on the weight of evidence, are reviewable
by this Court.' There is a categorical assertion that
where the question is one of fact, it is no longer
156
reviewable. It is a recognition of the wide
discretion enjoyed by the Court of Tax Appeals in
construing tax statutes. Nor as a matter of
principle is it advisable for this Court to set aside
the conclusion reached by an agency such as the
Court of Tax Appeals which is, by the very nature
of its function, dedicated exclusively to the study
and consideration of tax problems and has
necessarily developed an expertise on the subject,
unless, as did not happen here, there has been an
abuse or improvident exercise of its authority
(Alhambra Cigar and Cigarette Manufacturing Co.
v. Commissioner of Internal Revenue). The stand
of the state that the Court of Tax Appeals could
rightfully determine that '"priopionic glycine" is the
same as glutamic acid" was considered as well
within the authority of respondent Court (Vi Ve
Chemical Products v. Commissioner of Customs). It
would be an affront to the sense of fairness and of
justice if in another case, respondent Court, in the
exercise of its discretionary authority, after
determining that insulating oil comes within the
term insulator, is not be upheld.
2. YES
Doctrine The principle of an exemption from
taxation must be justified by words too clear to be
misread. From 1906, in Catholic Church v.
Hastings to 1966, in Esso Standard Eastern, Inc. v.
Acting Commissioner of Customs, it has been the
constant and uniform holding that exemption from
taxation is not favored and is never presumed, so
that if granted it must be strictly construed against
the taxpayer. Affirmatively put, the law frowns on
exemption from taxation, hence, an exempting
provision should be construed strictissimi juris
(Commissioner of Internal Revenue v. Guerrero). It
is true that in the construction of tax statutes tax
exemptions (and deductions are of this nature) are
not favored in the law, and are construed
strictissimi juris against the taxpayer. However, it
is equally a recognized principle that where the
provision of the law is clear and unambiguous, so
that there is no occasion for the court's seeking
the legislative intent, the law must be taken as it
is, devoid of judicial addition or subtraction. In this
case, we find the provision of Section 186-A
-whenever a tax free product is utilized, ... all
encompassing to comprehend tax-free raw
materials, even if imported. Where the law
provided no qualification for the granting of the
privilege, the court is not at liberty to supply any
(Republic Flour Mills v. CIR; J.B.L. Reyes).
Administrative Law
Dean Carlota
BANCO FILIPINO v MONETARY
BOARD
204 SCRA 767
Medialdea, J; December 11, 1991
FACTS
- There are a total of nine cases consolidated into
this decision promulgated by the SC. All the cases
are related in that all involve the closure on order
of the Monetary Board of Banco Filipino.
- In the course of an audit undertaken by the
Central Bank of the Philippines, a preliminary
report was issued by the audit team calling into
question the solvency of Banco Filipino given the
numerous lending accounts that may have to be
provided for. In the span of one or two months,
two other reports (Tiaoqui and Teodoro reports)
were made recommending to the Monetary Board
the take over of the Bank to protect the depositors
and also creditors of Banco Filipino as the
institution is already insolvent.
- The MB issued its resolution so declaring Banco
Filipino to be under receivership and eventually
placed the bank under liquidation. In the
meantime, legal cases in connection with the
closure of the bank were filed by customers,
shareholders, and the bank itself.
ISSUE
WON the Central Bank and the Monetary Board
acted arbitrarily and in bad faith in finding and
thereafter concluding that petitioner bank is
insolvent, and in ordering its closure on January
25, 1985.
HELD
YES
- There is no question that under Section 29 of the
Central Bank Act, the following are the mandatory
requirements to be complied with before a bank
found to be insolvent is ordered closed and
forbidden to do business in the Philippines: Firstly,
an examination shall be conducted by the head of
the appropriate supervising or examining
department or his examiners or agents into the
condition of the bank; secondly, it shall be
disclosed in the examination that the condition of
the bank is one of insolvency, or that its
continuance in business would involve probable
loss to its depositors or creditors; thirdly, the
department head concerned shall inform the
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Monetary Board in writing, of the facts; and lastly,
the Monetary Board shall find the statements of
the department head to be true.
- The examination of the bank was only partially
finished when the same was ordered closed. The
report to the Monetary Board clearly stated that
the findings of the audit team were insufficient and
unreliable as to the setting up of the valuation
reserves for the petitioner bank’s assets. Given
this, the resulting computation of the bank’s
solvency would also be unreliable.
- The actuation of the Monetary Board in closing
the bank on January 25, 1985 barely four days
after a conference with the latter on the
examiners' partial findings on its financial position
is also violative of what was provided in the CB
Manual of' Examination Procedures. Said manual
provides that only after the examination is
concluded, should a pre-closing conference led by
the examiner-in-charge be held with the
officers/representatives of the institution on the
findings/exception, and a copy of the summary of
the findings/violations should be furnished the
institution examined so that corrective action may
be taken by them as soon as possible (Manual of
Examination Procedures, General Instruction, p.
14). It is hard to understand how a period of four
days after the conference could be a reasonable
opportunity for a bank to undertake a responsive
and corrective action on the partial list of findings
of the examiner-in -charge.
- In the instant case, the basic standards of
substantial due process were not observed. 'Time
and again, We have held in several cases, that the
procedure of administrative tribunals must satisfy
the fundamentals of fair play and that their
judgment should express a well-supported
conclusion. In the celebrated case of Ang Tibay v.
Court of Industrial Relations, 69 Phil. 635, this
Court laid down several cardinal primary rights
which must be respected in a proceeding before
an administrative body. Administrative due
process does not mean that the other important
principles may be dispensed with, namely: the
decision of the administrative body must have
something to support itself and the evidence must
be substantial. Substantial evidence is more than a
mere scintilla. It means such relevant evidence as
a reasonable mind might accept as adequate to
support a conclusion (Ang Tibay vs. CIR, supra).
Hence, where the decision is merely based upon
pieces of documentary evidence that are not
sufficiently substantial and probative for the
157
purpose and conclusion they are presented, the
standard of fairness mandated in the due process
clause is not met. In the case at bar, the
conclusion arrived at by the respondent Board that
the petitioner bank is in an illiquid Board, Central
Bank of the Philippines financial position on
January 23, 1985, as to justify its closure on
January 25, 1985 cannot be given weight and
finality as the report itself admits the inadequacy
of its basis to support its conclusion.
Disposition Petition is denied. The Central Bank
and the Monetary Board are ordered to reorganize
petitioner Banco Filipino Savings and Mortgage
Bank and allow the latter to resume business in
the Philippines under the comptrollership of both
the Central Bank and the Monetary Board and
under such conditions as may be prescribed by the
latter in connection with its reorganization until
such time that petitioner bank can continue in
business with safety to its creditors, depositors
and the general public.
Grino-Aquino, J., Dissenting in part:
- Insolvency, under this Act, shall be understood to
mean the inability of a banking institution to pay
its liabilities as they fall clue in the usual and
ordinary course of business, provided, however,
that this shall not include the inability to pay of an
otherwise non-insolvent bank caused by extra-
ordinary demands induced by financial panic
commonly evidenced by a run on the banks in the
banking community.
The determinative factor in the closure,
receivership, and liquidation of a bank is the
finding, upon examination by the SES of the
Central Bank, that its condition "is one of
insolvency, or that its continuance in business
would involve probable loss to its depositors and
creditors." (Sec. 29, R.A. 265.) It should be pointed
out that insolvency is not the only statutory
ground for the closure of a bank. The other ground
is when "its continuance in business would involve
probable loss to its depositors and creditors."
- The Teodoro and Tiaoqui reports as well as the
report of the receivers, Carlota Valenzuela, Arnulfo
B. Aurellano and Ramon V. Tiaoqui, showed that
since the end of November 1983 BF had already
been incurring "chronic reserve deficiencies" and
experiencing severe liquidity problems. So much
so, that it had become "a substantial borrower in
the call loans market" and in June 1984 it obtained
a P30 million emergency loan from the Central
Bank. Additional emergency loans (a total of
Administrative Law
Dean Carlota
P119.7 millions) were extended by the Central
Bank to BF that month(MB Req. No. 839 dated
June 29,1984). On July 12,1984, BF's chairman,
Anthony Aguirre, offered to "turn over the
administration of the affairs of the bank" to the
Central Bank (Aguirre's letter to Governor Jose
Fernandez, Annex 7 of Manifestation dated May
3,1991). On July 23,1984, unable to meet heavy
deposit withdrawals, BF's management motu
proprio, without obtaining the conformity of the
Central Bank, closed the bank and declared a bank
holiday. On July 27, 1984, the CB, responding to
BF's pleas for additional financial assistance,
granted BF a P3 billion credit line (MB Res. No. 934
of July 27, 1984) to enable it to reopen and resume
business on August 1, 1984. P2.3601 billions of the
credit line were availed of by the end of 1984
exclusive of an overdraft of P932.4 millions. Total
accommodations granted to BF amounted to
P3.4122 billions.
Presumably to assure that the financial assistance
would be properly used, the MB appointed Basilio
Estanislao as conservator of the bank. A
conservatorship team of 78 examiners and
accountants was assigned at the bank to keep
track of its activities and ascertain its financial
condition.
- In the light of the results of the examination of BF
by the Teodoro and Tiaoqui teams, I do not find
that the CB's Resolution No. 75 ordering BF to
cease banking operations and placing it under
receivership was "plainly arbitrary and made in
bad faith." The receivership was justified because
BF was insolvent and its continuance in business
would cause loss to its depositors and creditors.
Insolvency, as defined in Rep. Act Act 265, means
"the inability of a banking institution to pay its
liabilities as they fall due in the usual and ordinary
course of business. Since June 1984, BF had been
unable to meet the heavy cash withdrawals of its
depositors and pay its liabilities to its creditors, the
biggest of them being the Central Bank, hence, the
Monetary Board correctly found its condition to be
one of insolvency.
PAL v CONFESOR
231 SCRA 41
NOCON; March 10, 1994
FACTS
A2010
- The non-representation aspects or economic
package of the 1989-1992 CBA between PAL and
PALEA expired. That same day, PALEA expressed
its desire to renegotiate the CBA and submitted its
proposals for an economic package that would
cost PAL P16.1 billion.
- Negotiations soon began thereafter. PAL
presented its proposed economic package
amounting to P1 billion. This was rejected by
PALEA. The parties continued their negotiations,
but were unable to reach an agreement.
- PALEA declared a deadlock in the negotiations
and filed on the following day a notice of strike
with the NCMB.
- At the time of the deadlock, the positions of the
parties were as follows: PAL proposed a
P991,492,046.00 package. PALEA proposed
several economic package: Wage increase plus
updating of pay scales and separate pay scales for
employees working directly with aircraft parts and
components plus some other items. The Union,
however, included a proviso that the above
priorities are without prejudice to the provisions
and proposals submitted by the Union to the
Company dated September 20, 1992 including
non-economic proposals.
- According to PAL, the estimated cost of the
foregoing PALEA demands which are easily
computable amounts to P3.4 billion.
- PAL wrote Secretary requesting that she assume
jurisdiction over the dispute in view of the
importance of its business and to prevent PALEA
from going on strike.
- Secretary issued an order assuming jurisdiction
over the labor dispute. She enjoined any work
stoppage and ordered the parties to desist from
any act that would exacerbate the situation. She
also ordered the parties to submit their respective
position papers within ten (10) days to facilitate
the resolution of the dispute.
- Secretary reviewed the positions of the parties on
the main deadlocked issues. While the above
wage award already corresponds to a substantial
increase in the existing salaries of the Company's
rank and file there still exists a need to upgrade
and update the prevailing payscale. This is
especially true in the case of those employees
working directly with aircraft parts and
components. The parties, therefore, more
particularly the Company, are urged to continue
discussing and threshing out this matter.
- Secretary ordered the parties to execute a
collective bargaining agreement incorporating the
158
dispositions herein contained. The agreement shall
be retroactive from 01 October and shall remain
effective for three years thereafter. All other
demands not passed upon herein are deemed
denied, without prejudice to the retention of all
existing benefits as well as to such improved terms
and conditions as the parties may have agreed
upon in the meantime.
- The parties filed separate motions for
reconsideration. Secretary issued the other
questioned Order denying PALEA's MFR while
granting in part that of PAL's. Secretary also
ordered the inclusion of two provisions proposed
by PAL to increase efficiency.
ISSUES
WON Secretary had gravely abused her discretion,
amounting to lack of excess of jurisdiction, in
awarding P1.268 billion in benefits in favor of
PALEA as the same was based on probabilities and
conjectures not supported by evidence.
HELD
YES.
- There is grave abuse of discretion amounting to
lack of jurisdiction where the respondent board,
tribunal or officer exercising judicial functions
exercised its judgment in a capricious, whimsical,
arbitrary or despotic manner. However, it has also
been said that grave abuse is committed when
"the lower court acted capriciously, and
whimsically or the petitioner's contention appears
to be clearly tenable of the broader interest of
justice or public policy [so] require . . . ." Also,
grave abuse of discretion is committed when the
board, tribunal or officer exercising judicial
function fails to consider evidence adduced by the
parties.
- While it is true that findings of fact of the
Secretary of Labor are entitled to respect by this
Court, we are inclined to review her findings since
the fundamental issue here is the survival of the
company. Besides, her findings are not based on a
thorough examination of the parties' contending
claims but merely on their respective position
papers. There was no trial wherein the adversarial
process would ensure a better presentation and
appreciation of the evidence.
- Secretary gravely abused her discretion when
she based her award in favor of PALEA on the
assumption that PAL would earn P3.4 billion pesos
during the three-year contract period. The
assumption finds no basis on the evidence
Administrative Law
Dean Carlota
adduced before her. Respondent Secretary had
noted in her original order PAL's erratic
performance over a ten-year period beginning
fiscal year (FY) 1981-1982 up to 1990-1991.
- Despite her recognition of PAL's unstable
financial performance and the possibility that its
earnings in the foreseeable future could be held
down by the factors she enumerated above,
Secretary proceeded to forecast that PAL would
make a projected net profit of P1.128 billion for FY
1992-1993, and P3.4 billion for the three-year
contract period.
- This Court believes that a more realistic
projection should take into account PAL's
performance for the previous ten years, during
which time PAL only experienced profit during two
fiscal years, 11 and not sole on the net earnings
posted in FY 1991-1992 of P1,113,478,000.00.
Relying solely on said amount would be a mistake
since the profit was largely due to the privatization
of PAL wherein the National Government assumed
PAL's foreign currency obligations amounting to
some P13.5 billion.
- Subsequent events have shown the error in
respondent Secretary's projections. The actual net
income earned by PAL for FY 1992-1993 was
P1,025,665.00, which fell short of respondent
Secretary's projection by P87.813 million. Clearly,
there is no way PAL could realize the income
projected by respondent Secretary.
- After making her projection of PAL's net profits
for the three-year contract period, Secretary then
allocated one-third of the projected profits as labor
costs to be paid to PALEA under the so-called
"traditional budget-management approach." This
Court is unaware of such a budget-management
approach being traditional in this jurisdiction.
Given the fact that neither of the parties cited the
same in their position papers filed before her,
Secretary should have explained more thoroughly
her application of said "traditional approach."
- At any rate, it would be improper to apply said
formula to the instant case since PALEA does not
represent PAL's entire labor force. PALEA accounts
for only 45% of PAL's total labor force. If the one-
third rule would be applied, then PALEA should
only be entitled to 45% thereof. The consequences
of applying the one-third rule and awarding the
entirety to the PALEA would be nothing short of
disastrous for PAL.
- Finally, the effectivity of the Order of January 28,
1991, must retroact to the date of the expiration of
the previous CBA, contrary to the position of
A2010
petitioner. Under the circumstances of the case,
Article 253-A cannot be properly applied to herein
case. In the absence of the specific provision of
law prohibiting retroactivity of the effectivity of
arbitral awards issued by the Secretary of Labor
pursuant to Article 263 (g) of the Labor Code, such
as herein involved, public respondent is deemed
vested with plenary and discretionary powers to
determine the effectivity thereof.
- We find no violation of Circular No. 28-91. PAL is
not required to mention the dismissal of its
previous petition since, having been dismissed, it
is not a case pending before any court or tribunal
within the contemplation of said circular. In
addition, a petition dismissed under Circular No. 1-
88 may be refiled as a new petition provided the
proper reglementary period is observed. The Court
notes that the present petition was filed within the
proper reglementary period for the filing of a
special civil action.
MANILA ELECTRIC COMPANY v NLRC
(MASAYA)
G.R. No. L-60054
NARVASA; July 2, 1991
FACTS
- Meralco employees discovered that
Antonio Sanchez was consuming
electricity at the house occupied by him
at Amparo Street, Sta. Ana, Manila,
although he had himself neither applied
with Meralco for electric service. It was
learned that electricity was being
supplied to Sanchez's house through a
clandestine and illicit connection. The
household helpers of Sanchez and the
owner of the house, a Mr. Castañeda,
informed the Meralco investigator that it
was a Meralco employee, Jose Masaya,
who had made the unauthorized electric
service connection.
- The Meralco Legal Department thereupon
sent Jose Masaya a letter charging him
with a violation of the Company Code on
Employee Discipline, and conducted a
formal investigation of the matter. Those
who gave testimony at that investigation
were Jose Masaya himself, and Renato
Repuyan, Meralco field investigator.
159
- Prior to being interrogated about the
illegal connection and in response to
preliminary questions by the investigator,
Masaya stated for the record that he had
received the letter accusing him of
misconduct, that he had a copy of the
code of discipline and understood the
nature of the precise charge against him,
and that he did not need to be assisted by
a lawyer or a representative of his Union
because, in his own words, "ang sasabihin
ko naman dito ay pawang katotohanan
lamang."
- Masaya deposed that he had indeed
installed the connection in question in the
following manner, again expressed in his
own words: "Nilagyan ko ng shunt o
kaputol ng alambre ang kanilang meter
base at ang koneksiyon nito ay kinabit ko
sa malapit na service wire;" and that for
that job, he had received P200 from
Antonio Sanchez.
- Repuyan testified on the fact of the
undenied and indisputable installation of
the illegal electrical connection at the
residence of Antonio Sanchez and also,
the disclosures made to him by Sanchez's
househelpers and the owner of the house.
- After the investigation, and on the basis
of the results thereof, Meralco filed with
the Ministry of Labor and Employment an
application for clearance to terminate
Masaya's services. Meralco also placed
Masaya under preventive suspension. A
week later, Masaya filed a complaint for
illegal dismissal against Meralco.
- After issues were joined on the complaint
for illegal dismissal as well as the
application for clearance, and trial had
thereon, Labor Arbiter Andres M.
Lomabao rendered a decision in Masaya's
favour. He was of the view that the
record of the investigation conducted by
Meralco should not be accorded
credence; that Meralco's contention that
Masaya had "surreptitiously effected the
direct connection of . . . electric service"
was not credible, because Masaya "was
employed as a bill collector, not as a
lineman collector, hence, he does not
know how to install electrical connection;"
Administrative Law
Dean Carlota
and that the money received by Masaya
from Sanchez (P200 or P250) was not in
consideration of any clandestine
connection but was accepted as
"representation expenses in following up
Mr. Sanchez' application for installation of
electric facilities . . . with the Engineer's
Office at the City Hall of Manila.
- On appeal by Meralco, the NLRC affirmed
the decision saying that while it is true
that in administrative proceedings,
substantial evidence only is required, the
instant case is an exception for the
reason that respondent-appellant in this
case is charging complainant-appellee of
a criminal offense, and, therefore, it is
incumbent upon the former to prove
beyond reasonable doubt the existence of
the crime, failing which, complainant-
appellee must be absolved from
responsibility. Masaya’s admission if at
all does not prove beyond reasonable
doubt the criminal act committed in the
absence of any showing that he was
given the opportunity to be heard by
counsel or at least, a representative to
confront his accuser.
ISSUE
WON proof beyond reasonable doubt is required in
this case as quantum of evidence
HELD
NO.
Contrary to the NLRC's view, Masaya was in truth
asked if he wished to be assisted by a lawyer or a
representative of his Union, and his response was
in the negative because, in his own words, "ang
sasabihin ko naman dito ay pawang katotohanan
lamang"
Next, in administrative or quasi-judicial
proceedings, proof beyond reasonable doubt is not
required as basis for a judgment of the legality of
an employer's dismissal of an employee, nor even
preponderance of evidence, substantial evidence
being sufficient. And this Court has ruled that the
ground for an employer's dismissal of an employee
need be established only by substantial evidence,
it not being required that the former's evidence
"be of such degree as is required in criminal cases,
i.e., proof beyond reasonable doubt." It is
absolutely of no consequence that the misconduct
with which an employee may be charged also
A2010
constitutes a criminal offense: theft,
embezzlement, assault on another employee or
company officer, arson, malicious mischief, etc.
The proceedings being administrative, the
quantum of proof is governed by the substantial
evidence rule and not, as the respondent
Commission seems to imagine, by the rule
governing judgments in criminal actions. It was
thus serious error, and grave abuse of discretion
for the Labor Arbiter and the respondent
Commission, for the reasons given, to reject and
exclude from consideration the express admissions
made by Masaya during the administrative
investigation conducted by Meralco.
The Court cannot close its eyes to the following
facts of record, to wit:
1) reality of the illegal electrical connection;
2) written communication to Masaya that he was
accused of that illegal connection and he would be
subjected to a formal investigation;
3) Masaya's acknowledgment that, having a copy
of the company's code of discipline, he understood
the nature of the accusation against him, and his
declining to be assisted by a lawyer or a
representative of his Union because, according to
him, "ang sasabihin ko naman dito ay pawang
katotohanan lamang;"
4) his voluntary admission that it was he who had
made the illegal electrical connection, describing
the manner by which he had made it, and that he
had received P250.00 from the occupant of the
house, Antonio Sanchez; and
5) his plea to the company for forgiveness for
having made the illegal connection.
- There is, finally, nothing in the record to
demonstrate that Masaya's admissions were made
otherwise than voluntarily.; his subsequent
assertion before the Arbiter that he had been
"starved" into signing the typewritten record of the
administrative investigation containing said
admissions is not persuasive, and was not in fact
accepted by the Arbiter or the Commission.
LAMEYRA V PANGILINAN
GR No 131675
GONZAGA-REYES; January 18, 2000
FACTS
- Pedro C. Lameyra was a janitor/messenger in the
Municipal Hall of Famy, Laguna. He was appointed
as such on February 2, 1988 under temporary
160
status and was given a permanent appointment on
January 1, 1989 to the same position by then
Municipal Mayor Melquiadez Acomular. Mayor
Acomular was defeated in the last election for the
mayoralty post by respondent Mayor George S.
Pangilinan.
- On August 21, 1995, petitioner Lameyra received
a letter from respondent Mayor Pangilinan
informing him that he is dropped from the roll of
employees of the LGU of Famy, Laguna pursuant
to Memorandum Circular No. 12, Series of 1994 of
CSC due to the following reasons: 1.
Insubordination; 2. AWOL.
- Petitioner filed a notice of appeal with CSC
alleging that he was a permanent employee and
that he was terminated without prior written notice
of the charges and without investigation and
hearing, in violation of his security of tenure and
due process. He alleged that the act of Pangilinan
was an act of political vengeance as he was
publicly known to have voted for his political rival
during the May 8, 1995 election.
- The CSC Resolution dismissed the appeal and
affirmed the action of the Municipal Mayor in
dropping him from the roll of employees for
absence without leave; the Commission ruled:
"Undisputedly, Lameyra was absent for the
period from July 6, 1995 to August 6, 1995 and
that he has not submitted any proof that he
actually filed an application for leave. Neither
did he present an approved leave application
concerning said absences. On the one hand,
Benito Vicencio, Personnel Officer/Human
Resources Management Assistant, Famy,
Laguna, certified that Lameyra did not report for
work during the said period. In sum, there is
sufficient ground to support the action of the
Municipal Government of Famy in dropping
Lameyra from the service.
- Lameyra filed a MFR that he had not earlier been
furnished copy of Mayor Pangilinan’s comment and
disputing the version of Mayor Pangilinan that he
refused to report for work. He claimed that upon
advice of the Regional office of the CSC in Sta.
Cruz, Laguna, he reported for work at the office of
the Vice Mayor Constancio Fernandez, as he was
not allowed by the Personnel Officer, Benito
Vicencio, to sign his name in the log book.
Attached to his motion was an Affidavit of Vice-
Mayor Constancio A. Fernandez attesting to the
fact that petitioner was reporting to his office Also
submitted was an affidavit of a co-employee,
Remegio Jamilan, and petitioner’s own sworn
Administrative Law
Dean Carlota
statement controverting the allegation of Mayor
Pangilinan that he refused to report for work or
sign the log book. In its Resolution, CSC denied
petitioner’s MFR.
Petitioner filed a petition for review before the CA,
which denied the same. The Court stated that the
Commission correctly ruled on the issues raised
before it, and rejected the claim of petitioner that
he was denied his right to due process, as he had
the opportunity to be heard on his motion for
reconsideration. Moreover, the Commission’s
findings are supported by substantial evidence.
MFR in CA was also denied.
ISSUES
WON petitioner was deprived of due process when
he was terminated, and WON CSC erred in refusing
to consider new evidence in the MFR,
HELD
- Civil Service Memorandum Circular No. 12 Series
of 1994 provides:
"2.1 Absence without approved leave
a. An officer or employee who is continuously
absent without approved leave (AWOL) for at
least thirty (30) calendar days shall be
separated from the service or dropped from
the rolls without prior notice. He shall,
however, be informed of his separation from
the service not later than five (5) days from its
effectivity which shall be sent to the address
appearing in his 201 files.
- From the provision, there is no prior notice
required to drop from the rolls an employee who
has been continuously absent without approved
leave (AWOL) for at least thirty (30) calendar days.
It appears that solely on the basis of the
certification of the Personnel Officer/Human
Resources Management Assistant Benito Vicencio
to the effect that petitioner did not report for work
for the period from July 6, 1995 to August 6, 1995,
and the undisputed fact that he has not submitted
any proof that he actually filed an application for
leave nor presented any approved leave
application for the said period, petitioner’s
termination from the service was upheld by the
CSC and CA.
- However, petitioner contests the finding that he
was absent at all. He claims that he reported for
work but was prevented from signing the log book
by the very officer, Benito Vicencio, who certified
that he did not report for work on the dates in
question. He alleges that he was not furnished a
A2010
copy of Mayor Pangilinan’s comment, and was able
to secure a copy only after receiving a copy of the
Resolution of the CSC upholding the termination of
his service. This allegation of petitioner, which was
raised even in the CA was not disputed by
respondent Pangilinan in his Comment to the
Petition nor in his Comment to the Petition filed in
the CA. Accordingly, the first opportunity that
petitioner had to contest the sufficiency of the
evidence to support his dismissal was when he
filed his MFR from the CSC resolution. The three
sworn statements which were annexes to said
motion directly controverted Vicencio's
certification that he was absent without leave,
cannot be considered new evidence belatedly
submitted as there was no notice and hearing
when he was dropped from the rolls. Considering
that one of the affiants is Vice-Mayor Fernandez,
whose acts as a public official are also entitled to a
presumption of regularity in the performance of
duty, it would be in compliance with the
requirements of due process to have given said
sworn statement due consideration in view of the
circumstances prevailing in this case. This is in
consonance with the respondent’s own theory that
petitioner was afforded his right to be heard when
he filed his MFR in the CSC.
- While it is settled doctrine that findings of fact of
an administrative agency must be respected and
this Court should not be tasked to weigh once
more the evidence submitted before the
administrative body, it is axiomatic that such
findings of fact should be supported by substantial
evidence. We are not convinced that the
certification of the personnel officer that petitioner
did not report for work from July 6, 1995 to August
6, 1995 constitutes such substantial evidence in
light of the petitioner’s submission that said
personnel officer precisely prevented him from
signing the log book, that he has been replaced by
one Leynes in July, 1995, and that he has been
asked to submit his resignation which he refused
to do. Under these circumstances, it is believed
that, petitioner should be given a last full
opportunity to prove his contention that the
termination of his services was illegal.
GERMAN MARINE AGENCIES v NLRC
(DE LARA)
350 SCRA 629
GONZAGA-REYES; Jan 30, 2001
161
FACTS
- Mr. de Lara, a radio officer of M/V T.A. VOYAGER,
got sick while on board. He did not receive
immediate medical attention while the vessel was
docked at the port of New Zealand and was only
confined in Manila Doctors Hospital after ten days,
which caused the deterioration of his health.
- After private respondent was discharged from
the hospital, he demanded from petitioners the
payment of his disability benefits and the unpaid
balance of his sickness wages, pursuant to the
Standard Employment Contract of the parties.
- Petitioners told private respondent that, aside
from the sickness wages that he had already
received, no other compensation or benefit was
forthcoming.
Petitioner’s contention: The company is not
liable to pay the disability benefits because
according to the certification made by Dra.
Cayabyab, allegedly "the officially accredited and
designated physician of respondents, likewise
accredited with the Philippine Overseas
Employment Administration" "Nothing [sic] his job
description as a radio operator, Mr. de Lara may be
allowed to go back to work."
- Dr. Reyes who certified that Mr. de Lara is not fit
to work is not a designated physician of the
company and not accredited with POEA.
Respondent’s claim The certificate issued by Ms.
Naneth [sic] Domingo-Reyes, a physician in MDH,
firmly states that Mr. de Lara "was classified under
partial permanent disability and is not fit to go
back to his previous work due to mental state."
- Private respondent filed a complaint with the
NLRC for payment of disability benefits and the
balance of his sickness wages. The labor arbiter
rendered a decision in favour of Mr. de Lara.
- The CA affirmed the decision of the NLRC.
ISSUE
1. WON the petitioner is liable to pay disability
benefit
2. WON there is grave abuse of discretion on the
part of CA in affirming the decision of the NLRC in
awarding the balance of Mr. de Lara’s wages
HELD
1. YES.
Reasoning The award of disability compensation
has a clear and valid basis in the Standard
Employment Contract and the facts as supported
by the medical certificate issued by Dr. Nannette
Administrative Law
Dean Carlota
Domingo-Reyes of the Manila Doctors Hospital.
Petitioners’ contention, that Dr. Domingo-Reyes is
not company designated is far from the truth. The
designation of the Manila Doctors Hospital by
petitioners as the company doctor for private
respondent cannot be denied. Their very act of
committing private respondent for treatment at
the Manila Doctors Hospital under the care of its
physician is tantamount to company designation.
The very act of paying the hospital bills by the
petitioners constitutes their confirmation of such
designation. Hence, petitioners cannot resort to
the convenience of denying this fact just to evade
their obligation to pay private respondent of his
claims for disability benefit.
- There is nothing in the Standard Employment
Contract that provides this accreditation
requirement, and even if there is, this would be
absurd and contrary to public policy as its effect
will deny and deprive the ailing seaman of his
basic right to seek immediate medical attention
from any competent physician. The lack of POEA
accreditation of a physician who actually treated
the ailing seaman does not render the findings of
such physician (declaring the seaman permanently
disabled) less authoritative or credible. To our
mind, it is the competence of the attending
physician, not the POEA accreditation, that
determines the true health status of the patient-
seaman, which in this instant case, is [sic] the
attending physicians from the Manila Doctors
Hospital.
2. NO.
The Supreme Court has always accorded respect
and finality to the findings of fact of the NLRC,
particularly if they coincide with those of the Labor
Arbiter, when supported by substantial evidence.
The reason for this is that a quasi-judicial agency
like the NLRC has acquired a unique expertise
because its jurisdiction is confined to specific
matters. Whether or not petitioners actually paid
the balance of the sickness wages to private
respondent is a factual question. In the absence of
proof that the labor arbiter or the NLRC had
gravely abused their discretion, the Court shall
deeqqqqqqqqqqqm conclusive and cannot be
compelled to overturn this particular factual
finding.
VELASQUEZ v HERNANDEZ
CSC VS HERNANDEZ
A2010
320 SCRA 478 proceedings by filing an answer to the charges,
submitting countervailing evidence, and cross-
NARVASA; June 27, 1991
examining the witnesses against her.
2. YES.
FACTS
Technical rules of procedure and evidence are not
-In this consolidated petition, Velasquez convened
strictly applied to administrative proceedings, and
a fact-finding committee to determine the veracity
administrative due process cannot be fully
of allegations that respondent committed
equated to due process in its strict judicial sense.
infractions such as soliciting, accepting and
Administrative proceedings are governed by the
receiving sums of money in exchange for transfer
“substantial evidence rule” as opposed to the
or promotion of complainant teachers. A formal
quantum of proof required in criminal cases to
charge for grave misconduct, conduct grossly
prove guilt beyond reasonable doubt. The
prejudicial to the best interest of the service,
Ombudsman, in ordering the withdrawal of the
abuse of authority, and violation of section 22 of
criminal complaints, was simply saying that the
the Omnibus Rrules Implementing Book V of EO
evidence was insufficient to establish guilt beyond
292 was filed against respondent. Respondent filed
reasonable doubt; hence, the dismissal of the
her answer, contending the allegations were
criminal case will not foreclose the administrative
fabricated by petitioner designed to harass and
action against respondent. In the instant case, the
discredit her.
sworn complaints of the complaining teachers
-Meanwhile, the Office of the Provincial Prosecutor
more than adequately complies with the standard
of Abra issued a resolution arising from the sworn
of proof for the administrative case.
complaints of the complaining teachers (CSC vs
Hernandez) for violation of Sec. 3 RA 3019 (Anti-
Graft and Corrupt Practices Act) which was
affirmed by the Deputy Ombudsman for Luzon. CIVIL SERVICE COMMISSION v
Respondent and a certain de la Cruz were charged CAYOBIT
with direct bribery, later set aside by the Deputy GR No. 145737
Ombudsman upon motion. CSC found respondent
PER CURIAM; September 3, 2003
guilty and ordered her dismissal. Her MFR denied,
respondent appealed to the CA which reversed the
FACTS
CSC resolution. The CA stressed that the twin
- Since 1982, respondent has been employed with
requisites of notice and hearing are not enough for
the National Housing Authority (NHA). On March
due process, but the tribunal hearing must be
29, 1990, she was appointed as Livelihood
unbiased; in this case, they find the composition of
Specialist in its Dagat-dagatan Development
the fact-finding Committee to be questionable. The
Project. The position was co-terminus with the
CA also ruled that petitioner failed to provide
project and did not require any eligibility. Even
substantial evidence since it appeared that some
then, she submitted her original certificate of
of the affiants who executed sworn statements to
eligibility showing a rating of 81.20%, the grade
support charges against respondent later retracted
she obtained in a civil service examination held on
their statements. Hence this petition.
July 30, 1989 in Manila. On June 5, 1990, petitioner
approved her appointment, which was given
ISSUE/s
retroactive effect from July 1, 1989.
1. WON the CA gravely erred in declaring
- Another appointment was extended to
that respondent’s right to administrative due
respondent in Sept 1993 as Senior Livelihood
process was violated
Officer. This position required civil service
2. WON the CA erred in holding that the evidence
eligibility owing to its permanent status. On
against the respondent was insufficient
September 29, 1993, Carmelita Bernardino, Senior
Specialist at petitioner’s field office in NHA, came
HELD
1. YES. across her appointment papers, which included her
The mere fact that respondent questioned the original certificate of eligibility. In the course of
impartiality of the committee will not result in a processing said papers, Bernardino found out that
denial of due process. What matters is that her eligibility was not entered in the service card
respondent actively participated in the on file with the field office. To verify, Bernardino
162
Administrative Law
Dean Carlota
went to petitioner’s National Capital Region office
on October 18, 1993. Bernardino discovered that
respondent was not in the passing list on file.
- The matter was referred by Bernardino to her
superior, Director Imelda Abueng, who verified
respondent’s eligibility with petitioner’s central
office. She found out that based on the masterlist
of eligibles kept at the central office, respondent
obtained a failing mark of 40.96%. Respondent’s
appointment was disapproved.
- On October 25, 1993, petitioner charged
respondent with dishonesty and grave misconduct,
committed as follows:
That in support of your appointment as Senior
Livelihood Officer, National Housing Authority,
Quezon City, you submitted a xerox copy of your
alleged Certificate of Eligibility (CS Professional)
purporting that you passed the July 30, 1989
Career Service Examination. However, after
verification from the masterlist of eligibles, it
was found out that you failed the said
examination with a rating of 40.96%.
- After hearing, respondent was held guilty of
Dishonesty and Grave Misconduct. She was
dismissed and was disqualified from taking any
civil service examination and from holding public
office
- Feeling aggrieved, respondent filed with this
court a Petition for Certiorari on March 29, 1995,
which was referred to CA for proper disposition.
Pursuant to Dennis Lazo v. Civil Service
Commission, the appellate court ordered petitioner
to retrieve and submit the answer sheets of
respondent. Its Management Information Office,
however, stated that the answer sheets have
already been disposed of in accordance with CSC
Resolution No. 87-070 which directs the
“destruction or disposal of answer sheets of
examinees who passed in the Civil Service
examinations… after five (5) years from the date
of the release of examination.”
- CA granted the petition, holding that there was
no substantial evidence to prove that petitioner
committed the offenses leveled against her.
- Petitioner’s MR was denied, hence this petition.
ISSUES
1. WON CA erred in holding that the masterlist of
eligibles is not the primary record of civil service
eligibles.
2. WON CA erred in holding that there was no
substantial evidence to prove that respondent
committed dishonesty and grave misconduct.
A2010
HELD
1. YES
- Petitioner is correct in arguing that the masterlist
of eligibles must be considered the primary record
of eligibility for this is the official record it keeps
pursuant to both its constitutional and statutory
mandates to conduct and safeguard civil service
examinations.
- Executive Order No. 292, otherwise known as the
Administrative Code of 1987, provides that
petitioner should keep a register of eligibles,
where the names of those who pass any particular
civil service examination shall be entered, thus:
Sec. 23. Release of Examination Results.-- The
results of any particular service examination held
in a number of places on the same date shall be
released simultaneously.
Sec. 24. Register of Eligibles.-- The names of the
competitors who pass an examination shall be
entered in a register of eligibles arranged in the
order of their general ratings and containing such
information as the Commission may deem
necessary.
The implementing rules of the Code similarly
provides, viz:
Sec. 5. The results of any particular civil service
examination held in a number of places on the
same date shall be held simultaneously. The
names of examinees who obtained the required
passing grades in an examination shall be entered
in a register of eligibles.
- The masterlist of eligibles is kept by petitioner for
records and verification purposes. It is precisely
against it that entries in the certificate of eligibility
are counter-checked and verified, specifically
whether the score stated therein is true and
correct.
2. YES
- Dishonesty is the concealment or distortion of
truth in a matter of fact relevant to one’s office or
connected with the performance of his duty. It is a
serious offense, which reflects on the person’s
character and exposes the moral decay which
virtually destroys his honor, virtue and integrity. Its
immense debilitating effect on the government
service cannot be overemphasized.
- Under Civil Service regulations, the use of fake or
spurious civil service eligibility is regarded as
dishonesty and grave misconduct, punishable by
dismissal from the service. CSC Memorandum
Circular No. 15, Series of 1991 provides:
163
An act which includes the procurement and/or
use of fake/spurious civil service eligibility, the
giving of assistance to ensure the commission or
procurement of the same, cheating, collusion,
impersonation, or any other anomalous act
which amounts to any violation of the Civil
Service examination, has been categorized as a
grave offense of Dishonesty, Grave Misconduct
or Conduct Prejudicial to the Best Interest of the
Service.
- The question therefore is whether there is
substantial evidence to hold that respondent
procured and used a fake or spurious certificate of
eligibility. SC held YES.
- The masterlist of eligibles shows that respondent
obtained a failing grade in the examination given
on July 30, 1989. Contrary to what is stated in her
certificate of eligibility that she passed it with an
81.20% rating, respondent’s actual score was only
40.96%. The masterlist is the primary record of
eligibles, the entry therein must prevail. The
masterlist of eligibles is an official record. Every
entry made therein is presumed genuine and
accurate unless proven otherwise.
Respondent failed to explain the discrepancy in
her grades appearing in the masterlist and her
certificate of eligibility. She was not able to offer
proof that the score indicated in her certificate was
due to the error or mistake of petitioner’s own
personnel. In fact, she did not even get a
certification from petitioner that her certificate was
issued by it.
- The bare testimony of respondent that she has
nothing to do with forging the certificate as she
actually just received it by mail in her residential
address deserves scant belief. We cannot accept
her simplistic claim that she used the certificate
under the false impression that it was genuine.
The three witnesses and the various documents
she presented cannot exculpate her. The
witnesses, in essence, merely testified that they
received the certificate of eligibility in question
from respondent. Their belief that she was eligible
was based on their reliance on the certificate.
- In administrative proceedings, the quantum of
evidence required is only substantial. It is such
relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even
if other minds equally reasonable might
conceivably opine otherwise. The standard of
substantial evidence is satisfied where there is
reasonable ground to believe that the respondent
Administrative Law
Dean Carlota
is responsible for the misconduct, even if the
evidence might not be overwhelming.
OFFICE OF THE OMBUDSMAN v
SANTOS
486 SCRA 463
PUNO, March 31, 2006
FACTS
-Estrelita Gumabon, a teacher of Lagro Elementary
School, filed a complaint against school principal
Florentina Santos for dishonesty, violation of
Sec.4(c) of RA 6713 and grave misconduct.
Gumabon alleges that (1) Santos falsified her daily
time record, particularly on one instance when her
daily time record entries indicated that she worked
at Lagro Elementary School the whole day, but she
actually went to Golden Child Montessori Dela
Costa III Anex (where the respondent was one of
the owners/incorporators and had the position of
president/chairman) and Carissa II Annex; (2)
Santos took several pieces of galvanized iron
sheets used in the construction and repair of some
rooms and toilets at Lagro elementary school; and
(3) Santos exhibited rued and oppressive behavior
not only to the teachers and personnel of Lagro
Elementary School, but also to parents or their
pupils (e.g. refused to call the security guard when
his wife called for an emergency, scolded teacher
in front of other people and marked her absent
when she was just late, required a food seller to
give certain amount to be able to sell in the school
but suddenly ordered not to let the food seller
enter without notice nor explanation) – all
allegations were either supported by testimonials
during the hearing or affidavits from various
witnesses; Santos also presented witnesses of her
own (refer to case – but testimonies were not
enough to rebut the allegations)
-Office of the Ombudsman: guilty, dismissed from
service with forfeiture of benefits equivalent to 12
months salary and temporary disqualification for
re-employment in the government for 1 year from
finality of decision
-CA: reversed, set aside: findings of Office of the
Ombudsman not supported by substantial
evidence
ISSUE
WON the findings of the Office of the Ombudsman
were supported by substantial evidence
A2010
The rule is that all public officers and employees
HELD are prohibited from engaging in the private
YES practice of their profession. The exception is when
Ratio. Administrative proceedings are governed such private practice is authorized by the
by the “substantial evidence rule.” A finding of Constitution or law. However, even if it is allowed
guilt in an administrative case would have to be by law or the Constitution, private practice of
sustained for as long as it is supported by profession is still proscribed when such practice
substantial evidence that the respondent has will conflict or tends to conflict with the official
committed acts stated in the complaint or formal functions of the employee concerned. Indeed,
charge. Substantial evidence is such relevant public servants are expected to devote their
evidence as a reasonable mind may accept as undivided attention to their public duties, to give
adequate to support a conclusion. the tax payers the competent and excellent
Reasoning. Court finds that the decision of the service that they deserve. In fact, Section 4 of the
Office of the Ombudsman show sufficient evidence Code of Conduct and Ethical Standards for Public
to prove the respondent’s administrative liability: Officials and Employees enjoins said officials and
-ON DISHONESTY: it has been substantially employees to always uphold public interest over
established that Santos actually reported for work and above personal interest. By actively
at the Lagro Elementary School in QC but instead participating in the management of Golden Child
of rendering the required number of hours of work, Montessori, a private school, while serving as
she went to a private school in San Jose Del Monte, Principal of Lagro Elementary School, a
Bulacan. She deliberately made it appear that she government school, respondent has transgressed
was present for work when in fact she was absent. the provisions of Section 7 (b) (2) of R.A. 6713.
Santos failed to present any evidence to counter -ON PENALTY: Impose a fine of five thousand pesos
the same. (P5,000) upon respondent in addition to the
-ON OPPRESSION/HARRASSMENT: It has been fairly penalty imposed upon her by the Office of the
established that Santos refused to give the call to Ombudsman.
the security guard when his wife made an Disposition. petition is GRANTED.
emergency call and the testimony of the security UNIVERSAL CAMERA CORP. v NATL
guard has not been rebutted by any evidence.
LABOR RELATIONS BOARD
Therefore, Santos’s actuations runs counter to the
established norms of conduct and ethical 340 U.S. 474
standards for public officials who, “must act with FRANKFURTER; February 26, 1951
justice and shall not discriminate against anyone”.
Her action violates the standard of personal FACTS
conduct, liable for violation of RA 6713. - The National Labor Relations Board ordered
-ON MISAPPROPRIATION: Several witnesses petitioner to reinstate with back pay an employee
testified regarding the ordering of Santos to found to have been discharged because he gave
deliver the galvanized sheets to her house and the certain testimony in another proceeding under the
subsequent discovery of the sheets by the police. National Labor Relations Act. The evidence as to
The testimony of Santos’ witnesses only bolstered the reason for his discharge was conflicting; and
the finding that Santos was responsible for having the Board overruled its examiner's findings of fact
taken several galvanized iron sheets which were
government property. = taking of government xxx
property for her own personal benefit = Grave (b) Outside employment and other activities related thereto. – Public officials and
Misconduct employees during their incumbency shall not:
-ON CONFLICT OF INTEREST (Santos being (1) Own, control, manage or accept employment as officer, employee, consultant,
Pres/Chairman of the Board of Golden Child counsel, broker, agent, trustee or nominee in any private enterprise regulated,
Montessori): violates Sec 7(b)(2) of RA 67133. supervised or licensed by their office unless expressly allowed by law;
(2) Engage in the private practice of their profession unless authorized by the
3 SECTION 7. Prohibited Acts and Transactions. – In addition to acts and omissions of Constitution or law, provided, that such practice will not conflict or tend to conflict with
public officials and employees now prescribed in the Constitution and existing laws, the their official functions; or
following shall constitute prohibited acts and transactions of any public official and (3) Recommend any person to any position in a private enterprise which has a
employee and are hereby declared to be unlawful: regular or pending official transaction with their office
164
Administrative Law
Dean Carlota
and his recommendation that the proceedings be
dismissed.
CA Decision
- The CA held that the Board's findings of fact were
"supported by substantial evidence on the record
considered as a whole." within the meaning of 10
(e) of the National Labor Relations Act, as
amended in 1947.
- This holding was based partly on the view (1)
that the 1947 amendments had not broadened the
scope of judicial review, and (2) that the Board's
rejection of its examiner's findings of fact was
without relevance in determining whether the
Board's findings were supported by substantial
evidence.
* The essential issue raised by this case is the
effect of the Administrative Procedure Act and the
legislation colloquially known as the Taft-Hartley
Act on the duty of Courts of Appeals when called
upon to review orders of the National Labor
Relations Board.
ISSUE
WON CA erred in holding that it was barred from
taking into account the report of the examiner on
questions of fact insofar as that report was
rejected by the Board
HELD
YES
Ratio (a) A trial examiner's findings are not as
unassailable as a master's and may be reversed by
the Board even when not clearly erroneous. (b) A
reviewing court need not give a trial examiner's
findings more weight than in reason and in the
light of judicial experience they deserve; but they
should be accorded the relevance that they
reasonably command in answering the
comprehensive question whether the evidence
supporting the Board's order is substantial.
Reasoning In amending 10 (e) of the National
Labor Relations Act so as to require that, on
judicial review, the Board's findings of fact must be
supported by substantial evidence "on the record
considered as a whole," Congress made it clear
that a reviewing court is not barred from setting
aside a Board decision when it cannot
conscientiously find that the evidence supporting
that decision is substantial, when viewed in the
light that the record in its entirety furnishes,
including the body of evidence opposed to the
Board's view. When read in the light of their
legislative history, the Administrative Procedure
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Act and the Labor Management Relations Act,
require the courts to assume more responsibility
for the reasonableness and fairness of Labor Board
decisions than some courts have shown in the
past. Whether on the record as a whole there is
substantial evidence to support agency findings is
a question which Congress has placed in the
keeping of the courts of appeals. This Court will
intervene only in what ought to be the rate
instance when the standard appears to have been
misapprehended or grossly misapplied.
- The Taft-Hartley Act provides that "The findings
of the Board with respect to questions of fact if
supported by substantial evidence on the record
considered as a whole shall be conclusive." Surely
an examiner's report is as much a part of the
record as the complaint or the testimony.
According to the Administrative Procedure Act, "All
decisions (including initial, recommended, or
tentative decisions) shall become a part of the
record." It is therefore difficult to escape the
conclusion that the plain language of the statutes
directs a reviewing court to determine the
substantiality of evidence on the record including
the examiner's report.
Dispositive Certiorari granted. Judgment vacated,
case remanded.
D. QUESTIONS OF DISCRETION
LAGUNA TAYABAS BUS CO v PSC
G.R. No. 10903
REYES; January 18, 1957
FACTS
-Teodulo Lacdan applied for a certificate of public
convenience with the Public Service Commission
(PSC) to operate a passenger and fright auto truck
line on the routes from Sta. Maria (Laguna) to
Manila and from Sta. Rosa to Manila.
-Laguna Tayabas Bus Co. and other operators
opposed Lacdan’s application
-After he had finished presenting his evidence,
Lacdan applied for a provisional permit to operate,
to which the other operators objected on the
ground that there was no urgent need for the
same
-PSC granted the application for provisional permit
165
-Laguna Tayabas Bus Co. filed a petition for
certiorari seeking to annul the grant of provisional
permit to Lacdan
ISSUE
WON PSC abused its discretion in granting the
provisional permit
HELD
No.
-Petitioner claims that the order complained of was
issued in grave abuse of discretion amounting to
excess of jurisdiction, because there was no
finding that the present services were inadequate
or insufficient
-Although there is no express finding of
inadequacy, the finding that residents of Sta.
Maria, Mabitac, Siniloan, Pangil, Pakil, Paete and
Longos, being mostly farmers and merchants,
need more means of transportation for themselves
and their products, and that with the current
number of trips provided by the other operators,
there is an average interval of 42 minutes between
trips, which would be reduced to 30 minutes if
Lacdan was granted the provisional permit, are
equivalent to a determination that the present
services are insufficient
-It was for the PSC to weigh the facts; erroneous
application of the significance of the competing
facts does not mean that it has abused its
discretion
-Well established is the rule that the SC will not
substitute its judgment for that of the PSC, and
Commonwealth Act 146 emphasizes that its orders
should be reversed only if it is: 1. without
reasonable support in the evidence; 2. rendered
against law; or 3. issued without jurisdiction
-Since the PSC could not anticipate how much time
would be required by the oppositors to submit
their evidence, and the need for services had been
duly established, the PSC had the power to
authorize Lacdan to provisionally extend his
services
MANILA TRADING v ZULUETA
69 PHIL 485
LAUREL; January 30, 1940
FACTS
Administrative Law
Dean Carlota
-Secretary of Labor apprised the Court of Industrial
Relations of a labor dispute existing between the
petitioner company and its employees
-respondent court entered an order requiring the
company, inter alia, not to dismiss any of its
employees and laborers except for good cause and
with its permission
-one of the gatekeepers of the petitioners,
Ramollo, was suspended for a breach of duty. The
breach consisted in that as gatekeeper of the
petitioner he permitted, contrary to instructions,
one of the customers to pass thru the exit gate
without paying for the work done on the car.
Before this, it is also alleged that he refused to
work in the setting up department of the company
when ordered by his superior. The Philippine Labor
Union, of which Ramollo was a part, submitted a
petition requesting the reinstatement of the
suspended laborer, to which an answer was filed
by the company.
-the respondent court (CIR) found that the laborer
was guilty of the breach imputed to him, but,
deciding that his suspension from June 30 to July
28 of the same year was a sufficient punishment,
ordered his immediate reinstatement
-employer appealed
ISSUES
WON CIR erred in ordering immediate
reinstatement
HELD
YES.
- The whole controversy is centered around the
right of the Court of Industrial Relations to order
the readmission of a laborer who, it is admitted,
had been found derelict in the performance of his
duties towards his employer. We concede that the
right of an employer to freely select or discharge
his employees, is subject to regulation by the State
basically in the exercise of its paramount police
power. (Commonwealth Acts Nos. 103 and 213.)
But much as we should expand beyond economic
orthodoxy, we hold that an employer cannot
legally be compelled to continue with the
employment of a person who admittedly was
guilty of misfeasance or malfeasance
towards his employer, and whose
continuance in the service of the latter is
patently inimical to his interests. The law, in
protecting the rights of the laborer,
authorizes neither oppression nor self-
destruction of the employer. There may, of
A2010
course, be cases where the suspension or
dismissal of an employee is whimsical or
unjustified or otherwise illegal in which case
he will be protected. Each case will be
scrutinized carefully and the proper authorities will
go to the core of the controversy and not close
their eyes to the real situation. This is not
however the case here.
KAPISANAN NG MGA MANGGAGAWA
SA LA SUERTE-POITAF v. NORIEL
77 SCRA 414
FERNANDO; June 20, 1977
FACTS
-Private respondent Federation of Free Workers, La
Suerte Chapter, filed a petition for certification
election alleging that out of a bargaining unit of
more or less 3,500, there were 1,068 signatories.
The previous certified collective bargaining
agreement between the employer La Suerte Cigar
and Cigarette Factory and petitioner labor union
terminated on December 5, 1975. There was,
eleven days later, a motion to intervene filed by
petitioner followed on March 1, 1976 by a motion
to dismiss on the ground that respondent Union
had not complied with the thirty percent consent
requirement and that the petition for certification
was filed beyond the sixty-day period to the
expiration of the collective bargaining contract.
When a few days later the employer submitted a
list of the rank and file employees numbering
4,055, private respondent countered with an
additional list of signatories, 331 in number,
making a total of 1,399 signatories. Private
respondent thereafter opposed the motion to
dismiss, stating that there was compliance with
the thirty percent consent requirement and that
the filing was within the period allowed by law. On
April 6, 1976, Med-Arbiter Eusebio M. Jimenez
issued an order denying the motion to dismiss and
granting the petition for certification election filed
by private respondent, the choice being between
petitioner and respondent unions, with employees
likewise being given the opportunity to vote for
"No Union." An appeal was taken to respondent
Noriel as Director of the Bureau of Labor Relations.
Then came on October 23, 1976 an order from
him, the dispositive portion of which is to the
effect that the appeal was denied. A motion for
166
reconsideration having proved futile, this petition
for certiorari was filed.
ISSUE
WON there was an arbitrary or improvident
exercise of authority to justify granting the writ of
certiorari
HELD
NO.
The objection of Kapisanan as to the alleged lack
of the thirty percent requirement in the number of
signatories according to the present Labor Code is
without merit. Private respondent, as noted in the
comment, "filed the petition for certification
supported by 1,068 signatories of the employees
of the employer or more than 30% of the 3,500
rank and file employees of the employer. After the
petition was filed, the employer however
submitted a list of its regular rank and file
employees with a total number of 4,055. Private
respondent, in order to comply with the 30%
consent requirement, submitted an additional list
of 331 rank and file employees. Thus, the
signatories totalled 1,399 or more than 30% of the
4,055 employees." Even if, as contended by
petitioner, there were among the signatories
submitted 105 falsified or double entries and came
from those not qualified to vote or a total of 112,
that would still leave 1,287 signatories or more
than thirty percent of the 4,055 employees. The
matter is thus essentially factual in
character, the determination by respondent
Noriel being entitled to respect.
- Nor was there any improvident or arbitrary
exercise of authority when respondent Noriel
ordered the certification election after the lapse of
the sixty-day period provided for by law. The law
cannot be any clearer. It argues against the
pretension of petitioner. No other meaning can be
attached to such provision, as applied to the
present situation, except that the former collective
bargaining agreement having expired on
December 5, 1975, sixty days prior to that date, a
petition for certification election could have been
filed. It does not mean that after December 5,
1975, no such petition could be entertained by
respondent Noriel, provided there was no certified
collective bargaining agreement that had taken its
place. It is undisputed that no subsequent certified
collective contract was in existence at the time the
petition for holding the certification election was
Administrative Law A2010
Dean Carlota
filed by respondent union on February 6, 1976. balloting to be supervised by this Office," The
There was no legal bar then to such a move. refusal to require the certification election as
Disposition PETITION DISMISSED. ordained by the Labor Code and the adoption of a PLDT v. NATIONAL
rather unorthodox approach was sought to be
TELECOMMUNICATIONS
justified on pragmatic considerations.
FEDERATION OF FREE WORKERS COMMISSION [EASTERN
(BISIG NG MANGGAGAWA SA UTEX) ISSUE TELECOMMUNICATIONS
WON the exercise of judicial review was proper in PHILIPPINES, INC.]
v NORIEL this case
86 SCRA 132 241 SCRA 486
FERNANDO; OCT 30, 1978 HELD FELICIANO; February 21, 1995
YES.
- It was such failure of respondent Noriel to abide FACTS
FACTS
by the express mandate of Article 258 of the Labor - In Aug 1992 SC by a split vote (10-4 with one (1)
- Petitioner labor union having, even before the
Code as well as the rules promulgated for its vacancy) rendered a Decision granting the Petition
sixty-day freedom period, filed a petition for
applicability and the rather ambiguous as well as for Certiorari filed by PLDT and set aside the
certification election as in the meanwhile a
novel aspects of the assailed decision that Decision and Order of the NTC. That Decision of
supplemental contract which would extend an
prompted this petition for certiorari. As noted at the NTC had granted the application of Eastern for
existing collective bargaining agreement between
the outset, certiorari lies. a Certificate of Public Convenience and Necessity
management and respondent union was entered
- This is not to deny that an administrative agency ("CPCN") and to construct, maintain and operate
into and presumably ratified by more than a
entrusted with the enforcement of a regulatory an International Gateway Facility ("IGF").
majority of the workers in the Universal Textile
statute is vested with discretion. Such discretion, - Parties both filed their respective MRs,
Mills, Inc. The Med-Arbiter ruled in favor of
however, is not unbounded. Where, as in this case, oppositions and replies.
respondent Union denying certification, but he was
the labor Code itself sets limits, they must be - The parties were heard on oral argument on the
reversed by respondent Noriel, the case being
observed. That is the only way to manifest fealty MR and related pleadings and the Motions were
remanded to the former precisely for the
to the rule of law. We turn again to Article 258. Its submitted for resolution.
"reception and evaluation of the supporting
last sentence specifically defines what must be - The Court granted the present MRs for the
signatures of at least 30% of the employees which
done by the Bureau of Labor Relations once the guidance of our courts, administrative
petitioner may present and for the resolution of all
certification election is conducted; it must "certify agencies and the general public. The SC here
(other) pending issues." A motion for
the winner as the exclusive collective bargaining reconsidered their original decision on
reconsideration by respondent Union was
representative of all the employees in the unit." several grounds and eventually ordered the
unavailing, respondent Noriel ruling that "the
That is the extent and scope of the authority PLDT to allow the interconnection of its domestic
ratification of the collective agreement ... is being
entrusted to respondent Noriel as Director of the telephone system with the international gateway
protested and the same can be threshed out in an
Bureau of Labor Relations. He cannot go further facility of Eastern Telecom. The Court cited (1) the
appropriate hearing before a Med-Arbiter, and that
than that. Yet, in the assailed order, he would provisions of the legislative franchise allowing such
the issue on the consent requirement can best be
direct respondent Union "to renegotiate with the interconnection; (2) the absence of any physical,
resolved by an appreciation of FFW's evidence."
management at universal Textile Mills the benefits technical, or economic basis for restricting the
- As a result, an order was issued by the Med-
and other conditions of employment for the second linking up of two separate telephone systems; and
Arbiter on May 3, 1977 calling for a certification
and third year of the contract within three months (3) the possibility of increase in the volume of
election. It came as a surprise to respondent
from receipt of this Resolution and to submit the international traffic and more efficient service, at
Union, therefore, that notwithstanding such a
renegotiated benefits to the workers for more moderate cost, as a result of
finding of the 30% requisite having been satisfied,
acceptance and ratification through a secret interconnection. .
the assailed decision of September 29, 1977
balloting to be supervised by this Office." And this, Antecedent Facts:
recognized "the effectivity and validity of the May
too, without the benefit of a certification election - 1987: Eastern filed with the NTC an application
28, 1976 agreement between [respondent Union]
mandated by law. The failure to abide by what the for a CPCN, to construct, maintain and operate an
and Universal Textile Mills for the first year of its
Labor Code categorically requires is thus plain and IGF, which is estimated to cost US$5 Million.
duration covering 1977" and at the same time
manifest. What was done by respondent Noriel is Eastern is a 60% Filipino owned corporation
directed respondent Union "to renegotiate with the
bereft of support in law, to countenance it would organized under Philippine law and holder of a
management at Universal Textile Mills the benefits
be to foil the statutory scheme. 'There can be no legislative franchise under R.A. No. 808, as
and other conditions of employment for the second
other conclusion except that his assailed order is amended by R.A. No. 5002, in relation to P.D. No.
and third year of the contract within three months
tainted with a serious jurisdictional defect. This is 489 granting it the right and privilege to:
from receipt of this Resolution and to submit the
then the proper occasion for the exercise of the . . . land, construct, maintain and operate
renegotiated benefits to the workers for
corrective authority of this Tribunal. telecommunication systems by cable or any
acceptance and ratification through a secret
167
Administrative Law
Dean Carlota
other means now known to science or which
in the future may be developed for the
reception and transmission of messages
between any point in the Philippines to points
exterior thereto, including airplanes, airships
or vessels even though such airplanes,
airships or vessels may be located within
territorial limits of the Philippines.
- Eastern is successor to Eastern Extension
Australasia and China Telegraph Company, a
British company which had been in the Philippines
since the Spanish colonial period. Together with
other companies, Eastern invested in the
Philippines US$25M in submarine cable and related
facilities, and installed, owns, maintains and
operates submarine cables between the
Philippines and Hongkong-Japan, the Philippines
and Taiwan, and the Philippines and Singapore.
The scope of the franchise authority of
Eastern.
- The contention of PLDT is that an IGF is
inherently part of "a telephone system" since it is
"useful only for a telephone system." Thus, PLDT
contends that in effect Eastern is asking for a
CPCN to establish a telephone system. But Eastern
has no franchise to establish a telephone system.
Hence, PLDT continues, Eastern cannot be granted
the CPCN it seeks.
- SC rejects PLDT's theory and now reconsider the
Court's original holding upon the grounds set out
below.
ISSUE:
WON there is ample legal authority on the part of
Eastern to install, maintain and operate the IGF
that it seeks
Held:
Yes
Reasoning:
NTC’s technical description of an IGF
- an IGF comprises equipment which makes
possible the interfacing or interconnection
between (1) a domestic telecommunication
system, like that of PLDT, and (2) the cables or
other equipment for transmitting electronically
messages from points within the Philippines to
points outside the Philippines, as well as messages
originating from points outside to points inside the
Philippines. The IGF constitutes a support for the selective reading that PLDT would
telecommunications exchange that in effect
connects PLDT's subscribers or users with the
subscribers and users of tele-communications
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systems located in different parts of the outside
world. The IGF is not in itself a telephone or
telecommunication system but it is not, in any
case necessary to try to determine what
constitutes a telephone system.
Grounds why SC reconsidered its orig
decision:
1. The existing legislative franchise of Eastern
authorizes it to land, construct, maintain and
operate "telecommunications systems" for the
purpose of effecting "the reception and
transmission of messages between any point in
the Philippines to points exterior [to the
Philippines]." "Telecommunication" means simply
communication over distance, making no limiting
reference to the means or mode of such
communication.
2. The legislative franchise of Eastern expressly
elaborates that the "telecommunication systems"
which Eastern may install, maintain and operate
may be "by cable or any other means now known
to science or which in the future may be
developed." Clearly, the species of method or the
particular modality of reception and transmission
of messages across the territorial boundaries of
the Philippines, was of secondary importance to
the legislative authority which granted the
franchise.
3. There is no basis at all in Eastern's legislative
franchise for a supposed distinction (which PLDT
tries very hard to suggest) between voice and non-
voice transmissions or messages and for a
supposed limitation upon Eastern to transmit and
receive only non-voice messages. The statute
simply does not distinguish between voice or oral
and data or non-voice messages or transmissions:
the statutory text speaks simply of "messages."
There is a basic and well-known scientific reason
why the statute makes no such distinction. Voice
messages do not travel via wires (cables whether
submarine or underground or aerial) or any other
media qua voice (i.e., as sound waves); voice
transmissions, exactly like data (or non-voice)
messages, travel in the form of electronic impulses
through cables (or any other media) and are
simply converted at the point of reception or
destination into other forms visually or audibly
perceptible by human beings."
4. PLDT's own legislative franchise provides no
have the Court place upon the word "telephone
system." The portion of PLDT's legislative franchise
defining the scope of PLDT's franchise authority
168
does not even use the word "telephone" except in
referring to PLDT by name) nor the phrase
"telephone system;" instead the oft-repeated and
operative term is "telecommunications." It is not
by accident that PLDT advertises itself in the
broadcast media as a telecommunications
company rather than as a telephone company. 8
Even the original 1928 legislative franchise of
PLDT did no limit a "telephone company" to the
transmission and reception of voice or oral
messages. 9
5. Eastern in its application was not asking for
authority to install and operate a domestic
telephone or other telecommunications system,
understood as a system for carrying messages
from one point in the Philippines to another point
also in the Philippines. Eastern was merely asking
for authority to install and operate an international
gateway facility, which would mediate between
the domestic telephone system of PLDT and the
transmitting and carrying facilities of Eastern. The
gateway facility will permit messages originating
from a person using PLDT's domestic telephone
system to enter the transmitting and carrying
facilities of Eastern, and as well allow messages
incoming from abroad through Eastern's carrying
facilities to enter PLDT's domestic system.
- In its decision, the NTC did not only address the
legal capability of, or franchise authority vested in
Eastern; it also explicitly considered the technical
requirements of the IGF and acknowledged the
technical and financial ability of Eastern to install,
maintain and operate the facility. Also, the NTC
was very protective of PLDT. For the approved
combined capacity of the gateway facilities of
Philcom and Eastern will amount to only 1/3 of
PLDT's existing gateway capacity. PLDT was
obviously not satisfied with two-thirds (2/3) of the
international end of telecommunications business.
- It is important to recall that NTC, as the
governmental agency charged with passing upon
applications for Certificates of Public Convenience
and Necessity (CPCNs) in the field of
telecommunications, is authorized to determine
what the specific operating and technical
requirements of "public convenience and
necessity" are in the field of telecommunications,
subject of course to relevant limitations
established by legislative enactments, if any. The
NTC is also authorized to examine and assess the
legal, technical and financial qualifications of an
applicant for a CPCN and in doing so exercises the
special capabilities and skills and institutional
Administrative Law
Dean Carlota
experience it has accumulated. Courts should not
intervene in that administrative process, save
upon a very clear showing of serious violation of
law or of fraud, personal malice or wanton
oppression. Courts have none of the technical and
economic or financial competence which
specialized administrative agencies have at their
disposal, and in particular must be wary of
intervening in matters which are at their core
technical and economic in nature but disguised,
more or less artfully, in the habiliments of a
"question of legal interpretation."
On the interconnection bet PLDT's domestic
telephone system or network and Eastern's
IGF
- PLDT strenuously contends that interconnection
is proper only between 2 discrete telephone
systems; this argument now makes clear why
PLDT contended so arduously that Eastern was not
a telephone system and therefore not entitled to
apply for interconnection with PLDT's system and
that NTC was not authorized to require such
interconnection between PLDT and Eastern. PLDT
went on to contend that interconnection with
Eastern "was not directed to meet or satisfy a
public need for it but rather, and exclusively, to
allow [Eastern] to exploit PLDT's present telephone
subscribers." SC cited the ff reasons why it didn’t
agree with PLDT:
1. PLDT's contention collides frontally with Sec 13
of PLDT's own legislative franchise, which
authorizes the NTC to order the grantee PLDT to
allow interconnection of its facilities, for both local
and international, with other duly authorized
telecommunications operators (ie. EASTERN).
2. There is no physical or technical economic basis
for restricting the notion of interconnection to the
linking up of 2 separate telephone systems. The
NTC found as a fact that interconnection can be
physically and technically effected between a
gateway facility operated by an international
carrier and a telephone or other
telecommunications system operated by another,
local, carrier. Eastern pointed out that its IGF can
be and is in fact required to be interconnected not
only with the PLDT domestic telephone system but
also with other domestic telecommunications
systems.
3. Considering the number of Filipinos living or
working overseas in different continents, and the
growing business and financial relations between
Philippine enterprises and international companies,
international calls from the outside world may well
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be at least as heavy in volume as, and might in
fact be or become heavier than, those originating
from the Philippines. In other words, there may be
expected reciprocal flows in a higher aggregate
volume of international traffic and more efficient
service, at more moderate cost, should come
about with the interconnection required by the
NTC.
- PLDT v. NTC, et al.: Such regulation of the use
and ownership of telecommunications systems is
in the exercise of the plenary police power of the
State for the promotion of the general welfare. The
1987 Constitution recognizes the existence of that
power when it provides:
Sec. 6. The use of property bears a social
function, and all economic agents shall
contribute to the common
good. Individuals and private groups including
corporations, cooperatives, and similar
collective organizations, shall have the right to
own, establish, and operate economic
enterprises, subject to the duty of the State to
promote distributive justice and to intervene
when the common good so demands (Article
XII).
- The interconnection which has been required of
PLDT is a form of "intervention" with property
rights dictated by "the objective of government to
promote the rapid expansion of
telecommunications services in all areas of the
Philippines, . . . to maximize the use of
telecommunications facilities available, . . . in
recognition of the vital role of communications in
nation building . . . and to ensure that all users of
the public telecommunications service have access
to all other users of the service wherever they may
be within the Philippines at an acceptable standard
of service and at reasonable cost." (DOTC Circular
No. 90-248).
- Undoubtedly, the encompassing objective is the
common good. The NTC, as the regulatory agency
of the State, merely exercised its delegated
authority to regulate the use of
telecommunications networks when it decreed
interconnection.
- the requirement of interconnection between
telecommunications carriers found in both
legislation and administrative regulations
constitutes a legitimate exercise of the plenary
police power of the State for the securing of the
general welfare.
- Also, there is no "appropriation" of property of
the PLDT without payment of just or reasonable
169
compensation as revenues will be shared by
Eastern with PLDT.
- It is also appropriate to note that at least one
other non-PLDT IGF which has been approved by
the NTC, the Philippine Global Communications
Company, Inc. ("Philglobcom") gateway facility,
has in fact been installed, interconnected with
PLDT's domestic telephone network and is
presently in operation. We must assume,
therefore, that not only was interconnection found
physically and technically feasible, but also that an
economically acceptable sharing of revenues
between PLDT on one hand and Philglobcom on
the other, was in fact reached and is being
implemented. There is no relevant distinction
between the Philglobcom franchise authority and
that of Eastern.
- PLDT has no right to treat its subscribers as its
proprietary assets to be "exploited" by PLDT alone,
rather than as customers to be served in the
manner that a public utility is supposed to serve
the public. The fundamental point is that
customers' choice and free competition among
carriers are essential if reasonable prices and
efficient and satisfactory service are to be
achieved and maintained and the public's rapidly
growing needs adequately served, in the area of
telecommunications, an area so vital to national
social and economic development.
VIII. ENFORCEMENT OF AGENCY
ACTION
A. RES JUDICATA; FINALITY OF
JUDGMENT
IPEKDJIAN MERCHANDISING CO.,
INC. v CTA, CIR
9 SCRA 72
MAKALINTAL; Sept 30, 1963
FACTS
- Commissioner of Internal Revenue assessed from
Ipekdjian P97,502.25 as compensating tax and
surcharge on gold chains imported by it, which
were later converted into gold bullion, + P200
compromise penalty.
Administrative Law
Dean Carlota
- Ipekdjian appealed to Board of Tax Appeals. BTA
affirmed Commissioner’s judgment. THIS IS BTA
CASE NO. 10
- Ipekdjian appealed to SC but SC dismissed.
Ipekdjian sought to reinstate its appeal with SC but
it was denied.
- Ipekdjian sought to reopen case with CTA. CTA
dismissed. MFR was also denied.
- Ipekdjian made partial payment, but later it filed
with Commissioner a claim for refund of the same.
This was denied.
- Ipekdjian filed petition for review in CTA. THIS IS
CTA CASE NO 374
- Commissioner filed his answer in the CTA case,
raising the affirmative defense of res judicata.
- Motion for execution of judgment in BTA case
was granted by CTA. Hence this petition for
certiorari.
ISSUE
WON BTA case operates to bar the CTA case
(Ipekdjian argues that res judicata applies only to
judgment of courts, not to decisions of
administrative agencies.)
HELD
1. YES
- Requisites, res judicata:
- final former judgment
- court has jurisdiction over subject matter
and parties
- judgment on merits
- between first and second actions:
- identity of parties
- identity of subject matter
- identity of cause of action
- The more equitable attitude is to allow extension
of defense to decisions of bodies upon whom
judicial powers have been conferred.
- In both cases, issue is the same: WON appellant
is liable for compensating tax.
NASIPIT LUMBER CO V NLRC
G.R. No. 54424
FERNAN; August 31, 1989
FACTS
- Collado was employed by petitioner NALCO as
security guard. In the course of Collado's
employment, 4 crates of lawanit boards containing
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1,000 panels were stolen from petitioner's
premises.
- Collado was implicated in the theft and was
placed under preventive suspension. NALCO filed a
petition for clearance to dismiss Collado with the
DOLE regional office. Collado filed an opposition.
The case was set for hearing but Collado, despite
notice, failed to appear.
- Application for clearance to dismiss was
approved. Collado filed a MFR on the ground that
he was not given an opportunity to rebut the false
findings or adduce evidence in his favor.
- Case was certified to the Executive Labor Arbiter
for compulsory arbitration. Executive Labor Arbiter
returned the case to the DOLE Regional Office
saying that MFR should be treated as an appeal
and as such it should be elevated to the Secretary
of Labor. “Besides, we also fear that if we take
cognizance of this case, perhaps, we might reverse
the order of the Regional Director which, to our
thinking, would only create a disturbance to the
harmonious relation existing between our two
offices.”
- Acting DOLE Secretary Inciong issued an order
affirming the order granting petitioner's
application for clearance to dismiss Collado.
- Collado filed a complaint before the Butuan
District Labor Office for unjust dismiss and
reinstatement with backwages and benefits.
- NALCO flied a motion to dismiss the complaint
alleging that Collado did not have any sufficient
cause of action. NALCO added that because Acting
Secretary Inciong's order had become final and
executory, the issue of illegal dismissal had also
become res judicata.
The case having been certified for compulsory
arbitration, Executive Labor Arbiter ordered NALCO
to reinstate Collado to his former position without
backwages and without loss of seniority rights
"provided he has the necessary papers required of
the service as security guard. He was constrained
to arrive at said conclusion because of the order of
the Nasipit municipal judge in Criminal Case No.
2236 finding that there was nothing in the
testimony of the prosecution witness to establish
the probable guilt of Collado who should therefore
be dropped from the complain for qualified theft.
He also took into consideration the certification of
the Agusan del Norte provincial fiscal showing that
Collado had also been dropped from the complaint
in Criminal Case No. 1127.
- NLRC modified Executive Labor Arbiter's decision
by ordering Collado's reinstatement to his former
170
position with 2 years backwages without
qualification and loss of seniority rights.
ISSUE
1. WON res judicata applies
2. WON Collado should be reinstated without loss
of seniority rights
HELD
1. NO
Ratio The principle of res judicata may not be
invoked in labor relations proceedings considering
that Section 5, Rule XIII, Book V of the Rules and
Regulations Implementing the Labor Code provides
that such proceedings are "non-litigious and
summary in nature without regard to legal
technicalities obtaining in courts of law." Said
pronouncement is in consonance with the
jurisprudential dictum that the doctrine of res
judicata applies only to judicial or quasi-judicial
proceedings and not to the exercise of
administrative powers.
Reasoning The fact that Book V, Rule XIV of the
Rules and Regulations Implementing the Labor
Code allowed a procedure for the approval of the
clearance with or without the opposition of the
employee concerned (Secs. 7 & 8), demonstrates
the non-litigious and summary nature of the
proceeding. The clearance requirement was
therefore necessary only as an expeditious shield
against arbitrary dismissals without the knowledge
and supervision of the Department of Labor.
Hence, a duly approved clearance implied that the
dismissal was legal or for cause (Sec. 2).
- SC is unprepared to rule that such action of
Acting Secretary of Labor barred Collado from
filing the complaint for illegal dismissal. If ever, the
most that can be attributed against Collado is
laches for his failure to question seasonably the
Acting Secretary of Labor's affirmance of the
approval of the clearance to terminate. However,
to count laches against Collado would be
prejudicial to his rights as laborer.
- The possibility that there would be two conflicting
decisions on the issue of Collado's dismissal may
now be considered academic. The requirement of
a written clearance from the Department prior to
termination was abolished by the enactment of
Batas Pambansa Blg. 130 in 1981. Dismissal
proceedings are now confined within the
establishments. The NLRC or the labor arbiter
steps in only if the said decision is contested by
the employee.
Administrative Law
Dean Carlota
2. NO
- The relation between petitioner and Collado is
now strained by the latter's violation of trust and
confidence reposed on him as a member of the
security force, a position impressed with a high
degree of trust. Proof beyond reasonable doubt of
an employee's misconduct is not required when
loss of confidence is ground for dismissal. It is
sufficient if the employer has "some basis" to lose
confidence or that the employer has reasonable
ground to believe or to entertain the moral
conviction that the employee is responsible for the
misconduct and that the nature of his participation
rendered him absolutely unworthy of the trust and
confidence demanded by his position.
- Compassion dictates us to grant him separation
pay as financial assistance. Separation pay shall
be allowed as a measure of social justice only in
those instances where the employee is validly
dismissed for causes other than serious
misconduct or those reflecting on his moral
character.
DULAY V MINISTER OF NATURAL
RESOURCES
218 SCRA 562
NOCON; February 9, 1993
FACTS
- In 1932, Juan Quibete bartered with Jose Padios
his parcel of land for the latter's fishpond of about
24 hectares at sitio Talaba-an, Cadiz, Negros
Occidental. Quibete, also in 1932, applied for a
Fish and Game Special Permit over the area. His
application was approved in 1949.
- In 1958 Angeles Dico filed her fishpond
application to occupy the area. Her application was
disapproved on the ground that the area had
already been awarded to Quibete. Dico filed a
protest with the Philippine Fisheries Commission
(PFC) alleging that Quibete was occupying and
improving a lot which was not the area covered by
his fishpond permit and that he transferred his
rights over the area (in 1964 to Retirado) without
the approval of the Secretary of Agriculture and
Natural Resources. The PFC dismissed the protest.
Dico brought her case to the Secretary of
Agriculture and Natural Resources who dismissed
her appeal. Her appeal to the President was also
dismissed.
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- While the case was still pending decision by the
Secretary of Agriculture and Natural Resources,
Dico filed with the Director of Lands a free patent
application for a 4-hectare dry portion of the lot
covered by the fishpond permit of Quibete.
Quibete protested. The application was rejected
and Quibete was directed to file the appropriate
public land application for the 4-hectare dry
portion. Dico’s MFR and appeal was denied.
- in 1964, Quibete sold his rights over the fishpond
to Petronilo Retirado whose heirs later sold their
rights to petitioner Godeliva Dulay. Dulay was
issued a fishpond lease agreement (FLA) over a
portion of the lot consisting of 18.3675 hectares,
expiring in 1998.
- In 1977, Dico submitted a letter-petition to the
PFC requesting for a reopening of fishpond conflict
of Dico vs. Quibete, Retirado and Dulay based on
newly discovered evidence. It was alleged that the
fishpond permit of Juan Quibete did not cover the
area in question (Lot No. 489-C) located in Sitio
Talaba-an but Lot No. 487 located in Barrio Luna.
She prayed that Dulay's FLA be cancelled and a
new one be issued in her name. [Tsk, ayaw talaga
paawat nito. Pesky neighbor!] Dulay moved to
dismiss based on resjudicata but her motion and
her subsequent MFR were both denied.
ISSUE
WON res judicata applies as well to judicial and
quasi-judicial acts of public, executive or
administrative officers and boards
HELD
YES.
Ratio Decisions and orders of administrative
agencies rendered pursuant to their quasi-judicial
authority, have, upon their finality, the force and
binding effect of a final judgment within the
purview of the doctrine of res judicata. The rule of
res judicata which forbids the reopening of a
matter once judicially determined by competent
authority applies to judicial and quasi-judicial acts
of public, executive or administrative officers and
boards acting within their jurisdiction.
Reasoning The lot Quibete improved as a
fishpond and which rights he sold to Retirado was
investigated TWICE. Both investigations, more
than three years apart with investigators from
different offices, showed that Quibete occupied
and improved Lot 489-C although in the different
documents, including maps, which make up this
case, it was designated as Lot 487. Thus, no merit
171
can be given to Dico's alleged pieces of evidence
as all these HAD already been studied thoroughly
in these separate investigations.
- The matter having become final, it was grave
abuse of discretion on the part of the Director of
the Bureau of Fisheries and Aquatic Resources to
give due course to Dico's letter-petition requesting
for a re-opening of the fishpond conflict.
Disposition Petition is GRANTED. Orders annulled.
PHIL AMERICAN GENERAL
INSURANCE CO. v CA
(Sarah)
MANILA ELECTRIC CO v PHIL
CONSUMERS FOUNDATION
(Mini)
B. WRIT OF EXECUTION; MANDAMUS
APOLEGA V HIZON
25 SCRA 336
MAKALINTAL; September 28, 1968
FACTS
- On May 26, 1961 Hizon filed a notice of claim for
compensation with Regional Office No. 5,
Department of Labor, San Pablo City, for injury
sustained by him on Jan. 5, 1961, while under the
employ of petitioner.
- On June 16, petitioner received a letter from the
Chief, Administrative Section of Regional Office No.
5, together with Form No. 3 (Employer's Report of
Sickness and Accident) and Form No. 5
(Employer's Supplementary Report of Sickness and
Accident), for him to fill out in connection with the
claim. He failed to do so, however, although he
now alleges that he went to the aforesaid office
and verbally informed the officers concerned that
the claimant was not his employee.
- On July 21, Regional Administrator Luciano
Alcantara issued an award requiring petitioner to
pay the claimant P158.90 for medical expenses,
P3,744.00 as compensation benefits and P38.00 as
fee.
- On November 30, 1962 Hizon died from
complication resulting from the injury suffered in
Administrative Law
Dean Carlota
the aforesaid accident and on Jan. 22, 1963 his
widow, Perseveranda Hizon, in her own behalf and
as guardian ad litem of their minor children, filed a
death compensation claim with the same office, a
copy of which was received by petitioner on Jan.
28. The claim was again uncontroverted, and on
Feb. 22, an award was issued in favor of the wife
and children of the Hizon in the following amounts:
(1) P328.90 for medical expenses; (2) P200.00 as
burial expenses; (3) P3,744.00 as compensation
benefits; and (4) P38.00 as fee. This award was
renewed on July 8 by hearing officer Enriquez of
the same Regional Office, requiring petitioner to
pay claimants the same amount of compensation.
Copy of the renewed award was received by
petitioner on July 19.
- On August 8, petitioner filed a motion for
extension of time to file a "Motion to Vacate the
Award and Motion to Dismiss the Case." An
extension of 10 days from August 12 was granted
by the hearing officer. Petitioner failed to file the
pleading contemplated, and so the hearing officer,
on September 9, issued an order declaring the
award as final and executory and elevated the
record of the case to the Workmen's
Compensation Commission for review. In an order
dated July 24, 1964 the Commission, thru
Associate Commissioner Perez, declared the award
of February 22, 1963 final and executory and
remanded the case to the Regional Office for
appropriate action. The Regional Office, thru
Dequina, issued a writ of execution against the
properties of the petitioner, pursuant to Section 51
of the Workmen's Compensation Act as amended
by Section 17 of RA 4119.
- On Nov. 17, 1964 petitioner elevated the case to
this Court in a petition for certiorari and prohibition
with preliminary injunction. In a resolution dated
Nov. 20, 1964, SC issued writ of preliminary
injunction prayed for upon petitioner's posting a
bond of P3,000.00.
ISSUE/S
1. WON petitioner was denied due process.
2. WON the Commission or the duly deputized
officials in the Regional Offices of the Department
of Labor have authority to issue writs of execution.
HELD
1. NO.
Reasoning Petitioner denies the fact that the
deceased Melanio Hizon was his employee at the
time of the accident and maintains that in any
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case the claim for compensation was filed beyond
the reglementary two-month period prescribed in
Section 24 of the Workmen's Compensation Act.
He further contends that he was never given a
chance to present evidence as he was not advised
of any hearing and therefore the proceedings
taken were null and void.
The allegation of lack of notice and hearing cannot
be sustained. Petitioner failed to controvert both
claims (injury and death) for compensation, as
required by Section 45 of the Workmen's
Compensation Act. By reason of such failure
petitioner waived his right to present evidence
concerning the claims and therefore cannot
complain that he was not duly heard. Under the
circumstances the hearing officer could make the
award without the necessity of a formal hearing,
treating the claim as uncontested and thus
dispensing with the reception of evidence. As to
the failure of the claimant to file the claim within
the time prescribed in Section 24 of the Act, the
same was non-jurisdictional and did not constitute
a bar to the proceeding, considering that the
employer did not suffer by such delay or failure
(Rio y Cia. vs. WCC, et al., supra). Indeed,
petitioner was given the chance to be heard when
he was granted time within which to file a motion
to vacate the award and to dismiss the case, but
which he failed to do.
2. YES.
Reasoning Originally the power to enforce a final
award made under the Workmen's Compensation
Act was vested "in any court of record in the
jurisdiction of which the accident occurred"
(Section 51, Act 3428). Subsequently, pursuant to
RA 997 as amended by RA 1241, and as effected
by Reorganization Plan 20-A adopted in 1956, the
authority to enforce awards was transferred from
the courts of justice to the Regional Administrator
and the Workmen's Compensation Commission.
This Court, in a number of cases (Everlasting
Pictures, Inc., et al. vs. Fuentes; Divinagracia vs.
CFI Manila, et al.; Community Sawmill Co. vs. WCC;
A.V.H. & Co. vs. WCC, et al.; Chung Quiao vs.
Abaday, et al., and cases cited therein), nullified
writs of execution issued by the Regional Offices
and by the Commission on the ground that
Reorganization Plan 20-A, insofar as it purported to
grant such power, was without legislative authority
or sanction.
As the law now stands, however, the power to
enforce awards under the Workmen's
Compensation Act is expressly vested in the
172
Commission or the duly deputized officials in the
Regional Offices of the Department of Labor (R.A.
4119). This grant of power does not contravene
the Constitution. Execution is a necessary step in
the enforcement of the award, and while it is
procedural in nature and therefore essentially falls
within the rule-making power of this Court, it may
be legislated upon by Congress under its
constitutional authority to "repeal, alter or
supplement the rules concerning pleading,
practice and procedure…" (Sec. 13, Art. VIII, 1935
Consti). In the law under consideration the
legislative intent to vest in the Commission the
power to enforce its awards is clear, in contrast of
RA 997, which did not authorize the
Reorganization Commission to transfer such
judicial power from the courts of justice to the
officials appointed or offices created under
Reorganization Plan 20- A. In one case (Lo Chi, et
al. vs. De Leon, et al.), where the Regional
Administrator issued a writ of execution to enforce
a compensation award, we held that "inasmuch as
the writ of execution was issued by Regional
Administrator De Leon on Dec. 2, 1960, before the
effectivity of RA 4119, the said writ is therefore
null and void," thus impliedly upholding the
constitutionality of RA 4119. The writ of execution
issued by respondent Prudencio D. Dequina is
valid.
VDA. DE CORPUZ v COMMANDING
GENERAL, PHILIPPINE ARMY
(Javi)
AMBROSIO v SALVADOR
G.R. No. L-47651
Aquino : December 11, 1978
FACTS:
- Thirty-nine taxi-drivers filed a complaint
with the NLRC on Jan 3 and Feb 8, 1973
against Extraco Taxi Through the General
Manager and/or Personnel Manager.
- Extraco Taxi was Identified as a public
service operator doing business at 137 A.
del Mundo Street, Caloocan City. The
plaintiffs prayed that certain exactions or
wage deductions made by Extraco Taxi be
declared void and returned to them and
Administrative Law
Dean Carlota
that the defendant be required to remit to
the Social Security System (SSS) their
contributions (NLRC Case No. 656).
- The case was submitted for arbitration to
an NLRC hearing officer. Extraco Taxi's
personnel manager and counsel appeared
before the hearing officer and submitted
a counter-affidavit. In that counter-
affidavit, the personnel manager swore
that Extraco Taxi was "a single
proprietorship of which Mr. Lim Pa was
the owner and proprietor". The arbitrator
in a decision dated June 15, 1973 ordered
Extraco Taxi to reimburse the
complainants the sum of P96,677 as
illegal wage deductions plus interest and
a fine of P2,000.
- On appeal by Extraco Taxi or Extraco
transportation Service and Shipping
Agency, the NLRC in its decision of June 9,
1975 reduced the claim to P64,536.60,
eliminated the fine of P2,000, and
ordered the defendant to remit to the SSS
and the Medicare Commission complaints'
contributions.
- The Secretary of Labor affirmed that
decision in his order of December 11,
1975.
- And on appeal to the President of the
Philippines, the said decision was affirmed
by authority of the President in the first
indorsement of the Presidential Assistant
for Legal Affairs dated October 4, 1976.
- To satisfy the judgment, the sheriff of the
NLRC levied upon three lots, with a total
area of 1,982.5 square meters, and
registered in the name of Lim Pa. Extraco
Taxi's office and garage were located on
those three lots. The levy was made on
the assumption that Lim Pa was the real
judgment debtor doing business under
the name Extraco Taxi. The sheriff issued
a notice announcing the sale of the lots at
public auction. The sale was scheduled on
June 8, 1977.
- Lim Pa filed in the NLRC a motion to
quash the writ of execution on the
grounds that he was not a party in the
case and that he was never sued in the
NLRC.
- In denying that motion, the Labor Arbiter
pointed out that in the counter-affidavit of
the personnel manager of Extraco Taxi,
A2010
Lim Pa was categorically pinpointed as
the sole owner and exclusive operator of
Extraco Taxi, which was a division of
Extraco Transportation Service and
Shipping Agency.
- Instead of exhausting his remedies in the
NLRC, Lim Pa filed an injunction complaint
dated June 7, 1977 with the Court of First
Instance at Caloocan City against the
thirty-nine claimants, the NLRC, its
sheriff, and the register of deeds of
Caloocan City. He prayed that the NLRC
sheriff be enjoined from proceeding with
the levy and execution sale,, that the
register of deeds be restrained from
recording the sale, and that the
defendants be ordered to pay him
damages in the sum of P10,000
- The lower court issued on June 8, 1977 an
order restraining the register of deeds
from recording the sale of the lots. In its
order of September 7, 1977, the lower
court directed the issuance of a writ of
preliminary injunction to restrain the
register of deeds from registering title
sale at public auction of Lim Pa's lots by
virtue of the judgment in the NLRC case.
The lower court reasoned out that the
judgment was not binding on Lim Pa
because, not having been impleaded, the
NLRC did not acquire jurisdiction over
him.
ISSUE:
WON Court of First Instance can issue an injunction
against the NLRC
HELD:
NO
Reasoning Sec 2, Rule 58 of the Rules of Court
explicitly provides that a judge of the Court of First
Instance may issue a writ of preliminary injunction
"in any action pending in an inferior court within its
district".
- Section 4, Rule XVI of the Rules and
Regulations Implementing the Labor
Code, in dogmatic terms provides that
"no temporary injunction or restraining
order many case involving or growing out
of a labor dispute shall be issued by any
court or other entity. "
- There is a ruling that the Court of First
Instance cannot issue a writ of injunction
173
or prohibition against the Court of
Industrial Relations because the CIR is
equal in rank with the Court of First
Instance (Kaisahan ng Mga Manggagawa
sa La Campana vs. Hon. Caluag, 112 Phil.
700). Hence, for lack of jurisdiction,
respondent Judge should dismiss the
injunction case or Civil Case No. C-6353
flied by Lim Pa against the thirty- seven
respondents, the NLRC, its sheriff and the
register of deeds.
MERANO V TUTAAN
115 SCRA 323
AQUINO; July 20, 1982
FACTS
- The National Labor Relations Commission ordered
San Miguel Corporation to reinstate Ramon V.
Merano to his former position without loss of
seniority rights and other rights and benefits to
which he is entitled under existing laws and with
backwages from December 16, 1977 up to his
reinstatement.
- This Court dismissed the petition of San Miguel
Corporation for the review of that decision. Hence,
it became final and executory.
- Pursuant to that decision, Merano was paid
P53,949.16 as monetary award up to August 31,
1980 but he was not reinstated. San Miguel
Corporation opposed the reinstatement due to his
supervening physical unfitness and asked that it
be allowed to pay Merano separation pay in lieu of
reinstatement.
- The NLRC in its en banc resolution ruled that
because Merano could no longer be reinstated due
to his illness, he should be paid his additional
backwages from September 1 to November 19,
1980, the date of the medical evaluation made by
the Chief of the National Orthopedic Hospital, and
separation pay up to that date at the rate of one
month's salary for every year of service.
- Even before the issuance of that NLRC resolution,
Merano filed in the Court of First Instance at
Quezon City a special civil action of mandamus
against San Miguel Corporation and the Labor
Arbiter who functioned as the execution arm of the
NLRC. Merano prayed that the respondents be
ordered to execute solidarily the judgment of the
NLRC and, on failure to do so, San Miguel
Corporation should be required to pay him the sum
Administrative Law
Dean Carlota
of P616,560 as his "expected income until he
reaches the age of 60 years" plus his unpaid back
salaries, to deposit in court his monthly salary, to
pay P35,000 as moral and exemplary damages
and P30,000 as attorney's fees and to defray the
expenses for his surgical operation.
- Trial judge, Hon. Eduardo C. Tutaan dismissed
Merano's petition on the ground that he had no
jurisdiction over the subject-matter of the case
which falls within the competent of the NLRC.
ISSUE
WON respondent judge erred in dismissing
Merano's petition for mandamus on the
ground of lack of jurisdiction
HELD
NO
- The Court of First Instance is not the proper
tribunal to pass upon Merano's complaint against
the failure of the Labor Arbiter to enforce the
NLRC's decision to reinstate him to his former
position of sales staff assistant. His remedy
against the refusal or inaction of the Labor Arbiter,
who is in charge of executing the awards of the
NLRC, is to call the NLRC's attention to the alleged
nonfeasance and not to file a mandamus action in
the Court of First Instance which has no jurisdiction
to interfere with the execution of a final judgment
of the NLRC. That labor tribunal has the same rank
and is in the same category as the Court of First
Instance.
- Articles 217 and 223 of the Labor Code indicate
that the NLRC has jurisdiction to review the
decisions, awards and orders of the Labor Arbiter.
It is elementary that mandamus does not lie if
petitioner has another plain, speedy and adequate
remedy in ordinary course of law.
Disposition The petition is dismissed.
GSIS v CIVIL SERVICE COMMISSION
202 SCRA 799
NARVASA; October 15, 1991
FACTS
- In May 1981, GSIS dismissed 6 EEs as being
"notoriously undesirable," they having allegedly
been found to be connected with irregularities in
the canvass of supplies and materials. The
dismissal was based on Article IX, PD 807 (Civil
A2010
Service Law) in relation to LOI 14-A and/or LOI 72.
The EEs' MFR was denied.
- 5 of these 6 dismissed EEs appealed to the Merit
Systems Board. The Board found the dismissals to
be illegal because effected without formal charges
having been filed or an opportunity given to the
employees to answer, and ordered the remand of
cases to GSIS for appropriate disciplinary
proceedings.
- GSIS appealed to CSC. CSC ruled that the
dismissal of all 5 was indeed illegal. GSIS appealed
to SC. Once more, it was rebuffed. On July 4, 1988
SC's 2nd Division promulgated a Resolution.
- On Jan 8, 1990, the aforesaid Resolution of July 4,
1988 having become final, the heirs of Namuco
and Manuel filed a motion for execution of CSC
Resolution of Oct21, 1987, supra. The GSIS
opposed and argued that CSC Resolution of Oct21,
1987 directing reinstatement of the employees
and payment to them of back salaries and benefits
had been superseded by the 2nd Division's
Resolution of July 4, 1988 precisely eliminating the
payment of back salaries.
- CSC granted the motion for execution in an Order
dated June 20, 1990. It accordingly directed the
GSIS "to pay the compulsory heirs of deceased
Namuco and Manuel for the period from the date
of their illegal separation up to the date of their
demise." GSIS filed MFR but was denied CSC
- Once again the GSIS has come to this Court, this
time praying that certiorari issue to nullify the
Orders of June 20, 1990 and November 22, 1990.
GSIS contends that CSC has no power to execute
its judgments and final orders or resolutions, and
even conceding the contrary, the writ of execution
issued on June 20, 1990 is void because it varies
this Court's Resolution of July 4, 1988.
ISSUE
WON CSC has the power or authority to enforce or
order execution of its decisions, resolutions or
orders
HELD
YES
- Constitutional: The Civil Service Commission, is a
constitutional commission invested by the
Constitution and relevant laws not only with
authority to administer the civil service, but also
with quasi-judicial powers. It has the authority to
hear and decide administrative disciplinary cases
instituted directly with it or brought to it on appeal.
It has the power, too, sitting en banc, to
174
promulgate its own rules concerning pleadings and
practice before it or before any of its offices, which
rules should not however diminish, increase, or
modify substantive rights.
- Statutory: CSC promulgated Resolution No. 89-
779 adopting, approving and putting into effect
simplified rules of procedure on administrative
disciplinary and protest cases, pursuant to the
authority granted by the constitutional and
statutory provisions above cited, as well as RA.
6713. Those rules provide, among other things,
that decisions in "administrative disciplinary
cases" shall be immediately executory unless a
MFR is seasonably filed. If the CSC decision is
brought to SC on certiorari, the same shall still be
executory unless a restraining order or preliminary
injunction is issued by the High Court
- In light of all the foregoing constitutional and
statutory provisions, it would appear absurd to
deny to the Civil Service Commission the power or
authority to enforce or order execution of its
decisions, resolutions or orders which, it should be
stressed, it has been exercising through the years.
The grant to a tribunal or agency of adjudicatory
power, or the authority to hear and adjudge cases,
should normally and logically be deemed to
include the grant of authority to enforce or
execute the judgments it thus renders, unless the
law otherwise provides.
- In Cucharo v. Subido: this Court sustained the
challenged directive of the Civil Service
Commissioner, that his decision "be executed
immediately 'but not beyond ten days from receipt
thereof.
- SC's Resolution of July 4, 1988, modified CSC's
Resolution of Oct21, 1987 inter alia granting back
salaries to the 5 dismissed employees, including
Namuco and Manuel. CSC's Order of June 20, 1990
directed the GSIS "to pay the compulsory heirs of
deceased Namuco and Manuel for the period from
the date of their illegal separation up to the date of
their demise."
- CSC asserted that in promulgating its disparate
ruling, it was acting "in the interest of justice and
for other humanitarian reasons," since the
question of WON Namuco and Manuel should
receive back salaries was "dependent on the result
of the disciplinary proceedings against their co-
respondents in the administrative case before the
GSIS," and since at the time of their death, "no
formal charge had as yet been made, nor any
finding of their personal culpability and they are
no longer in a position to refute the charge."
Administrative Law
Dean Carlota
Disposition Petition DISMISSED
CLAVANO v. HLURB
GR NO 143781
Bellosillo ; 2002 Feb. 27
FACTS
- Jose Clavano, Inc., sold under a contract to sell a
house and lot in Cebu City to (private respondents)
the spouses Enrique and Venus Tenazas. The
spouses paid fifty percent (50%) of the purchase
price but encountered problems in paying the
balance and some additional charges. Alleging
default on the part of the spouses, petitioner
refused to accept their subsequent payments and
sued them instead for rescission of their contract
to sell and the forfeiture of all prior payments
made thereon. The suit was however dismissed in
due course and petitioner took no further action
thereon.
-Private respondents filed a complaint for specific
performance with the Housing and Land Use
Regulatory Board (HLURB) Regional Office in Cebu
City against petitioner to compel it to honor their
contract to sell. The spouses alleged that they had
tendered enough money to pay for the balance
and all charges for the house and lot which
petitioner unreasonably refused to accept. They
asked for judgment compelling Jose Clavano, Inc.
to accept their payment and to execute in their
favor the necessary deed of absolute sale for the
disputed house and lot as well as to compensate
them for damages they had incurred. Petitioner
denied the allegations in the complaint and
insisted that the spouses had already defaulted in
their obligation to settle the balance of the
purchase price and other accounts. HLURB granted
it. Office of the President upheld it. CA dismissed
petition. HLURB Decision, as modified by the Office
of the President, lapsed into finality and ripened
for execution. The HLURB Regional Office issued a
writ of execution to enforce the judgment, and so
petitioner was constrained to surrender to the
spouses an unnotarized deed of absolute sale over
the subject house and lot, the corresponding
original owner’s duplicate of the transfer
certificate of title in petitioner’s name, tax
declaration certificates, manager’s check for costs
and attorney’s fees, miscellaneous documents,
and the keys to the house bought by the spouses.
A2010
-Private respondents filed a motion with the HLURB
complaining about several defects in the housing
unit as well as the fact that the deed of absolute
sale which petitioner had delivered was
unnotarized and the transfer certificate of title
earlier produced was still titled in the name of
petitioner. The spouses also asked the HLURB to
order petitioner to pay for the expenses of the
notarization of the deed and for the fees and taxes
necessary for transferring and recording the title in
the spouses’ name.
-HLURB granted the motion.
-Petitioner moved for reconsideration which was
dismissed. Certiorari to CA but was dismissed.
ISSUE
WON HLURB’s subsequent decision and order is
void
HELD
Yes.
- Firstly, decision has long become final and, has
also been completely satisfied. HLURB is thus left
with no other authority but to enforce the
dispositive part of its Decision which it can no
longer amend, modify or alter in a manner
affecting the merits of the judgment.
- Secondly, the subsequent Orders of the HLURB
requiring petitioner to pay for the expenses
incurred by private respondents in securing the
transfer of title in their name do not fall within the
ambit of the HLURB Decision whether expressly or
by necessary inference, i.e., “whatever then is
necessary to be done to carry out the decision
should be ordered.” The Orders are completely
separate from and independent of the Decision
and do not merely enforce it as the HLURB and the
Court of Appeals would want to impress. The
Orders cannot therefore be considered part of the
Decision which must be executed against
petitioner. Fundamental is the rule that execution
must conform to that ordained or decreed in the
dispositive part of the decision; consequently,
where the order of execution is not in harmony
with and exceeds the judgment which gives it life,
the order has pro-tanto no validity. While the
Decision commands petitioner to “execute a Deed
of Absolute Sale in favor of [private respondents]
and deliver the corresponding Transfer Certificate
of Title” to them and that only a public document
would serve to cede ownership of an immovable
property, such as the house and lot in question, we
cannot infer from these directives that petitioner
175
should also pay for the expenses in notarizing the
deed and in obtaining a new certificate of title. The
obligation to pay for such expenses is unconnected
with and distinct from the obligations to execute
and deliver the deed of absolute sale and the
certificate of title. Since there is no qualification
that the duties to execute and to deliver shall also
compel petitioner to assume the expenses for
transferring the pertinent title in favor of private
respondents, the ordinary and literal meaning of
the words “execute” and “deliver” should prevail,
that is, for petitioner to perform all necessary
formalities of the deed of sale and give or cede the
res of the certificate of title (that certificate which
naturally must be in their possession since
petitioner cannot give what it does not have) to
the actual or constructive control of private
respondents. Needless to stress, petitioner can
actually discharge these obligations without
settling for its own account the expenses which
private respondents are demanding. In this regard,
petitioner can appear before the notary public for
notarization of the deed of absolute sale and assist
in the cancellation of the certificate of title in its
name by giving this certificate together with the
deed of absolute sale to private respondents for
presentation at the Registry of Deeds, which it has
several times expressed willingness to do.
Clearly, there is nothing in the body much less in
the dispositive portion of the HLURB Decision nor
in the pleadings of the parties from where we may
deduce that petitioner must pay for the amounts
spent in transferring title to private respondents. It
is well settled that under these circumstances no
process may be issued to enforce the asserted
legal obligation.
Thirdly, the HLURB or the Court of Appeals cannot
order petitioner at this late stage to reimburse the
charges and fees relative to the transfer of title to
private respondents of the subject house and lot
when they (private respondents) did not allege this
obligation nor pray for this relief in their complaint
and other pleadings and did not attempt to prove
this cause of action one way or the other. It is
elementary that a judgment must conform to, and
be supported by, both the pleadings and the
evidence, and be in accordance with the theory of
the action on which the pleadings are framed and
the case was tried. The judgment must be
secundum allegata et probata.
Fourthly, neither can we imply such obligation
from the HLURB Decision since private
respondents’ complaint in the proceedings a quo
Administrative Law
Dean Carlota
only asked for judgment to compel petitioner to
accept their payment, thereafter execute in their
favor the necessary deed of absolute sale for the
disputed house and lot and to compensate them
for damages they had incurred. Stated otherwise,
private respondents only sought the enforcement
of the mutually binding contract to sell so that
they could finally own the house and lot but did
not, never, ask for the transfer of the title of the
immovable property in their name at petitioner’s
expense. Certainly these remedies, while not
exclusive of each other in that they may be joined
in one complaint, are not one and the same, nor
can we simply infer one from the other. It was ill
advised for private respondents to have failed to
include in their pleadings before the HLURB the
appropriate allegations which would have formed
(legitimately, that is) the basis for an order in the
14 November 1995 HLURB Decision compelling
petitioner to defray such expenses.
-In the case at bar, none of the circumstances
which this Court used in the past exist to justify
evidentiary hearings of new allegations during the
execution of judgment as nonetheless being part
of the segmented proceedings in the suit, i.e., a
fictional continuation of the trial proper. The
instant petition is not one where private
respondents are enforcing subsidiary liability of an
employer in a criminal case for negligence; nor
where the defense or claim sought to be heard on
execution has been raised or tried before the trial
court; nor where the post-judgment evidentiary
hearings are meant to address the impossibility of
exacting compliance with the judgment as
specified therein. In the instant case, we are not
concerned with just varying or replacing the
means of executing the Judgment but with
attempts to compel an altogether different relief
apart from those adjudged in the HLURB Decision.
Likewise, for obvious reasons, the assailed Orders
do not involve supervening events where the court
a quo is allowed to admit evidence of new facts
and circumstances and thereafter to suspend
execution of the judgment and grant relief as may
be warranted which may or may not result in its
modification. Supervening events refer to facts
which transpire after judgment has become final
and executory or to new circumstances which
developed after the judgment has acquired
finality, including matters which the parties were
not aware of prior to or during the trial as they
were not yet in existence at that time. Clearly, the
responsibility for the expenses for registering and
A2010
titling the subject house and lot - a matter pre-
dating the filing of the complaint with the HLURB,
and in fact, written in the contract to sell which
private respondents sought to enforce - does not
qualify as a supervening event which would have
justified such post-judgment hearings as those
undertaken by the HLURB and validated by the
Court of Appeals.
Fifthly, the assailed Orders of the HLURB did not
merely interpret for purposes of execution but
actually changed, amended or modified the HLURB
Decision. By ordering petitioner to pay for private
respondents’ expenses in transferring the
documents of title over the house and lot in their
names, the HLURB introduced new matters in the
Decision which were both material and substantial.
In the original Decision petitioner was mandated
only to execute the deed of absolute of sale and to
deliver the transfer certificate of title. But the
assailed Orders granted an entirely new relief
which significantly affected the obligations of
petitioner as judgment-debtor; petitioner was not
only to execute the deed and deliver the
documents of title but must also shell out money
to settle the expenses incurred in the process of
transferring title to private respondents.
Finally, it is unfortunate that private respondents
by their own negligence kept the issue hanging as
to who between them and petitioner should pay
for the expenses for the execution and registration
of the sale as well as the fees and taxes for the
issuance of new documents of title. And so a
corollary question that we might as well resolve
now (although not raised as an issue in the present
petition but conformably with Gayos v. Gayos that
it is a cherished rule of procedure that a court
should always strive to settle the entire
controversy in a single proceeding leaving no root
or branch to bear the seeds of future litigation) is
whether private respondents can still file a
separate complaint against petitioner to recover
the expenses for transferring to themselves the
title to the subject house and lot.
176