ANICETO MATEO et al. v. CA and EDGAR STA.

MARIAA
August 14, 1995| Puno, J. | Jurisdiction
Digester: Roa, Annamhel Monique
SUMMARY: Sta. Maria, previously a General Manager of the Morong Water District
was dismissed from his position by the corporations Board of Directors following a
complaint of some of its employees. He filed an action for Quo Warranto and
Mandamus with Preliminary Injunction in the RTC Rizal asking to restrain the
commission and continuance of the acts of the Board. The Board filed a MTD,
contending that the RTC has no jurisdiction over the subject matter of the case. The
Court upheld this contention.
DOCTRINE: The hiring and firing of employees of goverment-owned and controlled
corporations are governed by the provisions of the Civil Service Law and Rules and
Regulations. The party aggrieved by a decision, ruling, order, or action of an agency of
the government involving termination of services may appeal to the Commission within
fifteen (15) days.
FACTS:
! Petitioners, all Board Members of Morong Water District (MOWAD), conducted
an investigation on Edgar Sta. Maria (Sta. Maria), then General Manager, following
complaint of some MOWAD employees. Sta. Maria was preventively suspended
and a San Diego designated in his place as Acting General Manager. Later, he was
dismissed (January 7, 1993).
! Following this dismissal, Sta. Maria filed a Special Civil Action for Quo Warranto
and Mandamus with Preliminary Injunction before the RTC Rizal. His petition has
three causes of action:
1)! Hes been the General Manager since August 1984 with security of tenure.
Hence, he cannot be removed either temporarily or permanently except
for cause and only after compliance with the elementary rules of due
process. However, contrary to justice and fairness and without due
process, the MOWAD BOD barred him from performing his functions.
While he was away on travel, they, in conspiracy, destroyed his door and
locked it with a different door knob thereby making his attempts to gain
access futile.
2)! He was terminated, despite his having a clear right to the Office of
General Manager, which is now being usurped and unlawfully held by San
Diego.
3)! He is entitled to the relief mandated, which consists in restraining the
commission or continuance of the acts complained of.
! Petitioners filed an MTD, arguing: (1) the court had no jurisdiction over
disciplinary actions of government employees, which is vested exclusively in the
Civil Service Commission; and (2) quo warranto was not the proper remedy.
! MTD denied.
! Petitioners elevated the matter to the SC, which remanded it to the CA.
! CA Dismissed. MFR denied.

RULING: Petition is GRANTED and the decision of respondent Court of Appeals

and its Resolution are ANNULLED and SET ASIDE.
Whether the RTC of Rizal has jurisdiction over the case involving dismissal of an
employee of quasi-public corporation NO.
! There is no question that MOWAD is a quasi-public corporation created pursuant
to Presidential Decree (P.D.) No. 198, known as the provincial Water Utilities Act
of 1973, as amended.
! Davao City Water District v. Civil Service Commissions - Employees of governmentowned or controlled corporations with original charter fall under the jurisdiction of
the Civil Service Commission.
! The established rule is that the hiring and firing of employees of goverment-owned
and controlled corporations are governed by the provisions of the Civil Service
Law and Rules and Regulations.
! PD No. 807, EO No. 292, and Rule II section 1 of Memorandum Circular No. 44
series of 1990 of the Civil Service Commission spell out the initial remedy of Sta.
Maria against illegal dismissal.
o! The party aggrieved by a decision, ruling, order, or action of an
agency of the government involving termination of services may appeal to
the Commission within fifteen (15) days. Thereafter, he could go
on certiorari to this Court [SC] under Rule 65 of the Rules of Court if
he still feels aggrieved by the ruling of the Civil Service Commission.
! [Just to add,] Under the present rule, Revised Circular No. 1-91 as amended by
Revised Administrative Circular No. 1-95, which took effect on June 1, 1995, final
resolutions of the Civil Service Commission shall be appealable to the Court of
Appeals. This overturned the ruling in Mancita v. Barcinas.
! Mancita v. Barcinas - No appeal lies from the decision of the Service Commission.
Parties aggrieved thereby may proceed to the SC alone on certiorari under Rule 65 of
the Rules of Court, within thirty (30) days from receipt of a copy thereof, pursuant
to section 7, Article IX of the 1987 Constitution.
PHILIPPINE AIRLINES v. CIVIL AERONAUTICS BOARD!
March 26, 1997| Torres, Jr., J. |
Digester: Valena, Maria Patricia
SUMMARY: GrandAir filed an application for a Certificate of Public Convenience and
Necessity with the CAB. They were granted a Temporary Operating Permit. PAL
challenged this application and the TOP on the ground that GrandAir could not be
granted this certificate, since it did not yet have a legislative franchise. The Court held
that pursuant to Act No. 776, the CAB is authorized to hear and grant the application
even if GrandAir did not yet have a legislative franchise, pursuant to a valid delegation
under RA 776.
DOCTRINE: The power to authorize and control the operation of a public utility is
admittedly a prerogative of the legislature, since Congress is that branch of government

vested with plenary powers of legislation. However, it is generally recognized that a

franchise may be derived indirectly from the state through a duly designated agency, and
to this extent, the power to grant franchises has frequently been delegated, even to
agencies other than those of a legislative nature.
FACTS:
! On November 24, 1994, private respondent GrandAir applied for a Certificate of
Public Convenience and Necessity with the Board. The Chief Hearing Officer of
the CAB issued a Notice of Hearing setting the application for initial hearing on
December 16, 1994, and directing GrandAir to serve a copy of the application and
corresponding notice to all scheduled Philippine Domestic operators. On
December 14, 1994, GrandAir filed its Compliance, and requested for the issuance
of a Temporary Operating Permit. Petitioner, itself the holder of a legislative
franchise to operate air transport services, filed an Opposition to the application
for a Certificate of Public Convenience and Necessity, principally on the ground
that they had no franchise to operate from Congress. This opposition was denied
by the Chief Hearing Officer of the CAB, who ruled as follows: The Civil
Aeronautics Board has jurisdiction to hear and resolve the application. In Avia
Filipina vs. CAB, CA G.R. No. 23365, it has been ruled that under Section 10 (c)(1)
of R.A. 776, the Board possesses this specific power and duty.
! The CAB promulgated Resolution No. 119(92) approving the issuance of a
Temporary Operating Permit in favor of GrandAir for a period of three months,
i.e., from December 22, 1994 to March 22, 1994. Opposition of petitioner was
denied. The CAB justified its assumption of jurisdiction over GrandAirs
application under Act No. 776, in the same Resolution No. 119(92).
! On March 21, 1995, upon motion by private respondent, the temporary permit was
extended for a period of six (6) months or up to September 22, 1995.
PETITIONER:
! CAB acted beyond its powers and jurisdiction in taking cognizance of GrandAirs
application for the issuance of a Certificate of Public Convenience and Necessity,
and in issuing a temporary operating permit in the meantime, since GrandAir has
not been granted and does not possess a legislative franchise to engage in scheduled
domestic air transportation. A legislative franchise is necessary before anyone may
engage in air transport services, and a franchise may only be granted by Congress,
pursuant to Section 11, Article XII, and Section 1, Article VI, of the Constitution.
! DOJ Opinion No. 163, S. 1989: .[A] franchise is the legislative authorization to
engage in a business activity or enterprise of a public nature, whereas a certificate of
public convenience and necessity is a regulatory measure which constitutes the
franchises authority to commence operations. It is thus logical that the grant of the
former should precede the latter.
RESPONDENT:
! Avia Filipinas vs. Civil Aeronautics Board, and Silangan Airways, Inc. vs. Grand
International Airways - In both cases, the issue resolved was whether or not the

Civil Aeronautical Board can issue the Certificate of Public Convenience and
Necessity or Temporary Operating Permit to a prospective domestic air transport
operator who does not possess a legislative franchise to operate as such. Following
Albano vs. Reyes, the Court of Appeals upheld the authority of the Board to issue
such authority, even in the absence of a legislative franchise, which authority is
derived from Section 10 of Republic Act No. 776, as amended by P.D. No. 1462.
RULING: ACCORDINGLY, in view of the foregoing considerations, the Court
RESOLVED to DISMISS the instant petition for lack of merit. The respondent Civil
Aeronautics Board is hereby DIRECTED to CONTINUE hearing the application of
respondent Grand International Airways, Inc. for the issuance of a Certificate of Public
Convenience and Necessity.
Whether the CAB has jurisdiction over GrandAirs application YES.
! The Civil Aeronautics Board has jurisdiction over GrandAirs Application for a
Temporary Operating Permit. This rule has been established in the case of
Philippine Air Lines Inc. vs. Civil Aeronautics Board, 1968. The Board is expressly
authorized by Republic Act No. 776 to issue a temporary operating permit or
Certificate of Public Convenience and Necessity, and nothing contained in the said
law negates the power to issue said permit before the completion of the applicants
evidence and that of the oppositor thereto on the main petition.
! The CABs authority to grant a temporary permit upon its own initiative strongly
suggests the power to exercise said authority, even before the presentation of said
evidence has begun. Assuming arguendo that a legislative franchise is prerequisite
to the issuance of a permit, the absence of the same does not affect the jurisdiction
of the Board to hear the application, but only the issuance of the requested permit.
! The power to authorize and control the operation of a public utility is admittedly a
prerogative of the legislature, since Congress is that branch of government vested
with plenary powers of legislation. The question then is - whether or not Congress,
in enacting Republic Act No. 776, has delegated the authority to authorize the
operation of domestic air transport services to the respondent Board, such that
Congressional mandate for the approval of such authority is no longer necessary.
! It is generally recognized that a franchise may be derived indirectly from the state
through a duly designated agency, and to this extent, the power to grant franchises
has frequently been delegated, even to agencies other than those of a legislative
nature. In pursuance of this, it has been held that privileges conferred by grant by
local authorities as agents for the state constitute as much a legislative franchise as
though the grant had been made by an act of the Legislature.
! The trend of modern legislation is to vest the Public Service Commissioner with
the power to regulate and control the operation of public services under reasonable
rules and regulations, and as a general rule, courts will not interfere with the
exercise of that discretion when it is just and reasonable and founded upon a legal
right.

A reading of Section 10 of Act No. 776 of the same reveals the clear intent of
Congress to delegate the authority to regulate the issuance of a license to operate
domestic air transport services.1
Congress, by giving the respondent Board the power to issue permits for the
operation of domestic transport services, has delegated to the said body the
authority to determine the capability and competence of a prospective domestic air
transport operator to engage in such venture.
No undue delegation RA 776 provides for the limitations on the power of the
CAB.2 It also contains the requirements to determine the competency of a
prospective operator to engage in the public service of air transportation.3
The procedure for the processing of the application of a Certificate of Public
Convenience and Necessity had been established to ensure the weeding out of
those entities that are not deserving of public service.
Eristingcol v CA!
20 March 2009|Nachura, J.| Jurisdiction
Digester: Melliza, F.S.L.

SUMMARY: Eristingcol filed an action with the RTC phrased as one for the
declaration of nullity of UVAIs Construction Rules and Regulations. The RTC ruled in
favor of Eristingcol. Limjoco, the President of UVAI, elevated the dispute to the CA on
the grounds that the RTC acted without jurisdiction in the assailed decision since it was
the HLURB who has jurisdiction over the dispute. The Court, upon scrutinizing the
allegations in her complaint, found that said action is not one of nullification, which
would have been in the RTCs jurisdiction, but instead goes into the proper
interpretation of said Rules over the house and lot of its members, which is under the

jurisdiction of the HLURB. The Court ruled in favor of Limjoco, stating that
jurisdiction is determined by the allegations of the complaint.
DOCTRINE: Abejo v. De la Cruz : under the sense-making and expeditious doctrine
of primary jurisdiction the courts cannot or will not determine a controversy involving
a question which is within the jurisdiction of an administrative tribunal, where the
question demands the exercise of sound administrative discretion requiring the
special knowledge, experience, and services of the administrative tribunal to determine
technical and intricate matters of fact, and a uniformity of ruling is essential to comply
with the purposes of the regulatory statute administered.
FACTS:
! Eristingcol owned a residential lot in Urdaneta Village, Makati.
! She built her house with a concrete canopy directly above the main door and
highway.
! Urdaneta Village Assoc. Inc. (UVAI) fined Eristingcol PHP400,000 since her
houses concrete canopy violated the canopy easement in its Construction Rules
and Regulations (RCC).
o! UVAI also barred her construction workers and contractors access from
her lot.
! Eristingcol filed an action, which she phrased as one for nullification of UVAIs
RCCs for being contrary to law, with the RTC against UVAI and Limjoco.
! RTC ruled in favor of Eristingcol.
o! Limjoco appeals to the CA, which reversed the RTCs Decision for the
latters lack of jurisdiction over the dispute.
o! Eristingcol elevates the case to the SC.
! Limjoco argues that it is the HLURB that has jurisdiction over the case.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1. SECTION 10. Powers and Duties of the Board.(A) Except as otherwise provided herein, the
Board shall have the power to regulate the economic aspect of air transportation, and shall have
general supervision and regulation of, the jurisdiction and control over air carriers, general sales
agents, cargo sales agents, and air freight forwarders as well as their property rights, equipment,
facilities and franchise, insofar as may be necessary for the purpose of carrying out the provision
of this Act.
(c) The Board shall have the following specific powers and duties: (1) In accordance with the
provisions of Chapter IV of this Act, to issue, deny, amend, revise, alter, modify, cancel, suspend
or revoke in whole or in part upon petition or complaint or upon its own initiative any Temporary
Operating Permit or Certificate of Public Convenience and Necessity: Provided,, however, That
in the case of foreign air carriers, the permit shall be issued with the approval of the President of
the Republic of the Philippines.
2. SECTION 4. Declaration of policies.In the exercise and performance of its powers and
duties under this Act, the Civil Aeronautics Board and the Civil Aeronautics Administrator shall
consider the following, among other things, as being in the public interest, and in accordance with
the public convenience and necessity:
(a) The development and utilization of the air potential of the Philippines;
(b) The encouragement and development of an air transportation system properly adapted to the
present and future of foreign and domestic commerce of the Philippines, of the Postal Service
and of the National Defense;

(c) The regulation of air transportation in such manner as to recognize and preserve the inherent
advantages of, assure the highest degree of safety in, and foster sound economic condition in,
such transportation, and to improve the relations between, and coordinate transportation by, air
carriers;
(d) The promotion of adequate, economical and efficient service by air carriers at reasonable
charges, without unjust discriminations, undue preferences or advantages, or unfair or destructive
competitive practices;
(e) Competition between air carriers to the extent necessary to assure the sound development of
an air transportation system properly adapted to the need of the foreign and domestic commerce
of the Philippines, of the Postal Service, and of the National Defense;
(f) To promote safety of flight in air commerce in the Philippines; and,
(g) The encouragement and development of civil aeronautics.
3. Citizenship requirement under Sec. 12;
SECTION 21. Issuance of permit.The Board shall issue a permit authorizing the whole or any
part of the service covered by the application, if it finds: (1) that the applicant is fit, willing and
able to perform such service properly in conformity with the provisions of this Act and the rules,
regulations, and requirements issued thereunder; and (2) that such service is required by the public
convenience and necessity; otherwise the application
shall be denied.

strikes or lockouts meant such jurisdiction to be exclusive,

although it did not so expressly state in the law.
!! The Court held that under the sense-making and expeditious
doctrine of primary jurisdiction the courts cannot or will not
determine a controversy involving a question which is within the
jurisdiction of an administrative tribunal, where the question
demands the exercise of sound administrative discretion
requiring the special knowledge, experience, and services of the
administrative tribunal to determine technical and intricate
matters of fact, and a uniformity of ruling is essential to comply
with the purposes of the regulatory statute administered.
o! In this case, the need for the [Administrative Agencys] technical
expertise cannot be over-emphasized involving as it does the
meticulous analysis and correct interpretation of a corporations bylaws as well as the applicable provisions of the Corporation Code in
order to determine the validity of VGCCIs claims. The SEC,
therefore, took proper cognizance of the instant case.

Eristingcol, on the other hand, asserts that her complaint was properly filed with
the RTC since it prayed for the nullification of UVAIs CRR for being contrary to
law.
The Court held that the case should be outright dismissed on procedural grounds
for Eristingcols failure to implead all the respondents.
o! But it went on to discuss the issue on jurisdiction anyway to serve as a
guide for the bench and the bar.

RULING: WHEREFORE, premises considered, the petition is DENIED. The

Decision of the Court of Appeals in CA-G.R. SP. No. 64642 is hereby AFFIRMED.
Costs against petitioner.
Which of the two has jurisdiction: the HLURB or the RTC?HLURB.
! Jurisdiction is determined by the allegations in the complaint.
! Although the complaint was meticulously phrased as one of nullification, a scrutiny
of the allegations contained in Eristingcols complaint reveals that the nature of the
question subject of this controversy only superficially delves into the validity of
UVAIs Construction Rules.
! The complaint actually goes into the proper interpretation and application of
UVAIs by-laws, specifically its construction rules.
o! Essentially, the conflict between the parties arose as Eristingcol,
admittedly a member of UVAI, now wishes to be exempt from the
application of the canopy requirement set forth in UVAIs Construction
Rules.
o! Significantly, Eristingcol does not assail the height restriction of UVAIs
Construction Rules, as she has readily complied therewith.
! The Court cited China Banking Corp. v. CA:
o! An important consideration, moreover, is the nature of the controversy
between petitioner and private respondent corporation.
o! VGCCI claims a prior right over the subject share anchored mainly on
Sec. 3, Art. VIII of its by-laws which provides that after a member shall
have been posted as delinquent, the Board may order his/her/its share
sold to satisfy the claims of the Club It is pursuant to this provision that
VGCCI also sold the subject share at public auction, of which it was the
highest bidder. VGCCI caps its argument by asserting that its corporate
by-laws should prevail. The bone of contention, thus, is the proper
interpretation and application of VGCCIs aforequoted by-laws, a subject
which irrefutably calls for the special competence of the SEC.
o! We reiterate herein the sound policy enunciated by the Court in Abejo v.
De la Cruz:
!! 6. In the fifties, the Court taking cognizance of the move to vest
jurisdiction in administrative commissions and boards the power
to resolve specialized disputes in the field of labor (as in
corporations, public transportation and public utilities) ruled that
Congress in requiring the Industrial Courts intervention in the
resolution of labor-management controversies likely to cause

DELTRAVENTURES RESOURCES INC v. CABATO!

March 9, 2000 | Quisimbing, J. | Jurisdiction
Digester: Magtanong, Patch
SUMMARY: In a previous labor case, the NLRC held Green Mountain Farm, Ongpin
and Alabe to be guilty of illegal dismissal and unfair labor practices, and held them liable
to pay the complainants solidary. Finding them to have insufficient personal properties
to satisfy the monetary award, the NLRC sheriff levied real property of Ongpin.
Deltaventures then filed a third-party complaint against the NLRC asserting ownership
over the property levied. It also filed a complaint for injunction and damages with a
prayer for a TRO against the sheriff with the RTC. RTC Judge Cabato dismissed the
case for lack of jurisdiction because the NLRC retains authority over all proceedings
anent the execution of its decision. The Court affirmed the dismissal and held that the
complaint was in effect a motion to quash the writ of execution of a decision rendered
on a case properly within the jurisdiction of the Labor Arbiter, to wit: Illegal Dismissal
and Unfair Labor Practice. It is then logical to conclude that the subject matter of the
third party claim is but an incident of the labor case, a matter beyond the jurisdiction of
regional trial courts.
DOCTRINE: Regional Trial Courts have no jurisdiction to act on labor cases or
various incidents arising therefrom, including the execution of decisions, awards or
orders. Jurisdiction to try and adjudicate such cases pertains exclusively to the proper
labor official concerned under the Department of Labor and Employment. Whatever
irregularities attended the issuance and execution of the alias writ of execution should be
referred to the same administrative tribunal which rendered the decision
FACTS:

A Decision was rendered by Executive Labor Arbiter Norma Olegario of the

NLRC-CAR, holding Green Mountain Farm, Roberto Ongpin and Almus Alabe
guilty of Illegal Dismissal and Unfair Labor Practice and ordering them to pay the
complainants (laborers), in solidum.
The complainants in the abovementioned labor case, filed before the Commission a
motion for the issuance of a writ of execution as respondents appeal to the
Commission and this Court were respectively denied.
Executive Labor Arbiter Gelacio C. Rivera, Jr. to whom the case was reassigned in
view of Labor Arbiter Olegarios transfer, issued a writ of execution directing
NLRC Deputy Sheriff Adam Ventura to execute the judgment against respondents.
Finding that said judgment debtors do not have sufficient personal properties to
satisfy the monetary award, Sheriff Ventura proceeded to levy upon a real property,
registered in the name of Ongpin, one of the respondents in the labor case.
Thereafter, Sheriff Ventura caused the publication of the date of the public auction
of said real property.
Deltaventures Resources Inc., petitioner, filed before the Commission a third-party
claim asserting ownership over the property levied upon and subject of the Sheriffs
notice of sale. Labor Arbiter Rivera thus issued an order directing the suspension of
the auction sale until the merits of petitioners claim has been resolved.
However, petitioner filed with the Regional Trial Court of La Trinidad, Benguet a
complaint for injunction and damages, with a prayer for the issuance of a
temporary restraining order against Sheriff Ventura, reiterating the same allegations
it raised in the third party claim it filed with the Commission.
Judge Cabato issued a temporary restraining order, enjoining respondents in the
civil case before him to hold in abeyance any action relative to the enforcement of
the decision in the labor case.
Respondent court rendered its assailed decision which dismissed the complaint of
Deltaventures premised on the following grounds:
o! This Court is of equal rank with the NLRC, hence, has no jurisdiction to issue
an injunction against the execution of the NLRC decision
o! The NLRC retains authority over all proceedings anent the execution of its
decision. This power carries with it the right to determine every question which
may be involved in the execution of its decision.
o! Deltaventures Resources, Inc. should rely on and comply with the Rules of the
NLRC because it is the principal procedure to be followed, the Rules of Court
being merely suppletory in application.
o! The plaintiff, having in the first place addressed to the jurisdiction of the NLRC
by filing with it a Third Party Claim may not at the same time pursue the
present amended Complaint under the forum shopping rule.

RULING: Petition denied.

Whether the trial court may take cognizance of the complaint filed by petitioner
and consequently provide the injunctive relief sought NO.

Whether the acts complained of are related to, connected or interwoven with the
cases falling under the exclusive jurisdiction of the Labor Arbiter or of the
NLRCYES.
! Petitioner: court a quo erred in dismissing the third-party claim on the ground of
lack of jurisdiction. The NLRC-CAR did not acquire jurisdiction over the claim for
it (Delta) did not impugn the decision of the NLRC-CAR but merely questioned
the propriety of the levy made by Sheriff Ventura. The instant case does not
involve a labor dispute, as no employer-employee relationship exists between the
parties. Nor is the petitioners case related in any way to either parties case before
the NLRC-CAR hence, not within the jurisdiction of the Commission.
! Jurisdiction over the subject matter of a case is conferred by law and determined by
the allegations in the complaint which comprise a concise statement of the ultimate
facts constituting the petitioners cause of action
! Petitioner filed the third-party claim before the court a quo by reason of a writ of
execution issued by the NLRC-CAR Sheriff against a property to which it claims
ownership. The writ was issued to enforce and execute the Commissions decision
in the Illegal Dismissal and Unfair Labor Practice case against Green Mountain
Farm, Ongpin and Alabe.
! Ostensibly the complaint before the trial court was for the recovery of possession
and injunction, but in essence it was an action challenging the legality or propriety
of the levy vis-a-vis the alias writ of execution, including the acts performed by the
Labor Arbiter and the Deputy Sheriff implementing the writ.
! The complaint was in effect a motion to quash the writ of execution of a
decision rendered on a case properly within the jurisdiction of the Labor
Arbiter, to wit: Illegal Dismissal and Unfair Labor Practice. It is then logical
to conclude that the subject matter of the third party claim is but an incident
of the labor case, a matter beyond the jurisdiction of regional trial courts.
! Precedent abound confirming the rule that said courts have no jurisdiction to act
on labor cases or various incidents arising therefrom, including the execution of
decisions, awards or orders. Jurisdiction to try and adjudicate such cases pertains
exclusively to the proper labor official concerned under the Department of Labor
and Employment. To hold otherwise is to sanction split jurisdiction which is
obnoxious to the orderly administration of justice.
! Petitioner failed to realize that by filing its third-party claim with the deputy sheriff,
it submitted itself to the jurisdiction of the Commission acting through the Labor
Arbiter. It failed to perceive the fact that what it is really controverting is the
decision of the Labor Arbiter and not the act of the deputy sheriff in executing said
order issued as a consequence of said decision rendered.
! Jurisdiction once acquired is not lost upon the instance of the parties but continues
until the case is terminated. Whatever irregularities attended the issuance and
execution of the alias writ of execution should be referred to the same
administrative tribunal which rendered the decision. This is because any court
which issued a writ of execution has the inherent power, for the advancement of
justice, to correct errors of its ministerial officers and to control its own processes.

Moreover, it must be noted that the Labor Code in Article 254 explicitly prohibits
issuance of a temporary or permanent injunction or restraining order in any case
involving or growing out of labor disputes by any court or other entity. As correctly
observed by court a quo, the main issue and the subject of the amended complaint
for injunction are questions interwoven with the execution of the Commissions
decision. No doubt the aforecited prohibition in Article 254 is applicable.
Petitioner should have filed its third-party claim before the Labor Arbiter, from
whom the writ of execution originated, before instituting said civil case. The
NLRCEs Manual on Execution of Judgment, issued pursuant to Article 218 of the
Labor Code, provides the mechanism for a third-party claimant to assert his claim
over a property levied upon by the sheriff pursuant to an order or decision of the
Commission or of the Labor Arbiter.
The power of the Labor Arbiter to issue a writ of execution carries with it the
power to inquire into the correctness of the execution of his decision and to
consider whatever supervening events might transpire during such execution.
Moreover, in denying petitioners petition for injunction, the court a quo is merely
upholding the time-honored principle that a Regional Trial Court, being a co-equal
body of the National Labor Relations Commission, has no jurisdiction to issue any
restraining order or injunction to enjoin the execution of any decision of the latter.

Jesus Lim Arranza et al. v B.F. Homes, Inc. et al.

June 19, 2000|Davide, Jr., C.J.| Administrative Procedure; Jurisdiction
Digester: Anna Mickaella Lingat
SUMMARY: Respondent BF Homes, Inc (BFHI), is a domestic corporation engaged
in developing subdivision and selling residential lots. With the withdrawal of substantial
investments in BFHI, respondent filed with the SEC a petition for rehabilitation. Atty
Florencio Orendain was appointed as receiver. He was later relieved by the SEC of his
duties as a Receiver. The new Board of Receivers revoked the authority given by
Orendain to use the open spaces at Concha Cruz Drive and to collect community
assessment funds; deferred the purchase of new pumps ; recognized BF Paranaque
Homeowners Association (BFPHAI) as the representative of all homeowners; took over
the management of the Clubhouse and deployed its own guards. Petitioners filed with
the HLURB a class suit for and in behalf of the more than 7,000 homeowners against
respondent BFHI et al to enforce the rights of purchasers of lots in BF Homes
Paranaque 3. Respondents asserts that the SEC, not the HLURB, has jurisdiction
arguing that the SEC, being the appointing authority should be the one to take
cognizance of controversies arising from the performance of the receivers duties. The
Court held that it is HLURB that has jurisdiction over the case, and not the SEC.
DOCTRINE: The SEC has authority over the operation of all kinds of corporations,
partnerships or associations with the end in view of protecting the interests of the
investing public and creditors. The HLURB has jurisdiction over matters relating to
observance of laws governing corporations engaged in the specific business of
development of subdivisions and condominiums.
FACTS:
! BF Homes, Inc. (BFHI) is domestic corporation engaged in developing
subdivisions and selling residential lots. One of the subdivisions that BFHI
developed was the BF Homes Paraaque Subd.
! When Central Bank ordered the closure of Banco Filipino, which had substantial
investments in BFHI, BFHI filed with the SEC a petition for rehabilitation and a
declaration that it was in a state of suspension of payment. SEC placed BFHI under
a management committee, appointed Atty. Florencio B. Orendain as a Receiver,
and approved a Revised Rehabilitation Plan.
! Orendain instituted a central security system and unified the 65 homeowners
associations into an umbrella homeowners association called United BF
Homeowners Associations (UBFHAI).
! BFHI turned over to UBFHAI control and administration of security in the
subdivision, clubhouse and open spaces.
! Orendain was relieved by the SEC of his duties as a Receiver, and a new Board of
Receivers was appointed. The new Board revoked Orendains authority to use the
open spaces and to collect community assessment funds; deferred the purchase of
new pumps; recognized BF Paraaque Homeowners Association, Inc (BFPHAI) as

the representative of all homeowners in the subdivision; took over the management
of the Clubhouse; and deployed its own security guard in the subdivision.
Petitioners filed with HLURB a class suit for and in behalf of the more than 7,000
homeowners in the subdivision against BFHI, et al to enforce the rights of
purchasers of lots in BF Homes Paraaque.
In BFHIs answer, it claimed that:
o! It complied with its contractual obligations relative to the subdivisions
development
o! It could not be compelled to abide by agreements resulting from Orendains
ultra vires acts
o! Petitioners were precluded from instituting the instant action because of the
suspension of all actions for claims against a corporation under receivership.

HLURB
! Ruled in favor of the petitioners
! Enjoined BFHI:
o! From taking over/administering Concha Garden Row
o! From issuing stickers to residents and non-residents alike for free or with fees
o! From preventing necessary improvements and repairs of infrastructures within
the authority and administration of UBFHAI
o! From taking over security in the exit points of the subdivision
CA
! Reversed; set aside the writ of preliminary injuction issued by HLURB
! Petitioners action should be regarded as a claim within the contemplation of PD
No 902-A, which should be placed on equal footing with those of petitioners other
creditor or creditors and which should be filed with the Committee of Receivers.
! Petitioners action against BFHI, which is under receivership, should be suspended.
RULING: Decision of the Court of Appeals is hereby REVERSED and SET ASIDE.
This case is REMANDED to the Housing and Land Use Regulatory Board for
continuation of proceedings with dispatch as the Securities and Exchange Commission
proceeds with the rehabilitation of respondent BF Homes, Inc., through the Board of
Receivers. Thereafter, any and all monetary claims duly established before the HLURB
shall be referred to the Board of Receivers for proper disposition and thereafter, to the
SEC, if necessary. No costs.
Whether the HLRUB has the jurisdiction over the petitioners claims? YES,
not the SEC.
! PETITIONERS ARGUMENTS:
o! The issues are within the jurisdiction of HLURB.
o! Their complaint refers to rights of way, water, open spaces, road and perimeter
wall repairs, security and BFHIs interlocking corporations that facilitated the
circumvention of its obligation involves unsound real estate practices.

o! The action is for specific performance of a real estate developers obligations

under PD No 957 and the relief sought is revocation of the subdivision
projects registration certificate and license to sell.
o! Even if BFHI is under receivership, its obligations as a real estate developer
are not suspended.
o! Suspension of all actions for claims refers solely to monetary claims which are
but incidental to their complaints against BFHI. If filed elsewhere than
HLURB, it would result to splitting of causes of action
o! Acts enjoined by HLURB are not related to the disposition of BFHIs assets as
a corporation undergoing its final phase of rehabilitation.
! RESPONDENTS ARGUMENTS:
o! SEC has the jurisdiction over petitioners complaint based on the contracts
entered into by the former receiver.
o! SEC, being the appointing authority, should be he one tot take cognizance of
controversies arising from the performance of the receivers duties.
o! Since BFHIs properties are under SECs custodial egis, they are exempt from
any court processes.
COURT:
! PD No 957 (The Subdivision and Condominium Buyers Protective Decree) was
issued to answer to the popular call for correction of pernicious practices of
subdivision owners and/or developers that adversely affected the interests of
subdivision lot buyers.
! Sec 3 of PD No 957 empowered the National Housing Authority (NHA) with the
exclusive jurisdiction to regulate the real estate trade and business.
! Thereafter, the regulatory and quasi-judicial functions of the NHA were transferred
to the Human Settlements Regulatory Commission (HSRC) by virtue of EO No.
648. Sec 8 of said EO transferred NHAs authority to hear and decide cases on
unsound real estate business practices, claims involving refund filed against project
owners, developers, dealers, brokers or salesmen and cases of specific
performance to HSRC.
! The boom in the real estate business all over the country resulted in more litigation
between subdivision owners/developers and lot buyers with the issue of the
jurisdiction of the NHA or the HLURB over such controversies as against that of
the regular courts.
! The Court has consistently ruled that NHA or the HLURB has jurisdiction over
complaints arising from contracts between the subdivision developer and the lot
buyer or those aimed at compelling the subdivision developer to comply with its
contractual and statutory obligations to make the subdivision in a better place to
live in.
! In the present petition, petitioners complaint is for specific performance to enforce
their rights as purchasers of subdivision lots as regards rights of way, water, open
spaces, road and perimeter wall repairs, and security. The HLURB, then, has
jurisdiction over the complaint.

Assuming HLURB has jurisdiction, may the proceedings be suspended pending

the outcome of receivership before the SEC? - NO
! The fact that BFHI is under receivership does not divest the HLURB of that
jurisdiction.
! A receiver is a person appointed by the court, or in this instance, by a quasi-judicial
administrative agency, in behalf of all the parties for the purpose of preserving and
conserving the property and preventing its possible destruction or dissipation, if it
were left in the possession of any of the parties.
o! It is the duty of the receiver to administer the assets of the receivership estate;
and in the management and disposition of the property committed to his
possession, he acts in a fiduciary capacity and with impartiality towards all interested
persons.
o! The appointment of a receiver does not dissolve a corporation, nor does it
interfere with the exercise of its corporate rights.
! In this case where there appears to be no restraints imposed upon respondent as it
undergoes rehabilitation receivership, respondent continues to exist as a
corporation and hence, continues or should continue to perform its contractual and
statutory responsibilities to petitioners as homeowners.
! No violation of the SEC order suspending payments to creditors would result as far
as petitioners complaint before the HLURB is concerned. To reiterate, what
petitioners seek to enforce are respondents obligations as a subdivision developer.
Such claims are basically not pecuniary in nature although it could incidentally involve
monetary considerations.
! All that petitioners claims entail is the exercise of proper subdivision management
on the part of the SEC-appointed Board of Receivers towards the end that
homeowners shall enjoy the ideal community living that respondent portrayed they
would have when they bought real estate from it.
! In this case, under the complaint for specific performance before the HLURB,
petitioners do not aim to enforce a pecuniary demand. Their claim for
reimbursement should be viewed in the light of respondents alleged failure to
observe its statutory and contractual obligations to provide petitioners a "decent
human settlement" and "ample opportunities for improving their quality of life."
The HLURB, not the SEC, is equipped with the expertise to deal with that matter.
! For the SEC to acquire jurisdiction over any controversy under these provisions,
two elements must be considered:
o! (1) the status or relationship of the parties; and
o! (2) the nature of the question that is the subject of their controversy.
! The first element requires that the controversy must arise "out of intra~corporate
or partnership relations between and among stockholders, members or associates;
between any or all of them and the corporation, partnership or association of which
they are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the State in so far as it concerns their
individual franchises."

In this case, petitioners are not stockholders, members or associates of respondent.

They are lot buyers and now homeowners in the subdivision developed by the
respondent.
The second element requires that the dispute among the parties be intrinsically
connected with the regulation or the internal affairs of the corporation, partnership
or association. The controversy in this case is remotely related to the "regulation"
of respondent corporation or to respondents "internal affairs."
The main concern in this case is the issue of jurisdiction over petitioners complaint
against respondent for specific performance. P.D. No. 902~A, as amended, defines
the jurisdiction of the SEC; while P.D. No. 957, as amended, delineates that of the
HLURB.
These two quasi~judicial agencies exercise functions that are distinct from each
other.
o! The SEC has authority over the operation of all kinds of corporations,
partnerships or associations with the end in view of protecting the interests of
the investing public and creditors.
o! The HLURB has jurisdiction over matters relating to observance of laws
governing corporations engaged in the specific business of development of
subdivisions and condominiums.
The HLURB and the SEC being bestowed with distinct powers and functions, the
exercise of those functions by one shall not abate the performance by the other of
its own functions. There is no contradiction between P.D. No. 902~A and P.D.
No. 957.

COOPERATIVE DEVELOPMENT AUTHORITY v. DOLEFIL AGRARIAN

REFORM BENEFICIARIES COOPERATIVE INC!
May 29, 2002 | De Leon, Jr., J. | Adjudication of Cases - Jurisdiction
Digester: Fausto, Jaime Manuel A.
SUMMARY: Some members of DARBCI, a cooperative, complained to the CDA.
They alleged mismanagement and/or misappropriation of DARBCI funds between the
incumbent officers and members of its BOD. CDA froze DARBCIs funds and created
a committee to manage its affairs. The respondents, DARBCI and its former officers,
questioned the jurisidiction of the CDA to resolve cooperative complaints. Due to a
TRO, the CDA was able to continue its functions and initiated proceedings ordering the
holding of a special general assembly of DARBCI to elect new officers. Two TROs
were filed against CDA. Still, DARBCI, on its own initiative, held elections that ousted
the private respondents in this case. The private respondents then file twin motions for
contempt and to nullify the election proceedings for violation of the TRO enjoining the
elections. CA held that the elections were void and compelled DARBCI to explain why
they should not be held in contempt. The SC held that CDA was not vested with quasijudicial authority to adjudicate cooperative disputes. RA 6939, which enumerates CDAs
powers, clearly shows that its authority is to discharge purely administrative functions
that consist of policy making, registration, fiscal and technical assistance to
cooperatives and implementation of cooperative laws. Based on Congress deliberations,

the clear intent was not to vest CDA with quasi-judicial powers, as doing so could lead
to the stifling or prevention of cooperative autonomy.
DOCTRINE: The CDA was created to promote the viability and growth of
cooperatives, in recognition of the latter as instruments of national development.
The clear legislative intent shows that the CDA is devoid of any quasi-judicial authority
to adjudicate intra cooperative disputes. The authority to conduct hearings or inquiries
and the power to hold any person in contempt may be exercised by the CDA only in
the performance of its administrative functions under R.A. No. 6939.
FACTS:
! Petitioner - CDA; respondent - DARBCI; private respondents - officers of
DARBCI.
! CDA received from certain members of DARBCI, an agrarian reform cooperative,
complaints alleging mismanagement and/or misappropriation of funds of DARBCI
by the then incumbent officers and members of the board of directors of the
cooperative, some of whom are herein private respondents.
! Before respondents filed their answer, the CDA administrator issued an order
freezing the funds of DARBCI and creating a management committee to manage
the affairs of the cooperative.
! Respondents filed a Petition for Certiorari with a prayer for preliminary injunction
and damages against CDA, questioning the jurisdiction of the CDA to resolve
the complaints against the private respondents, specifically with respect to the
authority of the CDA to issue the freeze order and to create a management
committee that would run the affairs of DARBCI.
! RTC issued a TRO directing the parties to restore status quo ante, enabling private
respondents to reassume management of DARCBI.
! CDA questioned the TRO via petition for certiorari to the CA. CA issued a TRO
enjoining the RTC from enforcing the mentioned restraining order.
! Thus, CDA continued with the proceedings in a case where the CDA administrator
issued a resolution directing the holding of a special general assembly of DARBCI
members and the creation of an ad hoc election committee to supervise election of
officers and members of the BOD of DARBCI.
! This resolution prompted respondents to file a petition for prohibition with the
CA. The CA issued a resolution restraining CDA, its administrator and the ad hoc
election committee from proceeding with the election of officers and members of
DARBCIs BOD.
! On the same date, the RTC in another case with Investa Land Corp., issued a TRO
enjoining respondents from proceeding with a scheduled general assembly and
elections of officers of DARBCIs BOD.
! There was now a total of 2 TROs against CDA. Nevertheless, DARBCI on their
own initiative, convened a general assembly and held elections, thereby replacing
the private respondents as officers.
! Thus the private respondents in this case, filed Twin Motions for Contempt of
Court and to Nullify Proceedings with the CA.

The CA granted the petition and held that CDAs order granting the elections, and
the elections themselves were null and void. Also, the DARBCI officers were made
to explain why they should not be held in contempt for disregarding the TRO by
proceeding with the elections.
CDAs Arguments
! Petitioner CDA claims that it is vested with quasi judicial authority to adjudicate
cooperative disputes in view of its powers, functions and responsibilities under
Section 3 of RA 6939.
! This was confirmed by the DOJ in DOJ Opinion 1-, where it was said that the
express powers of CDA to cancel certificates of registration of cooperatives for
noncompliance with administrative requirements and to mandate and conciliate
disputes within or between cooperatives under RA 6939 were deemed quasi-judicial
in nature, the reason being there is an indispensible need to hold hearings and
investigate facts to constitute any violations. Thus it would be CDAs discretion
whether or not to cancel the certificates or registration. It is a conciliatory body that
functions as an arbitrator and is thus, quasi-judicial.
! The Office of the President shared the same view, reasoning that the assumption of
jurisdiction by the CDA on matters which partake of cooperative disputes is a
logical, necessary and direct consequence of its authority to register cooperatives.
! The grant of this power impliedly carries with it the visitorial power to entertain
cooperative conflicts, a lesser power compared to its authority to cancel registration
certificates when, in its opinion, the cooperative fails to comply with some
administrative requirements
! The petitioner avers that when an administrative agency is conferred with
quasi judicial powers and functions, such as the CDA, all controversies relating to
the subject matter pertaining to its specialization are deemed to be covered within
the jurisdiction of said administrative agency.
Respondents Arguments
! Respondents claim that CDA was merely granted regulatory or supervisory powers
over cooperatives in addition to its authority to mediate and conciliate between
parties involving the settlement of cooperative disputes.
!

RULING: Petition denied.

Whether the petition is dismissble for lack of the requisite imprimatur from the
OSG YES, (OSG only deputized CDAs counsel to appear in only civil cases in
the lower courts wherein CDA was a party litigant), BUT due to the novelty of
the main issue, the Court has decided to act on and determine the merits of the
petition.
Whether CDA is vested with quasi-judicial authority to adjudicate intracooperative disputes NO.
! RA 6939, Sec. 3 (see notes) enumerates the powers, functions and responsibilities
of the CDA.

!
!

!
!

It is clear that this provision that CDAs authority is to discharge purely

administrative functions which consist of policy making, registration, fiscal
and technical assistance to cooperatives and implementation of cooperative
laws. Nowhere in the said law can it be found any express grant to the CDA of
authority to adjudicate cooperative disputes.
At most, it can mediate and conciliate disputes with or between cooperatives, with
the limitation that a certificate of non resolution shall be issued by the
commission prior to the filing of appropriate action before the proper courts.
Being an administrative agency, the CDA has only such powers as are expressly
granted to it by law and those which are necessarily implied in the exercise thereof.
CDA argued that its authority to conduct hearings and inquiries, as well as
contempt powers necessarily vests upon the quasi-judicial authority to adjudicate
cooperative disputes.
! HOWEVER, in the records of deliberations by both chambers of Congress
prior to the enactment of RA 6939, it was clear that they did not intend to vest
quasi-judicial authority to CDA.
! Congress clarified that the parties must resort to the courts to adjudicate issues
concerning cooperatives.
! The provincial fiscal still files the case, while the CDA only recommends the
filing of legal charges, which is after the preliminary investigation conducted by
the fiscal.
! The amendment giving the CDA the power to conduct inquiries, studies
hearings and investigations was rejected in the Senate deliberations because
such power would interfere in the autonomous character of cooperatives.
The decision to withhold quasi judicial powers from the CDA is in accordance
with the policy of the government granting autonomy to cooperatives.
Cooperatives failed to flourish in the Philippines die to the stifling attitude of the
government towards them.
The CDA was created to promote the viability and growth of cooperatives, in
recognition of the latter as instruments of national development.
Thus, given the clear legislative intent underlying RA 6939, the Court holds that the
CDA is devoid of any quasi-judicial authority to adjudicate intra cooperative
disputes and more particularly disputes as regards the election of the members of
the Board of Directors and officers of cooperatives.
The authority to conduct hearings or inquiries and the power to hold any person in
contempt may be exercised by the CDA only in the performance of its
administrative functions under R.A. No. 6939.

Whether respondents committed forum shopping NO.

! There was neither identity of parties nor issues in the cases filed in the different
courts.
! The case that Investa filed against DARBCI, the latter has a separate and distinct
personality from the private respondents in this case.

The fact that the different cases was held by the same counsel does not constitute
forum shopping.

Whether the CA in invalidating the election of officers and members of

DARBCIs BOD was void for affecting the substantial rights and due process
rights of DARBCIs officers - YES.
! The validity of the general assembly which held the elections was never questioned.
Neither were the concerned officers made to comment on the filed twin motions
for contempt and to nullify proceedings.
! The TRO prevented the original election scheduled. Then, DARBCI at their own
initiative, held a general assembly and elected new officers that ousted the former
officers (private respondents in this case). This prompted private respondents to
file the twin motions for contempt.
! The CA, in invalidating the elections violated the new officers constitutional right
to due process because the CA failed to require the officers to file their comment
or opposition to the twin motions. The CA rendered judgment against the new
officers/ DARBCI without due notice and opportunity to be heard. The election
(out of DARBCIs own initiative) was never raised as an issue before anyway.
NOTES:
SEC. 3. Powers, Functions and Responsibilities.The Authority shall have the following
powers, functions and responsibilities:
.! (a) Formulate, adopt and implement integrated and comprehensive plans and
programs on cooperative development consistent with the national policy on
cooperatives and the overall socio economic development plan of the
Government;
.! (b) Develop and conduct management and training programs upon request of
cooperatives that will provide members of cooperatives with the
entrepreneurial capabilities, managerial expertise, and technical skills required
for the efficient operation of their cooperatives and inculcate in them the true
spirit of cooperativism and provide, when necessary, technical and professional
assistance to ensure the viability and growth of cooperatives with special
concern for agrarian reform, fishery and economically depressed sectors;
.! (c) Support the voluntary organization and consensual development of
activities that promote cooperative movements and provide assistance to
wards upgrading managerial and technical expertise upon request of the
cooperatives concerned;
.! (d) Coordinate the effects of the local government units and the private sector
in the promotion, organization, and development of cooperatives;
.! (e) Register all cooperatives and their federations and unions, including their
division, merger, consolidation, dissolution or liquidation. It shall also register
the transfer of all or substantially all of their assets and liabilities and such
other matters as may be required by the Authority;

.!
.!
.!
.!
.!
.!

.!
.!
.!
.!

(f) Require all cooperatives, their federations and unions to submit their
annual financial statements, duly audited by certified public accountants, and
general information sheets;
(g) Order the cancellation after due notice and hearing of the cooperatives
certificate of registration for non compliance with administrative
requirements and in cases of voluntary dissolution;
(h) Assist cooperatives in arranging for financial and other forms of assistance
under such terms and conditions as are calculated to strengthen their viability
and autonomy;
(i) Establish extension offices as may be necessary and financially viable to
implement this Act. Initially, there shall be extension offices in the Cities of
Dagupan, Manila, Naga, Iloilo, Cebu, Cagayan de Oro and Davao;
(j) Impose and collect reasonable fees and charges in connection with the
registration of cooperatives;
(k) Administer all grants and donations coursed through the Government for
cooperative development, without prejudice to the right of cooperatives to
directly receive and administer such grants and donations upon agreement with
the grantors and donors thereof;
(l) Formulate and adopt continuing policy initiatives consultation with the
cooperative sector through public hearing;
(m) Adopt rules and regulations for the conduct of its internal operations;
(n) Submit an annual report to the President and Congress on the state of the
cooperative movement;
(o) Exercise such other functions as may be necessary to implement the
provisions of the cooperative laws and, in the performance thereof, the
Authority may summarily punish for direct contempt any person guilty of
misconduct in the presence of the Authority which seriously interrupts any
hearing or inquiry with a fine of not more than five hundred pesos (P500.00)
or imprisonment of not more than ten (10) days, or both. Acts constituting
indirect contempt as defined under Rule 71 of the Rules of Court shall be
punished in accordance with the said Rule.
De Jesus v COA
June 10, 2003 | Carpio., J. |
Digester: Endaya, Ana Kristina R.

SUMMARY: An auditing team from COA audited the accounts of the Catbalogan
Water District (CWD) and found that the members of CWDs board of directors
(petitioners) received benefits under Resolution No. 313 promulgated by the Local
Water Utilities Administration (LWUA) which COA found to be against PD 198. They
appealed but COA denied their petition. Petitioners argue that COA had no jurisdiction
as it is within the power of the LWUA and the DBM.

The SC held that it is within COAs jurisdiction.

DOCTRINE:
The Constitution and existing laws mandate the COA to audit all government agencies,
including GOOCs with original charters. Constitution specifically vests in the COA the
authority to determine whether government entities comply with laws and regulations in
disbursing government funds, and to disallow illegal or irregular disbursements of
government funds. This independent constitutional body is tasked to be vigilant and
conscientious in safeguarding the proper use of the governments, and ultimately, the
peoples property.
The Court already ruled in several cases that a water district is a GOOC with a special
charter since it is created pursuant to a special law, PD 198. The COA has the authority
to investigate whether directors, officials or employees of GOOC, receiving additional
allowances and bonuses, are entitled to such benefits under applicable laws. Water
districts are subject to the jurisdiction of the COA
FACTS:
Petitioners: 5 members of the CWDs board the boards secretary
! An auditing team from the COA Leyte audited the accounts of the Catbalogan
Water District (CWD). The auditing team found that:
o! That between May to December 1997 and April to June 1998, members of
CWDs interim Board of Directors (Board) granted themselves the following
benefits:
!! Representation and Transportation Allowance (RATA)
!! Rice Allowance
!! Productivity Incentive Bonus
!! Anniversary Bonus
!! Year-End Bonus
!! Cash gifts.
o! These benefits were authorized under Resolution No. 313 of the Local Water
Utilities Administration (LWUA).
! During the audit, the COA audit team issued 2 notices of disallowance disallowing
payment of the allowances and bonuses received by the 6.
o! Ground of disallowance: They run counter to Section 13 of PD 198.
! Petitioners appealed to the COA Regional Office but COA Regional Director
Dominador T. Tersol denied the appeal.
! Petitioners filed a petition for review with the COA which denied the petition.
! MR was also denied.
! Hence, the instant petition.
COAs reasoning: Members of the CWD Board cannot receive compensation and
other benefits in addition to the per diems allowed by Section 13 of PD 198.
-! Resolution No. 313 as amended, which grants compensation and other
benefits to the members of the Board of Directors of CWD is not in harmony

-!

with the provisions of Sec. 13, PD 198, which speaks only of per diems, the
amount of which is subject to approval by the administrator if more than P50
each for every meeting.
It is a fundamental rule in statutory construction that if a statute is clear, plain
and free from ambiguity, it must be given literal meaning and applied without
attempted interpretation. Thus, any resolution granting allowances to directors
of Water Districts other than that authorized in Sec. 13 of PD 198 is null and
void. A statutorily proscribed benefit may not be amended by a mere
administrative fiat

RULING: Petition granted. RTCs decision reversed. Case Remanded for further
proceedings in accordance with our ruling.
!
!

The Catbalogan Water District was created pursuant to PD 198 (Provincial Water
Utilities Act of 1973).
What did PD 198 authorize?
o! Authorized the local legislative bodies, through an enabling resolution, to
create their respective water districts, subject to the guidelines and regulations
under PD 198.
o! Created the Local Water Utilities Administration (LWUA), a national agency,
and granted LWUA regulatory powers necessary to optimize public service
from water districts.

Ruling: COAs decision AFFIRMED WITH MODIFICATION that petitioners

need not refund the Representation and Transportation Allowance, Rice
Allowance, Productivity Incentive Bonus, Anniversary Bonus, Year-End Bonus
and cash gifts, received per Resolution No. 313, series of 1995, of the Local Water
Utilities Administration, between May to December 1997 and April to June 1998.
Whether COA erred in motu proprio exercising jurisdiction to declare LWUA
Board Resolution No. 313 not in conformity with Section 13 of PD 198? NO,
COA had jurisdiction.
Petitioners Argument: COA has no jurisdiction
! LWUA Resolution No. 131, series of 1995(Policy Guidelines on Compensation and
Other Benefits to WD Board of Directors)
o! LWUA is the government agency tasked to regulate and control water districts
created pursuant to PD 198 and that LWUA has the power to issue regulations
to implement effectively PD 198.
! COA has no jurisdiction to construe any provision of PD 198 on the
compensation and other benefits granted to LWUA-designated members of
the board of water districts.
o! By exercising motu proprio plenary jurisdiction to construe and apply
Section 13 of PD 198, the COA encroached on the powers of the LWUA.

!
!

COA also violated the presumption of legality and regularity generally accorded to
policy circulars issued by the administrative agency entrusted to enforce the law.
It is the Department of Budget and Management (DBM), not the COA, that has
the power to administer the compensation and classification system of the
government service and to revise it as necessary.
Eslao v. COA The COA can do no less than to faithfully observe and carry into
effect the mandate of LWUA Board Resolution No. 313, until it is declared void in
the proper forum.

Supreme Court
! Section 2, Subdivision D, Article IX of the 1987 Constitution expressly provides:
Sec. 2(1). The Commission on Audit shall have the power, authority, and duty
to examine, audit, and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property, owned or held in
trust by, or pertaining to the Government
! The Constitution and existing laws mandate the COA to audit all government
agencies, including GOOCs with original charters.
o! Constitution specifically vests in the COA the authority to determine whether
government entities comply with laws and regulations in disbursing
government funds, and to disallow illegal or irregular disbursements of
government funds.
o! This independent constitutional body is tasked to be vigilant and conscientious
in safeguarding the proper use of the governments, and ultimately, the peoples
property.
! The Court already ruled in several cases that a water district is a GOOC with a
special charter since it is created pursuant to a special law, PD 198.
o! The COA has the authority to investigate whether directors, officials or
employees of GOOC, receiving additional allowances and bonuses, are entitled
to such benefits under applicable laws.
o! Water districts are subject to the jurisdiction of the COA
! We cannot sustain petitioners claim that the COA usurped the functions of the
LWUA in construing PD 198 and disallowing payment of the additional allowances
and bonuses.
o! Such a theory leads to the absurd situation where the board of an
administrative agency, by the mere act of issuing a resolution, can put to
naught the broad and extensive powers granted to the COA by the
Constitution. This will prevent the COA from discharging its constitutional
duty as an effective, efficient and independent watchdog of the financial
operations of the government.
Case of Eslao is inapplicable
! Facts in Eslao:
o! The DENR and Pangasinan State University entered into an agreement to
evaluate government reforestation programs. The Asian Development Bank

granted a loan to fund the implementation of the agreement. The personnel

involved in the project were paid under the DBM-issued National
Compensation Circular No. 53, which dealt with foreign-assisted projects.
o! COA disallowed the payment on the ground that the compensation should fall
under the DBM-issued Compensation Policy Guidelines No. 80-4, which
governs all projects and provides for lower compensation rates.
Ruling:
o! SC held that National Compensation Circular No. 53 amended
Compensation Policy Guidelines No. 80-4 by excepting from the latters
scope foreign-assisted projects.
o! The Court declared that the COA cannot substitute its own judgment for any
applicable administrative regulation with the wisdom or propriety of which,
however, it does not agree, at least not before such regulation is set aside by
the courts.
Clearly, Eslao is not in point
o! Difference is that in Eslao:
!! The COA accepted the wisdom of Compensation Policy Guidelines No.
80-4 but refused to accept the propriety of the exception to the circular
embodied in National Compensation Circular No. 53. The DBM issued
both compensation regulations under its legislative authority to classify
positions and determine appropriate salaries for specific position classes
and. review appropriate salaries for specific position classes and review the
compensation benefits programs of agencies. Clearly, the COA had ample
legislative authority to issue both compensation regulations.
o! In this case: The COA was simply exercising its constitutional duty to examine
and audit disbursements of public funds that are patently beyond what the law
allows.
Petitioners confuse the COA which is an independent constitutional body with the
DBM which is under the executive branch of the government.
o! The DBM is responsible for formulating and implementing the national
budget. It is tasked to - assist the President in the preparation of a national
resources and expenditures budget, preparation, execution and control of the
National budget, preparation and maintenance of accounting systems essential
to the budgetary process, achievement of more economy and efficiency in the
management of government operations, administration of compensation and
position classification systems, assessment of organization effectiveness and
review and evaluation of legislative proposals having budgetary or
organizational implications.
o! While the DBM is the government agency tasked to release government
funds, the duty to examine and audit government accounts and expenditure
properly pertains to the COA

Whether PD 198 prohibits the Grant of RATA, EME, and Bonuses to Members
of the Board of Water Districts? YES, PD 198 expressly prohibits such grant.

Petitioners argument: The term compensation in Section 13 of PD 198 does not

include RATA, EME, bonuses and other similar benefits disallowed in this case.
Supreme Court
! Section 13 of PD 198, as amended, reads as follows: Compensation. - Each director
shall receive a per diem, to be determined by the board, for each meeting of the
board actually attended by him, but no director shall receive per diems in any given
month in excess of the equivalent of the total per diems of four meetings in any
given month. No director shall receive other compensation for services to the
district. Any per diem in excess of P50 shall be subject to approval of the
Administration.
! This issue is similar to a case already decided BayBay Water District v. COA
o! Facts of Baybay: Members of the board of Baybay Water District also
questioned the disallowance by the COA of payment of RATA, rice allowance
and excessive per diems.
o! Ruling in Baybay:
!! The Court ruled that PD 198 governs the compensation of members of
the board of water districts. Thus, members of the board of water districts
cannot receive allowances and benefits more than those allowed by PD
198.
!! Construing Section 13 of PD 198, per diem is precisely intended to be the
compensation of members of board of directors of water districts. Indeed,
words and phrases in a statute must be given their natural, ordinary, and
commonly-accepted meaning, due regard being given to the context in
which the words and phrases are used. By specifying the compensation
which a director is entitled to receive and by limiting the amount he/she is
allowed to receive in a month, and, in the same paragraph, providing No
director shall receive other compensation than the amount provided for
per diems, the law quite clearly indicates that directors of water districts
are authorized to receive only the per diem authorized by law and no
other compensation or allowance in whatever form.
!! Section 13 of PD 198 is clear enough that it needs no interpretation. It
expressly prohibits the grant of compensation other than the payment of
per diems, thus preempting the exercise of any discretion by water
districts in paying other allowances and bonuses.

Whether petitioners must refund the allowances they received in good faith? NO,
because of the ruling in Blaquera v. Alcala not Civil Liberties union which
petitioners used.
Petitioners Argument:
! COA grossly erred in requiring them to refund the allowances and bonuses they
received in good faith. Basis is Civil Liberties Union v. Executive Secretary.

o! Civil Liberties Union: the Court declared Executive Order No. 284
unconstitutional as it allows Cabinet members, undersecretaries or assistant
secretaries to hold multiple positions in violation of the express prohibition in
Section 13, Article VII of the 1987 Constitution.
o! HOWEVER, In cases were there is no de jure officer, a de facto officer, who
in good faith has had possession of the office and has discharged the duties
pertaining thereto, is legally entitled to the emoluments of the office, and may
in an appropriate action recover the salary, fees and other compensations
attached to the office.
o! It is unjust that the public should benefit from the services of a de facto officer
and then be freed from all liability to pay for such, services. Thus, the Court
ruled that any per diem, allowances or other emoluments received by the
respondents in Civil Liberties Union for actual services rendered in the
questioned positions may be retained by them.
Supreme Court
! Scenario with the instant case is different from Civil Liberties Union.
o! The CWD Board appointed petitioners pursuant to PD 198. Petitioners
received allowances and bonuses other than those granted to their office by
PD 198.
o! Petitioners cannot claim any compensation other than the per diem provided
by PD 198 precisely because no other compensation is attached to their office.

BUT petitioners will not refund what they received based on Blaquera v. Alcala
o! Facts of Blaquera: The officials and employees of several government
departments and agencies were paid incentive benefits which the COA
disallowed on the ground that Administrative Order No. 29 prohibited
payment of these benefits.
o! Ruling in Blaquera: While the Court sustained the COA on the disallowance, it
nevertheless declared that: Considering, however, that all the parties here acted
in good faith, we cannot countenance the refund of subject incentive benefits
which amounts the petitioners have already received. Indeed, no indicia of bad
faith can be detected under the attendant facts and circumstances. The officials
and chiefs of offices concerned disbursed such incentive benefits in the honest
belief that the amounts given were due to the recipients and the latter accepted
the same with gratitude, confident that they richly deserve such benefits.
Ruling in Blaquera applies to the instant case.
o! Petitioners here received the additional allowances and bonuses in good faith
under the honest belief that LWUA Board Resolution No. 313 authorized
such payment.
o! At the time petitioners received the additional allowances and bonuses, the
Court had not yet decided Baybay Water District. Petitioners had no knowledge
that such payment was without legal basis. Thus, being in good faith,
petitioners need not refund the allowances and bonuses they received but
disallowed by the COA.

CSC v ALFONSO
June 11, 2009 |Nachura, J. | Jurisdiction
Digester: de Vera, Clarissa M.
SUMMARY: Dr. Zenaida Pia and Emmanuel Bautista filed an Affidavit Complaint
with the CSC against Larry Alfonso for violation of RA6713. He was charged with grave
misconduct, conduct prejudicial to the best interest of the Service and violation of Civil
Service Law, rules and regulation. It was alleged that Alfonso repeatedly abused his
authority as head of PUPs personnel department by preparing and including his name
in the Special Order for overnight services, thus making himself earn a considerable
amount of money. Alfonso submitted his counter affidavit but the CSC found his
explanation wanting and ordered his preventive suspension. He filed an MR but was
denied. He then filed a motion to admit his supplemental answer assailing the
jurisdiction of the CSC alleging that the case should have been filed with the BOR of
PUP. His motion was not acted upon and an order for the enforcement of the order of
his preventive suspension was issued. He then filed a petition for certiorari and
prohibition which the CA granted. The CA reasoned that the jurisdiction of the CSC
was only with case filed by private citizens against public officials and can only entertain
such cases in its appellate jurisdiction. The SC ruled that the CSC has jurisdiction.
DOCTRINE:
Section 2(1) and Section 3 of Article IX-B of the Constitution provides that the CSC, as
the central personnel agency of the government has jurisdiction to supervise the
performance of and discipline all government employees, including those employed in
government-owned or controlled corporations with original charters
Although there are certain special laws that allow the creation of disciplinary committees
and governing bodies in different branches, subdivisions, agencies and instrumentalities
of the government, the Court said that it cannot interpret the creation of such
bodies as having divesting the CSC of its inherent power to supervise and
discipline government employees, including those in the academe. To declare
that the CSC has no jurisdiction would negate the very purpose for which the
CSC was established (to instill professionalism, integrity and accountability in our civil
service. Moreover, it would also impliedly amend the Constitution itself
FACTS:
! On July 6, 2006, Dr. Zenaida Pia (Professor IV in PUP Sta.Mesa) and Emmanuel
Bautista (President of Union ng mga Kawani sa PUP) filed an Affidavit-Complaint
with the Civil Service Commission (CSC) against Larry Alfonso (respondent), the
Director of the Human Resources Management Department of PUP for violation
of RA6713. He was charged with grave misconduct, conduct prejudicial to the best
interest of the Service and violation of Civil Service Law, rules and regulation.
o! It was alleged that Alfonso repeatedly abused his authority as head of
PUPs personnel department by preparing and including his name in
the Special Order for overnight services
o! Such Order allows him to work for 24 hrs straight from:
!! May 16 to 20
!! May 22 to 27
!! May 29 to June 2, 2006

!
!

o! Thus, he made a considerable earnings for allegedly working in

humanly impossible conditions 24 hours straight daily, for 3
consecutive weeks
To substantiate their claim, Dr. Pia and Bautista submitted several documentary
evidence (see notes)
As ordered by the Office of Legal Affairs of the CSC, Alfonso submitted a
Counter-Affidavit wherein he averred that:
o! He only worked overnight on May 17, 19, 22, 24, 26, 29 and 31, 2006
o! His daily time record explicitly indicates that it covers overnight
services pursuant to SO No.1004 , series of 2006
o! An entry such as Day 17, arrival 8:00 PM; Day 18, departure 8:00
AM connoted only a day of overnight work and not continuous 2
days of rendition of work
The CSC found Alfonsos explanation wanting thus, it issued a Resolution formally
charging him with grave misconduct and conduct prejudicial to the best interest of
the Service. He was likewise preventively suspended for 90 days.
Alfonso then filed an omnibus motion for reconsideration of the preventive
suspension order and requested a change of venue from the CSC-Central Office to
the CSC NCR. He argued that it is the CSC Regional Office that has jurisdiction
over the matter. However, his motion was denied
Alfonso then filed another motion for reconsideration accompanied by a motion to
admit his supplemental answer arguing that it is the PUP Board of Regents that has
the exclusive authority to appoint and remove PUP employees pursuant to RA
8292 (An Act Providing for the Uniform Composition and Powers of the
Governing Boards, the Manner of Appointment and Term of Office of the
President of Chartered State Universities and Colleges) in relation to RA4670
(Magna Carta for Public School Teachers)
Without ruling on the motion, the head of the CSC-NCR issued an order
implementing the preventive suspension order. Thus, Alfonso filed a Petition for
Certiorari and Prohibition with the Court of Appeals
The CA rendered a decision in favor of Alfonso holding that:
o! The CSC does not have original jurisdiction over the case filed
because the CSC may only take cognizance of an administrative case
in 2 ways:
!! Through a complaint filed by a private citizen against a
government official or employee
!! Appealed cases from the decisions rendered by Secretaries
or heads of agencies, instrumentalities, provinces, cities and
municipalities in cases filed against officers and employees
under their jurisdiction
o! In the case at bar, the case was not filed by a private citizen but
employees of PUP nor was it rendered in the CSCs appellate
jurisdiction
o! Even assuming the CSC may directly entertain such complaints, it
violated the doctrine of exhaustion of administrative remedies, thus,

the complaint should have been lodges with the PUP Board of
Regents
o! The power of the BOR to hire carries with it the power to discipline
PUP personnel pursuant to Section 7(c) of PD1341 and that this is
substantially in accord with Section 4(h) of RA8292
RULING:
Whether or not the CSC has jurisdiction to hear and decide the complaint filed
against Alfonso YES, the CSC has jurisdiction.
! Section 2(1) and Section 3 of Article IX-B of the Constitution provides that the
CSC, as the central personnel agency of the government has jurisdiction to
supervise the performance of and discipline all government employees, including
those employed in government-owned or controlled corporations with original
charters.
! Accordingly, PUP officers and employees, whether they be classified as teachers or
professors, are deemed civil servants accountable to the people and answerable to
the CSC in cases of complaints lodged by a citizen against tem as public servants
! The CSC has appellate jurisdiction over cases decided by the government
departments, agencies and instrumentalities. However, a complaint may be filed
directly with the CSC as provided in Sections 9(j) and 37(a) of PD807 (Civil Service
Law of 1975)
! Although there are certain special laws that allow the creation of disciplinary
committees and governing bodies in different branches, subdivisions, agencies and
instrumentalities of the government, the Court said that it cannot interpret the
creation of such bodies as having divesting the CSC of its inherent power to
supervise and discipline government employees, including those in the academe.
! The Court said that to declare that the CSC has no jurisdiction would negate the
very purpose for which the CSC was established (to instill professionalism, integrity
and accountability in our civil service. Moreover, it would also impliedly amend the
Constitution itself.
! It is error to contend that RA4670 conferred exclusive disciplinary authority on the
DECS over public school teachers and to have prescribed procedure in
administrative investigations involving them (Office of the Ombudsman v Masing)
o! Applying it to the case at bar, it is thus equally erroneous to argue
that the PUP Charter and RA8292 confer upon the BOR of PUP the
exclusive jurisdiction to hear disciplinary cases against university
professors and personnel
! the power of the BOR over the university is not exclusive in the matter of
disciplining and removing its employee and officials (Civil Service Commission v
Sojor)
! Moreover, Alfonso already submitted himself to the jurisdiction of the CSC when
he participated actively in the proceeding when he filed his counter affidavit and his
motion for reconsideration and even requested for a change of venue. It was only
when his motion was denied that he assailed the question of proper jurisdiction,

thus, by principle of estoppels by laches, he is barred from impugning the authority

of the CSC
Indeed, the CSC may choose to deputize any department or agency or group of
officials to conduct the investigation, or to delegate the investigation to the proper
regional office but the same is merely permissive and not mandatory upon the
Commission

Whether or not the prevention suspension was proper YES, the Court affirmed
the order of preventive suspension
! There are 2 kinds of preventive suspension of government employees charged with
offenses punishable by removal or suspension:
o! Preventive suspension pending investigation
o! Preventive suspension pending appeal if the penalty imposed by the
disciplining authority is suspension or dismissal, and after review, the
respondent is exonerated
! Preventive suspension pending investigation is not a penalty. It is a measure
intended to enable the disciplining authority to investigate charges against
respondent by preventing the respondent from intimidating or in any way
influencing witnesses against him. If the investigation was not finished and a
decision was not rendered within the period, the suspension will be lifted and
respondent will automatically be reinstated. If he was found to be innocent, he
must be reinstated. (Section 51 to 52 of the Revised Administrative Code of 1987)
! In the case at bar, Alfonso was charged with grave misconduct and conduct
prejudicial to the best interest of the service. These are classified as a grave offense.
Moreover, Alfonso is in the position to exert undue influence or pressure on the
potential witnesses that the complainants may produce, or to tamper with the
documentary evidence that may be used against him. Thus, the necessity of his
suspension in order to prevent compromise of the integrity and impartiality of the
entire proceedings.
NOTES:
Documentary evidence presented by the complainants:
1. Special Order No. 1004, s. 2006;
2. Special Order No. 0960, s. 2006;
3. Daily time records of Saturday and Overnight Services of
Alfonso;
4. PUP PermOT overnight May 2006 payroll register;
5. Xerox copy of check no. 162833 dated May 31, 2006;
6. Summary of Alfonsos Saturday, overnight and overtime schedule;
7. Computation of the number of hours, days and weeks that Alfonso allegedly served
8. Explanation of official time, night service, Saturday overtime and overnight services
rendered by Alfonso for the month of May.
Section 7(c) of P.D.1341:
Section 7. The Board of Regents shall have the following powers and duties in addition
to his general powers of administration and the exercise of all the powers of a

corporation as provided in Section 13 of Act Numbered fourteen hundred fifty nine as

amended, otherwise known as the Philippine Corporation Law:
(c) To appoint, on the recommendation of the President of the University, professors,
instructors, lecturers and other members of the faculty, and other officials and
employees of the University; to fix their compensation, hours of service, and such, other
duties and conditions as it may deem proper, any other provisions of the law to the
contrary notwithstanding; to grant to them in his discretion, leave of absence under
such regulations as it may promulgate, any other conditions of the law to the contrary
notwithstanding, and to remove them for cause after an investigation and hearing shall
have been had
ARTICLE IX-B of 1987 CONSTITUTION
Sec. 2. (1) The civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government-owned or controlled corporations
with original charters.
Sec. 3. The Civil Service Commission, as the central personnel agency of the
Government, shall establish a career service and adopt measures to promote morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service. It
shall strengthen the merit and rewards system, integrate all human resources
development programs for all levels and ranks, and institutionalize a management
climate conducive to public accountability. It shall submit to the President and the
Congress an annual report on its personnel programs
Sections 9(j) and 37(a) of P.D. 807 (the Civil Service Law of 1975):
SECTION 9. Powers and Functions of the Commission. The Commission shall administer
the Civil Service and shall have the following powers and function
(j) Hear and decide administrative disciplinary cases instituted directly with it in
accordance with Section 37 or brought to it on appeal;
xxxx
Section 37. Disciplinary Jurisdiction.(a) The Commission shall decide upon appeal all
administrative disciplinary cases involving the imposition of a penalty of suspension for
more than thirty days, or fine in an amount exceeding thirty days salary, demotion in
rank or salary or transfer, removal or dismissal from Office. A complaint may be filed
directly with the Commission by a private citizen against a government official
or employee in which case it may hear and decide the case or it may deputize
any department or agency or official or group of officials to conduct the
investigation. The results of the investigation shall be submitted to the Commission
with recommendation as to the penalty to be imposed or other action to be taken
Revised Administrative Code of 1987 (Executive Order No. 292):
SEC. 51. Preventive Suspension.The proper disciplining authority may preventively
suspend any subordinate officer or employee under his authority pending an
investigation, if the charge against such officer or employee involves dishonesty,
oppression or grave misconduct, or neglect in the performance of duty, or if there are
reasons to believe that the respondent is guilty of charges which would warrant his
removal from the service.

SEC. 52. Lifting of Preventive Suspension. Pending Administrative Investigation.When the

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

Respondents Efren Jalos, et al filed a complaint for

damageshttp://sc.judiciary.gov.ph/jurisprudence/2010/septem
ber2010/179918.htm!>!_ftn2 against Shell before the RTC, claiming that
they were all subsistence fishermen from the coastal barangay of Bansud, Oriental
Mindoro whose livelihood was adversely affected by the construction and
operation of Shells natural gas pipeline.
-!

SHELL PHILIPPINES EXPLORATION v. JALOS

September 8, 2010| Relova, J. | Jurisdiction
Digester: De Leon, Fenina
!
SUMMARY: Shell and the Republic of the Philippines entered into Service Contract 38
for the exploration and extraction of petroleum in Palawan, prompting Shell to
construct and install a pipeline to extract natural gas in an area. Respondents Jalos, et al
filed a complaint for damages against Shell before the RTC, claiming that they were all
fishermen whose livelihood was adversely affected by the construction and operation of
Shells natural gas pipeline. Shell moved to dismiss, alleging that the RTC had no
jurisdiction over the action, as it is a pollution case under that must be first brought to
The Pollution Adjudication Board (PAB). SC agrees. Complaint dismissible for failure
to state a cause of action. Although the complaint of Jalos, et al does not use the word
pollution in describing the cause of the alleged fish decline in the Mindoro Sea, it is
unmistakable based on their allegations that Shells pipeline produced some kind of
poison or emission that drove the fish away from the coastal areas, affected coral reefs
and led [to] stress to the marine life in the Mindoro Sea. The knowledge and skills
needed to determine the presence, the cause, and the effects of pollution are not within
the competence of ordinary courts
DOCTRINE: E.O 192 transferred to the PAB the powers and functions of the
National Pollution and Control Commission provided in R.A. 3931, as amended by
P.D. 984, empowering the PAB to [d]etermine the location, magnitude, extent, severity,
causes and effects of water pollution. Among its functions is to [s]erve as arbitrator for
the determination of reparation, or restitution of the damages and losses resulting from
pollution. In this regard, the PAB has the power to conduct hearings, impose penalties
for violation of P.D. 984, and issue writs of execution to enforce its orders and
decisions. The PABs decisions may be reviewed by the CA under Rule 43.
FACTS:
! Shell and the Republic of the Philippines entered into Service Contract 38 for the
exploration and extraction of petroleum in northwestern Palawan. Two years later,
Shell discovered natural gas in the Camago-Malampaya area and pursued its
development of the well under the Malampaya Natural Gas Project. This entailed
the construction and installation of a pipeline from Shells production platform to
its gas processing plant in Batangas. The pipeline spanned 504 km and crossed the
Oriental Mindoro Sea

Shell moved to dismiss, alleging that the RTC had no jurisdiction over the action,
as it is a pollution case under R.A. 3931, as amended by P.D. 984 or the Pollution
Control Law. The Pollution Adjudication Board (PAB) has primary jurisdiction
over pollution cases and actions for related damages. They also claimed that:
-!

-!
!

They said their fish catch became few after the construction of the pipeline. As a result,
their average net income per month fell from a high of P4,848.00 to only P573.00. They
said that the pipeline greatly affected biogenically hard-structured communities such as
coral reefs and led [to] stress to the marine life in the Mindoro Sea. They now have to
stay longer and farther out at sea to catch fish, as the pipelines operation has driven the
fish population out of coastal waters.

The complaint failed to state a cause of action since it did not specify any actionable wrong or
particular act or omission on Shells part that could have caused the alleged injury to Jalos, et al.
It could not be sued pursuant to the doctrine of state immunity without the States consent. Shell
said that under Service Contract 38, it served merely as an agent of the Philippine government in
the development of the Malampaya gas reserves.

RTC dismissed, ruling that the action was actually pollution-related, although
denominated as one for damages. The complaint should thus be brought first
before the PAB, the government agency vested with jurisdiction over pollutionrelated cases.
CA reversed, upholding the jurisdiction of the RTC over the action. It said that
Shell was not being sued for committing pollution, but for constructing and
operating a natural gas pipeline that caused fish decline and considerable reduction
in the fishermens income. The claim for damages was thus based on a quasi-delict
over which the regular courts have jurisdiction. Also,
-!
-!

The complaint sufficiently alleged an actionable wrong. Jalos, et al invoked their right to fish the
sea and earn a living, which Shell had the correlative obligation to respect.
They rejected Shells assertion that the suit was actually against the State. It observed that the
government was not even impleaded as party defendant. Besides, the State should be deemed to
have given its consent to be sued when it entered into the contract with Shell

RULING: CA reversed without prejudice to its refiling with the Pollution

Adjudication Board or PAB
Whether or not the complaint is a pollution case that falls within the primary
jurisdiction of the PAB YES. Thus, complaint is dismissible for failure to state
cause of action.
! (Definition of pollution)
Section 2(a) of P.D. 984 defines pollution as any alteration of the physical,
chemical and biological properties of any water x x x as will or is likely to
create or render such water x x x harmful, detrimental or injurious to public health,
safety or welfare or which will adversely affect their utilization for domestic,
commercial, industrial, agricultural, recreational or other legitimate purposes.

(Jurisdiction of PAB)
Executive Order 192 (1987) transferred to the PAB the powers and functions of
the National Pollution and Control Commission provided in R.A. 3931, as
amended by P.D. 984. These empowered the PAB to [d]etermine the location,
magnitude, extent, severity, causes and effects of water pollution. Among its
functions is to [s]erve as arbitrator for the determination of reparation, or
restitution of the damages and losses resulting from pollution. In this regard, the
PAB has the power to conduct hearings, impose penalties for violation of P.D. 984,
and issue writs of execution to enforce its orders and decisions. The PABs final
decisions may be reviewed by the CA under Rule 43 of the Rules of Court
Although the complaint of Jalos, et al does not use the word pollution in describing
the cause of the alleged fish decline in the Mindoro Sea, it is unmistakable based on
their allegations that Shells pipeline produced some kind of poison or emission that
drove the fish away from the coastal areas. While the complaint did not specifically
attribute to Shell any specific act of pollution, it alleged that the pipeline greatly
affected biogenically hard-structured communities such as coral reefs and led [to]
stress to the marine life in the Mindoro Sea. This is pollution as defined by law.
The power and expertise needed to determine such issue lies with the PAB. Jalos, et
al had an administrative recourse before filing their complaint with the regular
courts. The definition of the term pollution itself connotes the need for specialized
knowledge and skills, technical and scientific, in determining the presence, the
cause, and the effects of pollution. These knowledge and skills are not within the
competence of ordinary courts.
The failure of Jalos, et al to allege in their complaint that they had first taken resort
to PAB before going to court means that they failed to state a cause of action that
the RTC could act on.

[OTHER civ pro & agency issues lol]

Whether or not the complaint sufficiently alleges a cause of action against Shell
YES. There is cause of action. There is only failure to state cause of action, not
lack of cause of action.
! The complaint said that the natural gas pipelines construction and operation greatly
affected the marine environment, drove away the fish, and resulted in reduced
income for Jalos, et al. True, the complaint did not contain some scientific
explanation regarding how the construction and operation of the pipeline disturbed
the waters and drove away the fish from their usual habitat as the fishermen
claimed. But lack of particulars is not a ground for dismissing the complaint.
! All the elements of a cause of action are present. First, Jalos, et al undoubtedly had
the right to the preferential use of marine and fishing resources which is guaranteed
by no less than the Constitution. Second, Shell had the correlative duty to refrain
from acts or omissions that could impair Jalos, et als use and enjoyment of the
bounties of the seas. Lastly, Shells construction and operation of the pipeline,
which is an act of physical intrusion into the marine environment, is said to have
disrupted and impaired the natural habitat of fish and resulted in considerable
reduction of fish catch and income for Jalos, et al

Thus, the construction and operation of the pipeline may, in itself, be a wrongful
act that could be the basis of Jalos, et als cause of action.

Whether or not the suit is actually against the State and is barred under the
doctrine of state immunity. NO. Shell is not immune from suit.
! An agent is a person who binds himself to render some service or to do something
in representation or on behalf of another, with the consent or authority of the
latter It is this power to affect the principals contractual relations with third
persons that differentiates the agent from a service contractor
! Shell is not an agent of the Republic of the Philippines. It is but a service contractor
for the exploration and development of one of the countrys natural gas reserves. It
is but a provider of services, technology and financing for the Malampaya Natural
Gas Project
-! Shells main undertaking under Service Contract 38 is to [p]erform all petroleum
operations and provide all necessary technology and finance as well as other
connected services to the Philippine government. Shells primary obligation
under the contract is not to represent the Philippine government for the purpose
of transacting business with third persons. Rather, its contractual commitment
is to develop and manage petroleum operations on behalf of the State.
SUMMARY:
! In sum, while while the complaint in this case sufficiently alleges a cause of action,
the same must be filed with the PAB, which is the government agency tasked to
adjudicate pollution-related cases. Shell is not an agent of the State and may thus be
sued before that body for any damages caused by its operations. The parties may
appeal the PABs decision to the CA. But pending prior determination by the PAB,
courts cannot take cognizance of the complaint.

MACHADO v. GATDULA, COSLAP, ET AL.!

February 16, 2010| Brion, J. | Jurisdiction
Digester: Chua, Gian Angelo
SUMMARY: The dispute involves 2 adjoining parcels of land, one belonging to the
Sps. Machado (petitioner), and the other to Gatdula (respondent). Gatdula wrote a letter
to the COSLAP requesting assistance because the Machados allegedly blocked the right
of way to his private property by constructing a two-door apartment on their property.
COSLAP conducted a mediation conference and ordered a verification survey, as
agreed upon by the parties. On the basis of the surveyors report, COSLAP ordered the
Machados to reopen the right of way. Upon application of Gatdula, COSLAP issued a
writ of execution, and later a writ of demolition since the Machados persistently refused
to reopen the right of way. Machados appealed to the CA questioning COSLAPs
jurisdiction, among others. CA dismissed the petition saying that COSLAP had
jurisdiction and even if it didnt, the Machados are already estopped from questioning

such. The SC reversed the CA ruling that COSLAP had no jurisdiction and that the
Machados were not estopped.
DOCTRINE: (1) The terms of the law clearly do not vest COSLAP a general power to
assume jurisdiction over any land dispute. The instances when the COSLAP may
resolve land disputes are limited only to those involving public lands or those covered
by a specific license from the government, such as pasture lease agreements, timber
concessions, or reservation grants, as provided in EO 561, Sec. 3, Par. 2(a)-(e).
Undisputably, the properties involved in the present dispute are private lands owned by
private parties, none of whom is a squatter, a patent lease agreement holder, a
government reservation grantee, a public land claimant or a member of any cultural
minority. (2) Jurisdiction over a subject matter is conferred by law and not by the
parties action or conduct. Estoppel generally does not confer jurisdiction over a cause
of action to a tribunal where none, by law, exists. As such, it can be questioned anytime,
even on appeal.
FACTS:
! The dispute involves 2 adjoining parcels of land, one belonging to the Sps.
Machado (petitioner), and the other to Gatdula (respondent).
! Gatdula wrote a letter to the Commission on Settlement of Land Problems
(COSLAP) requesting assistance because the Machados allegedly blocked the right
of way to his private property by constructing a two-door apartment on their
property.
! COSLAP conducted a mediation conference and ordered a verification survey, as
agreed upon by the parties.
! The surveyor submitted a report to the COSLAP finding that the structure built by
the Machados encroached upon an alley found within the Gatdula property.
! The Machados contested this report alleging that Gatdula had no right of action
since they did not violate Gatdulas rights. They further assailed the jurisdiction of
the COSLAP, stating that the proper forum for the present case was the RTC.
! COSLAP issued a resolution directing the Machados to reopen the right of way
in favor of Gatdula. It declared the Machados estopped from questioning its
jurisdiction to decide the case, since they actively participated in the mediation
conferences and the verification surveys without raising any jurisdictional objection.
! The Machados filed an appeal to the Office of the President.
! Meanwhile, COSLAP issued a writ of execution, and later a writ of demolition
since the Machados persistently refused to reopen the right of way.
! Machados went to the CA to questions such writs.
! CA dismissed the Machados petition. On the issue of jurisdiction, CA found that
the COSLAP was created to provide a more effective mechanism for the
expeditious settlement of land problems, in general; the present case, therefore,
falls within its jurisdiction. Moreover, the Machados active participation in the
mediation conference and their consent to bring about the verification survey
bound them to the COSLAPs decisions, orders and resolutions.
RULING: Petition is granted.

Whether COSLAP has jurisdiction over the dispute NO.

Historical Precedents
! EO 251 created COSLAPs forerunner, the Presidential Action Committee on
Land Problems (PACLAP). The committee was tasked to expedite and coordinate
the investigation and resolution of land disputes, streamline and shorten
administrative procedures, adopt bold and decisive measures to solve land
problems, and/or recommend other solutions.
! EO 305 reconstituted the PACLAP. In broad terms, the committee was given
exclusive jurisdiction over all cases involving public lands and other lands of the
public domain.
! PD 832 reorganized PACLAP and broadly enlarged its function: Direct and
coordinate the activities, particularly the investigation work, of the various
government agencies and agencies involved in land problems or disputes, and
streamline administrative procedures to relieve small settlers and landholders and
members of cultural minorities of the expense and time-consuming delay attendant
to the solution of such problems or disputes;
! EO 561 abolished PACLAP and replaced it with COSLAP. Unlike the
former laws, EO 561 specifically enumerated the instances when the
COSLAP can exercise its adjudicatory functions (see notes).
The terms of the law clearly do not vest COSLAP a general power to assume
jurisdiction over any land dispute. The instances when the COSLAP may resolve
land disputes are limited only to those involving public lands or those covered by
a specific license from the government, such as pasture lease agreements, timber
concessions, or reservation grants, as provided in EO 561, Sec. 3, Par. 2(a)-(e).
! COSLAP has 2 rules to follow in acting on a land dispute lodged before it:
o! It can assumed jurisdiction only if the matter is one of those
enumerated in paragraph 2 (a) to (e) of the law;
o! Otherwise, it should refer the case to the agency having
appropriate jurisdiction for settlement or resolution.
! Moreover, in resolving whether to assume jurisdiction or to refer the case to an
agency having appropriate jurisdiction, COSLAP considers the following:
o! The nature or classification of the land involved;
o! The parties to the case;
o! The nature of the questions raised; and
o! The need for immediate and urgent action thereon to prevent
injury to persons and damage or destruction to property.
As applied in this case:
! Undisputably, the properties involved in the present dispute are private lands
owned by private parties, none of whom is a squatter, a patent lease agreement
holder, a government reservation grantee, a public land claimant or a member of
any cultural minority.

!
!

Moreover, the dispute between the parties can hardly be classified as critical or
explosive in nature that would generate social tension or unrest, or a critical
situation that would require immediate and urgent action.
The issues raised in the present case primarily involve the application of the Civil
Code provisions on Property and the Easement of Right of Way.
Longino v. General disputes requiring no special skill or technical expertise of an
administrative body that could be resolved by applying pertinent provisions of the
Civil Code are within the exclusive jurisdiction of the regular courts.
Also, the Machados cannot invoke Section 3, paragraph 2(e) of EO 561, which
provides that the COSLAP may assume jurisdiction over complaints involving
other similar land problems of grave urgency, to justify the COSLAPs intervention
in this case. Applying ejusdem generis, a dispute between two parties concerning
the right of way over private lands cannot be characterized as similar to those
enumerated under Section 3, paragraph 2(a) to (d) of EO 561.

Whether the Machados are estopped from assailing jurisdiction NO.

! Jurisdiction over a subject matter is conferred by law and not by the parties action
or conduct. Estoppel generally does not confer jurisdiction over a cause of action
to a tribunal where none, by law, exists.
! The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had jurisdiction or
not.
o! If it had no jurisdiction, but the case was tried and decided
upon the theory that it had jurisdiction, the parties are not
barred, on appeal, from assailing such jurisdiction, for the same
must exist as a matter of law, and may not be conferred by
consent of the parties or by estoppel.
o! However if the lower court had jurisdiction, and the case was
heard and decided upon a the theory that the court had no
jurisdiction, the party who induced it to adopt such theory will
not be permitted, on appeal, to assume an inconsistent position
that the lower court had jurisdiction. The principle of estoppel
would apply and the rule that jurisdiction in conferred by law,
and does not depend upon the will of the parties, would have no
bearing.
! In this case, the COSLAP did not have jurisdiction over the subject matter of the
complaint filed by Gatdula, yet it proceeded to assume jurisdiction over the case
and even issued writs of execution and demolition against the Machados. The lack
of jurisdiction cannot be cured by the parties participation in the proceedings
before the COSLAP.
! Under the circumstances, the Machados can rightfully question its jurisdiction at
anytime, even during appeal or after final judgment.
! A judgment issued by a quasi-judicial body without jurisdiction is void. It cannot be
the source of any right or create any obligation. All acts pursuant to it and all claims

emanating from it have no legal effect. The void judgment can never become final
and any writ of execution based on it is likewise void.
NOTES:
Section 3. Powers and Functions. The Commission shall have the following
powers and functions: xxx
(2) Refer and follow up for immediate action by the agency having appropriate
jurisdiction any land problem or dispute referred to the Commission:
Provided, That the Commission may, in the following cases, assume
jurisdiction and resolve land problems or disputes which are critical and
explosive in nature considering, for instance, the large number of the parties
involved, the presence or emergence of social tension or unrest, or other
similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or
timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the
public domain; and
(e) Other similar land problems of grave urgency and magnitude.

Vda. DE HERRERA v. BERANRDO!

June 1, 2011| Peralta, J. | Jurisdiction
Digester: Chan, Ysabelle
SUMMARY: Heirs of Bernardo filed a complaint against Herrera before COSLAP
concerning a parcel of land in Rizal. COSLAP ruled that respondents have a rightful
claim over the property. CA affirmed ruling that COSLAP has exclusive jurisdiction
over the case. The SC reversed ruling that the cause of action pertains to the claim of
ownership over the property, an action involving title to or possession of real property.
Therefore, this is within the jurisdiction of the Regional Trial Court
DOCTRINE: The jurisdiction of a tribunal, including a quasi judicial officer or
government agency, over the nature and subject matter of a petition or complaint is
determined by the material allegations and the character of the relief prayed for,
irrespective of whether the petitioner or complainant is entitled to any or all such reliefs.
If there is no jurisdiction, all the proceedings including the decision rendered, are null
and void. It cannot be the source of any right or create any obligation. All acts
performed pursuant to it and all claims emanating from it have no legal effect. Having
no legal effect, the situation is the same as it would be as if there was no judgment at all.
It leaves the parties in the position they were before the proceedings.
FACTS:

!
!

Respondent heirs of Crisanto S. Bernardo filed a complaint before the Commission

on the Settlement of Land Problem (COSLAP) against Alfredo Herrera for
interference, disturbance, unlawful claim, harassment and trespassing over a parcel
of land in Rizal with an area of 7993 sqm.
o! Respondents: the land was owned by their predecessor-in-interest, Crisanto
Bernardo later on acquired by Crisanto S. Bernardo. The land was later on
covered by Tax Declaration No. CD-006-0828 under the name of the
respondents
o! Petitioner: the portion consisting of about 700sqm was bought by Diosdado
Herrera (Alfredos father) from a certain Villaran. Upon Diosdados death,
Alfredo inherited said 700 sqm lot
|COSLAP| respondents have a rightful claim over the propert.
o! The MR filed by Alfredo was denied
|CA| dismissed the petition for certiorari of petitioner and affirmed the resolution
of COSLAP. COSLAP has exclusive jurisdiction over the case. Even assuming that
COSLAP has no jurisdiction, petition is already estopped from raising the issue of
jurisdiction because Alfredo failed to raise said issue before the COSLAP and he
actively participated in the proceedings

RULING: Petition GRANTED.

Whether COSLAP had jurisdiction to decide the question of ownership - NO
! Petitioner: COSLAP has no adjudicatory powers to settle and decide the question
of ownership. The present case cant be classified as explosive in nature as the
parties never resorted to violence in resolving the controversy. It is the Regional
Trial Court which has jurisdiction over issues relating to ownership
! Respondents: COSLAP has jurisdiction. Petitioner is estopped from questioning
the jurisdiction of the COSLAP by reason of laches due to Alfredos active
participation. The filing of the Motion for Reconsideration and/or Reopening of
proceedings before the COSLAP is indicative of his conformity.
! The COSLAP was created by virtue of Executive Order (E.O.) No. 561, issued on
September 21, 1979 by then President Ferdinand E. Marcos. It is an administrative
body established as a means of providing a mechanism for the expeditious
settlement of land problems among small settlers, landowners and members of the
cultural minorities to avoid social unrest.
! Section 3 of E.O. No. 561 specifically enumerates the instances when the COSLAP
can exercise its adjudicatory functions4

Administrative agencies, like COSLAP, are of limited jurisdiction that can only
wield powers specifically granted to it by its enabling statute. Under Section 3 of
E.O. No. 561, the COSLAP has two options in acting on a land dispute or problem
lodged before it, to wit:
o! (a) refer the matter to the agency having appropriate jurisdiction for
settlement/resolution; or
o! (b) assume jurisdiction if the matter is one of those enumerated in paragraph 2
(a) to (e) of the law, if such case is critical and explosive in nature, taking into
account the large number of parties involved, the presence or emergence of
social unrest, or other similar critical situations requiring immediate action.
To know which of the options COSLAP can exercise, it has to consider
the nature or classification of the land involved, the parties to the case, the
nature of the questions raised, and the need for immediate and urgent
action thereon to prevent injuries to persons and damage or destruction to
property. The law does not vest jurisdiction on the COSLAP over any
land dispute or problem.
In this case, COSLAP has no jurisdiction over the subject matter of respondents
complaint. The present case does not fall under any of the cases enumerated under
Section 3, paragraph 2 (a) to (e). The dispute is not critical and explosive in nature,
nor does it involve a large number of parties, nor is there a presence or emergence
of social tension or unrest. It can also hardly be characterized as involving a critical
situation that requires immediate action.
It is axiomatic that the jurisdiction of a tribunal, including a quasi judicial officer
or government agency, over the nature and subject matter of a petition or
complaint is determined by the material allegations and the character of the relief
prayed for, irrespective of whether the petitioner or complainant is entitled to any
or all such reliefs.
Respondents cause of action before COSLAP pertains to their claim of ownership
over the subject property, an action involving title to or possession of real property,
or any interest therein, the jurisdiction of which is vested with the Regional Trial
Courts or the Municipal Trial Courts depending on the assessed value of the
subject property.1
Banaga v. Commission on the Settlement of Land Problem applied by the CA and is
inapplicable to the present case. It involved parties with conflicting free patent
applications over a parcel of public land and pending with the Bureau of Lands.
o! Because of the Bureau of Lands inaction within a considerable period of time
on the claims and protests of the parties and to conduct an investigation, the
COSLAP assumed jurisdiction and resolved the conflicting claims of the

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
4 Section 3. Powers and Functions.The Commission shall have the following powers and functions:
xxxx
2. Refer and follow up for immediate action by the agency having appropriate jurisdiction any land
problem or dispute referred to the Commission: Provided, That the Commission may, in the following
cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature
considering, for instance, the large number of the parties involved, the presence or emergence of social
tension or unrest, or other similar critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the public domain; and
(e) Other similar land problems of grave urgency and magnitude.7

parties. The Court held that since the dispute involved a parcel of public land
on a free patent issue, the COSLAP had jurisdiction over that case.
o! In the present case, there is no showing that the parties have conflicting free
patent applications over the subject parcel of land that would justify the
exercise of the COSLAPs jurisdiction.
Since COSLAP has no jurisdiction, all the proceedings including the decision
rendered, are null and void. It cannot be the source of any right or create any
obligation. All acts performed pursuant to it and all claims emanating from it have
no legal effect. Having no legal effect, the situation is the same as it would be as if
there was no judgment at all. It leaves the parties in the position they were before
the proceedings.

Whether the doctrine of estoppel applies in this case - NO

! Respondents allegation of estoppel does not hold water because the jurisdictional
issue, may be raised at any stage of the proceedings, even on appeal, and is not lost
by waiver or by estoppel. The fact that a person attempts to invoke unauthorized
jurisdiction of a court does not estop him from thereafter challenging its
jurisdiction over the subject matter, since such jurisdiction must arise by law and
not by mere consent of the parties.
! Regalado v. Go: laches should be clearly present for the Sibonghanoy21 doctrine to
apply, thus: Estoppel by laches may be invoked to bar the issue of lack of
jurisdiction only in cases in which the factual milieu is analogous to that in the cited
case.
Whether the Torrens title should be annulled because of alleged fraud,
misrepresentation - NO
! Anent the issuance of OCT No. M 10991 in favor of petitioners husband Alfredo
Herrera in 2002, respondents alleged that there was fraud, misrepresentation and
bad faith in the issuance thereof. Thus, respondents are now questioning the
legality of OCT No. M 10991, an issue which this Court cannot pass upon in this
present petition. It is a rule that the validity of a Torrens title cannot be assailed
collaterally.
PAT-OG, SR. v SOLE!
June 5, 2013 | Mendioza, J. | Jurisdiction
Digester: Castro, Raachel Ann
SUMMARY: Pat-og, a teacher, allegedly punched his student, Bang-on, in the stomach.
Two cases were filed against him: admin case with CSC-CAR and crim case with RTC.
While admin case was pending, he was convicted by RTC for Less Serious Physical
Injury. Eventually, said conviction was used in the admin case. He was also found guilty
and penalized in the admin case. Pat-og argued that CSC has no jurisdiction over him.
SC disagreed.
DOCTRINE: Pat-og, as a public school teacher, is first and foremost, a civil servant
accountable to the people and answerable to the CSC for complaints lodged against him
as a public servant. To hold that R.A. No. 4670 divests the CSC of its power to

discipline public school teachers would negate the very purpose for which the CSC was
established and would impliedly amend the Constitution itself.
FACTS:
! Two cases were filed by complainant Bang-on, a 14-year old high school student,
against Alberto Pat-og, a third year high school MAPEH teacher. The dispute arose
from a PE (basketball) class being held by Pat-og that Bang-on joined with his
friends; they were really not part of said class. According to Bang-on, Pat-og made
them form two lines but he thought Pat-og asked for three lines so he stayed in the
middle. Without warning, Pat-og punched him in the stomach. He got sick and was
confined. It was found that he suffered from contusion hematoma in the
hypogastric area.
! Meanwhile, Pat-og countered that he was holding his MAPEH class and Bang-on
and his friends, despite the fact that they werent even supposed to be there, failed
to follow his instructions. He scolded them but insisted that he had witnesses to
attest that he never boxed Bang-on.
! The first case filed was an administrative case filed with CSC-CAR. The second
case filed was a criminal case (less serious physical injury) filed with RTC-Bontoc,
Mt. Province.
! Administrative case: CSC-CAR ordered Pat-og to submit counter-affidavit. Despite
his insistence that he never boxed Bang-on and sworn statement of other students
that he never boxed Bang-on, CSC-CAR found the existence of a prima facie case
for misconduct against him and formally charged him.
! Criminal case: While the administrative case was pending, RTC found him guilty. He
was sentenced to 11-20 days imprisonment. After application for probation was
granted, the decision became final.
! Back to the administrative case: A pre-hearing conference was conducted after repeated
postponement by Pat-og. With the approval of the CSC-CAR, the prosecution
submitted its position paper in lieu of a formal presentation of evidence and
formally offered its evidence, including the decision in the criminal case. Affidavits
were submitted by the prosecution. Pat-og offered the testimonies of his own
witnesses: a co-teacher and one Kimmot who was supposedly in the basketball
court also at that time.
! CSC-CAR ruling 2006: The CSC-CAR believed that the act committed by Pat-og
was sufficient to find him guilty of Grave Misconduct. It, however, found the
corresponding penalty of dismissal from the service too harsh under the
circumstances. Thus, it adjudged petitioner guilty of Simple Misconduct and
imposed the maximum penalty of suspension for six (6) months.
! CSC ruling 2007: (Upon MR filed by Pat-og) The CSC sustained the CSC-CARs
conclusion that there existed substantial evidence to sustain the finding that Pat-og
did punch Bang-on in the stomach. The CSC ruled that the affidavits of Bang-ons
witnesses were not bereft of evidentiary value even if Pat-og was not afforded a
chance to cross-examine the witnesses of Bang-on because it is not an
indispensable requirement of administrative due process. Finding that his act of
punching his student displayed a flagrant and wanton disregard of the dignity of a

person, reminiscent of corporal punishment that had since been outlawed for being
harsh, unjust, and cruel, the CSC upgraded Pat-ogs offense from Simple
Misconduct to Grave Misconduct and ordered his dismissal from the service.
Pat-og filed an MR questioning for the first time the jurisdiction of the CSC:
administrative charges against a public school teacher should have been initially
heard by a committee to be constituted pursuant to the Magna Carta for Public
School Teachers. The CSC denied his motion for reconsideration. It ruled that Patog was estopped from challenging its jurisdiction considering that he actively
participated in the administrative proceedings against him, raising the issue of
jurisdiction only after his appeal was dismissed by the CSC.
CA ruling 2011: (1) Pat-og was estopped from questioning the jurisdiction of the
CSC as the records clearly showed that he actively participated in the proceedings.
(2) Pat-og was not denied due process when he failed to cross-examine Bang-on
and his witnesses because he was given the opportunity to be heard and present his
evidence before the CSC-CAR and the CSC. (3) CSC committed no error in taking
into account the conviction of Pat-og in the criminal case. His conviction was not
the sole basis of the CSC for his dismissal from the service because there was
substantial evidence proving that Pat-og had indeed hit Bang-on.

RULING: Guilty of grave misconduct but only suspended for 6 months.

Whether CSC has jurisdiction - YES
! Pat-og: Section 9 of Republic Act (R.A.) No. 4670, otherwise known as the Magna
Carta for Public School Teachers, provides that administrative charges against a
public school teacher shall be heard initially by a committee constituted under said
section. As no committee was ever formed, he posits that he was denied due
process and that the CSC did not have the jurisdiction to hear and decide his
administrative case. Notwithstanding the fact that the issue of jurisdiction was
raised for the first time on appeal, the rule remains that estoppel does not confer
jurisdiction on a tribunal that has no jurisdiction over the cause of action or subject
matter of the case.
! (1) His argument that the administrative case against him can only proceed under
R.A. No. 4670 is misplaced. CSC, the Department of Education (DepEd) and the
Board of Professional Teachers-Professional Regulatory Commission (PRC) have
concurrent jurisdiction over administrative cases against public school teachers.
(Puse v Santos-Puse)
! (2) The CSC, as the central personnel agency of the government, has the inherent
power to supervise and discipline all members of the civil service, including public
school teachers. (the Constitution)
! Concurrent jurisdiction: that which is possessed over the same parties or subject
matter at the same time by two or more separate tribunals. Where concurrent
jurisdiction exists in several tribunals, the body that first takes cognizance of the
complaint shall exercise jurisdiction to the exclusion of the others.
o! CSC first acquired jurisdiction over the case because the complaint was
filed before it. Thus, it had the authority to proceed and decide the case to
the exclusion of the DepEd and the Board of Professional Teachers

Special laws, such as R.A. No. 4670, do not divest the CSC of its inherent power
to supervise and discipline all members of the civil service, including public school
teachers (CSC v Alfonso).
o! Pat-og, as a public school teacher, is first and foremost, a civil servant
accountable to the people and answerable to the CSC for complaints
lodged against him as a public servant. To hold that R.A. No. 4670 divests
the CSC of its power to discipline public school teachers would negate the
very purpose for which the CSC was established and would impliedly
amend the Constitution itself.
Granting that the CSC was without jurisdiction, he is indeed estopped from raising
the issue. Although the rule states that a jurisdictional question may be raised at any
time, such rule admits of the exception where, as in this case, estoppel has
supervened.

Whether Pat-og was accorded due process YES

! Pat-og: The affidavits of the complainant and his witnesses are of questionable
veracity having been subscribed in Bontoc, which is nearly 30 kilometers from the
residences of the parties.
! The essence of due process is simply to be heard, or as applied to administrative
proceedings, a fair and reasonable opportunity to explain ones side, or an
opportunity to seek a reconsideration of the action or ruling complained of.
! At any rate, having actively participated in the proceedings before the CSC-CAR,
the CSC, and the CA, Pat-og was apparently afforded every opportunity to explain
his side and seek reconsideration of the ruling against him.
! Conclusion: The CSC-CAR, the CSC and the CA did not, therefore, err in giving
credence to the affidavits of the complainants and his witnesses, and in
consequently ruling that there was substantial evidence to support the finding of
misconduct on the part of the petitioner.
Whether the penalty meted out against Pat-og was proper NO
! Pat-og: There is no substantial evidence to prove that he boxed him with a clear
intent to violate the law or in flagrant disregard of the established rule, as required
for a finding of grave misconduct. He was not motivated by bad faith or ill will
because he acted in the belief that, as a teacher, he was exercising authority over
Bang-on in loco parentis, and was, accordingly, within his rights to discipline his
student. Also, since he was already old and this was his first offense, he asked that
he be convicted only of simple misconduct and only suspended, not dismissed.
! Teachers are duly licensed professionals who must not only be competent in the
practice of their noble profession, but must also possess dignity and a reputation
with high moral values.
! First, what is misconduct? Misconduct means intentional wrongdoing or deliberate
violation of a rule of law or standard of behavior. To constitute an administrative
offense, misconduct should relate to or be connected with the performance of the
official functions and duties of a public officer. In grave misconduct, as opposed to

simple misconduct, the elements of corruption, clear intent to violate the law or
t1agrant disregard of an established rule must be manifest.
o! They must strictly adhere to observe, and practice the set of ethical and
moral principles, standards, and values laid down in the Code of Ethics of
Professional Teachers, which apply to all teachers in schools in the
Philippines, whether public or private, as provided in the preamble of the
said Code. Section 8 of Article VII I of the same Code expressly provides
that a teacher shall not inflict corporal punishment on offending
learners.
o! Pat-og then cannot argue that, in punching Bang-on, he was exercising his
right as a teacher in loco parentis to discipline his student. It is beyond
cavil that the petitioner, as a public school teacher, deliberately violated
his Code of Ethics. Such violation is a flagrant disregard for the
established rule contained in the said Code tantamount to grave
misconduct.
Under Section 52(A)(2) of Rule IV of the Uniform Rules on Administrative Cases
in the Civil Service, the penalty for grave misconduct is dismissal from the service,
which carries with it the cancellation of eligibility, forfeiture of retirement benefits
and perpetual disqualification from reemployment in the government service. This
penalty must, however, be tempered with compassion as there was sufficient
provocation on the part of Bang-on.
Considering further the mitigating circumstances that Pat-og has been in the
government service for 33 years, that this is his first offense and that he is at the
cusp of retirement (62 years old), the Court finds the penalty of suspension for six
months as appropriate under the circumstances.

NOTES:
! For those details which are not important but seems important.
FUNA v. MECO
February 4, 2014| Perez J. | Jurisdiction
Digester: Alexis Bea
SUMMARY: Due to the Joint Communique agreement, Philippines officially ended
relations with Taiwan and recognized PROC. However, in order to maintain unofficial
relations with the country, the Philippines established MECO which functions basically
as an unofficial consular office. Funa filed a petition for mandamus alleging that COA
had never audited and examined the accounts of MECO despite the fact that it is a
GOCC or a government instrumentality. COA and MECO denies this. SC held that
MECO is neither a GOCC or a GI. It is a sui generis private entity. Regarding the
jurisdiction of COA, SC held that not all accounts may be audited by COA. COA can
only audit the accounts for verification fees and consular fees.
DOCTRINE: Section 14(1), Book V of the Administrative Code authorizes the COA
to audit accounts of non-governmental entities "required to pay xxx or have

government share" but only with respect to "funds xxx coming from or through the
government." This provision of law perfectly fits the MECO:
First. The MECO receives the "verification fees" by reason of being the collection agent
of the DOLEa government agency. Out of its collections, the MECO is required, by
agreement, to remit a portion thereof to the DOLE. Hence, the MECO is accountable
to the government for its collections of such "verification fees" and, for that purpose,
may be audited by the COA.
Second. Like the "verification fees," the "consular fees" are also received by the MECO
through the government, having been derived from the exercise of consular functions
entrusted to the MECO by the government. Hence, the MECO remains accountable to
the government for its collections of "consular fees" and, for that purpose, may be
audited by the COA.
AGENCY: Manila Economic Cultural Office
FACTS:
The Context (See more on the Notes for why we had to end relations with the Taiwanese)
! Joint Communiqu: Philippines ended relations with Taiwan and recognized PROC
(Peoples Republic of China)
o! The Philippine Government recognizes the Government of the Peoples Republic of
China as the sole legal government of China, fully understands and respects the position
of the Chinese Government that there is but one China and that Taiwan is an integral
part of Chinese territory, and decides to remove all its official representations from
Taiwan within one month from the date of signature of this communiqu.
! The Philippines commitment to the One China policy of the PROC, however, did
not preclude the country from keeping unofficial relations with Taiwan on a
"people-to-people" basis.
! Maintaining ties with Taiwan that is permissible by the terms of the Joint
Communiqu, however, necessarily required the Philippines, and Taiwan, to course
any such relations thru offices outside of the official or governmental organs. This
is done through
o! The people of Taiwan and of the Philippines maintained an unofficial
relationship facilitated by the offices of the Taipei Economic and Cultural
Office, for the former, and the MECO, for the latter
! The MECO was organized on 16 December 1997 under Batas Pambansa Blg. 68 or
the Corporation Code in order to be responsible for the fostering "friendly" and
"unofficial" relations with the people of Taiwan, particularly in the areas of trade,
economic cooperation, investment, cultural, scientific and educational exchanges
! To enable it to carry out such responsibility, the MECO was "authorized" by the
government to perform certain "consular and other functions" that relates to the
promotion, protection and facilitation of Philippine interests in Taiwan.
! At present, it is the MECO that oversees the rights and interests of OFWs in

Taiwan; promotes the Philippines as a tourist and investment destination for the
Taiwanese; and facilitates the travel of Filipinos and Taiwanese from Taiwan to the
Philippines, and vice versa
Facts Leading to the Mandamus Petition
! On 23 August 2010, Funa sent a letter to the COA requesting for a "copy of the
latest financial and audit report" of the MECO invoking, for that purpose, his
"constitutional right to information on matters of public concern."
! He made the request on the belief that the MECO, being under the "operational
supervision" of the Department of Trade and Industry (DTI), is a government
owned and controlled corporation (GOCC) and thus subject to the audit
jurisdiction of the COA.
! August 25, 2010: Funas request was referred to COA Assistant Commissioner
Emma M. Espina for "further disposition."
! Assistant Commissioner Naranjo: MECO was "not among the agencies audited by
any of the three Clusters of the Corporate Government Sector."
Mandamus Petition
! Taking the 25 August 2010 memorandum as an admission that the COA had never
audited and examined the accounts of the MECO, Funa filed the instant petition
for mandamus in his capacities as "taxpayer, concerned citizen, a member of the
Philippine Bar and law book author (lol ikaw na kuya).
! Funa: by failing to audit the accounts of the MECO, the COA is neglecting its duty
under Section 2(1), Article IX-D of the Constitution to audit the accounts of an
otherwise bona fide GOCC or government instrumentality. MECO is a GOCC
without an original charter or, at least, a government instrumentality, the funds of
which partake the nature of public funds.
o! MECO possesses all the essential characteristics of a GOCC and an
instrumentality under the Executive Order No. (EO) 292, s. 1987 or the
Administrative Code:
!! it is a non-stock corporation vested with governmental functions
relating to public needs;
!! it is controlled by the government thru a board of directors
appointed by the President of the Philippines;
!! it is under the operational and policy supervision of the DTI.
(See Notes)
o! To further bolster his position that the accounts of the MECO ought to
be audited by the COA, Funa calls attention to the practice, allegedly
prevailing in the United States of America, wherein the American Institute
in Taiwan (AIT)the counterpart entity of the MECO in the United
Statesis supposedly audited by that countrys Comptroller General.
(citing Wood Jr. v. AIT)
! MECO: denies that it is a GOCC or a government instrumentality and even if it
performs public functions, its funds are private funds. It argues:
o! It is not owned or controlled by the government. Contrary to the

allegations of the petitioner, the President of the Philippines does not

appoint its board of directors. The "desire letter" that the President
transmits is merely recommendatory and not binding on the corporation.
As a corporation organized under the Corporation Code, matters relating
to the election of its directors and officers, as well as its membership, are
governed by the appropriate provisions of the said code, its articles of
incorporation and its by-laws. Thus, it is the directors who elect the
corporations officers; the members who elect the directors; and the
directors who admit the members by way of a unanimous resolution. All
of its officers, directors, and members are private individuals and are not
government officials.
o! The government merely has policy supervision over it. Policy supervision
is a lesser form of supervision wherein the governments oversight is
limited only to ensuring that the corporations activities are in tune with
the countrys commitments under the One China policy of the PROC.
The day-to-day operations of the corporation, however, remain to be
controlled by its duly elected board of directors.
MECO: categorizing it as a GOCC or a government instrumentality can potentially
violate the countrys commitment to the One China policy of the PROC. Thus, the
MECO cautions against applying to the present mandamus petition the
pronouncement in the Wood decision regarding the alleged auditability of the AIT
in the United States
COA: despite being a non-governmental entity, the MECO may still be audited
with respect to the "verification fees" for overseas employment documents that it
collects from Taiwanese employers on behalf of the DOLE. Under the Joint
Circular No. 3-99, the MECO is mandated to remit to the Department of Labor
and Employment (DOLE) a portion of such "verification fees. Thus, MECO is
classified as a non-governmental entity "required to pay xxx government share"
subject to a partial audit of its accounts under Section 26 of the Audit Code

RULING: We grant the petition in part. We declare that the MECO is a nongovernmental entity. However, under existing laws, the accounts of the MECO
pertaining to the "verification fees" it collects on behalf of the DOLE as well as the fees
it was authorized to collect under Section 2(6) of EO No. 15, s. 2001, are subject to the
audit jurisdiction of the COA. Such fees pertain to the government and should be
audited by the COA
Whether or not MECO is a GOCC or a government instrumentalityNO
! The MECO is not a GOCC or government instrumentality. It is a sui generis
private entity especially entrusted by the government with the facilitation of
unofficial relations with the people in Taiwan without jeopardizing the countrys
faithful commitment to the One China policy of the PROC
(TOPIC) Whether or not the accounts of MECO are subject to the audit and
jurisdiction of COAYES (but not all accounts of MECO: consular and
verification fees only)

!
!

!
!

(summary of the ratio) Despite its non-governmental character, the MECO handles
government funds in the form of the "verification fees" it collects on behalf of the
DOLE and the "consular fees" it collects under Section 2(6) of EO No. 15, s. 2001.
Hence, under existing laws, the accounts of the MECO pertaining to its collection
of such "verification fees" and "consular fees" should be audited by the COA.
Under Section 2(1) of Article IX-D of the Constitution, the COA was vested with
the "power, authority and duty" to "examine, audit and settle" the "accounts" of the
following entities:
o! The government, or any of its subdivisions, agencies and instrumentalities;
o! GOCCs with original charters;
o! GOCCs without original charters;
o! Constitutional bodies, commissions and offices that have been granted
fiscal autonomy under the Constitution; and
o! Non-governmental entities receiving subsidy or equity, directly or indirectly, from or
through the government, which are required by law or the granting institution to submit
to the COA for audit as a condition of subsidy or equity.
The term "accounts" mentioned in the subject constitutional provision pertains to
the "revenue," "receipts," "expenditures" and "uses of funds and property" of the
foregoing entities
Complementing the constitutional power of the COA to audit accounts of "nongovernmental entities receiving subsidy or equity xxx from or through the
government" is Section 29(1) of the Audit Code, which grants the COA visitorial
authority over the following non-governmental entities:
o! Non-governmental entities "subsidized by the government";
o! Non-governmental entities "required to pay levy or government share";
o! Non-governmental entities that have "received counterpart funds from
the government"; and
o! Non-governmental entities "partly funded by donations through the
government."
Section 29(1) of the Audit Code, however, limits the audit of the foregoing
non-governmental entities only to "funds xxx coming from or through the
government." This section of the Audit Code is, in turn, substantially reproduced
in Section 14(1), Book V of the Administrative Code.
Both petitioner and the COA claim that the accounts of the MECO are within the
audit jurisdiction of the COA, but vary on the extent of the audit and on what type
of auditable entity the MECO is.
Funa posits that all accounts of the MECO are auditable as the latter is a bona fide
GOCC or government instrumentality.
On the other hand, the COA argues that only the accounts of the MECO that
pertain to the "verification fees" it collects on behalf of the DOLE are auditable
because the former is merely a non-governmental entity "required to pay xxx
government share" per the Audit Code.
SC: agrees that the accounts of the MECO pertaining to its collection of
"verification fees" is subject to the audit jurisdiction of the COA.
However, such accounts are not the only ones that ought to be audited by the

COA. Upon careful evaluation of the information made available by the records
vis--vis the spirit and the letter of the laws and executive issuances applicable, the
SC finds that the accounts of the MECO pertaining to the fees it was authorized to
collect under Section 2(6) of EO No. 15, s. 2001, are likewise subject to the audit
jurisdiction of the COA.
Verification Fees Collected by the MECO
! The "verification fees" refers to the "service fee for the verification of overseas
employment contracts, recruitment agreement or special powers of attorney" that
the DOLE was authorized to collect under Section 7 of EO No. 1022
! These fees are supposed to be collected by the DOLE from the foreign employers
of OFWs and are intended to be used for "the promotion of overseas employment
and for welfare services to Filipino workers within the area of jurisdiction of
[concerned] foreign missions under the administration of the [DOLE].
! Under Joint Circular 3-99, the following officials have been tasked to be the
"Verification Fee Collecting Officer" on behalf of the DOLE:
o! The labor attach or duly authorized overseas labor officer at a given
foreign post, as duly designated by the DOLE Secretary;
o! In foreign posts where there is no labor attach or duly authorized
overseas labor officer, the finance officer or collecting officer of the DFA
duly deputized by the DOLE Secretary as approved by the DFA
Secretary;
o! In the absence of such finance officer or collecting officer, the alternate
duly designated by the head of the foreign post.
! Since the Philippines does not maintain an official post in Taiwan, however, the
DOLE entered into a "series" of Memorandum of Agreements with the MECO,
which made the latter the formers collecting agent with respect to the "verification
fees" that may be due from Taiwanese employers of OFWs.
! Evidently, the entire "verification fees" being collected by the MECO are
receivables of the DOLE. Such receipts pertain to the DOLE by virtue of Section 7
of EO No. 1022.
Consular Fees Collected by the MECO
! Aside from the DOLE "verification fees," however, the MECO also collects
"consular fees," or fees it collects from the exercise of its delegated consular
functions.
! The authority behind "consular fees" is Section 2(6) of EO No. 15, s. 2001. The
said section authorizes the MECO to collect "reasonable fees" for its performance
of the following consular functions:
1.! Issuance of temporary visitors visas and transit and crew list visas, and such
other visa services as may be authorized by the DFA;
2.! Issuance, renewal, extension or amendment of passports of Filipino citizens in
accordance with existing regulations, and provision of such other passport
services as may be required under the circumstances;
3.! Certification or affirmation of the authenticity of documents submitted for

authentication; and
4.! Providing translation services.
Evidently, and just like the peculiarity that attends the DOLE "verification fees,"
there is no consular office for the collection of the "consular fees." Thus, the
authority for the MECO to collect the "reasonable fees," vested unto it by the
executive order.
The "consular fees," although held and expended by the MECO by virtue of EO
No. 15, s. 2001, are, without question, derived from the exercise by the MECO of
consular functionsfunctions it performs by and only through special authority
from the government.
There was never any doubt that the visas, passports and other documents that the
MECO issues pursuant to its authorized functions still emanate from the Philippine
government itself.
Such fees, therefore, are received by the MECO to be used strictly for the purpose
set out under EO No. 15, s. 2001. They must be reasonable as the authorization
requires. It is the government that has ultimate control over the disposition of the
"consular fees," which control the government did exercise when it provided in
Section 2(6) of EO No. 15, s. 2001 that such funds may be kept by the MECO "to
defray the cost of its operations."

The Accounts of the MECO Pertaining to the Verification Fees and Consular Fees May
Be Audited by the COA.
! Section 14(1), Book V of the Administrative Code authorizes the COA to
audit accounts of non-governmental entities "required to pay xxx or have
government share" but only with respect to "funds xxx coming from or
through the government." This provision of law perfectly fits the MECO:
o! First. The MECO receives the "verification fees" by reason of being
the collection agent of the DOLEa government agency. Out of its
collections, the MECO is required, by agreement, to remit a portion
thereof to the DOLE. Hence, the MECO is accountable to the
government for its collections of such "verification fees" and, for that
purpose, may be audited by the COA.
o! Second. Like the "verification fees," the "consular fees" are also
received by the MECO through the government, having been derived
from the exercise of consular functions entrusted to the MECO by
the government. Hence, the MECO remains accountable to the
government for its collections of "consular fees" and, for that
purpose, may be audited by the COA.
! Tersely put, the 27 February 2008 Memorandum of Agreement between the
DOLE and the MECO and Section 2(6) of EO No. 15, s. 2001, vis--vis,
respectively, the "verification fees" and the "consular fees," grant and at the same
time limit the authority of the MECO to collect such fees. That grant and limit
require the audit by the COA of the collections thereby generated.
NOTES

!
!

After the Chinese civil war, the country was left with 2 governments in a stalemate
each claiming sovereignty. Both are claiming that there is only one legitimate
government in China (One China policy)
o! Peoples Republic of China: Mainland
o! Nationalist Republic of China: Taiwan
The number of states partial to the PROCs version of the One China policy,
gradually increased in the 1960s and 70s
Since then, almost all of the states that had recognized the PROC as the legitimate
government of China and terminated their official relations with NRC in favor of
establishing diplomatic relations with the PROCincluding the Philippines

1. The MECO is vested with government functions. It performs functions that are
equivalent to those of an embassy or a consulate of the Philippine government.25 A
reading of the authorized functions of the MECO as found in EO No. 15, s. 2001,
reveals that they are substantially the same functions performed by the Department of
Foreign Affairs (DFA), through its diplomatic and consular missions, per the
Administrative Code.
2. The MECO is controlled by the government. It is the President of the Philippines
that actually appoints the directors of the MECO, albeit indirectly, by way of "desire
letters" addressed to the MECOs board of directors. An illustration of this exercise is
the assumption by Mr. Antonio Basilio as chairman of the board of directors of the
MECO in 2001, which was accomplished when former President Gloria MacapagalArroyo, through a memorandum28 dated 20 February 2001, expressed her "desire" to
the board of directors of the MECO for the election of Mr. Basilio as chairman
3. The MECO is under the operational and policy supervision of the DTI. The MECO
was placed under the operational supervision of the DTI by EO No. 328, s. of 2004,
and again under the policy supervision of the same department by EO No. 426, s. 2005.
DAR v. TRINIDAD VALLEY REALTY AND DEVELOPMENT CORP.
February 11, 2014 | Villarama, J. | Jurisdiction
Digester: Bathan, Maria Aurelia
SUMMARY: DAR placed 479.9 ha of land, owned by Trinidad Valley, under the
CARP and consequently distributed these parcels of land to the beneficiaries. Trinidad
filed before the RTC a Special civil action for declaration of unconstitutionality of RA
6557, but subsequently amended the petition to become an ordinary action for the
annulment of titles issued in favor of the beneficiaries. The Republic brought the matter
to the CA alleging that the RTC acted with grave abuse of discretion in allowing such
amendment and the RTC had no jurisdiction over it since cases involving the
implementation, enforcement, and interpretation of agrarian cases is vested in the CA
and not the RTC. The CA ruled in favor of the Republic. Meanwhile, the RTC decided
on the ordinary action before it in favor of Trinidad. Both cases were brought to the SC.
The SC agreed with the CA and held that the RTC had no jurisdiction over the case.

DOCTRINE: The DAR could not be ousted from its authority by the simple
expediency of appending an allegedly constitutional or legal dimension to an issue that is
clearly agrarian. The jurisprudential trend is for courts to refrain from resolving a
controversy involving matters that demand the special competence of administrative
agencies, even if the questions involved are also judicial in character.

FACTS:
! Trinidad Valley Realty and Development Corp., Frannie Greenmeadows Pastures,
Inc., Isabel Greenland Agri-based Resources, Inc., Isabel Evergreen Plantations,
Inc., Michelle Farms, Inc., Isabel Greemeadows Quality Products, and Efren
Nuevo are the registered owners of a parcel of land in Vallehermoso, Negros
Oriental. The landholding consists of a total area of 641.7895 ha, 200 ha of which is
devoted to the cultivation of sugar cane
! The Department of Agrarian Reform (DAR) placed 479.8905 ha of the said land
under the coverage of RA 6557 (Comprehensive Agrarian Reform Law of 1988)
between March 1995 and July 2000. Certificates of Land Ownership Award
(CLOA) and TCTs were issued in favor of the agrarian reform beneficiaries.
! June 10, 2004 Trinidad Valley et al. filed before the RTC Guihulngan Branch,
Negros Oriental a Petition for Declaration of Unconstitutionality through
Certiorari, Prohibition, and Mandamus with Prayer for Preliminary Prohibitory
Injunction and Restraining Order against the Land Registration Authority (LRA),
the DAR, and the beneficiaries under the Comprehensive Agrarian Reform
Program (CARP). They alleged the following:
o! The DAR committed grave abuse of discretion when it:
!! 1) Passed AO No. 12 series of 1989 and other related issuances which
allowed the DAR to unilaterally choose beneficiaries other than those
intended by the Constitution as beneficiaries;
!! 2) Subjected Trinidad et al.s properties to compulsory acquisition, when
it ordered Land Bank to determine the valuation of the property without
any judicial pronouncement on just compensation;
!! 3) Unilaterally ordered the cancellation of its title without court
intervention when it issued final CLOAs to beneficiaries who are not yet
owners of the land without any court proceeding.
o! The valuation by Land Bank is not just compensation
o! The Register of Deeds cannot cancel Trinidads title without a court order
o! The Land Bank and ROD also committed grave abuse of discretion
! DAR: 1) Jurisdiction exclusively vested in it, 2) DAR Adjudication Board Rules
provided the power to cancel or annul CLOAs and the jurisdiction of the RTC is
limited only to the determination of just compensation and prosecution of all
criminal offenses under RA 6657; 3) RTC has no jurisdiction over petitions for
certiorari, prohibition, and mandamus in agrarian reform cases RA 6657 vested
this in the CA; the transfer of ownership and physical installation of the
beneficiaries is authorized by RA 6657 [Assoc. of Small Landowners v. Sec. of Agrarian
Reform]; 4) CLOAs partake of the nature of a Torrens Title and its validity cannot
be collaterally attacked.

!
!

Trinidad filed a Motion for Leave in order to amend the nature of the action from a
special civil action of C,P,M to an ordinary action of annulment of land titles. DAR
opposed this.
RTC conducted a hearing on the propriety of admitting the amended petition and
later ordered a resolution admitting said petition and ruling that it had jurisdiction
over the case.
LRA et al. moved for consideration on the ground of lack of merit and jurisdiction.
DAR also filed its MR on the same ground. Both motions were denied.
Pre-trial proceeded in the ordinary action and was redocketed as a Civil Case.
The RTC issued a judgment on the pleadings and declared as unconstitutional and
void the issuances of the DAR and the LRA. It also annulled the CLOAs issued by
the DAR and issued a permanent prohibitory injunction restraining the
beneficiaries and DAR from exercising acts of possession, dispossession or
ownership over any portion of the property.
Meanwhile, in a petition for certiorari filed with the CA by the Republic, the LRA
sought to annul the RTC Order for lack of jurisdiction, RTCs alleged grave abuse
of discretion in admitting the amended petition, and RTCs non-acquisition of
jurisdiction since the correct docket fees had not been paid.
CA reversed and set aside the RTC Order. Sec. 54 of RA 6657 clearly provides that
it is the CA and not the RTC which has jurisdiction over the case, reiterating the
Association of Small Landowners ruling. Moreover, while the Rules of Court allows
amendments which substantially alter the nature of the cause of action, the
admission by the RTC of the amended petition was not proper and should have
been denied.
Trinidad MR: The amendment did not change the cause of action of
unconstitutionality. Also, the case was already pending before the SC i.e. Moot and
academic.
CA denied MR. No new arguments were raised to warrant a re-examination.
o! The subject matter of the instant petition is the jurisdiction of the lower court to
try and hear the Special Civil Action, which the CA answered in the negative.
o! Granting arguendo that the ordinary action and the special civil action are the same,
the CA decision cannot be rendered moot and academic by the judgment of
RTC in the ordinary action since a decision rendered without jurisdiction is null
and void; hence, its as if no decision was ever rendered by the RTC.

*SC consolidated this with two other petitions (DAR v. Trinidad Valley; Grace Fua
(Provincial Reform Officer of Negros Oriental v. Trinidad Valley) since all stem from
the RTCs assailed decision.
RULING: CA decision ruling that RTC had no jurisdiction is affirmed. RTC ordered
to dismiss the special civil action for lack of jurisdiction. The Permanent Prohibitory
Injunction issued by the RTC is lifted and set aside.
Whether the RTC had jurisdiction over the cases NO.

The jurisdiction of a court over the subject matter of an action is determined by the
law in force at the time of the filing of the complaint and the allegations of the
complaint. It is determined exclusively by the Constitution and the law and cannot
be conferred by the voluntary act or agreement of the parties. It cannot also be
acquired through or waived, enlarged or diminished. It is neither for the court nor
the parties to violate or disregard the rule, this matter being legislative in character.
The nature of an action, as well as which court or body has jurisdiction over it, is
determined based on the allegations contained in the complaint of the plaintiff,
irrespective of whether or not the plaintiff is entitled to recover upon all or some of
the claims asserted therein. The averments in the complaint and the character of
the relief sought are the ones to be consulted. Once vested by the allegations in the
complaint, jurisdiction also remains vested irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims asserted therein.
Here, the CA has correctly and succinctly synthesized that both the original and
amended petition contain the same allegations: that the beneficiaries are not those
intended by the Constitution as beneficiaries, etc. The CA correctly assessed that
these allegations assail the acts of the DAR in awarding the CLOAs to the
beneficiaries and question the procedure in fixing the compensation acts which
pertain to the application, implementation, enforcement or interpretation of RA
6657.
Sec. 54 of RA 6657 leaves no room for doubt that decisions, orders, awards or
rulings of the DAR may be brought to the CA by certiorari and not with the RTC
through an ordinary action for cancellation of title.
The records show that Trinidad had actually brought the matter to the DAR prior
to the filing of its petitions. This reveals an acknowledgment by Trinidad that the
case indeed involves issues relation to the application, implementation,
enforcement or interpretation of RA 6657. The matter brought before the DAR
was appealed to the Office of the Secretary, who ruled that the lands have a slope
of 18% and were already developed and that the lands were already being occupied
by farmer-beneficiaries with their respective CLOAs which cannot be collaterally
attacked. The Secretary ruled that Trinidad failed to prove by substantial evidence
that the areas that it wanted to be exempted from CARP coverage are nonproductive and less suitable for agricultural use. This Order was not appealed by
Trinidad to the CA.
It is also significant to note that in the proceedings before the DAR, the issue on
the unconstitutionality of the subject administrative issuances was never raised an
issue that must have been raised at the earliest possible opportunity.
The jurisdictional shifts on the authority to hear and decide agrarian reform matters
is instructive: in 1980, upon the passage of BP 129, otherwise known as the
Judiciary Reorganization Act, the Courts of Agrarian Relations were integrated into
the Regional Trial Courts and the jurisdiction of the former was vested in the latter

courts. However, with the enactment of EO 229, which took effect on August 29,
1987, the RTCs were divested of their general jurisdiction to try agrarian reform
matters. The said jurisdiction is now vested in the DAR exclusive and original
jurisdiction over all matters involving the implementation of agrarian reform.5
Sections 56 and 57 of EO 229 provide for the designation by the SC of at least one
RTC within each province to act as a special agrarian court. The said special court
have original and exclusive jurisdiction only over petitions for the determination of
just compensation to landowners and the prosecution of criminal offenses under
the said Act. These limit the jurisdiction of the RTC in agrarian cases only in these
two instances.
The case at bar deals with acts of the DAR and the application, implementation,
enforcement, or interpretation of RA 6657 issues which do not involve the
special jurisdiction of the RTC acting as a Special Agrarian Court. Hence, when
the RTC head and decided the instant case, it did so without jurisdiction.
DAR v. Cuenca: All controversies on the implementation of the CARP all under the
jurisdiction of the DAR even though they raise questions that are also legal or
constitutional in nature. The DAR could not be ousted from its authority by the
simple expediency of appending an allegedly constitutional or legal dimension to an
issue that is clearly agrarian. Moreover, the jurisprudential trend is for courts to
refrain from resolving a controversy involving matters that demand the special
competence of administrative agencies, even if the questions involved are also
judicial in character.

NOTES:
SECTION 54. Certiorari.Any decision, order, award or ruling of the DAR on any
agrarian dispute or on any matter pertaining to the application, implementation,
enforcement, or interpretation of this Act and other pertinent laws on agrarian reform
may be brought to the Court of Appeals by certiorari except as otherwise provided in
this Act within fifteen (15) days from the receipt of a copy thereof.
The findings of fact of the DAR shall be final and conclusive if based on substantial
evidence. (Emphasis and underscoring supplied.)

EMILIO GALANG, as Commissioner of Immigration v. THE HON. COURT OF

APPEALS and TEE HOOK CHUN
May 30, 1961 | Concepcion, J. | Administrative and judicial proceedings arising from the
same facts
Digester: Batac, Jeffrey
SUMMARY: Tee Hook Chun arrived in Manila with a fake passport. An exclusion order
was subsequently issued by the Immigration Commissioner against him. Later, a criminal

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
5 SECTION 50. Quasi Judicial Powers of the DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original
jurisdiction over all matters involving the implementation of agrarian reform, except those falling

under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).

case was filed against him before the CFI of Manila for misrepresenting his citizenship, for
which he was found guilty. The CFI of Manila granted Tee Hook Chun's motion for bail
pending the resolution of his appeal, but the Immigration Commissioner refused to release
him. Tee Hook Chun then filed a petition for the writ of habeas corpus before the CA,
which granted it and ordered the Immigration Commissioner to release him from detention.
The Court held that although the administrative and judicial proceedings in this case were
based on similar facts, the administrative proceeding shall be independent of the criminal
action. Hence, an order of release in the criminal action, upon the filing therein of the
corresponding bail bond, would not affect the legality of the detention under a warrant of
arrest or deportation issued by the Immigration Commissioner.
DOCTRINE: Although criminal and administrative proceedings are entirely different and
distinct from each other, the former is not legally inconsistent with the latter and vice versa.
As such, the prosecution for the former does not entail a waiver of the action due for the
latter.
FACTS:
! Tee Hook Chun arrived in Manila from HK bearing a fake Filipino passport with the
name Eutemio Rayel. After a preliminary investigation, the Immigration Commissioner
ordered the exclusion of Tee Hook Chun for being a foreigner.
! Thereafter, prosecutors of the City of Manila filed a criminal action against Tee Hook
Chun for breach of paragraph (e) of section 45 of CA 613 when he made a
misrepresentation of his citizenship to avoid immigration laws. He was later found
guilty by the CFI Manila where he was ordered to be imprisoned for a year, to pay a fine
of P1,000, and be deported to HK after serving his sentence.
! Tee Hook Chun filed an appeal before the CFI of Manila, which ordered his release
pending the resolution of his appeal after he posted a bail of P10,000. But the
Immigration Commissioner refused to release Tee Hook Chun on the ground that an
exclusion order had already been issued against the latter.
! Because of the Immigration Commissioner's refusal to release him, Tee Hook Chun
filed a petition for the writ of habeas corpus before the CA, which petition was
eventually granted.
! Hence, the instant petition.

acquittal of the accused in said criminal action would not bar his deportation under the
same provision, by the Commissioner of Immigration.
When the detaining officer holds the accused in pursuance of a warrant issued by
another court, in connection with another case, whether the latter be criminal or civil,
said detaining officer is not bound to release said accused by order of the court first
mentioned, and defendant's continued deprivation of liberty, despite such order, upon
the authority of the warrant issued by the latter court or by Congress, will not be illegal
and would not justify the issuance of a writ of habeas corpus.

Whether the filing of a subsequent criminal action against Tee Hook Chun
invalidated the adverse ruling rendered against him in the administrative
proceedings. NO.
! The power of exclusion is not set aside, waived or lost upon institution of the criminal
case. The sole effect is that one order will have to yield to the other, but only in point of
priority or order of execution or performance. But neither will nullify onr set aside the
other, nor imply a renunciation of the latter.
! In the present case, the Immigration Commissioner may have to postpone the actual
exclusion of Tee Hook Chun, until after the latter has served such penalty as may
eventually be imposed upon him in the criminal case. And if the sentence in the
criminal case should include an order for Tee Hook Chun's deportation, the
Immigration Commissioner shall then deport him. In such event, Tee Hook Chun
would be "deported", not excluded from the Philippines, not because the Immigration
Commissioner's authority to order the exclusion has been extinguished, nullified or
waived in consequence of the filing of said criminal action, but, because, it would be
unnecessary to exercise it, in view of the Tee Hook Chun's deportation.
! The logic for this rule is: If the party accused in a criminal case were entitled to release,
despite the warrant of exclusion, the effect of said criminal action as deterrent would be
considerably impaired. In fact, under certain conditions, one bent on being in the
Philippines at all cost, even if only for a couple of years, would welcome his prosecution
in court, for it would afford him a sure means to beat the proceedings for his exclusion,
gain entry into the Philippines and be free to roam therein on bail, until the judgment
rendered in the criminal case shall have become executory.

RULING: Petition granted. CA ruling reversed.

Whether the CA's order to have Tee Hook Chun released from custody be sufficient
to override the latter's detention on account of the exclusion order rendered against
him in the administrative proceedings. NO.
! At the outset, it should be noted that, although both administrative and criminal
proceedings arose from the same facts, each proceeding sought to deal with a violation
of a provision of the Philippine Immigration Act of 1940 which is entirely different and
distinct from that dealt with in the other proceeding.
! The administrative proceeding for deportation shall be "independent of the criminal
action." Hence, an order of release in the criminal action, upon the filing therein of the
corresponding bail bond, would not affect the legality of the detention under a warrant
of arrest or deportation issued by the Commissioner of Immigration. Similarly, the