Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 109703 July 5, 1994

REALTY EXCHANGE VENTURE CORPORATION AND/OR
MAGDIWANG, REALTY CORPORATION, petitioner,
vs.
LUCINA S. SENDINO and the OFFICE OF THE EXECUTIVE
SECRETARY, Office of the President, Malacaang,
Manila, respondents.
Siruelo, Muyco & Associates Law Office for petitioner.
Sisenando Villaluz, Jr. for private respondent.

KAPUNAN, J.:
Private respondent Lucina C. Sendino entered into a reservation
agreement with Realty Exchange Venture, Inc. (REVI) for a 120square meter lot in Raymondville Subdivision in Sucat, Paranaque for
P307,800.00 as its purchase price. 1 She paid P1,000.00 as partial reservation
fee on January 15, 1989 and completed payment of this fee on January 20, 1989 by paying
2
P4,000.00.

On July 18, 1989, private respondent paid REVI P16,600.00 as full

downpayment on the purchase price. 3However, she was advised by REVI to
change her co-maker, which she agreed, asking for an extension of one month to do so.

For alleged non-compliance with the requirement of submission of the

appropriate documents under the terms of the original
agreement, 4 REVI, through its Vice-President for Marketing, informed respondent of the
cancellation of the contract on the 31st of July 1989.

On April 20, 1990, private respondent filed a complaint for Specific

Performance against REVI with the office of Appeals, Adjudication and

Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board
(HLURB) asking that respondent be ordered:
1. To comply and continue with the sale of the house and
lot, Block 4, Lot 17 at the Raymondville Subdivision, Sucat
Road, Paranaque, Metro Manila;
2. To pay complainant actual, nominal and moral damages,
the amount of which will be proved in the hearing;
3. To pay complainant attorney's fee in the sum of
P10,000.00;
4. To pay complainant exemplary damages in the sum of
P10,000.00 to set an example and to avoid a repetition of
such illegal and unsound business practices of the
respondent. 6
This petition was amended on August 17, 1990 by impleading
petitioners Magdiwang Realty Corporation (MRC) which appeared to be
the registered owner of the subject lot as per TCT No. 76023.
On April 3, 1991 the HLURB, whose authority to hear and decide the
complaint was challenged by REVI in its answer, 7 rendered its judgment in
favor of private respondent and ordered petitioners to continue with the sale of the house
and lot and to pay private respondent P5,000 as moral damages, P5,000 as exemplary
8
damages and P6,000 as attorney's fees and costs of the suit. An appeal from this decision
was taken to the HLURB OAALA Arbiter, which affirmed the Board's decision. The decision of
the OAALA Arbiter was appealed to the Office of the President, herein public respondent.

On January 7, 1993, the public respondent rendered its decision

dismissing the petitioners' appeal. Motion for reconsideration of the
decision was denied by the public respondent on January 26, 1993.
Consequently petitioners come before this Court, in this petition, which
the Court resolves to treat as a petition for certiorari, raising the
following issues:
I
PUBLIC RESPONDENT COMMITTED SERIOUS ERROR IN
DECLARING THAT THE HOUSING AND LAND USE
REGULATORY BOARD HAS QUASI-JUDICIAL FUNCTIONS,
NOTWITHSTANDING ABSENCE OF EXPRESS GRANT BY

EXECUTIVE ORDER NO. 90 OF DECEMBER 17, 1986 WHICH

CREATED IT. AND EVEN IF THE HLURB HAS QUASIJUDICIAL FUNCTIONS, PUBLIC RESPONDENT LIKEWISE
SERIOUSLY ERRED IN DECLARING THAT THE BOARD OF
COMMISSIONERS IS ALLOWED TO SIT IN A DECISION TO
RENDER JUDGMENT AND TO DELEGATE ITS QUASIJUDICIAL AUTHORITY TO A SUBORDINATE OFFICE.
II
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION
IN DECLARING THAT THE LOT SUBJECT OF THE CONTRACT
SOUGHT TO BE ENFORCED IS PARAPHERNAL DESPITE
ADMISSION OF ITS CONJUGAL NATURE.
III
PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION
IN DECLARING THAT ONLY NOTARIAL NOTICE OF
RESCISSION MAY VALIDLY CANCEL A RESERVATION
AGREEMENT PURSUANT TO REPUBLIC ACT NO. 6552.
As the first and third issues raised by the petitioners strike at the core
of the case at bench, this Court deems it appropriate to initially
dispose of the issue of private respondent's capacity to bring her
complaint before the HLURB-OAALA.
It is settled that rules of procedure are as a matter of course
construed liberally in proceedings before administrative bodies.

In the
instant case, the original suit for specific performance and damages was filed by the private
respondent with the HLURB-OAALA, an administrative body not hamstrung by the strict
procedural technicalities of the Rules of Court. Under the circumstances, it was certainly
appropriate for the HLURB-OAALA to have acted on the substantive questions relating to the
validity of petitioners' unilateral rescission of the contract without unduly concerning itself
with a mere procedural slip, the non-joinder of private petitioner's husband in the original
complaint before the HLURB. Moreover, since petitioners participated in the administrative
proceedings without objecting to or raising the procedural infirmity, they were certainly
estopped from raising it on appeal before the Office of the President and before this Court.

Proceeding to the principal issues raised by the petitioner, while E.O.

85 dated 12 December 1986 abolished the Ministry of Human
Settlements (MHS), it is patently clear from a reading of its provisions
that the said executive order did not abolish the Human Settlements

Regulatory Commission (HSRC) which continued to exercise its powers

and functions even after the Ministry of Human Settlements ceased to
exist. In spite of the Aquino Government's stated intention of
eradicating what it considered the vestiges of the previous regime, it
was not its intention to create a vacuum by abolishing those juridical
entities, agencies, corporations, etc., attached to or supervised by the
MHS, which performed vital administrative functions. Pertinently,
Section 3 of E.O. 85 mandates that:
. . . The final disposition and final organizational alignment
or attachment of the juridical entities, agencies,
corporations and councils attached to, or under the
administrative supervision of the MHS including their
respective existing projects, appropriations and other assets
shall be subject to subsequent enactments by the
President.
Pursuant to this provision therefore, the President subsequently issued
Executive Order No. 90, series of 1986, recognizing the Human
Settlements Regulatory Commission (renamed the HLURB) as one of
the principal housing agencies of the government. Prior to this,
Executive Order No. 648 in 1981 transferred all the functions of the
National Housing Authority (pursuant to Presidential Decrees Nos. 957,
1216 and 1344) to the Human Settlements Regulatory Commission
(HSRC) consolidating all regulatory functions relating to land use and
housing development in a single entity. 10 Being the sole regulatory body for
11

housing and land development, the renamed body, the HLURB,

would have been reduced
to a functionally sterile entity if, as the petitioner contends, it lacked the powers exercised
by its predecessor which included the power to settle disputes concerning land use and
housing development and acquisition. Moreover, this Court has had the occasion to
definitively rule on the question as to whether or not the Housing and Land Use Regulatory
Board could exercise the same quantum of judicial or quasi-judicial powers possessed by
the HSRC under the Ministry of Human Settlements in the exercise of its regulatory
12
functions when it held, in United Housing Corporation vs. Hon. Dayrit
that:

As explicitly provided by law, jurisdiction over actions for

specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or
condominium unit against the owner or developer, is vested
exclusively in the HSRC, Section 1 of PD 1344, in no
uncertain terms, provides:

Sec. 1. In the exercise of its functions to regulate real

estate trade and business and in addition to its powers
provided for in Presidential Decree No. 957, the National
Housing Authority shall have exclusive jurisdiction to hear
and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims
filed by subdivision lot or condominium unit
buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of
contractual and statutory obligations filed by
buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker or
salesman. (Emphasis Ours)
This is reinforced by section 8 of EO 648 (otherwise known
as the Charter of the Human Settlements Regulatory
Commission) which took effect on February 7, 1981, thus:
Sec. 8. Transfer of Functions. The Regulatory functions of
the National Housing Authority pursuant to Presidential
Decree Nos. 957, 1216, 1344 and other related laws are
hereby transferred to the Human Settlements Regulatory
Commission. . . . Among the regulatory functions are . . .
(11) Hear and decide cases of unsound real estate business
practices, claims involving refund filed against project
owners, developers, dealers, brokers, or salesmen and
cases of specific performance(Emphasis Ours).
Private respondents reliance, therefore, on sections 1 and 8
of the Judiciary Reorganization Act of 1980 is untenable.
Thus, as correctly pointed out by petitioner, section 19,
paragraph 6 of said law is material to the issue of where
jurisdiction lies, and We quote:
Sec. 19. . . .

(6) In all other cases not within the exclusive

jurisdiction of any court, tribunal, persons or
body exercising judicial or quasi-judicial
functions.
xxx xxx xxx
Neither can We accede to private respondents'
claim that resort to the courts is justified under
section 41 of PD 957 specifically under the
phrase "legal remedies that may beavailable to
aggrieved subdivision lot buyers."
There is no question that a statute may vest exclusive
original jurisdiction in an administrative agency over certain
disputes and controversies falling within the agency's
special expertise. The constitutionality of such grant of
exclusive jurisdiction to the National Housing Authority
(now Housing and Land Use Regulatory Board) over cases
involving the sale of lots in commercial subdivisions was
upheld in Tropical Homes Inc. v. National Housing
Authority (152 SCRA 540 [1987]) and again sustained in a
later decision in Antipolo Realty Corporation v. National
Housing Authority (153 SCRA 399 [1987]) where We
restated that the National Housing Authority (now HLURB)
shall have exclusive jurisdiction to regulate the real estate
trade and business in accordance with the terms of PD No.
957 which defines the quantum of judicial or quasijudicial powers of said agency. 13
Clearly, therefore, the HLURB properly exercised its jurisdiction over
the case filed by the petitioners with its adjudicative body, the OAALA,
in ordering petitioners to comply with their obligations arising from the
Reservation Agreement. In general, the quantum of judicial or quasijudicial powers which an administrative agency may exercise is defined
in the agency's enabling act. In view of the Court's pronouncement
in United Housing Corporation vs. Hon. Dayrit, supra, recognizing the
HLURB as the successor agency of the HSRC's powers and functions, it
therefore follows that the transfer of such functions from the NHA to
the HRSC effected by Section 8 of E.O. 648, series of 1981, thereby
resulted in the acquisition by the HLURB of adjudicatory powers which

included the power to "(h)ear and decide cases of unsound real estate
business practices . . . and cases of specific performance." 14 Obviously, in
the exercise of its powers and functions, the HLURB must interpret and apply contracts,
determine the rights of the parties under these contracts, and award damages whenever
15
appropriate.
We fail to see how the HSRC which possessed jurisdiction over the actions
for specific performance for contractual and statutory obligations filed by buyers of
subdivision lots against developers had suddenly lots its adjudicatory powers by the mere
fiat of a change in name through E.O. 90. One thrust of the multiplication of administrative
agencies is that the interpretation of such contracts and agreements and the determination
16
of private rights under these agreements is no longer a uniquely judicial function.
The
absence of any provision, express or implied, in E.O. 90, repealing those quasi-judicial
powers inherited by the HSRC from the National Housing Authority, furthermore militates
against petitioners' position on the question.

Going to petitioners' contention that the decision of the OAALA should

have been rendered by the Board of Commissioners sitting en banc,
we find ample authority both in the statutes and in jurisprudencejustifying the Board's act of dividing itself into divisions of three. Under
Section 5 of E.O. 648 which defines the powers and duties of the
Commission, the Board is specifically mandated to "(a)dopt rules of
procedure for the conduct of its business" and perform such functions
necessary for the effective accomplishment of (its) above mentioned
functions." Since nothing in the provisions of either E.O. 90 or E.O.
648 denies or withholds the power or authority to delegate
adjudicatory functions to a division, we cannot see how the Board, for
the purpose of effectively carrying out its administrative
responsibilities and quasi-judicial powers as a regulatory body should
be denied the power, as a matter of practical administrative
procedure, to constitute its adjudicatory boards into various divisions.
After all, the power conferred upon an administrative agency to issue
rules and regulations necessary to carry out its functions has been
held "to be an adequate source of authority to delegate a particular
function, unless by express provision of the Act or by implication it has
been withheld." 17 The practical necessity of establishing a procedure whereby cases
are decided by three (3) Commissioners furthermore assumes greater significance when
one notes that the HLURB, as constituted, only has four (4) full time commissioners and five
(5) part time commissioners to deal with all the functions, administrative, adjudicatory, or
otherwise, entrusted to
18
it.
As the Office of the President noted in its February 26, 1993 Resolution denying
petitioners' Motion for Reconsideration, "it is impossible and very impractical to gather the
four (4) full time and five (5) part time commissioners (together) just to decide a case."
Considering that its part time commissioners act merely in an ex-officio capacity, requiring a
majority of the Board to sit en banc on each and every case brought before it would result
19
in an administrative nightmare.

Finally, petitioners' assertion that RA 6552 is inapplicable in the instant

case because the said law does not apply to cases of reservation
agreements finds no merit in the case at bench in view of Section 24
of P.D. 957 which provides:
Sec. 24. Failure to Pay Installments The rights of the
buyer in the event of his failure to pay the installments due
for reasons other than the failure of the owner or developer
to develop the project shall be governed by Republic Act
No. 6552.
As the Solicitor General correctly pointed out, RA 6552 makes no
distinction between "option" and "sale" 20 which, under P.D. 957 also includes
"an exchange or attempt to sell, an option of sale or purchase, a solicitation of a sale or an
21
offer to sell directly."
This all-embracing definition virtually includes all transactions
concerning land and housing acquisition, including reservation agreements. Since R.A. 6552
mandates cancellation by notarial
act among other requirements before any cancellation of a contract may be effected,
petitioners' precipitate cancellation of its contract with private respondent without observing
the conditions imposed by the said law was invalid and improper.

In fine, the HLURB-OAALA acted within the scope of its authority in

ordering petitioners to comply and continue with the sale of the house
and lot subject of the contract between the original parties. It cannot
be gainsaid that the quasi-judicial functions exercised by the body are
necessary incidents to the proper exercise of its powers and functions
under E.O. 90 and the laws enacted delineating the scope of authority
of its Board of Commissioners. Denying the body those functions so
necessary in carrying out its power to regulate housing and land use
results in its effective emasculation as an important regulatory body in
an area vital to the national economy.
The acute housing shortage problem has prompted thousands of
middle and lower class buyers of houses and lots and condominium
units to enter into all sorts of agreements with private housing
developers involving all manner of installment schemes under
contracts drawn exclusively by these developers. Many of these virtual
contracts of adhesion entrap innocent buyers by requiring cash
deposits under reservation agreements which include, sometimes in
the fine print, default clauses guaranteeing huge monetary windfalls
for the developers in the event that their buyers (oftentimes for the
flimsiest of reasons) default by failing to come up with certain
requirements. While the Court can take judicial notice of this

pernicious practice, it can only hope that future legislation would

address the need to protect the innocent middle or lower class home
purchaser. In the case of the individual victim, this Court can only go
to the extent of awarding such damages as may be proper under the
peculiar circumstances of the cases brought before it.
WHEREFORE, premises considered, the petition is hereby DISMISSED
for lack of merit. Costs against petitioners.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 110120 March 16, 1994

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding
Judge RTC, Branch 127, Caloocan City, HON. MACARIO A.
ASISTIO, JR., City Mayor of Caloocan and/or THE CITY
GOVERNMENT OF CALOOCAN,respondents.
Alberto N. Hidalgo and Ma. Teresa T. Oledan for petitioner.
The City Legal Officer & Chief, Law Department for Mayor Macario A.
Asistio, Jr. and the City Government of Caloocan.

ROMERO, J.:
The clash between the responsibility of the City Government of
Caloocan to dispose off the 350 tons of garbage it collects daily and
the growing concern and sensitivity to a pollution-free environment of
the residents of Barangay Camarin, Tala Estate, Caloocan City where
these tons of garbage are dumped everyday is the hub of this
controversy elevated by the protagonists to the Laguna Lake
Development Authority (LLDA) for adjudication.
The instant case stemmed from an earlier petition filed with this Court
by Laguna Lake Development Authority (LLDA for short) docketed as
G.R.
No. 107542 against the City Government of Caloocan, et al. In the
Resolution of November 10, 1992, this Court referred G.R. No. 107542
to the Court of Appeals for appropriate disposition. Docketed therein

as CA-G.R. SP
No. 29449, the Court of Appeals, in a decision 1 promulgated on January 29,
1993 ruled that the LLDA has no power and authority to issue a cease and desist order
enjoining the dumping of garbage in Barangay Camarin, Tala Estate, Caloocan City. The
LLDA now seeks, in this petition, a review of the decision of the Court of Appeals.

The facts, as disclosed in the records, are undisputed.

On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of
Lourdes Parish, Barangay Camarin, Caloocan City, filed a lettercomplaint 2 with the Laguna Lake Development Authority seeking to stop the operation of
the 8.6-hectare open garbage dumpsite in Tala Estate, Barangay Camarin, Caloocan City
due to its harmful effects on the health of the residents and the possibility of pollution of the
water content of the surrounding area.

On November 15, 1991, the LLDA conducted an on-site investigation,

monitoring and test sampling of the leachate 3 that seeps from said dumpsite
to the nearby creek which is a tributary of the Marilao River. The LLDA Legal and Technical
personnel found that the City Government of Caloocan was maintaining an open dumpsite
at the Camarin area without first securing an Environmental Compliance Certificate (ECC)
from the Environmental Management Bureau (EMB) of the Department of Environment and
4
Natural Resources, as required under Presidential Decree No. 1586, and clearance from
5
LLDA as required under Republic Act No. 4850, as amended by Presidential Decree No.
6
813 and Executive Order No. 927, series of 1983.

After a public hearing conducted on December 4, 1991, the LLDA,

acting on the complaint of Task Force Camarin Dumpsite, found that
the water collected from the leachate and the receiving streams could
considerably affect the quality, in turn, of the receiving waters since it
indicates the presence of bacteria, other than coliform, which may
have contaminated the sample during collection or handling. 7 On
8

December 5, 1991, the LLDA issued a Cease and Desist Order ordering the City
Government of Caloocan, Metropolitan Manila Authority, their contractors, and other
entities, to completely halt, stop and desist from dumping any form or kind of garbage and
other waste matter at the Camarin dumpsite.

The dumping operation was forthwith stopped by the City Government

of Caloocan. However, sometime in August 1992 the dumping
operation was resumed after a meeting held in July 1992 among the
City Government of Caloocan, the representatives of Task Force
Camarin Dumpsite and LLDA at the Office of Environmental
Management Bureau Director Rodrigo U. Fuentes failed to settle the
problem.

After an investigation by its team of legal and technical personnel on

August 14, 1992, the LLDA issued another order reiterating the
December 5, 1991, order and issued an Alias Cease and Desist Order
enjoining the City Government of Caloocan from continuing its
dumping operations at the Camarin area.
On September 25, 1992, the LLDA, with the assistance of the
Philippine National Police, enforced its Alias Cease and Desist Order by
prohibiting the entry of all garbage dump trucks into the Tala Estate,
Camarin area being utilized as a dumpsite.
Pending resolution of its motion for reconsideration earlier filed on
September 17, 1992 with the LLDA, the City Government of Caloocan
filed with the Regional Trial Court of Caloocan City an action for the
declaration of nullity of the cease and desist order with prayer for the
issuance of writ of injunction, docketed as Civil Case No. C-15598. In
its complaint, the City Government of Caloocan sought to be declared
as the sole authority empowered to promote the health and safety and
enhance the right of the people in Caloocan City to a balanced ecology
within its territorial jurisdiction. 9
On September 25, 1992, the Executive Judge of the Regional Trial
Court of Caloocan City issued a temporary restraining order enjoining
the LLDA from enforcing its cease and desist order. Subsequently, the
case was raffled to the Regional Trial Court, Branch 126 of Caloocan
which, at the time, was presided over by Judge Manuel Jn. Serapio of
the Regional Trial Court, Branch 127, the pairing judge of the recentlyretired presiding judge.
The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on
the ground, among others, that under Republic Act No. 3931, as
amended by Presidential Decree No. 984, otherwise known as the
Pollution Control Law, the cease and desist order issued by it which is
the subject matter of the complaint is reviewable both upon the law
and the facts of the case by the Court of Appeals and not by the
Regional Trial Court. 10
On October 12, 1992 Judge Manuel Jn. Serapio issued an order
consolidating Civil Case No. C-15598 with Civil Case No. C-15580, an
earlier case filed by the Task Force Camarin Dumpsite entitled "Fr.
John Moran, et al. vs. Hon. Macario Asistio." The LLDA, however,

maintained during the trial that the foregoing cases, being

independent of each other, should have been treated separately.
On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the
motion to dismiss, issued in the consolidated cases an order 11 denying
LLDA's motion to dismiss and granting the issuance of a writ of preliminary injunction
enjoining the LLDA, its agent and all persons acting for and on its behalf, from enforcing or
implementing its cease and desist order which prevents plaintiff City of Caloocan from
dumping garbage at the Camarin dumpsite during the pendency of this case and/or until
further orders of the court.

On November 5, 1992, the LLDA filed a petition for certiorari,

prohibition and injunction with prayer for restraining order with the
Supreme Court, docketed as G.R. No. 107542, seeking to nullify the
aforesaid order dated October 16, 1992 issued by the Regional Trial
Court, Branch 127 of Caloocan City denying its motion to dismiss.
The Court, acting on the petition, issued a Resolution 12 on November 10,
1992 referring the case to the Court of Appeals for proper disposition and at the same time,
without giving due course to the petition, required the respondents to comment on the
petition and file the same with the Court of Appeals within ten (10) days from notice. In the
meantime, the Court issued a temporary restraining order, effective immediately and
continuing until further orders from it, ordering the respondents: (1) Judge Manuel Jn.
Serapio, Presiding Judge, Regional Trial Court, Branch 127, Caloocan City to cease and
desist from exercising jurisdiction over the case for declaration of nullity of the cease and
desist order issued by the Laguna Lake Development Authority (LLDA); and (2) City Mayor
of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its
garbage at the Tala Estate, Barangay Camarin, Caloocan City.

Respondents City Government of Caloocan and Mayor Macario A.

Asistio, Jr. filed on November 12, 1992 a motion for reconsideration
and/or to quash/recall the temporary restraining order and an urgent
motion for reconsideration alleging that ". . . in view of the calamitous
situation that would arise if the respondent city government fails to
collect 350 tons of garbage daily for lack of dumpsite (i)t is therefore,
imperative that the issue be resolved with dispatch or with sufficient
leeway to allow the respondents to find alternative solutions to this
garbage problem."
On November 17, 1992, the Court issued a Resolution 13 directing the Court
of Appeals to immediately set the case for hearing for the purpose of determining whether
or not the temporary restraining order issued by the Court should be lifted and what
conditions, if any, may be required if it is to be so lifted or whether the restraining order
should be maintained or converted into a preliminary injunction.

The Court of Appeals set the case for hearing on November 27, 1992,
at 10:00 in the morning at the Hearing Room, 3rd Floor, New Building,
Court of Appeals. 14 After the oral argument, a conference was set on December 8,
1992 at 10:00 o'clock in the morning where the Mayor of Caloocan City, the General
Manager of LLDA, the Secretary of DENR or his duly authorized representative and the
Secretary of DILG or his duly authorized representative were required to appear.

It was agreed at the conference that the LLDA had until December 15,
1992 to finish its study and review of respondent's technical plan with
respect to the dumping of its garbage and in the event of a rejection of
respondent's technical plan or a failure of settlement, the parties will
submit within 10 days from notice their respective memoranda on the
merits of the case, after which the petition shall be deemed submitted
for resolution. 15 Notwithstanding such efforts, the parties failed to settle the dispute.
On April 30, 1993, the Court of Appeals promulgated its decision
holding that: (1) the Regional Trial Court has no jurisdiction on appeal
to try, hear and decide the action for annulment of LLDA's cease and
desist order, including the issuance of a temporary restraining order
and preliminary injunction in relation thereto, since appeal therefrom
is within the exclusive and appellate jurisdiction of the Court of
Appeals under Section 9, par. (3), of Batas Pambansa Blg. 129; and
(2) the Laguna Lake Development Authority has no power and
authority to issue a cease and desist order under its enabling law,
Republic Act No. 4850, as amended by P.D. No. 813 and Executive
Order
No. 927, series of 1983.
The Court of Appeals thus dismissed Civil Case No. 15598 and the
preliminary injunction issued in the said case was set aside; the cease
and desist order of LLDA was likewise set aside and the temporary
restraining order enjoining the City Mayor of Caloocan and/or the City
Government of Caloocan to cease and desist from dumping its garbage
at the Tala Estate, Barangay Camarin, Caloocan City was lifted,
subject, however, to the condition that any future dumping of garbage
in said area, shall be in conformity with the procedure and protective
works contained in the proposal attached to the records of this case
and found on pages 152-160 of the Rollo, which was thereby adopted
by reference and made an integral part of the decision, until the
corresponding restraining and/or injunctive relief is granted by the
proper Court upon LLDA's institution of the necessary legal
proceedings.

Hence, the Laguna Lake Development Authority filed the instant

petition for review on certiorari, now docketed as G.R. No. 110120,
with prayer that the temporary restraining order lifted by the Court of
Appeals be re-issued until after final determination by this Court of the
issue on the proper interpretation of the powers and authority of the
LLDA under its enabling law.
On July, 19, 1993, the Court issued a temporary restraining
order 16 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to
cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan
City, effective as of this date and containing until otherwise ordered by the Court.

It is significant to note that while both parties in this case agree on the
need to protect the environment and to maintain the ecological
balance of the surrounding areas of the Camarin open dumpsite, the
question as to which agency can lawfully exercise jurisdiction over the
matter remains highly open to question.
The City Government of Caloocan claims that it is within its power, as
a local government unit, pursuant to the general welfare provision of
the Local Government Code, 17 to determine the effects of the operation of the
dumpsite on the ecological balance and to see that such balance is maintained. On the basis
of said contention, it questioned, from the inception of the dispute before the Regional Trial
Court of Caloocan City, the power and authority of the LLDA to issue a cease and desist
order enjoining the dumping of garbage in the Barangay Camarin over which the City
Government of Caloocan has territorial jurisdiction.

The Court of Appeals sustained the position of the City of Caloocan on

the theory that Section 7 of Presidential Decree No. 984, otherwise
known as the Pollution Control law, authorizing the defunct National
Pollution Control Commission to issue an ex-parte cease and desist
order was not incorporated in Presidential Decree No. 813 nor in
Executive Order No. 927, series of
1983. The Court of Appeals ruled that under Section 4, par. (d), of
Republic Act No. 4850, as amended, the LLDA is instead required "to
institute the necessary legal proceeding against any person who shall
commence to implement or continue implementation of any project,
plan or program within the Laguna de Bay region without previous
clearance from the Authority."
The LLDA now assails, in this partition for review, the abovementioned
ruling of the Court of Appeals, contending that, as an administrative
agency which was granted regulatory and adjudicatory powers and

functions by Republic Act No. 4850 and its amendatory laws,

Presidential Decree No. 813 and Executive Order No. 927, series of
1983, it is invested with the power and authority to issue a cease and
desist order pursuant to Section 4 par. (c), (d), (e), (f) and (g) of
Executive Order No. 927 series of 1983 which provides, thus:
Sec. 4. Additional Powers and Functions. The authority shall
have the following powers and functions:
xxx xxx xxx
(c) Issue orders or decisions to compel compliance with the
provisions of this Executive Order and its implementing
rules and regulations only after proper notice and hearing.
(d) Make, alter or modify orders requiring the
discontinuance of pollution specifying the conditions and the
time within which such discontinuance must be
accomplished.
(e) Issue, renew, or deny permits, under such conditions as
it may determine to be reasonable, for the prevention and
abatement of pollution, for the discharge of sewage,
industrial waste, or for the installation or operation of
sewage works and industrial disposal system or parts
thereof.
(f) After due notice and hearing, the Authority may also
revoke, suspend or modify any permit issued under this
Order whenever the same is necessary to prevent or abate
pollution.
(g) Deputize in writing or request assistance of appropriate
government agencies or instrumentalities for the purpose of
enforcing this Executive Order and its implementing rules
and regulations and the orders and decisions of the
Authority.
The LLDA claims that the appellate court deliberately suppressed and
totally disregarded the above provisions of Executive Order No. 927,

series of 1983, which granted administrative quasi-judicial functions to

LLDA on pollution abatement cases.
In light of the relevant environmental protection laws cited which are
applicable in this case, and the corresponding overlapping jurisdiction
of government agencies implementing these laws, the resolution of the
issue of whether or not the LLDA has the authority and power to issue
an order which, in its nature and effect was injunctive, necessarily
requires a determination of the threshold question: Does the Laguna
Lake Development Authority, under its Charter and its amendatory
laws, have the authority to entertain the complaint against the
dumping of garbage in the open dumpsite in Barangay Camarin
authorized by the City Government of Caloocan which is allegedly
endangering the health, safety, and welfare of the residents therein
and the sanitation and quality of the water in the area brought about
by exposure to pollution caused by such open garbage dumpsite?
The matter of determining whether there is such pollution of the
environment that requires control, if not prohibition, of the operation
of a business establishment is essentially addressed to the
Environmental Management Bureau (EMB) of the DENR which, by
virtue of Section 16 of Executive Order No. 192, series of 1987, 18 has
assumed the powers and functions of the defunct National Pollution Control Commission
created under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication
Board (PAB) under the Office of the DENR Secretary now assumes the powers and functions
of the National Pollution Control Commission with respect to adjudication of pollution
19
cases.

As a general rule, the adjudication of pollution cases generally pertains

to the Pollution Adjudication Board (PAB), except in cases where the
special law provides for another forum. It must be recognized in this
regard that the LLDA, as a specialized administrative agency, is
specifically mandated under Republic Act No. 4850 and its amendatory
laws to carry out and make effective the declared national policy 20 of
promoting and accelerating the development and balanced growth of the Laguna Lake area
and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila,
21
Pasay, Quezon and Caloocan
with due regard and adequate provisions for environmental
management and control, preservation of the quality of human life and ecological systems,
and the prevention of undue ecological disturbances, deterioration and pollution. Under such
a broad grant and power and authority, the LLDA, by virtue of its special charter, obviously
has the responsibility to protect the inhabitants of the Laguna Lake region from the
deleterious effects of pollutants emanating from the discharge of wastes from the
surrounding areas. In carrying out the aforementioned declared policy, the LLDA is
mandated, among others, to pass upon and approve or disapprove all plans, programs, and

projects proposed by local government offices/agencies within the region, public

corporations, and private persons or enterprises where such plans, programs and/or
22
projects are related to those of the LLDA for the development of the region.

In the instant case, when the complainant Task Force Camarin

Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan
City, filed its letter-complaint before the LLDA, the latter's jurisdiction
under its charter was validly invoked by complainant on the basis of its
allegation that the open dumpsite project of the City Government of
Caloocan in Barangay Camarin was undertaken without a clearance
from the LLDA, as required under Section 4, par. (d), of Republic Act.
No. 4850, as amended by P.D. No. 813 and Executive Order No. 927.
While there is also an allegation that the said project was without an
Environmental Compliance Certificate from the Environmental
Management Bureau (EMB) of the DENR, the primary jurisdiction of
the LLDA over this case was recognized by the Environmental
Management Bureau of the DENR when the latter acted as
intermediary at the meeting among the representatives of the City
Government of Caloocan, Task Force Camarin Dumpsite and LLDA
sometime in July 1992 to discuss the possibility of
re-opening the open dumpsite.
Having thus resolved the threshold question, the inquiry then narrows
down to the following issue: Does the LLDA have the power and
authority to issue a "cease and desist" order under Republic Act No.
4850 and its amendatory laws, on the basis of the facts presented in
this case, enjoining the dumping of garbage in Tala Estate, Barangay
Camarin, Caloocan City.
The irresistible answer is in the affirmative.
The cease and desist order issued by the LLDA requiring the City
Government of Caloocan to stop dumping its garbage in the Camarin
open dumpsite found by the LLDA to have been done in violation of
Republic Act No. 4850, as amended, and other relevant environment
laws, 23 cannot be stamped as an unauthorized exercise by the LLDA of injunctive powers.
By its express terms, Republic Act No. 4850, as amended by P.D. No. 813 and Executive
Order No. 927, series of 1983, authorizes the LLDA to "make, alter or modify order
24
requiring the discontinuance or pollution." (Emphasis supplied) Section 4, par. (d)
explicitly authorizes the LLDA to make whatever order may be necessary in the exercise of
its jurisdiction.

To be sure, the LLDA was not expressly conferred the power "to issue
and ex-parte cease and desist order" in a language, as suggested by
the City Government of Caloocan, similar to the express grant to the
defunct National Pollution Control Commission under Section 7 of P.D.
No. 984 which, admittedly was not reproduced in P.D. No. 813 and
E.O. No. 927, series of 1983. However, it would be a mistake to draw
therefrom the conclusion that there is a denial of the power to issue
the order in question when the power "to make, alter or modify orders
requiring the discontinuance of pollution" is expressly and clearly
bestowed upon the LLDA by Executive Order No. 927, series of 1983.
Assuming arguendo that the authority to issue a "cease and desist
order" were not expressly conferred by law, there is jurisprudence
enough to the effect that the rule granting such authority need not
necessarily be express.25 While it is a fundamental rule that an administrative agency
has only such powers as are expressly granted to it by law, it is likewise a settled rule that
an administrative agency has also such powers as are necessarily implied in the exercise of
26
its express powers.
In the exercise, therefore, of its express powers under its charter as a
regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region,
the authority of the LLDA to issue a "cease and desist order" is, perforce, implied.
Otherwise, it may well be reduced to a "toothless" paper agency.

In this connection, it must be noted that in Pollution Adjudication

Board v. Court of Appeals, et al., 27 the Court ruled that the Pollution Adjudication
Board (PAB) has the power to issue an ex-parte cease and desist order when there is prima
facie evidence of an establishment exceeding the allowable standards set by the antipollution laws of the country. Theponente, Associate Justice Florentino P. Feliciano,
declared:

Ex parte cease and desist orders are permitted by law and

regulations in situations like that here presented precisely
because stopping the continuous discharge of pollutive and
untreated effluents into the rivers and other inland waters
of the Philippines cannot be made to wait until protracted
litigation over the ultimate correctness or propriety of such
orders has run its full course, including multiple and
sequential appeals such as those which Solar has taken,
which of course may take several years. The relevant
pollution control statute and implementing regulations were
enacted and promulgated in the exercise of that pervasive,
sovereign power to protect the safety, health, and general
welfare and comfort of the public, as well as the protection
of plant and animal life, commonly designated as the police

power. It is a constitutional commonplace that the ordinary

requirements of procedural due process yield to the
necessities of protecting vital public interests like those
here involved, through the exercise of police power. . . .
The immediate response to the demands of "the necessities of
protecting vital public interests" gives vitality to the statement on
ecology embodied in the Declaration of Principles and State Policies or
the 1987 Constitution. Article II, Section 16 which provides:
The State shall protect and advance the right of the people
to a balanced and healthful ecology in accord with the
rhythm and harmony of nature.
As a constitutionally guaranteed right of every person, it carries the
correlative duty of non-impairment. This is but in consonance with the
declared policy of the state "to protect and promote the right to health
of the people and instill health consciousness among them." 28 It is to be
borne in mind that the Philippines is party to the Universal Declaration of Human Rights and
the Alma Conference Declaration of 1978 which recognize health as a fundamental human
29
right.

The issuance, therefore, of the cease and desist order by the LLDA, as
a practical matter of procedure under the circumstances of the case, is
a proper exercise of its power and authority under its charter and its
amendatory laws. Had the cease and desist order issued by the LLDA
been complied with by the City Government of Caloocan as it did in the
first instance, no further legal steps would have been necessary.
The charter of LLDA, Republic Act No. 4850, as amended, instead of
conferring upon the LLDA the means of directly enforcing such orders,
has provided under its Section 4 (d) the power to institute "necessary
legal proceeding against any person who shall commence to
implement or continue implementation of any project, plan or program
within the Laguna de Bay region without previous clearance from the
LLDA."
Clearly, said provision was designed to invest the LLDA with
sufficiently broad powers in the regulation of all projects initiated in
the Laguna Lake region, whether by the government or the private
sector, insofar as the implementation of these projects is concerned. It
was meant to deal with cases which might possibly arise where

decisions or orders issued pursuant to the exercise of such broad

powers may not be obeyed, resulting in the thwarting of its laudabe
objective. To meet such contingencies, then the writs
of mandamus and injunction which are beyond the power of the LLDA
to issue, may be sought from the proper courts.
Insofar as the implementation of relevant anti-pollution laws in the
Laguna Lake region and its surrounding provinces, cities and towns are
concerned, the Court will not dwell further on the related issues raised
which are more appropriately addressed to an administrative agency
with the special knowledge and expertise of the LLDA.
WHEREFORE, the petition is GRANTED. The temporary restraining
order issued by the Court on July 19, 1993 enjoining the City Mayor of
Caloocan and/or the City Government of Caloocan from dumping their
garbage at the Tala Estate, Barangay Camarin, Caloocan City is hereby
made permanent.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 96938 October 15, 1991
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,
vs.

CIVIL SERVICE COMMISSION, HEIRS OF ELIZAR NAMUCO, and

HEIRS OF EUSEBIO MANUEL, respondents.
Benigno M. Puno for private respondents.
Fetalino, Llamas-Villanueva and Noro for CSC.

NARVASA, J.:p
In May, 1981, the Government Service Insurance System (GSIS)
dismissed six (6) employees as being "notoriously undersirable," they
having allegedly been found to be connected with irregularities in the
canvass of supplies and materials. The dismissal was based on Article
IX, Presidential Decree No. 807 (Civil Service Law) 1 in relation to LOI 14-A and/or
LOI No. 72. The employees' Motion for Reconsideration was subsequently denied.

Five of these six dismissed employees appealed to the Merit Systems

Board. The Board found the dismissals to be illegal because effected
without formal charges having been filed or an opportunity given to
the employees to answer, and ordered the remand of the cases to the
GSIS for appropriate disciplinary proceedings.
The GSIS appealed tothe Civil Service Commission. By Resolution
dated October 21, 1987, the Commission ruled that the dismissal of all
five was indeed illegal and disposed as follows:
WHEREFORE, it being obvious that respondents' separation
from the service is illegal, the GSIS is directed to reinstate
them with payment of back salaries and benefits due them
not later than ten (10) days from receipt of a copy hereof,
without prejudice to the right of the GSIS to pursue proper
disciplinary action against them. It is also directed that the
services of their replacement be terminated effective upon
reinstatement of herein respondents.
xxx xxx xxx
Still unconvinced, the GSIS appealed to the Supreme Court (G.R. Nos.
80321-22). Once more, it was rebuffed. On July 4, 1988 this Court's
Second Division promulgated a Resolution which:

a) denied its petition for failing to show any grave abuse of

discretion on the part of the Civl Service Commission, the
dismissals of the employees having in truth been made
without formal charge and hearin, and
b) declared that reinstatement of said five employees was
proper, "without prejudice to the right of the GSIS to
pursue proper disciplinary action against them;"
c) MODIFIED, however, the challenged CSC Resolution of
October 21, 1987 "by elminating the payment of back
salaries to private respondents (employees) until the
outcome of the disciplinary proceedings is known,
considering the gravity of the offenses imputed to
them ..., 2
d) ordered reinstateement only of three employees, namely: Domingo Canero, Renato Navarro and
Belen Guerrero, "it appearing tht respondents Elizar Namuco and Eusebio Manuel have since passed
away." 3

On January 8, 1990, the aforesaid Resolution of July 4, 1988 having

become final, the heirs of Namuco and Manuel filed a motion for
execution of the Civil Service Commission Resolution of October 21,
1987, supra. The GSIS opposed the motion. It argued that the CSC
Resolution of October 21, 1987 directing reinstatement of the
employees and payment to them of back salaries and benefits had
been superseded by the Second Division's Resolution of July 4, 1988
precisely eliminating the payment of back salaries.
The Civil Service Commission granted the motion for execution in an
Order dated June 20, 1990. It accordingly directed the GSIS "to pay
the compulsory heirs of deceased Elizar Namuco and Eusebio Manuel
for the period from the date of their illegal separation up to the date of
their demise." The GSIS filed a motion for reconsideration. It was
denied by Order of the CSC dated November 22, 1990.
Once again the GSIS has come to this Court, this time praying that
certiorari issue to nullify the Orders of June 20, 1990 and November
22, 1990. Here it contends that the Civil Service Commission has no
pwer to execute its judgments and final orders or resolutions, and
even conceding the contrary, the writ of execution issued on June 20,
1990 is void because it varies this Court's Resolution of July 4, 1988.

The Civil Service Commission, like the Commission on Elections and

the Commission on Audit, is a consitutional commission invested by
the Constitution and relevant laws not only with authority to
administer the civil service, 4but also with quasi-judicial powers. 5 It has the authority to hear and
decide administrative disciplinary cases instituted directly with it or brought to it on appeal. 6 The Commission shall decide
by a majority vote of all its Members any case or matter brought before it within sixty days from the date of its submission
for decision it within sixty days from the date of its submission for on certiorari by any aggrieved party within thirty days
from receipt of a copy thereof. 7 It has the power, too, sitting en banc, to promulgate its own rules concerning pleadings
and practice before it or before any of its offices, which rules should not however diminish, increase, or modify substantive
rights. 8

On October 9, 1989, the Civil Service Commission promulgated

Resolution No. 89-779 adopting, approving and putting into effect
simplified rules of procedure on administrative disciplinary and protest
cases, pursuant tothe authority granted by the constitutional and
statutory provisions above cited, as well as Republic Act No.
6713. 9Those rules provide, among other things, 10 that decision in "administrative disciplinary cases" shall be
immediately executory unless a motion for reconsideration is seasonably filed. If the decision of the Commission is brought
to the Supreme Court on certiorari, the same shall still be executory unless a restraining order or preliminary injunction is
issued by the High Court." 11 This is similar to a provision in the former Civil Service Rules authorizing the Commissioner,
"if public interest so warrants, ... (to) order his decision executed pending appeal to the Civil Service Board of
Appeals." 12 The provisions are analogous and entirely consistent with the duty or responsibility reposed in the Chairman
by PD 807, subject to policies and resolutions adopted by the Commission, "to enforce decision on administrative discipline
involving officials of the Commission," 13 as well as with Section 37 of the same decree declaring that an appeal to the
Commission 14 "shall not stop the decision from being executory, and in case the penalty is suspension or removal, the
respondent shall be considered as having been under preventive suspension during the pendency of the appeal in the
event he wins an appeal."

In light of all the foregoing consitutional and statutory provisions, it

would appear absurd to deny to the Civil Service Commission the
power or authority or order execution of its decisions, resolutions or
orders which, it should be stressed, it has been exercising through the
years. It would seem quite obvious that the authority to decide cases
is inutile unless accompanied by the authority to see taht what has
been decided is carried out. Hence, the grant to a tribunal or agency of
adjudicatory power, or the authority to hear and adjudge cases, should
normally and logically be deemed to include the grant of authority to
enforce or execute the judgments it thus renders, unless the law
otherwise provides.
In any event, the Commission's exercise of that power of execution
has been sanctioned by this Court in several cases.
In Cucharo v. Subido,

15 for instance, this Court sustained the challenged directive of the Civil Service
Commissioner, that his decision "be executed immediately 'but not beyond ten days from receipt thereof ...". The Court
said:

As a major premise, it has been the repeated

pronouncement of this Supreme Tribunal that the Civil

Service Commissioner has the discretion toorder the

immediate execution in the public interst of his
decision separating petitioner-appellant from the service,
always sbuject however to the rule that, in the event the
Civil Service Board of Appeals or the proper court
determines that his dismissal is illegal, he should be paid
the salary corresponding to the period of his separation
from the service unitl his reinstatement.
Petitioner GSIS concedes that the heirs of Namuco and Manuel "are
entitled tothe retirement/death and other benefits due them as
government employees" since, at the time of their death, they "can be
considered not to have been separated from the separated from the
service." 16
It contend, however, that since Namuco and Manuel had not been
"completely exonerated of the administrative charge filed against them
as the filing of the proper disciplinary action was yet to have been
taken had death not claimed them" no back salaries may be paid to
them, although they "may charge the period of (their) suspension
against (their) leave credits, if any, and may commute such leave
credits to money
value;" 17 this, on the authority of this Court's decision in Clemente v. Commission on Audit. 18 It is in line with
these considerations, it argues, that the final and executory Resolution of this Court's Second Division of July 4, 1988
should be construed; 19 and since the Commission's Order of July 20, 1990 maikes a contrary disposition, the latter order
obviously cannot prevail and must be deemed void and ineffectual.

This Court's Resolution of July 4, 1988, as already stated, modified the

Civil Service Commission's Resolution of October 21, 1987 inter
alia granting back salaries tothe five dismissed employees, including
Namuco and Manuel and pertinently reads as follows:
We modify the said Order, however, by eliminating the
payment of back salaries to private respondents until the
outcome of the disciplinary proceedings is known,
considering the gravity of the offense imputed to them in
connection with the irregularities in the canvass of supplies
and materials at the GSIS.
The reinstatement order shall apply only to respondents
Domingo Canero, Renato Navarro and Belen Guerrero, it

appearing that respondents Elizar Namuco and Eusebio

Manuel have since passed away. ....
On the other hand, as also already stated, the Commission's Order of
June 20, 1990 directed the GSIS "to pay the compulsory heirs of
deceased Elizar Namuco and Eusebio Manuel for the period from the
date of their illegal separation up to the date of their demise."
The Commission asserted that in promulgating its disparate ruling, it
was acting "in the interest of justice and for other humanitarian
reasons," since the question of whether or not Namuco and Manuel
should receive back salaries was "dependent on the result of the
disciplinary proceedings against their co-respondents in the
administrative case before the GSIS," and since at the tiem of their
death, "no formal charge ... (had) as yet been made, nor any finding
of their personal culpability ... and ... they are no longer in a position
to refute the charge."
The Court agrees that the challenged orders of the Civil Service
Commission should be upheld, and not merely upon compassionate
grounds, but simply because there is no fair and feasible alternative in
the circumstances. To be sure, if the deceased employees were still
alive, it would at least be arguable, positing the primacy of this Court's
final dispositions, that the issue of payment of their back salaries
should properly await the outcome of the disciplinary proceedings
referred to in the Second Division's Resolution of July 4, 1988.
Death, however, has already sealed that outcome, foreclosing the
initiation of disciplinary administrative proceedings, or the continuation
of any then pending, against the deceased employees. Whatever may
be said of the binding force of the Resolution of July 4, 1988 so far as,
to all intents and pursposes, it makes exoneration in the adminstrative
proceedings a condition precedent to payment of back salaries, it
cannot exact an impossible performance or decree a useless exercise.
Even in the case of crimes, the death of the offender exteinguishes
criminal liability, not only as to the personal, but also as to the
pecuniary, penalties if it occurs before final judgment. 20 In this context, the

subsequent disciplinary proceedings, even if not assailable on grounds of due process, would be an inutile, empty
procedure in so far as the deceased employees are concerned; they could not possibly be bound by any substatiation in
said proceedings of the original charges: irrigularities in the canvass of supplies and materials. The questioned order of the
Civil Service Commission merely recognized the impossibility of complying with the Resolution of July 4, 1988 and the legal
futility of attempting a post-mortem investigation of the character contemplated.

WHEREFORE, the petition is DISMISSED, without pronouncement as to

costs.
SO ORDERED.