SECOND DIVISION

LUCIA BARRAMEDA VDA. DE G.R. No. 176260

BALLESTEROS,

Petitioner,
Present:

CARPIO, J., Chairperson,

NACHURA,
- versus -
PERALTA,

ABAD, and

MENDOZA, JJ.
RURAL BANK OF CANAMAN INC.,
represented by its Liquidator, the
philippine deposit insurance
corporation,

Respondent.
Promulgated:

November 24, 2010

X -------------------------------------------------------------------------------------- X

DECISION

MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Civil
Procedure assailing the August 15, 2006 Decision1[1] of the Court of Appeals (CA) in
CA-G.R. No. 82711, modifying the decision of the Regional Trial Court of Iriga City,
Branch 36 (RTC-Iriga), in Civil Case No. IR-3128, by ordering the consolidation of the
said civil case with Special Proceeding Case No. M-5290 (liquidation case) before the
Regional Trial Court of Makati City, Branch 59 (RTC-Makati).

It appears from the records that on March 17, 2000, petitioner Lucia Barrameda Vda.
De Ballesteros (Lucia) filed a complaint for Annulment of Deed of Extrajudicial Partition,
Deed of Mortgage and Damages with prayer for Preliminary Injunction against her
children, Roy, Rito, Amy, Arabel, Rico, Abe, Ponce Rex and Adden, all surnamed
Ballesteros, and the Rural Bank of Canaman, Inc., Baao Branch (RBCI) before the
RTC-Iriga. The case was docketed as Civil Case No. IR-3128.

In her complaint, Lucia alleged that her deceased husband, Eugenio, left two (2)
parcels of land located in San Nicolas, Baao, Camarines Sur, each with an area of 357
square meters; that on March 6, 1995, without her knowledge and consent, her children
executed a deed of extrajudicial partition and waiver of the estate of her husband
wherein all the heirs, including Lucia, agreed to allot the two parcels to Rico Ballesteros
(Rico); that, still, without her knowledge and consent, Rico mortgaged Parcel B of the
estate in favor of RBCI which mortgage was being foreclosed for failure to settle the
loan secured by the lot; and that Lucia was occupying Parcel B and had no other place
to live. She prayed that the deed of extrajudicial partition and waiver, and the
subsequent mortgage in favor of RBCI be declared null and void having been executed
without her knowledge and consent. She also prayed for damages.

In its Answer, RBCI claimed that in 1979, Lucia sold one of the two parcels to
Rico which represented her share in the estate of her husband. The extrajudicial
partition, waiver and mortgage were all executed with the knowledge and consent of
Lucia although she was not able to sign the document. RBCI further claimed that Parcel
B had already been foreclosed way back in 1999 which fact was known to Lucia through
the auctioning notary public. Attorneys fees were pleaded as counterclaim.

The case was then set for pre-trial conference. During the pre-trial, RBCIs
counsel filed a motion to withdraw after being informed that Philippine Deposit
Insurance Corporation (PDIC) would handle the case as RBCI had already been closed
and placed under the receivership of the PDIC. Consequently, on February 4, 2002, the
lawyers of PDIC took over the case of RBCI.

On May 9, 2003, RBCI, through PDIC, filed a motion to dismiss on the ground
that the RTC-Iriga has no jurisdiction over the subject matter of the action. RBCI stated
that pursuant to Section 30, Republic Act No. 7653 (RA No. 7653), otherwise known as
the New Central Bank Act, the RTC-Makati, already constituted itself, per its Order
dated August 10, 2001, as the liquidation court to assist PDIC in undertaking the
liquidation of RBCI. Thus, the subject matter of Civil Case No. IR-3128 fell within the
exclusive jurisdiction of such liquidation court. Lucia opposed the motion.

On July 29, 2003, the RTC-Iriga issued an order2[2] granting the Motion to Dismiss, to
wit:

This resolves the Motion to Dismiss filed by the defendant Rural Bank of Canaman, Inc.,
premised on the ground that this court has no jurisdiction over the subject matter of the
action. This issue of jurisdiction was raised in view of the pronouncement of the
Supreme Court in Ong v. C.A. 253 SCRA 105 and in the case of Hernandez v. Rural
Bank of Lucena, Inc., G.R. No. L-29791 dated January 10, 1978, wherein it was held
that the liquidation court shall have jurisdiction to adjudicate all claims against the bank
whether they be against assets of the insolvent bank, for Specific Performance, Breach
of Contract, Damages or whatever.
It is in view of this jurisprudential pronouncement made by no less than the Supreme
Court, that this case is, as far as defendant Rural Bank of Canaman Inc., is concerned,
hereby ordered DISMISSED without prejudice on the part of the plaintiff to ventilate their
claim before the Liquidation Court now, RTC Branch 59, Makati City.

SO ORDERED.

Not in conformity, Lucia appealed the RTC ruling to the CA on the ground that
the RTC-Iriga erred in dismissing the case because it had jurisdiction over Civil Case
No. IR-3128 under the rule on adherence of jurisdiction.

On August 15, 2006, the CA rendered the questioned decision ordering the
consolidation of Civil Case No. IR-3128 and the liquidation case pending before RTC-
Makati. The appellate court ratiocinated thus:

The consolidation is desirable in order to prevent confusion, to avoid multiplicity

of suits and to save unnecessary cost and expense. Needless to add, this procedure is
well in accord with the principle that the rules of procedure shall be liberally construed in
order to promote their object and to assist the parties in obtaining just, speedy and
inexpensive determination of every action and proceeding (Vallacar Transit, Inc. v. Yap,
126 SCRA 500 [1983]; Suntay v. Aguiluz, 209 SCRA 500 [1992] citing Ramos v. Ebarle,
182 SCRA 245 [1990]). It would be more in keeping with the demands of equity if the
cases are simply ordered consolidated. Pursuant to Section 2, Rule 1, Revised Rules of
Court, the rules on consolidation should be liberally construed to achieve the object of
the parties in obtaining just, speedy and inexpensive determination of their cases (Allied
Banking Corporation v. Court of Appeals, 259 SCRA 371 [1996]).

The dispositive portion of the decision reads:

IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby MODIFIED, in
such a way that the dismissal of this case (Civil Case No. IR-3128) is set aside and in
lieu thereof another one is entered ordering the consolidation of said case with the
liquidation case docketed as Special Proceeding No. M-5290 before Branch 59 of the
Regional Trial Court of Makati City, entitled In Re: Assistance in the Judicial Liquidation
of Rural Bank of Canaman, Camarines Sur, Inc., Philippine Deposit Corporation,
Petitioner. No pronouncement as to cost.

SO ORDERED.3[3]

Lucia filed a motion for reconsideration4[4] but it was denied by the CA in its Resolution
dated December 14, 2006.5[5]

Hence, the present petition for review on certiorari anchored on the following

GROUNDS

(I)

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE REGIONAL TRIAL
COURT OF IRIGA CITY, BRANCH 36 IS VESTED WITH JURISDICTION TO
CONTINUE TRYING AND ULTIMATELY DECIDE CIVIL CASE NO. IR-3128.
(II)

THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN

ORDERING THE CONSOLIDATION OF CIVIL CASE NO. IR-3128 WITH THE
LIQUIDATION CASE DOCKETED AS SPECIAL PROCEEDINGS NO. M-5290
BEFORE BRANCH 59 OF THE REGIONAL TRIAL COURT OF MAKATI CITY.6[6]

Given the foregoing arguments, the Court finds that the core issue to be resolved
in this petition involves a determination of whether a liquidation court can take
cognizance of a case wherein the main cause of action is not a simple money claim
against a bank ordered closed, placed under receivership of the PDIC, and undergoing
a liquidation proceeding.

Lucia contends that the RTC-Iriga is vested with jurisdiction over Civil Case No. 3128,
the constitution of the liquidation court notwithstanding. According to her, the case was
filed before the RTC-Iriga on March 17, 2000 at the time RBCI was still doing business
or before the defendant bank was placed under receivership of PDIC in January 2001.

She further argues that the consolidation of the two cases is improper. Her case, which
is for annulment of deed of partition and waiver, deed of mortgage and damages,
cannot be legally brought before the RTC-Makati with the liquidation case considering
that her cause of action against RBCI is not a simple claim arising out of a creditor-
debtor relationship, but one which involves her rights and interest over a certain
property irregularly acquired by RBCI. Neither is she a creditor of the bank, as only the
creditors of the insolvent bank are allowed to file and ventilate claims before the
liquidator, pursuant to the August 10, 2001 Order of the RTC-Makati which granted the
petition for assistance in the liquidation of RBCI.
In its Comment,7[7] PDIC, as liquidator of RBCI, counters that the consolidation of Civil
Case No. 3128 with the liquidation proceeding is proper. It posits that the liquidation
court of RBCI, having been established, shall have exclusive jurisdiction over all claims
against the said bank.

After due consideration, the Court finds the petition devoid of merit.

Lucias argument, that the RTC-Iriga is vested with jurisdiction to continue trying Civil
Case No. IR-3128 until its final disposition, evidently falls out from a strained
interpretation of the law and jurisprudence. She contends that:

Since the RTC-Iriga has already obtained jurisdiction over the case it should continue
exercising such jurisdiction until the final termination of the case. The jurisdiction of a
court once attached cannot be ousted by subsequent happenings or events, although of
a character which would have prevented jurisdiction from attaching in the first instance,
and the Court retains jurisdiction until it finally disposes of the case (Aruego Jr. v. Court
of Appeals, 254 SCRA 711).

When a court has already obtained and is exercising jurisdiction over a controversy, its
jurisdiction to proceed to final determination of the case is not affected by a new
legislation transferring jurisdiction over such proceedings to another tribunal. (Alindao v.
Joson, 264 SCRA 211). Once jurisdiction is vested, the same is retained up to the end
of the litigation (Bernate v. Court of Appeals, 263 SCRA 323).8[8]
The afore-quoted cases, cited by Lucia to bolster the plea for the continuance of her
case, find no application in the case at bench.

Indeed, the Court recognizes the doctrine on adherence of jurisdiction. Lucia, however,
must be reminded that such principle is not without exceptions. It is well to quote the
ruling of the CA on this matter, thus:

This Court is not unmindful nor unaware of the doctrine on the adherence of jurisdiction.
However, the rule on adherence of jurisdiction is not absolute and has exceptions. One
of the exceptions is that when the change in jurisdiction is curative in character (Garcia
v. Martinez, 90 SCRA 331 [1979]; Calderon, Sr. v. Court of Appeals, 100 SCRA 459
[1980]; Atlas Fertilizer Corporation v. Navarro, 149 SCRA 432 [1987]; Abad v. RTC of
Manila, Br. Lll, 154 SCRA 664 [1987]).

For sure, Section 30, R.A. 7653 is curative in character when it declared that the
liquidation court shall have jurisdiction in the same proceedings to assist in the
adjudication of the disputed claims against the Bank. The interpretation of this Section
(formerly Section 29, R.A. 265) becomes more obvious in the light of its intent. In
Manalo v. Court of Appeals (366 SCRA 752, [2001]), the Supreme Court says:

xxx The requirement that all claims against the bank be pursued in the liquidation
proceedings filed by the Central Bank is intended to prevent multiplicity of actions
against the insolvent bank and designed to establish due process and orderliness in the
liquidation of the bank, to obviate the proliferation of litigations and to avoid injustice and
arbitrariness (citing Ong v. CA, 253 SCRA 105 [1996]). The lawmaking body
contemplated that for convenience, only one court, if possible, should pass upon the
claims against the insolvent bank and that the liquidation court should assist the
Superintendents of Banks and regulate his operations (citing Central Bank of the
Philippines, et al. v. CA, et al., 163 SCRA 482 [1988]).9[9]

As regards Lucias contention that jurisdiction already attached when Civil Case
No. IR-3128 was filed with, and jurisdiction obtained by, the RTC-Iriga prior to the filing
of the liquidation case before the RTC-Makati, her stance fails to persuade this Court. In
refuting this assertion, respondent PDIC cited the case of Lipana v. Development Bank
of Rizal10[10] where it was held that the time of the filing of the complaint is immaterial,
viz:

It is the contention of petitioners, however, that the placing under receivership of

Respondent Bank long after the filing of the complaint removed it from the doctrine in
the said Morfe Case.

This contention is untenable. The time of the filing of the complaint is immaterial. It is
the execution that will obviously prejudice the other depositors and creditors. Moreover,
as stated in the said Morfe case, the effect of the judgment is only to fix the amount of
the debt, and not to give priority over other depositors and creditors.

The cited Morfe case11[11] held that after the Monetary Board has declared that a bank
is insolvent and has ordered it to cease operations, the Board becomes the trustee of its
assets for the equal benefit of all the creditors, including depositors. The assets of the
insolvent banking institution are held in trust for the equal benefit of all creditors, and
after its insolvency, one cannot obtain an advantage or a preference over another by an
attachment, execution or otherwise.

Thus, to allow Lucias case to proceed independently of the liquidation case, a possibility
of favorable judgment and execution thereof against the assets of RBCI would not only
prejudice the other creditors and depositors but would defeat the very purpose for which
a liquidation court was constituted as well.
Anent the second issue, Lucia faults the CA in directing the consolidation of Civil Case
No. IR-3128 with Special Proceedings No. M-5290. The CA committed no error. Lucias
complaint involving annulment of deed of mortgage and damages falls within the
purview of a disputed claim in contemplation of Section 30 of R.A. 7653 (The New
Central Bank Act). The jurisdiction should be lodged with the liquidation court. Section
30 provides:

Sec. 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the
head of the supervising or examining department, the Monetary Board finds that a bank
or quasi-bank:

(a) is unable to pay its liabilities as they become due in the ordinary course of
business: Provided, That this shall not include inability to pay caused by extraordinary
demands induced by financial panic in the banking community;

(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet
its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or
creditors; or

(d) has wilfully violated a cease and desist order under Section 37 that has become
final, involving acts or transactions which amount to fraud or a dissipation of the assets
of the institution; in which cases, the Monetary Board may summarily and without need
for prior hearing forbid the institution from doing business in the Philippines and
designate the Philippine Deposit Insurance Corporation as receiver of the banking
institution.

For a quasi-bank, any person of recognized competence in banking or finance may be

designated as receiver.

The receiver shall immediately gather and take charge of all the assets and liabilities of
the institution, administer the same for the benefit of its creditors, and exercise the
general powers of a receiver under the Revised Rules of Court but shall not, with the
exception of administrative expenditures, pay or commit any act that will involve the
transfer or disposition of any asset of the institution: Provided, That the receiver may
deposit or place the funds of the institution in non-speculative investments. The receiver
shall determine as soon as possible, but not later than ninety (90) days from take over,
whether the institution may be rehabilitated or otherwise placed in such a condition that
it may be permitted to resume business with safety to its depositors and creditors and
the general public: Provided, That any determination for the resumption of business of
the institution shall be subject to prior approval of the Monetary Board.
If the receiver determines that the institution cannot be rehabilitated or permitted to
resume business in accordance with the next preceding paragraph, the Monetary Board
shall notify in writing the board of directors of its findings and direct the receiver to
proceed with the liquidation of the institution. The receiver shall:

(1) file ex parte with the proper regional trial court, and without requirement of prior
notice or any other action, a petition for assistance in the liquidation of the institution
pursuant to a liquidation plan adopted by the Philippine Deposit Insurance Corporation
for general application to all closed banks. In case of quasi-banks, the liquidation plan
shall be adopted by the Monetary Board. Upon acquiring jurisdiction, the court shall,
upon motion by the receiver after due notice, adjudicate disputed claims against the
institution, assist the enforcement of individual liabilities of the stockholders, directors
and officers, and decide on other issues as may be material to implement the liquidation
plan adopted. The receiver shall pay the cost of the proceedings from the assets of the
institution.

(2) convert the assets of the institution to money, dispose of the same to creditors
and other parties, for the purpose of paying the debts of such institution in accordance
with the rules on concurrence and preference of credit under the Civil Code of the
Philippines and he may, in the name of the institution, and with the assistance of
counsel as he may retain, institute such actions as may be necessary to collect and
recover accounts and assets of, or defend any action against, the institution. The assets
of an institution under receivership or liquidation shall be deemed in custodia legis in the
hands of the receiver and shall, from the moment the institution was placed under such
receivership or liquidation, be exempt from any order of garnishment, levy, attachment,
or execution. [Emphasis supplied]

xxx

Disputed claims refers to all claims, whether they be against the assets of the insolvent
bank, for specific performance, breach of contract, damages, or whatever.12[12] Lucias
action being a claim against RBCI can properly be consolidated with the liquidation
proceedings before the RTC-Makati. A liquidation proceeding has been explained in the
case of In Re: Petition For Assistance in the Liquidation of the Rural Bank of BOKOD
(Benguet), Inc. v. Bureau of Internal Revenue13[13] as follows:
A liquidation proceeding is a single proceeding which consists of a number of cases
properly classified as "claims." It is basically a two-phased proceeding. The first phase
is concerned with the approval and disapproval of claims. Upon the approval of the
petition seeking the assistance of the proper court in the liquidation of a closed entity, all
money claims against the bank are required to be filed with the liquidation court. This
phase may end with the declaration by the liquidation court that the claim is not proper
or without basis. On the other hand, it may also end with the liquidation court allowing
the claim. In the latter case, the claim shall be classified whether it is ordinary or
preferred, and thereafter included Liquidator. In either case, the order allowing or
disallowing a particular claim is final order, and may be appealed by the party aggrieved
thereby.

The second phase involves the approval by the Court of the distribution plan prepared
by the duly appointed liquidator. The distribution plan specifies in detail the total amount
available for distribution to creditors whose claim were earlier allowed. The Order finally
disposes of the issue of how much property is available for disposal. Moreover, it ushers
in the final phase of the liquidation proceeding - payment of all allowed claims in
accordance with the order of legal priority and the approved distribution plan.

xxx

A liquidation proceeding is commenced by the filing of a single petition by the Solicitor

General with a court of competent jurisdiction entitled, "Petition for Assistance in the
Liquidation of e.g., Pacific Banking Corporation. All claims against the insolvent are
required to be filed with the liquidation court. Although the claims are litigated in the
same proceeding, the treatment is individual. Each claim is heard separately. And the
Order issued relative to a particular claim applies only to said claim, leaving the other
claims unaffected, as each claim is considered separate and distinct from the others. x x
x [Emphasis supplied.]
It is clear, therefore, that the liquidation court has jurisdiction over all claims, including
that of Lucia against the insolvent bank. As declared in Miranda v. Philippine Deposit
Insurance Corporation,14[14] regular courts do not have jurisdiction over actions filed by
claimants against an insolvent bank, unless there is a clear showing that the action
taken by the BSP, through the Monetary Board, in the closure of financial institutions
was in excess of jurisdiction, or with grave abuse of discretion. The same is not
obtaining in this present case.

The power and authority of the Monetary Board to close banks and liquidate them
thereafter when public interest so requires is an exercise of the police power of the
State. Police power, however, is subject to judicial inquiry. It may not be exercised
arbitrarily or unreasonably and could be set aside if it is either capricious, discriminatory,
whimsical, arbitrary, unjust, or is tantamount to a denial of due process and equal
protection clauses of the Constitution.15[15]

In sum, this Court holds that the consolidation is proper considering that the liquidation
court has jurisdiction over Lucias action. It would be more in keeping with law and equity
if Lucias case is consolidated with the liquidation case in order to expeditiously
determine whether she is entitled to recover the property subject of mortgage from
RBCI and, if so, how much she is entitled to receive from the remaining assets of the
bank.

WHEREFORE, the petition is DENIED.

SO ORDERED.
 JOSE CATRAL MENDOZA Associate
Justice

2.

LOUIS 'BAROK' C. BIRAOGO v. PHILIPPINE TRUTH COMMISSION OF 2010, GR No.

192935, 2010-12-07

Facts:

For consideration before the Court are two consolidated cases[5] both of which essentially assail
the validity and constitutionality of Executive Order No. 1, dated July 30, 2010, entitled
"Creating the Philippine Truth Commission of 2010.

The genesis of the foregoing cases can be traced to the events prior to the historic May 2010
elections, when then Senator Benigno Simeon Aquino III declared his staunch condemnation of
graft and corruption with his slogan, "Kung walang corrupt, walang mahirap." The

Filipino people, convinced of his sincerity and of his ability to carry out this noble objective,
catapulted the good senator to the presidency.

To transform his campaign slogan into reality, President Aquino found a need for a special body
to investigate reported cases of graft and corruption allegedly committed during the previous
administration.

In particular, it shall:... a) Identify and determine the reported cases of such graft and corruption
which it will investigate;... b) Collect, receive, review and evaluate evidence related to or
regarding the cases of large scale corruption which it has chosen to investigate, and to this end
require any agency, official or employee of the Executive Branch, including government-owned
or controlled... corporations, to produce documents, books, records and other papers;... c) Upon
proper request or representation, obtain information and documents from the Senate and the
House of Representatives records of investigations conducted by committees thereof relating to
matters or subjects being investigated by the Commission;
Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is
a mere ad hoc body formed under the Office of the President with the primary task to investigate
reports of graft and corruption committed by third-level public officers... and employees, their
co-principals, accomplices and accessories during the previous administration, and thereafter to
submit its finding and recommendations to the President, Congress and the Ombudsman.

To accomplish its task, the PTC shall have all the powers of an investigative body under Section
37, Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a quasi-judicial
body as it cannot adjudicate, arbitrate, resolve, settle, or render awards in... disputes between
contending parties.

All it can do is gather, collect and assess evidence of graft and corruption and make
recommendations. It may have subpoena powers but it has no power to cite people in contempt,
much less order their arrest. Although it is... a fact-finding body, it cannot determine from such
facts if probable cause exists as to warrant the filing of an information in our courts of law.
Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions.

Truth commissions have been described as bodies that share the following characteristics: (1)
they examine only past events; (2) they investigate patterns of abuse committed over a period of
time, as opposed to a particular event; (3) they are temporary bodies that finish their... work with
the submission of a report containing conclusions and recommendations; and (4) they are
officially sanctioned, authorized or empowered by the State

The Thrusts of the Petitions

Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to
declare it unconstitutional and to enjoin the PTC from performing its functions.

(a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to
create a public office and appropriate funds for its operation.

(c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the "Truth
Commission" with quasi-judicial powers duplicating, if not superseding, those of the Office of
the Ombudsman created under the 1987 Constitution and the Department of Justice... created
under the Administrative Code of 1987.

Issues:

1. Whether or not the petitioners have the legal standing to file their respective petitions and
question Executive Order No. 1;
2. Whether or not Executive Order No. 1 violates the principle of separation of powers by
usurping the powers of Congress to create and to appropriate funds for public offices,
agencies and commissions;
 3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the
DOJ;
4. Whether or not Executive Order No. 1 violates the equal protection clause; and
5. Whether or not petitioners are entitled to injunctive relief.

main contention of the petitioners on the validity of the truth

commission

In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public
office and not merely an adjunct body of the Office of the President.[31] Thus, in order that the
President may create a public office he must be empowered by the

Constitution, a statute or an authorization vested in him by law. According to petitioner, such

power cannot be presumed[32] since there is no provision in the Constitution or any specific law
that authorizes the President to create a truth... commission.[33] He adds that Section 31 of the
Administrative Code of 1987, granting the President the continuing authority to reorganize his
office, cannot serve as basis for the creation of a truth commission considering the aforesaid
provision merely... uses verbs such as "reorganize," "transfer," "consolidate," "merge," and
"abolish."[34] Insofar as it vests in the President the plenary power to reorganize the Office of
the President to the extent of creating a public office, Section 31 is inconsistent... with the
principle of separation of powers enshrined in the Constitution and must be deemed repealed
upon the effectivity thereof.

Does the creation of the PTC fall within the ambit of the power to reorganize as expressed in
Section 31 of the Revised Administrative Code? Section 31 contemplates "reorganization" as
limited by the following functional... and structural lines: (1) restructuring the internal
organization of the Office of the President Proper by abolishing, consolidating or merging units
thereof or transferring functions from one unit to another; (2) transferring any function under the
Office of the President to... any other Department/Agency or vice versa; or (3) transferring any
agency under the Office of the President to any other Department/Agency or vice versa.

Ruling:

Power of the President to Create the Truth Commission

Clearly, the provision refers to reduction of personnel, consolidation of offices, or abolition

thereof by reason of... economy or redundancy of functions. These point to situations where a
body or an office is already existent but a modification or alteration thereof has to be effected.
The creation of an office is nowhere mentioned, much less envisioned in said provision.
Accordingly, the... answer to the question is in the negative.

To say that the PTC is borne out of a restructuring of the Office of the President under Section
31 is a misplaced supposition, even in the plainest meaning attributable to the term "restructure"-
an "alteration of an existing structure." Evidently, the PTC was not part of... the structure of the
Office of the President prior to the enactment of Executive Order No. 1
In the same vein, the creation of the PTC is not justified by the President's power of control.
Control is essentially the power to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to substitute the judgment of the... former
with that of the latter

Clearly, the power of control is entirely different from the power to create public offices. The
former is inherent in the Executive, while the latter finds basis from either a valid delegation
from Congress, or his... inherent duty to faithfully execute the laws.

The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to
create a public office. Said decree is already stale, anachronistic and inoperable. P.D. No. 1416
was a delegation to then President Marcos of the authority to reorganize the... administrative
structure of the national government including the power to create offices and transfer
appropriations pursuant to one of the purposes of the decree, embodied in its last "Whereas"
clause:

WHEREAS, the transition towards the parliamentary form of government will necessitate
flexibility in the organization of the national government.

Clearly, as it was only for the purpose of providing manageability and resiliency during the
interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficio upon the
convening of the First Congress, as expressly provided in Section 6, Article XVIII of the 1987

Constitution.

While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416
as amended by P.D. No. 1772, the creation of the PTC finds justification under Section 17,
Article VII of the Constitution, imposing upon the President the duty to ensure that the laws... are
faithfully executed. Section 17 reads:

Section 17. The President shall have control of all the executive departments, bureaus, and
offices. He shall ensure that the laws be faithfully executed.

As correctly pointed out by the respondents, the allocation of power in the three principal
branches of government is a grant of all powers inherent in them. The President's power to
conduct investigations to aid him in ensuring the faithful execution of laws - in this case,...
fundamental laws on public accountability and transparency - is inherent in the President's
powers as the Chief Executive. That the authority of the President to conduct investigations and
to create bodies to execute this power is not explicitly mentioned in the Constitution or... in
statutes does not mean that he is bereft of such authority.[

It would not be accurate, however, to state that "executive power" is the power to enforce the
laws, for the President is head of state as well as head of government and whatever powers
inhere in such positions pertain to the office unless the Constitution itself withholds... it.
Furthermore, the Constitution itself provides that the execution of the laws is only one of the
powers of the President. It also grants the President other powers that do not involve the
execution of any provision of law, e.g., his power over the country's... foreign relations

On these premises, we hold the view that although the 1987 Constitution imposes limitations on
the exercise of specific powers of the President, it maintains intact what is traditionally
considered as within the scope of "executive power." Corollarily, the powers of... the President
cannot be said to be limited only to the specific powers enumerated in the Constitution. In other
words, executive power is more than the sum of specific powers so enumerated.

Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As
stated above, the powers of the President are not limited to those specific powers under the
Constitution.

The Chief Executive's power to create the Ad hoc Investigating Committee cannot be doubted.
Having been constitutionally granted full control of the Executive Department, to which
respondents belong, the President has the obligation to ensure that... all executive officials and
employees faithfully comply with the law. With AO 298 as mandate, the legality of the
investigation is sustained. Such validity is not affected by the fact that the investigating team
and the PCAGC had the same composition, or that the... former used the offices and facilities of
the latter in conducting the inquiry. [Emphasis supplied]

Power of the Truth Commission to Investigate

The President's power to conduct investigations to ensure that laws are faithfully executed is well
recognized. It flows from the faithful-execution clause of the Constitution under Article VII,
Section 17 thereof.[56] As the Chief

Executive, the president represents the government as a whole and sees to it that all laws are
enforced by the officials and employees of his department. He has the authority to directly
assume the functions of the executive department.

Invoking this authority, the President constituted the PTC to primarily investigate reports of graft
and corruption and to recommend the appropriate action. As previously stated, no quasi-judicial
powers have been vested in the said body as it cannot adjudicate rights of... persons who come
before it.

It has been said that "Quasi-judicial powers involve the power to hear and determine questions of
fact to which the legislative policy is to apply and to decide in accordance with the standards laid
down by law itself in enforcing and administering... the same law."

Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of
justice, or even a quasi-judicial agency or office. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial function. To be... considered as
such, the act of receiving evidence and arriving at factual conclusions in a controversy must be
accompanied by the authority of applying the law to the factual conclusions to the end that the
controversy may be decided or resolved authoritatively, finally and... definitively, subject to
appeals or modes of review as may be provided by law.[60] Even respondents themselves admit
that the commission is bereft of any quasi-judicial power.[61]

The... function of determining probable cause for the filing of the appropriate complaints before
the courts remains to be with the DOJ and the Ombudsman

At any rate, the Ombudsman's power to investigate under R.A. No. 6770 is not exclusive but is
shared with other similarly authorized government agencies.

This power of investigation granted to the Ombudsman by the 1987 Constitution and The
Ombudsman Act is not exclusive but is shared with other similarly authorized government
agencies such as the PCGG and judges of municipal trial courts and municipal circuit... trial
courts.

The power to conduct preliminary investigation on charges against public employees and
officials is likewise concurrently shared with the Department of Justice. Despite the passage of
the Local Government Code in 1991, the Ombudsman retains concurrent... jurisdiction with the
Office of the President and the local Sanggunians to investigate complaints against local elective
officials. [

The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a
preliminary investigation or the determination of the existence of probable cause. This is
categorically out of the PTC's sphere of functions. Its power to investigate is... limited to
obtaining facts so that it can advise and guide the President in the performance of his duties
relative to the execution and enforcement of the laws of the land. In this regard, the PTC
commits no act of usurpation of the Ombudsman's primordial duties.

Violation of the Equal Protection Clause

Although the purpose of the Truth Commission falls within the investigative power of the
President, the Court finds difficulty in upholding the constitutionality of Executive Order No. 1
in view of its apparent transgression of the equal protection clause enshrined in Section 1,...
Article III (Bill of Rights) of the 1987 Constitution.

Section 1. No person shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws.

Applying these precepts to this case, Executive Order No. 1 should be struck down as violative
of the equal protection clause. The clear mandate of the envisioned truth commission is to
investigate and find out the truth "concerning the reported cases of graft and... corruption during
the previous administration"[87] only. The intent to single out the previous administration is
plain, patent and manifest.

In this regard, it must be borne in mind that the Arroyo administration is but just a member of a
class, that is, a class of past administrations. It is not a class of its own. Not to include past
administrations similarly situated constitutes arbitrariness which the equal... protection clause
cannot sanction. Such discriminating differentiation clearly reverberates to label the commission
as a vehicle for vindictiveness and selective retribution.

It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The
Court, however, is of the considered view that although its focus is restricted, the constitutional
guarantee of equal protection under the laws should not in any way be... circumvented.

The Court is not convinced. Although Section 17 allows the President the discretion to expand
the scope of investigations of the PTC so as to include the acts of graft and corruption committed
in other past administrations, it does not guarantee that they would be covered... in the future.
Such expanded mandate of the commission will still depend on the whim and caprice of the
President. If he would decide not to include them, the section would then be meaningless. This
will only fortify the fears of the petitioners that the Executive

Order No. 1 was "crafted to tailor-fit the prosecution of officials and personalities of the Arroyo
administration."[

The president has the authority to create the committee, however

EO1 must be struck down for being unconstitutional because it
violates the equal protection clause of the consti

WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared
UNCONSTITUTIONAL insofar as it is violative of the equal protection clause of the
Constitution.

3.

EDUARDO M. COJUANGCO, JR. v. REPUBLIC OF THE PHILIPPINES

G.R. No. 180705, November 27, 2012, Velasco, Jr., J.

It is well-settled that laws must be published to be valid. In fact, publication is an

indispensable condition for the effectivity of a law.
Facts:
R.A. 6260 was enacted creating the Coconut Investment Company (CIC) to administer the
Coconut Investment Fund (CIF), which, under Section 8 thereof, was to be sourced from a
P0.55 levy on the sale of every 100 kg. of copra. Charged with the duty of collecting and
administering the Fund was Philippine Coconut Administration (PCA). Like COCOFED with
which it had a legal linkage, the PCA, by statutory provisions scattered in different coco levy
decrees, had its share of the coco levy. Per Cojuangco’s own admission, PCA paid, out of the
Coconut Consumers Stabilization Fund (CCSF), the entire acquisition price for the 72.2%
option shares. The list of First United Bank (FUB) stockholders included Cojuangco with
14,440 shares and PCA with 129,955 shares. It would appear later that, pursuant to the
stipulation on maintaining Cojuangco’s equity position in the bank, PCA would cede to him
10% of its subscriptions to (a) the authorized but unissued shares of FUB and (b) the
increase in FUB’s capital stock. In all, from the "mother" PCA shares, Cojuangco would
receive a total of 95,304 FUB (UCPB) shares broken down as follows: 14,440 shares + 10%
(158,840 shares) + 10% (649,800 shares) = 95,304.
Issue:
Whether or not the agreement between PCA and Cojuangco can be accorded the status of a
law without publication.
Ruling:
NO. It bears to stress at this point that the PCA-Cojuangco Agreement referred to above in
Section 1 of P.D. 755 was not reproduced or attached as an annex to the same law. It is
well-settled that laws must be published to be valid. In fact, publication is an indispensable
condition for the effectivity of a law. Tañada v. Tuvera (G.R. No. L-63915, 1986) said as
much: Publication of the law is indispensable in every case x x x. Laws must come out in the
open in the clear light of the sun instead of skulking in the shadows with their dark, deep
secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding
unless their existence and contents are confirmed by a valid publication intended to make
full disclosure and give proper notice to the people. The furtive law is like a scabbarded
saber that cannot feint, parry or cut unless the naked blade is drawn. The publication must
be of the full text of the law since the purpose of publication is to inform the public of the
contents of the law. Mere referencing the number of the presidential decree, its title or
whereabouts and its supposed date of effectivity would not satisfy the publication
requirement.
In this case, while it incorporated the PCA-Cojuangco Agreement by reference, Section 1 of P.D.
755 did not in any way reproduce the exact terms of the contract in the decree. Neither was a
copy thereof attached to the decree when published. The SC cannot, therefore, extend to the
said Agreement the status of a law. Consequently, the Court joined the Sandiganbayan in its
holding that the PCA-Cojuangco Agreement shall be treated as an ordinary transaction between
agreeing minds to be governed by contract law under the Civil Code.

4.

Gr 187231

DECISION

BERSAMIN, J.:
 Petitioner Minerva Gomez-Castillo (Castillo) hereby seeks to nullify the orders dated January 30,
2009 and March 11, 200916[1] issued in EAC No. A-01-2009 by the Commission on Elections (COMELEC).

Antecedents

Castillo and respondent Strike P. Revilla ran for Municipal Mayor of Bacoor, Cavite during the
May 14, 2007 local elections. After the Municipal Board of Canvassers proclaimed Revilla as the elected
Municipal Mayor of Bacoor, Cavite, Castillo filed an Election Protest Ad Cautelam17[2] in the Regional
Trial Court (RTC) in Bacoor, Cavite, which was eventually raffled to Branch 19.

Through his Answer, Revilla sought the dismissal of the election protest, alleging that it was filed
in the wrong Branch of the RTC. He pointed out that Supreme Court Administrative Order (SCAO) No.
54-2007 designated Branch 22 of the RTC in Imus, Cavite and Branch 88 of the RTC in Cavite City to hear,
try and decide election contests involving municipal officials in Cavite; and that contrary to SCAO No. 54-
2007, Castillo filed his protest in the RTC in Bacoor, Cavite, which was not the proper court.

On November 21, 2008, Branch 19 dismissed Castillos election protest for being violative of
SCAO No. 54-2007.

On December 23, 2008, Castillo presented a notice of appeal.18[3] Thereupon, the RTC ordered
that the complete records of the protest be forwarded to the Election Contests Adjudication
Department (ECAD) of the COMELEC.19[4]
The First Division of the COMELEC dismissed the appeal for being brought beyond the five-day
reglementary period, noting that although Castillo had received the November 21, 2008 order of the
RTC on December 15 , 2008, she filed her notice of appeal on December 23, 2008, a day too late to
appeal, to wit:

Pursuant to Section 3, Rule 22 of the COMELEC Rules of Procedure which requires the appellant
to file her notice of appeal within five (5) days after promulgation of the decision of the court xxx and
considering further that jurisprudence holds that perfection of an appeal in the manner and within the
period laid down by law is not only mandatory but JURISDICTIONAL, this Commission, First Division,
RESOLVES to DISMISS the instant appeal for appellant's failure to file her Notice of Appeal within the five
(5) day reglementary period.

SO ORDERED.20[5]

Castillo moved for the reconsideration of the dismissal of her appeal, but the COMELEC denied the
motion because she did not pay the motion fees required under Sec. 7(f), Rule 40 of the COMELEC Rules
of Procedure, as amended by COMELEC Resolution No. 02-0130, viz:

The Motion for Reconsideration filed by protestant-appellant Minerva G. Castillo, thru

registered mail on 13 February 2009 and received by this Commission on 4 March 2009, seeking
reconsideration of the Commission's (First Division) Order dated 30 January 2009, is hereby DENIED for
failure of the movant to pay the necessary motion fees under Sec. 7(f), Rule 40 of the Comelec Rules of
Procedure21[6] as amended by Comelec Resolution no. 02-0130.22[7]
Castillo has brought the present recourse, contending that the COMELECs orders dismissing her appeal
and denying her motion for reconsideration were issued with grave abuse of discretion amounting to
lack or excess of jurisdiction.

Parties Arguments

Castillo insists that her notice of appeal was seasonably filed; otherwise, the RTC would not have
given due course to his appeal; that Section 3, Rule 22 of the COMELEC Rules of Procedure, cited in the
assailed order dated January 30, 2009, did not apply to her case, because Section 2 of Rule I of the
COMELEC Rules of Procedure provides that:

Sec. 2. Applicability.- These rules, except Part VI, shall apply to all actions and proceedings
brought before the Commission. Part VI shall apply to election contests and Quo Warranto cases
cognizable by courts of general jurisdiction.

that the COMELEC Rules of Procedure applied only to actions and proceedings brought before the
COMELEC, not to actions or proceedings originating in courts of general jurisdiction; that even assuming
that the appeal was belatedly filed, the rules on election contests should be liberally construed to the
end that mere technical objections would not defeat the will of the people in the choice of public
officers; that the Court relaxed on numerous occasions the application of the rules in order to give due
course to belated appeals upon strong and compelling reasons; that an electoral contest like hers was
imbued with public interest, because it involved the paramount need to clarify the real choice of the
electorate; that Section 4 of Rule I of the COMELEC Rules of Procedure even allows the COMELEC to
suspend its own rules of procedure in order to obtain a speedy disposition of all matters pending before
the COMELEC; and that the COMELEC should not have dismissed her motion for reconsideration for her
mere failure to pay the corresponding filing fee, but should have considered the soundness of her
argument to the effect that SCAO No. 54-2007 continued to vest jurisdiction to try and decide election
contest involving elective municipal officials in the RTC as a whole, rendering the designation of the RTC
branches to handle election protests akin to a designation of venue.

Castillo further insists that Section 12 of Rule 2 of the COMELEC Rules of Procedure provides
that assignment of cases to the specially designated courts should be done exclusively by raffle
conducted by the executive judge or by the judges designated by the Supreme Court; and that her
protest was thus duly raffled to the RTC in Bacoor, Cavite, considering that SCAO 54-2007 should be
construed as a permissive rule that cannot supersede the general rule that jurisdiction over election
contests is vested in the RTC.

In his comment,23[8] Revilla submits that the COMELEC correctly dismissed Castillos appeal for
being filed beyond the five-day reglementary period prescribed in Section 3 of Rule 22 of the COMELEC
Rules of Procedure, thus:

Section 3. Notice of Appeal. - Within five (5) days after promulgation of the decision of the
court, the aggrieved party may filed with said court a notice of appeal, and serve a copy thereof upon
the attorney of record of the adverse party.

that A.M. No. 07-4-15-SC, otherwise known as The Rules of Procedure in Election Contests Involving
Elective Municipal and Barangay Officials, clearly and categorically directed:

Section 8. Appeal. - An aggrieved party may appeal the decision to the commission on Elections,
within five days after promulgation, by filing a notice of appeal with the court that rendered the
decision, with copy served on the adverse counsel or party if not represented by counsel.

that the period for filing an appeal is not a mere technicality of law or procedure and the right to appeal
is merely a statutory privilege that may be exercised only in the manner prescribed by the law; that the
notice of appeal, even on the assumption that it was filed on time, still remained futile due to the
petitioners failure to pay the corresponding fee for the motion for reconsideration; that the failure to
pay the filing fee rendered the motion for reconsideration a mere scrap of paper, because it prevented
the COMELEC from acquiring jurisdiction over the protest; and that the COMELEC could not be faulted
for applying its procedural rules to achieve a just and expeditious determination of every proceeding
brought before it.
Issues

Does Section 13 of Rule 2 of A.M. No. 07-4-15-SC designate the RTC Branch that has jurisdiction
over an election contest, or does it merely designate the proper venue for filing?

In case the RTC was incorrect, is the error enough to warrant the reversal of its order of dismissal
despite its having attained finality?

Ruling

The petition has no merit.

Error of Petitioner in filing the protest in

RTC in Bacoor, not jurisdictional

It is well-settled that jurisdiction is conferred by law. As such, jurisdiction cannot be fixed by the
will of the parties; nor be acquired through waiver nor enlarged by the omission of the parties; nor
conferred by any acquiescence of the court. The allocation of jurisdiction is vested in Congress, and
cannot be delegated to another office or agency of the Government.

The Rules of Court does not define jurisdictional boundaries of the courts. In promulgating the Rules of
Court, the Supreme Court is circumscribed by the zone properly denominated as the promulgation of
rules concerning pleading, practice, and procedure in all courts;24[9] consequently, the Rules of Court
can only determine the means, ways or manner in which said jurisdiction, as fixed by the Constitution
and acts of Congress, shall be exercised. The Rules of Court yields to the substantive law in determining
jurisdiction.25[10]

The jurisdiction over election contests involving elective municipal officials has been vested in
the RTC by Section 251, Batas Pambansa Blg. 881 (Omnibus Election Code).26[11] On the other hand,
A.M. No. 07-4-15-SC, by specifying the proper venue where such cases may be filed and heard, only
spelled out the manner by which an RTC with jurisdiction exercises such jurisdiction. Like other rules on
venue, A.M. No. 07-4-15-SC was designed to ensure a just and orderly administration of justice,27[12]
and is permissive, because it was enacted to ensure the exclusive and speedy disposition of election
protests and petitions for quo warranto involving elective municipal officials.28[13]

Castillos filing her protest in the RTC in Bacoor, Cavite amounted only to a wrong choice of
venue. Hence, the dismissal of the protest by Branch 19 constituted plain error, considering that her
wrong choice did not affect the jurisdiction of the RTC. What Branch 19 should have done under the
circumstances was to transfer the protest to Branch 22 of the RTC in Imus, Cavite, which was the proper
venue. Such transfer was proper, whether she as the protestant sought it or not, given that the
determination of the will of the electorate of Bacoor, Cavite according to the process set forth by law
was of the highest concern of our institutions, particularly of the courts.

Castillos tardy appeal should be dismissed

 Section 8 of A.M. No. 07-4-15-SC provides that:

Section 8. Appeal. - An aggrieved party may appeal the decision to the Commission on Elections within
five days after promulgation by filing a notice of appeal with the court that rendered the decision with
copy served on the adverse counsel or party if not represented by counsel.

Although Castillo had received the November 21, 2008 order of the RTC on December 15, 2008,
she filed her notice of appeal only on December 23, 2008, or eight days after her receipt of the decision.
Her appeal was properly dismissed for being too late under the aforequoted rule of the COMELEC.

Castillo now insists that her appeal should not be dismissed, because she claims that the five-day
reglementary period was a mere technicality, implying that such period was but a trivial guideline to be
ignored or brushed aside at will.

Castillos insistence is unacceptable. The period of appeal and the perfection of appeal are not mere
technicalities to be so lightly regarded, for they are essential to the finality of judgments, a notion
underlying the

stability of our judicial system.29[14] A greater reason to adhere to this notion exists herein, for the
short period of five days as the period to appeal recognizes the essentiality of time in election protests,
in order that the will of the electorate is ascertained as soon as possible so that the winning candidate is
not deprived of the right to assume office, and so that any doubt that can cloud the incumbency of the
truly deserving winning candidate is quickly removed.

Contrary to Castillos posture, we cannot also presume the timeliness of her appeal from the fact that
the RTC gave due course to her appeal by its elevating the protest to the COMELEC. The presumption of
timeliness would not arise if her appeal was actually tardy.
 It is not trite to observe, finally, that Castillos tardy appeal resulted in the finality of the RTCs
dismissal even before January 30, 2002. This result provides an additional reason to warrant the assailed
actions of the COMELEC in dismissing her appeal. Accordingly, the Court finds that the COMELECs
assailed actions were appropriate and lawful, not tainted by either arbitrariness or whimsicality,

WHEREFORE, the petition is dismissed for lack of merit.

SO ORDERED.

5.

THIRD DIVISION
[ G.R. No. 164258, August 22, 2012 ]
ESTRELLA TAGLAY, PETITIONER, VS. JUDGE MARIVIC TRABAJO DARAY AND LOVERIE
PALACAY, RESPONDENTS.

DECISION

PERALTA, J.:

Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court seeking to
reverse and set aside the Orders[1] of the Regional Trial Court (RTC) of Digos City, Branch 18, dated
March 9, 2004 and June 7, 2004, in Criminal Case No. FC-71-02. The March 9, 2004 Order denied herein
petitioner's Motion to Dismiss, while the June 7, 2004 Order denied her Motion for Reconsideration.

The instant petition arose from a Criminal Complaint[2] for Qualified Trespass to Dwelling filed by private
respondent against herein petitioner with the 5th Municipal Circuit Trial Court (MCTC) of Sta. Maria-
Malita-Don Marcelino, Davao del Sur on June 19, 2001.

Finding probable cause to indict petitioner, the Public Prosecutor assigned to handle the case filed an
Information[3] against her on November 19, 2001. The Information reads as follows:

The undersigned Prosecutor accuses ESTRELLA TAGLAY of the crime of Qualified Trespass to Dwelling as
defined and penalized under Article 280 of the Revised Penal Code, as amended, committed as follows:
That on June 2, 2001 at about 2:30 o'clock in the afternoon at Tibangao, Malita, Davao del Sur,
Philippines, and within the jurisdiction of this Honorable Court, the aforesaid accused, a private person
and without any justifiable reason and by means of violence, did then and there willfully, unlawfully and
feloniously enter into the dwelling of Loverie Palacay without her consent and against her will and once
inside maltreated, boxed and choked her, to her damage and prejudice.

CONTRARY TO LAW.[4]

Upon arraignment on June 7, 2002, petitioner pleaded not guilty.[5] Pre-trial conference was set on
August 13, 2002.

However, on August 15, 2002, the MCTC issued an Order,[6] to wit:

It appearing that private complainant Loverie Palacay was a minor on June 2, 2001, the date of the
incident, since she was born on August 7, 1983, per Certification dated August 15, 2002 issued by
Municipal Registrar Josephine A. Marquez, this case, upon manifestation of Prosecutor Perfecto P.
Ordaneza and pursuant to Republic Act. No. 8369 and Circular 11-99, is hereby transferred to Branch 20,
Regional Trial Court, Digos City, for proper disposition.

SO ORDERED.

Subsequently, the case was transferred to the RTC of Digos City where petitioner was brought to trial.

Witnesses were then presented by the prosecution. Prior to the presentation of the final witness for the
prosecution, petitioner filed a Motion to Dismiss on the ground of lack of jurisdiction. Petitioner
contended that the RTC did not acquire jurisdiction over the case, because the MCTC erroneously
transferred the case to the RTC instead of dismissing it. Petitioner also argued that the RTC's lack of
jurisdiction was further aggravated when she was not arraigned before the RTC.

On March 9, 2004, the RTC issued its assailed Order[7] ruling that it acquired jurisdiction over the case
when it received the records of the case as a consequence of the transfer effected by the MCTC; that
the transfer of the case from the MCTC is authorized under Administrative Matter No. 99-1-13-SC and
Circular No. 11-99; that there is no doubt that the offended party is a minor and, thus, the case falls
within the original jurisdiction of Family Courts pursuant to Republic Act (R.A.) No. 8369. The RTC also
held that even granting that there was defect or irregularity in the procedure because petitioner was not
arraigned before the RTC, such defect was fully cured when petitioner's counsel entered into trial
without objecting that his client had not yet been arraigned. Furthermore, the RTC noted that
petitioner's counsel has cross-examined the witnesses for the prosecution. Consequently, the RTC
denied petitioner's Motion to Dismiss.

Petitioner filed a Motion for Reconsideration, but the same was denied by the RTC via its Order[8] dated
June 7, 2004.

Hence, the instant petition for certiorari.

Petitioner raises two main grounds.

First, petitioner contends that the RTC did not acquire jurisdiction over the case because Circular No. 11-
99, which authorizes the transfer of Family Courts cases filed with first-level courts to the RTCs, is
applicable only to cases which were filed prior to the effectivity of the said Circular on March 1, 1999.
Petitioner argues that all Family Courts cases filed with first-level courts after the effectivity of the said
Circular can no longer be transferred to the RTC; instead they should be dismissed. Considering that the
Information in the instant case was filed with the MCTC on November 19, 2001, petitioner avers that the
MCTC should have dismissed the case instead of ordering its transfer to the RTC.

Second, petitioner insists that she should have been arraigned anew before the RTC and that her
arraignment before the MCTC does not count because the proceedings conducted therein were void.

The petition is meritorious.

At the outset, it is necessary to stress that, generally, a direct recourse to this Court in a petition for
certiorari is highly improper for it violates the established policy of strict observance of the judicial
hierarchy of courts.[9] While this Court has concurrent jurisdiction with the RTCs and the CA to issue
writs of certiorari, this concurrence is not to be taken as an unrestrained freedom of choice as to which
court the application for the writ will be directed.[10] There is after all a hierarchy of courts. That
hierarchy is determinative of the venue of appeals and should also serve as a general determinant of the
appropriate forum for petitions for the extraordinary writs.[11] This Court is a court of last resort and
must so remain if it is to satisfactorily perform the functions assigned to it by the Constitution and
immemorial tradition.[12] A direct invocation of the Supreme Court's original jurisdiction to issue these
extraordinary writs is allowed only when there are special and important reasons therefor, clearly and
specifically set out in the petition.[13]

However, it is also settled that this Court has full discretionary power to take cognizance of a petition
filed directly with it if compelling reasons, or the nature and importance of the issues raised, so
warrant.[14] Under the present circumstances, the Court will take cognizance of this case as an exception
to the principle of hierarchy of courts, considering that the Information against petitioner was filed way
back in November 2001.[15] Any further delay in the resolution of the instant petition will be prejudicial
to petitioner. Moreover, the principle may be relaxed when pure questions of law are raised as in this
case.[16]

Now, on the merits of the petition.

It is significant to point out, at this juncture, the well-entrenched doctrine that the jurisdiction of a
tribunal over the subject matter of an action is conferred by law.[17] Jurisdiction over the subject matter
is determined by the statute in force at the time of the commencement of the action.[18] The Family
Courts Act of 1997, which took effect on November 23, 1997.[19] Section 5 (a) of R.A. 8369 clearly
provides that Family Courts have exclusive original jurisdiction over criminal cases where one or more of
the accused is below eighteen (18) years of age but not less than nine (9) years of age, or where one or
more of the victims is a minor at the time of the commission of the offense. In the present case, there
is no dispute that at the time of the commission of the alleged offense on June 2, 2001, private
respondent, who is also the private complainant, was a minor. Hence, the case falls under the original
and exclusive jurisdiction of Family Courts.

Anent the first issue raised, the Court agrees that the Resolution of this Court in Administrative Matter
No. 99-1-13-SC and Circular No. 11-99, issued pursuant thereto, is applicable only to Family Courts cases
which were filed with first-level courts prior to the effectivity of the said Resolution on March 1, 1999.[20]
This is evident in the language used by the Court in the third "Whereas" clause of the subject Resolution
wherein it was stated that "pending the constitution and organization of the Family Courts and the
designation of branches of the Regional Trial Courts as Family Courts in accordance with Section 17
(Transitory Provisions) of R.A. 8369, there is a need to provide guidelines in the hearing and
determination of criminal cases falling within the jurisdiction of Family Courts which have heretofore
been filed with first-level courts." The operative word, as correctly cited by petitioner, is "heretofore"
which means "before this" or "up to this time."[21] Moreover, Section 1 of the same Resolution directs all
first-level courts, within ten (10) days from receipt of a copy of the subject Resolution, to take an
inventory of all criminal cases falling within the jurisdiction of the Family Courts which were filed with
them (first-level courts), to prepare an appropriate inventory and to submit the same to the Court
Management Office of the Office of the Court Administrator. Logic dictates that only those cases which
were filed prior to the issuance of the Resolution shall be included in the inventory and, therefore, shall
be subject to transfer by first-level courts to the appropriate RTCs. The necessary implication then is that
all cases filed with first-level courts after the effectivity of the Resolution on March 1, 1999 should be
dismissed for lack of jurisdiction. In the present case, the Information was filed against petitioner on
November 19, 2001. Thus, the MCTC is already bereft of any authority to transfer the case to the RTC as
the same no longer falls under the coverage of Circular No. 11-99. What the MCTC should have done
was to dismiss the case for lack of jurisdiction.

More importantly, what justifies the dismissal of the case is that the Information filed with the MCTC
cannot be used as a basis for the valid indictment of petitioner before the RTC acting as a Family Court,
because there was no allegation therein of private complainant's minority. To proceed to trial before the
RTC on the basis of the Information filed with the MCTC would be an exercise in futility as there is an
infirmity in the Information constituting a jurisdictional defect which cannot be cured. There is no point
in proceeding under a defective Information that could never be the basis of a valid conviction.[22] The
Information filed with the MCTC must thus first be amended and thereafter filed with the RTC. Pending
the filing of such Information, the RTC has not yet acquired jurisdiction because while a court may have
jurisdiction over the subject matter, it does not acquire jurisdiction over the case itself until its
jurisdiction is invoked with the filing of a valid Information.[23]
The Court also agrees with petitioner in her contention in the second issue raised that she should have
been arraigned by the RTC.

It is true that petitioner was arraigned by the MCTC. However, the MCTC has no jurisdiction over the
subject matter of the present case. It is settled that the proceedings before a court or tribunal without
jurisdiction, including its decision, are null and void.[24] Considering that the MCTC has no jurisdiction, all
the proceedings conducted therein, including petitioner's arraignment, are null and void. Thus, the need
for petitioner's arraignment on the basis of a valid Information filed with the RTC.

It is also true that petitioner's counsel participated in the proceedings held before the RTC without
objecting that his client had not yet been arraigned. However, it is wrong for the RTC to rely on the case
of People v. Cabale,[25] because the accused therein was in fact arraigned, although the same was made
only after the case was submitted for decision. In the similar cases of People v. Atienza and Closa[26] and
People v. Pangilinan,[27] the accused in the said cases were also belatedly arraigned. The Court, in these
three cases, held that the active participation of the counsels of the accused, as well as their opportunity
to cross-examine the prosecution witnesses during trial without objecting on the ground that their
clients had not yet been arraigned, had the effect of curing the defect in the belated arraignment.
Moreover, the accused in these cases did not object when they were belatedly arraigned. The same,
however, cannot be said in the instant case. There is no arraignment at all before the RTC. On the other
hand, the arraignment conducted by the MCTC is null and void. Thus, there is nothing to be cured.
Petitioner's counsel also timely raised before the RTC the fact that her client, herein petitioner, was not
arraigned.

Arraignment is the formal mode and manner of implementing the constitutional right of an accused to
be informed of the nature and cause of the accusation against him.[28] The purpose of arraignment is,
thus, to apprise the accused of the possible loss of freedom, even of his life, depending on the nature of
the crime imputed to him, or at the very least to inform him of why the prosecuting arm of the State is
mobilized against him.[29] As an indispensable requirement of due process, an arraignment cannot be
regarded lightly or brushed aside peremptorily.[30] Otherwise, absence of arraignment results in the
nullity of the proceedings before the trial court.[31]

As a final note, it may not be amiss to stress that at all stages of the proceedings leading to his trial and
conviction, the accused must be charged and tried according to the procedure prescribed by law and
marked by observance of the rights given to him by the Constitution.[32] In the same way that the
reading of the Information to the accused during arraignment is not a useless formality, so is the validity
of the information being read not an idle ceremony.[33]

Criminal due process requires that the accused must be proceeded against under the orderly processes
of law.[34] In all criminal cases, the judge should follow the step-by-step procedure required by the
Rules.[35] The reason for this is to assure that the State makes no mistake in taking the life or liberty
except that of the guilty.[36]
WHEREFORE, the petition is GRANTED. The assailed Orders of the Regional Trial Court of Digos City,
Branch 18, dated March 9, 2004 and June 7, 2004, are REVERSED and SET ASIDE and a new one
rendered dismissing the Information in Criminal Case No. FC-71-02, without prejudice to refiling the
same in the proper court.

SO ORDERED.

6.

THIRD DIVISION

G.R. No. 189649, April 20, 2015

ADORACION CAROLINO (SPOUSE AND IN SUBSTITUTION OF THE DECEASED

JEREMIAS A. CAROLINO), Petitioner, v. GEN. GENEROSO SENGA, AS CHIEF OF
STAFF OF THE ARMED FORCES OF THE PHILIPPINES (AFP); BRIG. GEN.
FERNANDO ZABAT, AS CHIEF OF THE AFP FINANCE CENTER; COMMO.
REYNALDO BASILIO, AS CHIEF OF THE AFP-GHQ MANAGEMENT AND FISCAL
OFFICE; AND COMMO. EMILIO MARAYAG, PENSION AND GRATUITY OFFICER,
PENSION AND GRATUITY MANAGEMENT CENTER, AFP FINANCE CENTER,
Respondent.

DECISION

PERALTA, J.:

Before us is a petition for review under Rule 45 seeking to reverse and set aside the Decision1
dated May 25, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 103502 and the
Resolution2 dated September 10, 2009 denying reconsideration thereof.

The factual and legal antecedents are as follows:

On December 1, 1976, Jeremias A. Carolino, petitioner's husband, retired3 from the Armed
Forces of the Philippines (AFP) with the rank of Colonel under General Order No. 1208 dated
November 29, 1976, pursuant to the provisions of Sections 1(A) and 10 of Republic Act (RA)
No. 340,4 as amended. He started receiving his monthly retirement pay in the amount of
P18,315.00 in December 1976 until the same was withheld by respondents in March 2005. On
June 3, 2005, Jeremias wrote a letter5 addressed to the AFP Chief of Staff asking for the reasons
of the withholding of his retirement pay. In a letter reply,6 Myrna F. Villaruz, LTC (FS) PA,
Pension and Gratuity Officer of the AFP Finance Center, informed Jeremias that his loss of
Filipino citizenship caused the deletion of his name in the alpha list of the AFP Pensioners'
Payroll effective March 5, 2005; and that he could avail of re-entitlement to his retirement
benefits and the restoration of his name in the AFP Pensioners' Masterlist Payroll by complying
with the requirements prescribed under RA No. 9225, or the Dual Citizenship Act.

It appeared that the termination of Jeremias' pension was done pursuant to Disposition Form7
dated October 29, 2004, which was approved by the Chief of Staff and made effective in January
2005. In the said Disposition Form, the AFP Judge Advocate General opined that under the
provisions of Sections 4, 5, and 6 of RA No. 340, retired military personnel are disqualified from
receiving pension benefits once incapable to render military service as a result of his having
sworn allegiance to a foreign country. It was also mentioned that termination of retirement
benefits of pensioner of the AFP could be done pursuant to the provisions of Presidential Decree
(PD) No. 16388 which provides that the name of a retiree who loses his Filipino citizenship shall
be removed from the retired list and his retirement benefits terminated upon such loss. It being in
consonance with the policy consideration that all retirement laws inconsistent with the provisions
of PD No. 1638 are repealed and modified accordingly.

On August 24, 2006, Jeremias filed with the Regional Trial Court (RTC) of Quezon City, a
Petition for Mandamus9 against Gen. Generoso Senga, as Chief of Staff of the AFP, Brig. Gen.
Fernando Zabat, as Chief of the AFP Finance Center, Comm. Reynaldo Basilio, as Chief of the
AFP-GHQ Management and Fiscal Office, and Comm. Emilio Marayag, Pension and Gratuity
Management Officer, Pension and Gratuity Management Center, AFP Finance Center, seeking
reinstatement of his name in the list of the AFP retired officers, resumption of payment of his
retirement benefits under RA No. 340, and the reimbursement of all his retirement pay and
benefits which accrued from March 5, 2005 up to the time his name is reinstated and, thereafter,
with claim for damages and attorney's fees. The case was docketed as Civil Case No. Q-06-
58686, and raffled off to Branch 220.

On February 26, 2007, the RTC rendered its Decision10 granting the petition for mandamus, the
dispositive portion of which reads:chanroblesv irtuallawlibrary

WHEREFORE, judgment is hereby rendered ordering General Hermogenes Esperon, Jr., as

Chief of Staff of the AFP, Brigadier General Fernando Zabat, as the Commanding Officer of the
AFP Finance Center, Commodore Reynaldo Basilio, as Chief of the AFP-GFIQ Management
and Fiscal Office, and Captain Theresa M. Nicdao, as Pension and Gratuity Officer of the
Pension and Gratuity Management Center, or any of their respective successors and those taking
instructions from them as agents or subordinates, to: chanroblesvirtuallawlibrary

a. immediately reinstate the name of petitioner in the list of retired AFP Officers,
and to resume payment of his retirement benefits under RA 340; and

b. release to [petitioner] all retirement benefits due him under RA 340 which
accrued to him from March 2005 continuously up to the time his name is
reinstated in the list of AFP retired officers.11

The RTC found that the issue for resolution is the applicability of RA No. 340 and PD No. 1638
upon Jeremias' retirement benefits. It found that he retired as a commissioned officer of the AFP
in 1976; thus, RANo. 340 is the law applicable in determining his entitlement to his retirement
benefits and not PD No. 1638 which was issued only in 1979. Article 4 of the Civil Code
provides that "laws shall have no retroactive effect unless the contrary is provided." PD No. 1638
does not provide for such retroactive application. Also, it could not have been the intendment of
PD No. 1638 to deprive its loyal soldiers of a monthly pension during their old age especially
where, as here, the right had been vested to them through time. RA No. 340 does not provide that
the loss of Filipino citizenship would terminate one's retirement benefits; and that PD No. 1638
does not reduce whatever benefits that any person has already been receiving under existing law.

Respondents sought reconsideration,12 but the RTC denied the same in an Order13 dated May 25,
2007, the decretal portion of which reads: chanroblesvirtuallawlibrary

WHEREFORE, premises considered, the instant Motion for Reconsideration is hereby

DENIED, considering that the questioned decision has not yet attained.its finality. The Motion
for Execution in the meantime is hereby DENIED.14 cralawlawlibrary

Aggrieved, respondents elevated the case to the CA. After the submission of the parties'
respective memoranda, the case was submitted for decision.

Jeremias died on September 30, 200715 and was substituted by his wife, herein petitioner.

On May 25, 2009, the CA granted respondents' appeal. The dispositive portion of the CA
decision reads:chanroblesv irtuallawlibrary

WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed decision
is REVOKED and SET ASIDE.16 cralawlawlibrary

In so ruling, the CA found that while it is true that Jeremias retired in 1976 under the provisions
of RA No. 340, as amended, which does not contain any provision anent cessation or loss of
retirement benefits upon acquiring another citizenship, PD No. 1638, which was signed in 1979,
effectively repealed RA No. 340, as amended. Section 27 of PD No. 1638, which provides that
the name of a retiree who loses his Filipino citizenship shall be removed from the retired list and
his retirement benefits terminated upon such loss, was correctly made applicable to Jeremias'
retirement benefits. Logic dictates that since Jeremias had already renounced his allegiance to the
Philippines, he cannot now be compelled by the State to render active service and to render
compulsory military service when the need arises. The CA found that for the writ of mandamus
to lie, it is essential that Jeremias should have a clear legal right to the thing demanded and it
must be the imperative duty of respondents to perform the act required which petitioner failed to
show; thus, mandamus will not lie.

Petitioner's motion for reconsideration was denied in a Resolution dated September 10, 2009.

Hence, this petition raising the following: chanroblesvir tuallawlibrary

RESPONDENT COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN

RENDERING THE ASSAILED DECISION AND RESOLUTION WHICH SET ASIDE AND
REVERSED THE 26 FEBRUARY 2007 DECISION OF THE QC RTC BECAUSE: chanroblesvirtuallawlibrary

PD 1638 should not have been applied and cannot be used against petitioner as her husband's
retirement and pension were granted to him by the AFP under RA 340 which was not superseded
by PD 1638, a later statute.
Petitioner correctly availed of the remedy of mandamus to compel the reinstatement of his
pension and benefits from the AFP under RA 340 as PD 1638 was not applicable to him.
Petitioner contends that her husband's retirement from the active service in 1976 was pursuant to
the provisions of RA No. No. 340 as PD No. 1638 was not yet in existence then, and there was
nothing in RA No. 340 that disqualifies a retired military personnel from receiving retirement
benefits after acquiring foreign citizenship. The concept of retirement benefits is such that one is
entitled to them for services already rendered and not for those to be made at a future time.
Retirement benefits due petitioner's husband under RA No. 340, is an acquired right which
cannot be taken away by a subsequent law. PD No. 1638 does not expressly provide for its
retroactive application. Respondents, being officers of the AFP tasked to implement the
provisions of RA No. 340 have neglected their function thereunder by delisting petitioner's
husband as a retiree, thus, mandamus is proper.

In his Comment, the Solicitor General argues that PD No. 1638 applies to all military personnel
in the service of the AFP whether active or retired; hence, it applies retroactively to petitioner's
husband. Even when a retiree is no longer in the active service, his being a Filipino still makes
him a part of the Citizen Armed Forces; that whether a military personnel retires under the
provisions of RA No. 340 or under PD No. 1638, he is still in the service of the military and/or
the State only that he is retired, thus, they should not be treated differently upon the loss of
Filipino citizenship. He argues when there is an irreconcilable conflict between the two laws of
different vintages, i.e., RA No. 340 and PD No. 1638, the latter enactment prevails.

The Solicitor General argues that mandamus will not issue to enforce a right to compel
compliance with a duty which is questionable or over which a substantial doubt exists. In this
case, petitioner's husband does not have a well-defined, clear and certain legal right to
continuously receive retirement benefits after becoming an American citizen. Likewise, the AFP
does not have a clear and imperative duty to grant the said benefits considering that Section 27 of
PD No. 1638 provides that the name of a retiree who loses his Filipino citizenship shall be
removed from the retired list and his retirement benefits terminated upon such loss.

Petitioner filed her reply thereto. We find merit in the petition.

Petitioner's husband retired in 1976 under RA No. 340. He was already receiving his monthly
retirement benefit in the amount of P18,315.00 since December 1976 until it was terminated in
March 2005. Section 5, RA No. 340 provides: chanroblesvirtuallawlibrary

Sec. 5. Officers and enlisted men placed in the retired list shall be subject to the rules and articles
of war and to trial by court-martial for any breach thereof. At any time said officers and enlisted
men may be called to active service by the President. Refusal on the part of any officer or
enlisted man to perform such services shall terminate his right to further participation in the
benefits of this Act provided he resides in the Philippines and is physically fit for service. Such
fitness for service shall be determined by applicable regulations.
The afore-quoted provision clearly shows how a retiree's retirement benefits may be terminated,
i.e., when the retiree refuses to perform active service when called to do so provided that (1) the
retiree resides in the Philippines and (2) is physically fit for service. There is no other
requirement found in the law which would be the reason for the termination of a retiree's
retirement benefits. Petitioner's husband was never called to perform active service and refused
to do so, however, his retirement benefit was terminated. The reason for such termination was his
loss of Filipino citizenship based on Section 27 of PD No. 1638, to wit: chanroblesvirtuallawlibrary

Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12 shall be carried in the
retired list of the Armed Forces of the Philippines. The name of a retiree who loses his Filipino
citizenship shall be removed from the retired list and his retirement benefits terminated upon
such loss.
We find that the CA erred in applying PD No. 1638 to the retirement benefits of petitioner's
husband.

Firstly, PD No. 1638 was signed by then President Ferdinand Marcos on September 10, 1979.
Under Article 4 of the Civil Code, it is provided that laws shall have no retroactive effect, unless
the contrary is provided. It is said that the law looks to the future only and has no retroactive
effect unless the legislator may have formally given that effect to some legal provisions;17 that all
statutes are to be construed as having only prospective operation, unless the purpose and
intention of the legislature to give them a retrospective effect is expressly declared or is
necessarily implied from the language used; and that every case of doubt must be resolved
against retrospective effect.18 These principles also apply to amendments of statutes.

PD No. 1638 does not contain any provision regarding its retroactive application, nor the same
may be implied from its language. In fact, Section 36 of PD No. 1638 clearly provides that the
decree shall take effect upon its approval. As held in Parreno v. COA,19 there is no question that
PD No. 1638, as amended, applies prospectively. Since PD No. 1638, as amended, is about the
new system of retirement and separation from service of military personnel, it should apply to
those who were in the service at the time of its approval.20 Conversely, PD No. 1638 is not
applicable to those who retired before its effectivity in 1979. The rule is familiar that after an act
is amended, the original act continues to be in force with regard to all rights that had accrued
prior to such amendment.21

Moreover, Section 27 of PD No. 1638 specifically provides for the retirees to whom the law shall
be applied, to wit:chanroblesvirtuallawlibrary

Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12 shall be carried in
the retired list of the Armed Forces of the Philippines. The name of a retiree who loses his
Filipino citizenship shall be removed from the retired list and his retirement benefits terminated
upon such loss, (emphasis supplied)
Notably, petitioner's husband did not retire under those above-enumerated Sections of PD No.
1638 as he retired under RA No. 340.

Secondly, it has been held that before a right to retirement benefits or pension vests in an
employee, he must have met the stated conditions of eligibility with respect to the nature of
employment, age, and length of service.22 Undeniably, petitioner's husband had complied with
the conditions of eligibility to retirement benefits as he was then receiving his retirement benefits
on a monthly basis until it was terminated. Where the employee retires and meets the eligibility
requirements, he acquires a vested right to the benefits that is protected by the due process
clause.23 It is only upon retirement that military personnel acquire a vested right to retirement
benefits.24 Retirees enjoy a protected property interest whenever they acquire a right to
immediate payment under pre-existing law.25
In Ayog v. Cusi,26 we expounded the nature of a vested right, thus: chanroblesvirtuallawlibrary

"A right is vested when the right to enjoyment has become the property of some particular
person or persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property
legally vested, to enforce contracts, and enjoy the rights of property conferred by the existing
law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in property which has become
fixed and established and is no longer open to doubt or controversy" (Downs vs. Blount 170 Fed.
15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).

The due process clause prohibits the annihilation of vested rights. "A state may not impair vested
rights by legislative enactment, by the enactment or by the subsequent repeal of a municipal
ordinance, or by a change in the constitution of the State, except in a legitimate exercise of the
police power" (16 C.J.S. 1177-78).

It has been observed that, generally, the term "vested right" expresses the concept of present
fixed interest, which in right reason and natural justice should be protected against arbitrary State
action, or an innately just and imperative right which an enlightened free society, sensitive to
inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing
Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587).27 cralawlawlibrary

Petitioner's husband acquired vested right to the payment of his retirement benefits which must
be respected and cannot be affected by the subsequent enactment of PD No. 1638 which provides
that loss of Filipino citizenship terminates retirement benefits. Vested rights include not only
legal or equitable title to the enforcement of a demand, but also an exemption from new
obligations after the right has vested.28

In fact, Sections 33 and 35 of PD No. 1638 recognize such vested right, to wit: chanroblesvirtuallawlibrary

Section 33. Nothing in this Decree shall be construed in any manner to reduce whatever
retirement and separation pay or gratuity or other monetary benefits which any person is
heretofore receiving or is entitled to receive under the provisions of existing law.

xxxx

Section. 35. Except those necessary to give effect to the provisions of this Decree and to preserve
the rights granted to retired or separated military personnel, all laws, rules and regulations
inconsistent with the provisions of this Decree are hereby repealed or modified accordingly.
Section 33 of PD No. 1638 is clear that the law has no intention to reduce or to revoke whatever
retirement benefits being enjoyed by a retiree at the time of its passage. Hence, Section 35
provides for an exception to what the decree repealed or modified, i.e., except those necessary to
preserve the rights granted to retired or separated military personnel.

We also find that the CA erred in finding that mandamus will not lie.

Section 3, Rule 65 of the Rules of Court lay down under what circumstances petition for
mandamus may be filed, to wit: chanroblesvirtuallawlibrary

SEC. 3. Petition for mandamus. - When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy
and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and praying that judgment
be rendered commanding the respondent, immediately or at some other time to be specified by
the court, to do the act required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the respondent.

A writ of mandamus can be issued only when petitioner's legal right to the performance of a
particular act which is sought to be compelled is clear and complete. A clear legal right is a right
which is indubitably granted by law or is inferable as a matter of law.29 A doctrine well-
embedded in our jurisprudence is that mandamus will issue only when the petitioner has a clear
legal right to the performance of the act sought to be compelled and the respondent has an
imperative duty to perform the same.30 The remedy of mandamus lies to compel the performance
of a ministerial duty.31 A purely ministerial act or duty is one that an officer or tribunal performs
in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority,
without regard to or the exercise of its own judgment upon the propriety or impropriety of the act
done.32 If the law imposes a duty upon a public officer, and gives him the right to decide how or
when the duty shall be performed, such duty is discretionary and not ministerial.33

The petition for mandamus filed by petitioner's husband with the RTC was for the payment of
his terminated retirement benefits, which has become vested, and being a ministerial duty on the
part of the respondents to pay such claim, mandamus is the proper remedy to compel such
payment.

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate
administrative authorities in the resolution of a controversy falling under their jurisdiction before
the same may be elevated to the courts of justice for review.34 However, the principle of
exhaustion of administrative remedies need not be adhered to when the question is purely legal.35
This is because issues of law cannot be resolved with finality by the administrative officer.36
Appeal to the administrative officer would only be an exercise in futility.37 Here, the question
raised is purely legal, i.e., what law should be applied in the payment of retirement benefits of
petitioner's husband. Thus, there was no need to exhaust all administrative remedies before a
judicial relief can be sought. cralawred

WHEREFORE, the petition is GRANTED. The Decision dated May 25, 2009 and the
Resolution dated September 10, 2009 of the Court of Appeals are hereby REVERSED and SET
ASIDE. The Decision dated February 26, 2007 of the Regional Trial Court of Quezon City,
Branch 220, is AFFIRMED.

SO ORDERED. chanroblesvirtuallawlibrary

Velasco, Jr., (Chairperson), Perez,* Reyes, and Jardeleza, JJ., concur.

Aldrin Jeff Cudia vs The Superintendent of the Philippine Military
Academy

G.R. No. 211362 – Political Law – Constitutional Law – Academic Freedom

Remedial Law – Mandamus – Ministrant vs Discretionary Function

Aldrin Jeff Cudia was a member of the Philippine Military Academy (PMA) Siklab Diwa Class
of 2014. On November 14, 2013, Cudia’s class had a lesson examination in their Operations
Research (OR) subject the schedule of which was from 1:30pm to 3pm.

However, after he submitted his exam paper, Cudia made a query to their OR teacher. Said
teacher, then asked Cudia to wait for her. Cudia complied and as a result, he was late for his next
class (English). Later, the English teacher reported Cudia for being late.

In his explanation, Cudia averred that he was late because his OR class was dismissed a bit late.
The tactical officer (TO) tasked to look upon the matter concluded that Cudia lied when he said
that their OR class was dismissed late because the OR teacher said she never dismissed her class
late. Thus, Cudia was meted with demerits and touring hours because of said infraction.

Cudia did not agree with the penalty hence he asked the TO about it. Not content with the
explanation of the TO, Cudia said he will be appealing the penalty he incurred to the senior
tactical officer (STO). The TO then asked Cudia to write his appeal.

In his appeal, Cudia stated that his being late was out of his control because his OR class was
dismissed at 3pm while his English class started at 3pm also. To that the TO replied: that on
record, and based on the interview with the teachers concerned, the OR teacher did not dismiss
them (the class) beyond 3pm and the English class started at 3:05pm, not 3pm; that
besides, under PMA rules, once a student submitted his examination paper, he is dismissed from
said class and may be excused to leave the classroom, hence, Cudia was in fact dismissed well
before 3pm; that it was a lie for Cudia to state that the class was dismissed late because again, on
that day in the OR class, each student was dismissed as they submit their examination, and were
not dismissed as a class; that if Cudia was ordered by the teacher to stay, it was not because such
transaction was initiated by the teacher, rather, it was initiated by Cudia (because of his query to
the teacher), although there were at least two students with Cudia at that time querying the
teacher, the three of them cannot be considered a “class”; Cudia could just have stated all that
instead of saying that his class was dismissed a bit late, hence he lied. The STO sustained the
decision of the TO.

Later, the TO reported Cudia to the PMA’s Honor Committee (HC) for allegedly violating the
Honor Code. Allegedly, Cudia lied in his written appeal when he said his class was dismissed
late hence, as a result, he was late for his next class.

The Honor Code is PMA’s basis for the minimum standard of behavior required of their cadets.
Any violation thereof may be a ground to separate a cadet from PMA.

Cudia submitted an explanation to the HC. Thereafter, the HC, which is composed of nine (9)
cadets, conducted an investigation. After two hearings and after the parties involved were heard
and with their witnesses presented, the HC reconvened and the members cast their vote. The
initial vote was 8-1: 8 found Cudia guilty and 1 acquitted Cudia. Under PMA rules (Honor
System), a dissenting vote means the acquittal of Cudia. However, they also have a practice of
chambering where the members, particularly the dissenter, are made to explain their vote. This is
to avoid the “tyranny of the minority”. After the chambering, the dissenter was convinced that
his initial “not guilty vote” was improper, hence he changed the same and the final vote became
9-0. Thus, Cudia was immediately placed inside PMA’s holding center.

Cudia appealed to the HC chairman but his appeal was denied. Eventually, the Superintendent of
the PMA ordered the dismissal of Cudia from the PMA.

Cudia and several members of his family then sent letters to various military officers requesting
for a re-investigation. It was their claim that there were irregularities in the investigation done by
the HC. As a result of such pleas, the case of Cudia was referred to the Cadet Review and
Appeals Board of PMA (CRAB).

Meanwhile, Cudia’s family brought the case to the Commission on Human Rights (CHR) where
it was alleged that PMA’s “sham” investigation violated Cudia’s rights to due process,
education, and privacy of communication.

Eventually, the CRAB ruled against Cudia. This ruling was affirmed by the AFP Chief of Staff.
But on the other hand, the CHR found in favor of Cudia.

PMA averred that CHR’s findings are at best recommendatory. Cudia filed a petition for
certiorari, prohibition, and mandamus before the Supreme Court. PMA opposed the said petition
as it argued that the same is not proper as a matter of policy and that the court should avoid
interfering with military matters.

ISSUES:
1. Whether or not Cudia’s petitions is proper.

2. Whether or not the PMA can validly dismiss Cudia based on its findings.

HELD:

I.

Mandamus is not proper

Mandamus will not prosper in this case. Cudia’s prayer that PMA should be compelled to
reinstate him as well as to give him his supposed academic awards is not proper. The Courts,
even the Supreme Court, cannot compel PMA to do so because the act of restoring Cudia’s rights
and entitlements as a cadet as well as his awards is a discretionary act. Mandamus cannot be
availed against an official or government agency, in this case PMA, whose duty requires the
exercise of discretion or judgment. Further, such act which PMA was sought by Cudia to
perform is within PMA’s academic freedom as an educational institution – and such performance
is beyond the jurisdiction of courts.

Certiorari is allowed

The petition for certiorari is allowed because the issue herein is whether or not PMA and its
responsible officers acted with grave abuse of discretion when it dismissed Cudia. Under the
Constitution, that is the duty of the courts to decide actual controversies and to determine
whether or not a government branch or instrumentality acted with grave abuse of discretion.
Thus, PMA cannot argue that judicial intervention into military affairs is not proper as a matter
of policy. Suffice it to say that judicial non-interference in military affairs is not an absolute rule.

On the civil liberties of PMA cadets

One of the arguments raised by PMA is that cadets, when they enrolled in the PMA, have
surrendered parts of their civil and political liberties. Hence, when they are disciplined and
punished by the PMA, said cadets cannot question the same, much less, question it in the courts.
in short, they cannot raise due process.

On this, the SC held that such argument is wrong. It is true that a PMA cadet, by enrolling at
PMA, must be prepared to subordinate his private interests for the proper functioning of the
educational institution he attends to, one that is with a greater degree than a student at a civilian
public school. However, a cadet facing dismissal from PMA, whose private interests are at stake
(life, liberty, property) which includes his honor, good name, and integrity, is entitled to due
process. No one can be deprived of such without due process of law and the PMA, even as a
military academy, is not exempt from such strictures. Thus, when Cudia questioned in court the
manner upon which he was dismissed from the PMA, such controversy may be inquired upon by
the courts.
(Author’s note: PMA, in essence, raised that due process, as contemplated by the Constitution, is
not needed in dismissing a cadet yet, as can be seen in the below discussion, PMA presented
evidence that due process was, in fact, complied with.)

II. Yes. It is within PMA’s right to academic freedom to decide whether or not a cadet is still
worthy to be part of the institution. Thus, PMA did not act with grave abuse of discretion when it
dismissed Cudia. In fact, Cudia was accorded due process. In this case, the investigation of
Cudia’s Honor Code violation followed the prescribed procedure and existing practices in the
PMA. He was notified of the Honor Report submitted by his TO. He was then given the
opportunity to explain the report against him. He was informed about his options and the entire
process that the case would undergo. The preliminary investigation immediately followed after
he replied and submitted a written explanation. Upon its completion, the investigating team
submitted a written report together with its recommendation to the HC Chairman. The HC
thereafter reviewed the findings and recommendations. When the honor case was submitted for
formal investigation, a new team was assigned to conduct the hearing. During the formal
investigation/hearing, he was informed of the charge against him and given the right to enter his
plea. He had the chance to explain his side, confront the witnesses against him, and present
evidence in his behalf. After a thorough discussion of the HC voting members, he was found to
have violated the Honor Code. Thereafter, the guilty verdict underwent the review process at the
Academy level – from the OIC of the HC, to the SJA (Staff Judge Advocate), to the
Commandant of Cadets, and to the PMA Superintendent. A separate investigation was also
conducted by the HTG (Headquarters Tactics Group). Then, upon the directive of the AFP-GHQ
(AFP-General Headquarters) to reinvestigate the case, a review was conducted by the CRAB.
Further, a Fact-Finding Board/Investigation Body composed of the CRAB members and the
PMA senior officers was constituted to conduct a deliberate investigation of the case. Finally, he
had the opportunity to appeal to the President. Sadly for him, all had issued unfavorable rulings.
And there is no reason for the SC to disturb the findings of facts by these bodies.

Academic freedom of the PMA

Cudia would argue that there is no law providing that a guilty finding by the HC may be used by
the PMA to dismiss or recommend the dismissal of a cadet from the PMA; that Honor Code
violation is not among those listed as justifications for the attrition of cadets considering that the
Honor Code and the Honor System (manner which PMA conducts investigation of Honor Code
violations) do not state that a guilty cadet is automatically terminated or dismissed from service.

Such argument is not valid. Even without express provision of a law, the PMA has regulatory
authority to administratively dismiss erring cadets. Further, there is a law (Commonwealth Act
No. 1) authorizing the President to dismiss cadets. Such power by the President may be
delegated to the PMA Superintendent, who may exercise direct supervision and control over the
cadets.

Further, as stated earlier, such power by the PMA is well within its academic freedom. Academic
freedom or, to be precise, the institutional autonomy of universities and institutions of higher
learning has been enshrined in the Constitution.
The essential freedoms of academic freedom on the part of schools are as follows;

a. the right to determine who may teach;

b. the right to determine what may be taught;

c. the right to determine how it shall be taught;

d. the right to determine who may be admitted to study.

The Honor Code is just but one way for the PMA to exercise its academic freedom. If it
determines that a cadet violates it, then it has the right to dismiss said cadet. In this case, based
on its findings, Cudia lied – which is a violation of the Honor Code.

But Cudia’s lie is not even that big; is dismissal from the PMA really warranted?

The PMA Honor Code does not distinguish between a big lie and a minor lie. It punishes any
form of lying. It does not have a gradation of penalties. In fact, it is the discretion of the PMA as
to what penalty may be imposed. When Cudia enrolled at PMA, he agreed to abide by the Honor
Code and the Honor System. Thus, while the punishment may be severe, it is nevertheless
reasonable and not arbitrary, and, therefore, not in violation of due process -also considering that
Cudia, as a cadet, must have known all of these.

BUSUEGO VS OFFICE OF THE OMBUDSMAN MINDANAO

GR 196842
9 October 2013

The Ombudsman has full discretionary authority in the determination of probable cause during a preliminary
investigation.

FACTS:
Private respondent Rosa S. Busuego (Rosa) filed a complaint for: (1) Concubinage under Article 334 of the
Revised Penal Code; (2) violation of Republic Act No. 9262 (Anti-Violence Against Women and Their Children); and
(3) Grave Threats under Article 282 of the Revised Penal Code, before the Office of the Ombudsman against her
husband, Alfredo. Alfredo is the Chief of Hospital, Davao Regional Hospital. They have 2 children. However, their
marriage turned sour. She saw photographs of, and love letters addressed to Alfredo from, other women. She
confronted her husband but he claimed ignorance of the existence of such letters.

An opportunity to work as nurse in N.Y. USA. Alfredo opposed. Nonetheless, Rosa completed the
requirements. However, before leaving, furious with Rosa’s pressing, Alfredo took his gun and pointed it at Rosa’s
temple. Alfredo was only staved off because Rosa’s mother arrived at the couple’s house.

Rosa went to the US and was eventually joined by her 2 children, Alfred and Robert. Robert eventually
returned to Davao City to study medicine. Sometime in 1997, Rosa learned that a certain Emy Sia (Sia) was living at
their conjugal home. When Rosa asked Alfredo, he said that Sia, nurse at the Regional Hospital, was just in a sorry
plight and was allegedly raped by Rosa’s brother-in-law so he allowed her to sleep at the maids’ quarters.
 In October 2005, Rosa finally learned of Alfredo’s extra-marital relationships. Robert and the housekeepers
executed a joint affidavit to support Rosa’s allegations. Rosa and the other son Alfred flew to Davao without informing
Alfredo. She gathererd and consolidated information of her husband’s sexual affairs. She also averred that during the
course of the marriage, Alfredo physically and verbally abused her and her family. Alfredo denied all accusations. In
their subsequent exchange of responsive pleadings, Rosa maintained Alfredo’s culpability, and naturally, Alfredo
claimed innocence.

In the course thereof, the procedural issue of Rosa’s failure to implead Sia and de Leon as respondents
cropped up. Alfredo insisted that Rosa’s complaint ought to be dismissed for failure to implead his alleged concubines
as respondents.

Specifically to dispose of that issue, the Ombudsman scheduled a clarificatory hearing where both Rosa and
Alfredo were represented by their respective counsels. The office of the Ombudsman explained that the position of
Alfredo would just prolong the conduct of the preliminary investigation since Rosa can just re-file her complaint. The
doctrine of res judicata does not apply in the preliminary investigation stage. Hence, the counsel for Rosa was
directed to submit to this Office the addresses of the alleged mistresses so that they could be served with the Order
directing them to file their counter-affidavits. Rosa submitted an Ex-Parte Manifestation on the last known addresses
of Julie de Leon and Emy Sia (alleged mistresses.)

Ombudsman issued a Joint Order4 impleading Sia and de Leon as party-respondents in the complaint for
Concubinage and directing them to submit their respective counter-affidavits within a period of time. Sia and de Leon
did not submit their respective counter-affidavits.
Alfredo opposed the Ombudsman’s ruling to simply amend the complaint and implead the alleged
mistresses. He filed his Comment to the Provincial Prosecutor praying for the dismissal of the complaint for failure to
implead the two mistresses.

Ombudsman issued herein assailed Resolution, disposing of the procedural issues, which states that the
short cut procedure would delay the proceedings is misplaced, since Rosa could still amend her complaint and re-file
the case for the doctrine of res judicata will not apply. Alfredo filed a Motion for Reconsideration excepting to the
Ombudsman’s ruling on the automatic inclusion of Sia as respondent in the complaint and their indictment for the
crime of Concubinage.

Nonetheless, the Ombudsman stood pat on its ruling, declared that the Partial Motion for Reconsideration
was filed out of time. Alfredo now comes to us on petition for certiorari alleging grave abuse of discretion in the
Ombudsman’s finding of probable cause to indict him and Sia for Concubinage.

ISSUE:
Whether or not the Ombudsman has full discretionary authority in the determination of probable cause
during a preliminary investigation.

RULING:
Yes. Therefore the Court sustain the Ombudsman’s decision.

The Ombudsman has full discretionary authority in the determination of probable cause during a preliminary
investigation. This is the reason why judicial review of the resolution of the Ombudsman in the exercise of its power
and duty to investigate and prosecute felonies and/or offenses of public officers is limited to a determination of
whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction. Courts are not
empowered to substitute their judgment for that of the Ombudsman.

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment tantamount to
lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty
or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is
exercised in an arbitrary and despotic manner by reason of passion or hostility. In this regard, petitioner failed to
demonstrate the Ombudsman's abuse, much less grave abuse, of discretion.

The Ombudsman merely followed the provisions of its Rules of Procedure. No information may be filed and
no complaint may be dismissed without the written authority or approval of the ombudsman in cases falling within the
jurisdiction of the Sandiganbyan, or of the proper Deputy Ombudsman in all other cases.
 Notably, Rosa’s complaint contained not just the Concubinage charge, but other charges: violation of
Republic Act No. 9262 and Grave Threats. Upon the Ombudsman’s perusal, the complaint was supported by
affidavits corroborating Rosa’s accusations. Thus, at that stage, the Ombudsman properly referred the complaint to
Alfredo for comment. Nonetheless, while the Ombudsman found no reason for outright dismissal, it deemed it fit to
hold a clarificatory hearing to discuss the applicability of Article 344 of the Revised Penal Code, the issue having
been insisted upon by Alfredo.

Surely the procedural sequence of referral of the complaint to respondent for comment and thereafter the
holding of a clarificatory hearing is provided for in paragraph b, Section 2 and paragraphs d and f, Section 4 of Rule
II, which the Court have at the outset underscored. The Ombudsman merely facilitated the amendment of the
complaint to cure the defect pointed out by Alfredo. The Ombudsman’s primary jurisdiction, albeit concurrent with the
DOJ, to conduct preliminary investigation of crimes involving public officers, without regard to its commission in
relation to office, had long been settled in Sen. Honasan II v. The Panel of Investigating Prosecutors of DOJ.

The Constitution, Section 15 of the Ombudsman Act of 1989 and Section 4 of the Sandiganbayan Law, as
amended, do not give to the Ombudsman exclusive jurisdiction to investigate offenses committed by public officers or
employees. The authority of the Ombudsman to investigate offenses involving public officers or employees is
concurrent with other government investigating agencies such as provincial, city and state prosecutors. However, the
Ombudsman, in the exercise of its primary jurisdiction over cases cognizable by the Sandiganbayan, may take over,
at any stage, from any investigating agency of the government, the investigation of such cases.

In other words, respondent DOJ Panel is not precluded from conducting any investigation of cases against
public officers involving violations of penal laws but if the cases fall under the exclusive jurisdiction of the
Sandiganbayan, the respondent Ombudsman may, in the exercise of its primary jurisdiction take over at any stage.

Thus, with the jurisprudential declarations that the Ombudsman and the DOJ have concurrent jurisdiction to
conduct preliminary investigation, the respective heads of said offices came up with OMB-DOJ Joint Circular No. 95-
001 for the proper guidelines of their respective prosecutors in the conduct of their investigations.

WHEREFORE the petition is DISMISSED.

#8 FIRST DIVISION
G.R. Nos. 197592 & 20262 November 27, 2013
THE PROVINCE OF AKLAN, Petitioner,
vs.
JODY KING CONSTRUCTION AND DEVELOPMENT CORP.,
Respondent.
PONENTE: VILLARAMA, JR., J.

Facts:
On 12 January 1998, the parties entered into a contract for the
design and construction of the Caticlan Jetty Port and Terminal
(Phase I), which total project cost is P38.9M. In the course of
construction, Aklan issued variation/change orders for
additional works. On 5 January 2001, Aklan entered again into
a negotiated contract with Jody for the construction of
Passenger Terminal Building (Phase II), which total contract
price is P2.5M.
On 22 October 2001, Jody demanded P22.4M from Aklan
covering unpaid additional works, taxes levied, price
escalations, additional labor & overhead costs brought by
change orders, and interests, but failed to settle. Thus on 13
July 2006, Jody filed a collection case in RTC Marikina against
Aklan to which it decided in favor of Jody on 14 August 2009.
Aklan moved to reconsider on 9 October 2009 but was denied
on 27 October 2009 because it was filed late by one day. On 24
November 2009, the RTC issued a writ of execution.

Aklan thus filed in CA a petition for certiorari with application

for TRO and preliminary injunction but was dismissed on 18
October 2010 finding no grave abuse of discretion in RTC’s
issuance of writ of execution. On 7 December 2009, the RTC
denied Aklan’s notice of appeal filed on 1 December 2009.

When its motion to reconsider was denied, Aklan filed again in

CA a petition for certiorari questioning the denial of his notice
of appeal. But it was denied on 31 August 2011 for Aklan’s

failure to provide valid justification for filing a late motion for

reconsideration. It also ruled that Aklan is estopped from
invoking the doctrine of primary jurisdiction as it only raised
the issue of COA’s primary jurisdiction after its notice of
appeal was denied and a writ of execution was issued against
it. Thus, the present petitions for review on certiorari.

Issues:
1. Whether or not the doctrine of primary jurisdiction applies
to the case.
2. Whether or not the issuance of the writ of execution is void.

Ruling:

YES. Petitions are Granted.

COA has primary jurisdiction over private respondent’s money claims Petitioner is not estopped from
raising the issue of
jurisdiction.

The doctrine of primary jurisdiction holds that if a case is such that its determination requires the
expertise, specialized
training and knowledge of the proper administrative bodies,
relief must first be obtained in an administrative proceeding
before a remedy is supplied by the courts even if the matter
may well be within their proper jurisdiction.22 It applies where
a claim is originally cognizable in the courts, and comes into
play whenever enforcement of the claim requires the
resolution of issues which, under a regulatory scheme, have
been placed within the special competence of an
administrative agency. In such a case, the court in which the
claim is sought to be enforced may suspend the judicial
process pending referral of such issues to the administrative
body for its view or, if the parties would not be unfairly
disadvantaged, dismiss the case without prejudice.23

The objective of the doctrine of primary jurisdiction is to guide

the court in determining whether it should refrain from
exercising its jurisdiction until after an administrative agency
has determined some question or some aspect of some
question arising in the proceeding before the court.24

As can be gleaned, respondent seeks to enforce a claim for

sums of money allegedly owed by petitioner, a local
government unit.

Under Commonwealth Act No. 327,25 as amended by Section

26 of Presidential Decree No. 1445,26 it is the COA which has
primary jurisdiction over money claims against government
agencies and instrumentalities.

Section 26. General jurisdiction. The authority and powers of the

Commission shall extend to and comprehend all matters relating to
auditing procedures, systems and controls, the keeping of the general
accounts of the Government, the preservation of vouchers pertaining
thereto for a period of ten years, the examination and inspection of the
books, records, and papers relating to those accounts; and the audit and
settlement of the accounts of all persons respecting funds or property
received or held by them in an accountable capacity, as well as the
examination, audit, and settlement of all debts and claims of any sort
due from or owing to the Government or any of its subdivisions, agencies
and instrumentalities. The said jurisdiction extends to all
government-owned or controlled corporations, including their
subsidiaries, and other self-governing boards, commissions, or agencies
of the Government, and as herein prescribed, including non -
governmental entities subsidized by the government, those funded by
donations through the government, those required to pay levies or
government share, and those for which the government has put up a
counterpart fund or those partly funded by the government. (Emphasis
supplied.)

Pursuant to its rule-making authority conferred by the 1987

Constitution27 and existing laws, the COA promulgated the
2009 Revised Rules of Procedure of the Commission on Audit.
Rule II, Section 1 specifically enumerated those matters
falling under COA’s exclusive jurisdiction, which include

"money claims due from or owing to any government agency."

Rule VIII, Section 1 further provides:

Section 1. Original Jurisdiction - The Commission Proper shall

have original jurisdiction over:

a) money claim against the Government; b) request for concurrence in

the hiring of legal retainers by government agency; c) write off of
unliquidated cash advances and dormant accounts receivable in
amounts exceeding one million pesos (P1,000,000.00); d) request for
relief from accountability for loses due to acts of man, i.e. theft, robbery,
arson, etc, in amounts in excess of Five Million pesos (P5,000,000.00).

In Euro-Med Laboratories Phil., Inc. v. Province of

Batangas,28 we ruled that it is the COA and not the RTC which
has primary jurisdiction to pass upon petitioner’s money claim
against respondent local government unit. Such jurisdiction
may not be waived by the parties’ failure to argue the issue
nor active participation in the proceedings. Thus:

This case is one over which the doctrine of primary jurisdiction clearly
held sway for although petitioner’s collection suit for P487,662.80 was
within the jurisdiction of the RTC, the circumstances surrounding
petitioner’s claim brought it clearly within the ambit of the COA’s
jurisdiction.

First, petitioner was seeking the enforcement of a claim for a

certain amount of money against a local government unit. This
brought the case within the COA’s domain to pass upon money
claims against the government or any subdivision thereof
under Section 26 of the Government Auditing Code of the
Philippines:

The authority and powers of the Commission [on Audit] shall extend to
and comprehend all matters relating to x x x the examination, audit, and
settlement of all debts and claims of any sort due from or owing to the
Government or any of its subdivisions, agencies, and instrumentalities. x
x x.

The scope of the COA’s authority to take cognizance of claims

is circumscribed, however, by an unbroken line of cases
holding statutes of similar import to mean only liquidated
claims, or those determined or readily determinable from
vouchers, invoices, and such other papers within reach of
accounting officers. Petitioner’s claim was for a fixed amount
and although respondent took issue with the accuracy of
petitioner’s summation of its accountabilities, the amount
thereof was readily determinable from the receipts, invoices
and other documents. Thus, the claim was well within the
COA’s jurisdiction under the Government Auditing Code of the
Philippines.

Second, petitioner’s money claim was founded on a series of

purchases for the medical supplies of respondent’s public
hospitals. Both parties agreed that these transactions were
governed by the Local Government Code provisions on supply
and property management and their implementing rules and
regulations promulgated by the COA pursuant to Section 383
of said Code. Petitioner’s claim therefore involved compliance
with applicable auditing laws and rules on procurement. Such
matters are not within the usual area of knowledge,
experience and expertise of most judges but within the special
competence of COA auditors and accountants. Thus, it was but
proper, out of fidelity to the doctrine of primary jurisdiction,
for the RTC to dismiss petitioner’s complaint.

Petitioner argues, however, that respondent could no longer

question the RTC’s jurisdiction over the matter after it had
filed its answer and participated in the subsequent
proceedings. To this, we need only state that the court may
raise the issue of primary jurisdiction sua sponte and its
invocation cannot be waived by the failure of the parties to
argue it as the doctrine exists for the proper distribution of
power between judicial and administrative bodies and not for
the convenience of the parties.29 (Emphasis supplied.)

Respondent’s collection suit being directed against a local

government unit, such money claim should have been first
brought to the COA.30 Hence, the RTC should have suspended
the proceedings and refer the filing of the claim before the
COA. Moreover, petitioner is not estopped from raising the
issue of jurisdiction even after the denial of its notice of appeal
and before the CA.

There are established exceptions to the doctrine of primary

jurisdiction, such as: (a) where there is estoppel on the part of
the party invoking the doctrine; (b) where the challenged
administrative act is patently illegal, amounting to lack of
jurisdiction; (c) where there is unreasonable delay or official
inaction that will irretrievably prejudice the complainant; (d)
where the amount involved is relatively small so as to make
the rule impractical and oppressive; (e) where the question
involved is purely legal and will ultimately have to be decided
by the courts of justice; (f) where judicial intervention is
urgent; (g) when its application may cause great and
irreparable damage; (h) where the controverted acts violate
due process; (i) when the issue of non-exhaustion of
administrative remedies has been rendered moot; (j) when
there is no other plain, speedy and adequate remedy; (k)
when strong public interest is involved; and, (l) in quo
warranto proceedings.31 However, none of the foregoing
circumstances is applicable in the present case.

The doctrine of primary jurisdiction does not warrant a court

to arrogate unto itself authority to resolve a controversy the
jurisdiction over which is initially lodged with an
administrative body of special competence.32 All the
proceedings of the court in violation of the doctrine and all
orders and decisions rendered thereby are null and void.33
Writ of Execution issued in violation of COA’s primary
jurisdiction is void

Since a judgment rendered by a body or tribunal that has no

jurisdiction over the subject matter of the case is no judgment
at all, it cannot be the source of any right or the creator of any
obligation.34 All acts pursuant to it and all claims emanating
from it have no legal effect and the void judgment can never
be final and any writ of execution based on it is likewise void.35
Clearly, the CA erred in ruling that the RTC committed no
grave abuse of discretion when it ordered the execution of its
judgment against petitioner and garnishment of the latter’s
funds.

In its Supplement to the Motion for Reconsideration, petitioner

argued that it is the COA and not the RTC which has original
jurisdiction over money claim against government agencies
and subdivisions.1âwphi1 The CA, in denying petitioner's
motion for reconsideration, simply stated that the issue had
become moot by respondent's filing of the proper petition with
the COA. However, respondent's belated compliance with the
formal requirements of presenting its money claim before the
COA did not cure the serious errors committed by the RTC in
implementing its void decision. The RTC's orders
implementing its judgment rendered without jurisdiction must
be set aside because a void judgment can never be validly
executed.

- Digested [17 November 2016, 22:17]

***

MASLAG V MONZON
FACTS: In 1998, petitioner filed a Complaint
7
for reconveyance of real property with
declaration of nullity of original certificate of title (OCT) against respondents Elizabeth
Monzon, William Geston and the Registry of Deeds of La Trinidad, Benguet.
After trial, the MTC found respondent Monzon guilty of fraud in obtaining an OCT over
petitioner’s property, that cause the respondent to appeal to the RTC of La Trinidad.
October 22, 2003, declaring the MTC without jurisdiction over petitioner’s cause of
action. Appeal from orders dismissing case without trial; lack of jurisdiction.
On May 4, 2004, Judge Diaz De Rivera issued a Resolution reversing the MTC
Decision. to turn over the possession of the 4,415 square meter land she presently
occupies to [Monzon]. This case is remanded to the court a quo for further proceedings
to determine whether [Maslag] is entitled to the remedies afforded by law to a builder in
good faith for the improvements she constructed thereon.
Petitioner filed a Notice of Appeal
15
from the RTC’s May 4, 2004 Resolution and prayed
that the MTC Decision be adopted.
Respondents moved to dismiss petitioner’s ordinary appeal for being the improper
remedy. They asserted that the proper mode of appeal is a Petition for Review under
Rule 42 because the RTC rendered its May 4, 2004 Resolution in its appellate
jurisdiction.
September 22, 2006, The CA dismissed petitioner’s appeal cited the earlier October 22,
2003 Order of the RTC declaring the MTC without jurisdiction over the case. A perusal
of the May 4, 2004 Resolution of the RTC, which is the subject matter of the appeal,
clearly reveals that it took cognizance of the MTC case in the exercise of its appellate
jurisdiction.

ISSUE: W o N the CA was correct in dismissing petitioner’s appeal.

HELD: YES, the CA is correct in affirming RTC decision.

Under the present state of the law, in cases involving title to real property, original and
exclusive jurisdiction belongs to either the RTC or the MTC, depending on the assessed
value of the subject property.
28
Pertinent provisions of Batas Pambansa Blg. (BP)
129,
29
as amended by Republic Act (RA) No. 7691.
Regional Trial Courts shall exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;

(2) In all civil actions which involve the title to, or possession of, real property, or
any interest therein, where the assessed value of the property involved exceeds
Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where x
x x the assessed value of the property exceeds Fifty thousand pesos
([P]50,000.00) except actions for forcible entry into and unlawful detainer of lands
or buildings, original jurisdiction over which is conferred upon Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in
Civil Cases. — Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts shall exercise:
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of
the property or interest therein does not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00)
Judge Cabato, erred in applying Section 19(1) of BP 129 in determining which court has
jurisdiction over the case and in pronouncing that the MTC is divested of original and
exclusive jurisdiction.In the mistaken choice of their remedy, they can blame no one but
themselves.
Petition is denied for lack of merit.