G.R. No.
L-5621 March 25, 1953 he interrogated about fifteen laborers who were then
PHILIPPINE MOVIE PICTURES WORKERS'
ASSOCIATION, Petitioner, vs. PREMIERE
PRODUCTIONS, INC., Respondent.
Cipriano Cid for petitioner.
Salvador C. Bayani for respondent.
BAUTISTA ANGELO, J.:
This is a petition for review of two orders of the Court of
Industrial Relations, one dated November 8, 1951, and the
other November 24, 1951, which give authority to
respondent to lay-off forty-four (44) of its employees in
accordance with its urgent petition on condition that, in the
event work is available in the future where their ability may
be required, the same workers should be reemployed and
that, if after the termination of the case, the court would
find that at the time of their lay off work was available, the
respondent shall pay to them the back wages to which they
are entitled. These two holders were upheld by the court en
banc in a resolution dated March 10, 1952, which is also
involved in the present petition for
review.chanroblesvirtualawlibrary chanrobles virtual law
library
On October 2, 1951, respondent filed with the Court of
Industrial Relations an urgent petition seeking authority to
lay-off 44 men working in three of its departments, the first
batch to be laid off thirty (30) days after the filing of the
petition and the rest 45 days thereafter, in order that in the
intervening period it may finish the filming of its pending
picture. The ground for the lay-off is the financial losses
which respondent was allegedly suffering during the
current year
Petitioner opposed the request alleging that the claim of
financial losses has no basis in fact it being only an act of
retaliation on the part of respondent for the strike staged by
the workers days before in an attempt to harass and
intimidate them and weaken and destroy the union to which
they belong.
On November 5, 1951, date when the urgent petition was
set for hearing, at the request of counsel for respondent,
Hon. Arsenio C. Roldan, presiding judge of the Court of
Industrial Relations, held an ocular inspection of the studios
and filming premises of respondent in the course of which
there was no more work for the laborers to do in connection
present in the place. On the strength of the evidence
adduced during the ocular inspection Judge Roldan issued
an order on November 8, 1951, allowing respondent to lay-
off the workers mentioned in its petition with respect to
Unit No. 2 and those assigned to the Ground Maintenance
Department subject to the condition that, in the event that
work is available in the future, they should be re-employed.
With respect to the workers assigned to Unit No. 1, the
hearing was postponed.
A subsequent hearing was held in connection with the
workers assigned to Unit. 1 and on the strength of the
evidence submitted by respondent, Judge Roldan again
found the petition justifiable and authorized their lay-off in
an order dated November 24, 1951, under the same
condition as those contained in his previous order.
Petitioner moved for the reconsideration of both orders
dated November 8 and November 24, 1951, which motion
the court en banc denied in a resolution issued on March
10, 1952. Hence this petition for review.
The only issue submitted to this court for reconsideration
is: May the Court of Industrial Relations authorize the lay
off of workers on the basis of an ocular inspection without
receiving full evidence to determine the cause or motive of
such lay-off
It appears that when the case was called for hearing to look
in the merits of the urgent petition of respondent seeking to
lay-off 44 men who were working in three of its
departments on the ground of lack of work and because its
business was suffering financial losses during the current
year the court, which was then represented by its presiding
Judge, decided to make an ocular inspection of the studios
and filming premises of respondent following a request
made to that effect by its counsel, and in the course of said
inspection Judge Roldan proceeded to interrogate the
workers he found in the place in the presence of the counsel
of both parties. The testimony of those interrogated was
taken down and the counsel of both parties were allowed to
cross-examine them. Judge Roldan also proceeded to
examine some of the records of respondent company
among them the time cards of some workers which showed
that while the workers reported for work, when their
presence was checked they were found to be no longer in
the premises. And on the strength of the findings made by
judge Roldan in this ocular inspection he reached the
conclusion that the petition for lay-off was justified because
with the different jobs given to them. It is now contended
that such a procedure is unfair to the labor union in that it
deprived the workers affected of the opportunity to
disprove what apparently was represented to the court
during the ocular inspection which at best may only be the
result of prearrangement devised by the company to justify
its claim of lack of work and that what the court should
have done was to make a full-dress investigation if not a
formal hearing giving both parties all the time and
opportunity to present their evidence before deciding such
an important matter which affects the position and the only
means of livelihood of the workers affected by the petition.
In other words, the petitioning labor union workers were
deprived of their employment without due process of law.
The claim of petitioner that the laborers were not given an
opportunity to present their evidence to disprove the claim
of lack of work is disputed by counsel for respondent
company who claims that the labor union had its day in
court because its counsel was present in the investigation or
ocular inspection and even presented some witnesses to
protect its interest. The record before the court on this
matter is not clear and for such reason it has no way of
determining the truth of both claims. The stenographic
notes taken during the ocular inspection have not been
elevated for the reason undoubtedly that this is a petition
for review and the only issue before the court is one of law.
In the face of this confusing situations on an issue which is
determinative of the controversy, the only guide that the
court finds is the order of the court of origin which happily
contains a reference to the evidence that it has considered
and which has served as basis for its conclusion resulting in
lay-off of the workers in whose behalf the present petition
was brought before this court. We refer to the order of
November 8, 1951, subject of the petition for review,
wherein Judge Roldan makes express mention of the
evidence can only refer to testimony given by the workers
interrogated by him and to whatever documents he found or
examined in the course of such inspection. It is true, as
counsel for respondent avers, that hearing were conducted
by the court a quo on October 8, and 15, 1951, and on
November 5, 6, 15, and 21, 1951, but it is likewise true that
those hearings do not necessarily refer to the petition under
consideration but to other matters and incidents which were
then before the court for determination such as the petition
of the labor union containing fourteen (14) demands and
the petition of the same union to declare respondent in
contempt for having violated certain directives of the court.
At any rate, this matter does not appear clear and we are
inclined to resolve the doubt in favor of labor considering
the spirit of our Constitution. The right to labor is a
constitutional as well as statutory right. Every man has a
natural right to the fruits of his own industry. A man who
has been employed to undertake certain labor and has put
into it his time and effort is entitled to be protected. The
right of a person to his labor is deemed to be property
within the meaning of constitutional guarantees. That is his
means of livelihood. He cannot be deprived of his labor or
work without due process of law
Although the Court of Industrial Relations, in the
determination of any question or controversy, may adopt its
own rules of procedure and may act according to justice
and equity without regard to technicalities, and for that
matter is not bound by any technical rules of evidence
(section 20, Commonwealth Act No. 103), this broad grant
of power should not be interpreted to mean that it can
ignore or disregard the fundamental requirements of due
process in the trials and investigation of cases brought
before it for determination. As aptly pointed out by this
court, there are certain cardinal primary rights which the
Court of Industrial Relations must respect in the trial of
every labor case. One of them is the right to a hearing
which includes the right of the party interested to present
his own case and submit evidence in support thereof
(Manila Trading and Supply Co. vs. Philippine Labor
Union, 71 Phil., 124, 129). An ocular inspection of the
establishment or premise involved is proper if the court
finds it necessary, but such is authorized only to help the
court in clearing a doubt, reaching a conclusion, or finding
the truth. But it is not the main trial nor should it exclude
the presentation of other evidence which the parties may
deem necessary to establish their case. It is merely an
auxiliary remedy the law affords the parties or the court to
reach an enlightened determination of the case.
Considering the merits of the controversy before us, we are
of the opinion that the required due process has not been
followed. The court a quo merely acted on the strength of
the ocular inspection it conducted in the premises of the
respondent company. The petition for lay-off was
predicated on the lack of work and of the further fact that
the company was incurring financial losses. These
allegations cannot be established by a mere inspection of
the place of labor specially when such inspection was
conducted at the request of the interested party. As counsel
for petitioner says, such inspection could at best witness
"the superficial fact of cessation of work but it could not be
determinative of the larger and more fundamental issue of
lack of work due to lack of funds". This fundamental issue
cannot be determined without looking into the financial
situation of the respondent company. In fact, this matter is
now being looked into by the court a quo in connection
with the fourteen demands of the labor union, but before
finishing its inquiry it decided to grant the lay-off pending
final determination of the main case. This action is in our
opinion premature and has worked injustice to the
laborers.chanroblesvirtualawlibrary chanrobles virtual law
library
WHEREFORE, the orders subject of the present petition
for review are hereby set aside, and it is ordered that the
cause be remanded to the court of origin for further
proceedings giving to petitioner an opportunity to present
its evidence in support of its opposition to the urgent
petition for lay-off of respondent company. No
pronouncement as to costs.chanroblesvirtualawlibrary
chanrobles virtual law library
Paras, C.J., Pablo, Bengzon, Padilla, Reyes, Jugo and
Labrador, JJ., concur.
Tuason and Montemayor, JJ., concur in the result.
EN BANC
[G.R. Nos. L-7996-99. May 31, 1956.]
ESTATE OF FLORENCIO P. BUAN, Petitioner, vs.
PAMPANGA BUS COMPANY AND LA MALLORCA,
Respondents.
DECISION
REYES, A., J.:
This is a petition to review a decision of the Public Service
Commission.
The estate of Florencio P. Buan, herein Petitioner, is an
authorized bus operator along various lines in central and
northern Luzon, with authority to operate 8 auto-trucks
along the Manila-Bagac line and 11 along the Moron
Dinalupihan line. Allegedly in response to various
resolutions of municipal councils and on petition of civic
and labor groups in the province of Bataan urging extension
of its services to their respective municipalities, Petitioner
applied in four cases in the Commission for certificates of
public convenience to operate additional trips between
Manila and various municipalities and barrios in Bataan,
with a total of 83 units distributed as
follows:chanroblesvirtuallawlibrary
Manila-Balanga and vice versa 30 units
Manila-Mariveles and vice versa 10 “
Manila-Lamao and vice versa 8 “
Manila-Moron and vice versa 8 “
Manila-Orani and vice versa 7 “
Manila-Cabcaben and vice versa 4 “
Manila-Orion and vice versa 6 “
Manila-Limay and vice versa 6 “
Manila-Dinalupihan and vice versa 4 “
The Pampanga Bus Company and La Mallorca opposed
these applications, both alleging that they are authorized to
operate and are actually operating a fleet of auto-trucks on
the lines applied for and rendering adequate and
satisfactory service; that the additional services applied for
are superfluous, will not promote public interest in a proper
and suitable manner, and will result in cut-throat and
ruinous competition. The Commission, after hearing the
parties and their evidence and having before it the records
of the authorized services on the lines applied for, as well
as the findings of two of its agents who had been ordered
by it to make an on-the-spot survey of the passenger traffic
along those lines, rendered a joint decision in the four
cases, denying the applications on the grounds that
Petitioner had not made a case for the grant of the
certificates applied for, that the service of the Oppositors
was adequate and sufficient for the actual needs of the
public and that the grant of the applications would only
result in unnecessary or wasteful competition.
Reconsideration of this decision having been denied,
Petitioner has sought a review of this Court.
It would appear from the record that the Pampanga Bus
Company is authorized and actually operating 27 round
trips on the Limay-Manila line, 8 on the Limay-San
Fernando, Pampanga, line; 14 on the Mariveles-Limay line,
4 on the Balanga-Moron line, 3 on the Balanga-
Dinalupihan line, and 1 on the Guagua-Dinalupihan line,
while the La Mallorca has 15 round trips on the Lamao-
Manila line, 6 on the Balanga-Manila line, 16 on the
Cabcaben Balanga line, and 20 on the Balanga-Dinalupihan
line. The main issue in this petition for review is whether or
not the trips actually being operated by the two companies,
together with those of Petitioner, are adequate to serve the
public need.
To prove the inadequacy of the present service, 14
witnesses took the stand for Petitioner and testified to the
insufficiency of transportation facilities and the need for
additional service on the lines applied for. Documentary
proof, consisting of resolutions of municipal councils of
Balanga, Dinalupihan, Limay, and Orani, and a petition of
the Association of Citizens of Orion, was also adduced to
show the need for the solicited additional service, and there
was also mention of the inability of the Pampanga Bus
Company to register its authorized number of units, as well
as the alleged noncompliance on the part of the two
Respondents companies with the terms of their certificates
by suppressing trips on hours when they do not expect a
sufficient number of passengers. On their part the two
Respondent companies presented six witnesses, and
documentary proof too, to show that they were rendering
service in accordance with the requirements of their
certificates and that the needs of the traveling public were
being adequately served.
Unable at first to arrive at a decision from the conflicting
evidence presented for both parties, the Commission
ordered a survey of the passenger traffic on the lines
applied for, and to that end assigned and stationed in two
strategic places in Bataan two of its agents. The agents
made a check-up of the number of passengers coming to
and from the whole province for a period of one week and
thereafter submitted their findings. Considering these
findings together with the evidence submitted by the
parties, the Commission found that —
“The reports of agents at both checkpoints confirm the
assertion of the Oppositors that the existing passenger
traffic in all the lines do not warrant the authorization of
additional service. In examination of the reports will show
that on an average from 12 to 15 passengers were carried
by each bus checked and in many instances the number of
passengers carried was between two and ten. A
computation of the load of the buses on all the lines during
the period of checking shows that the average payload per
bus on the lines was even less than 50 per cent. On the
Manila-Balanga line, the load was 33 per cent; Manila-
Limay 30 per cent; Manila-Lamao 33 per cent; -Orion 33
per cent; Manila-Bagac 39 percent, and on the local lines
like San Fernando- Limay, Dinalupihan-Balanga; Guagua
Limay and Dinalupihan-Moron, the average load was about
20 per cent of the carrying capacity of the truck. A similar
finding results from the checking undertaken at Layac,
Dinalupihan, where the payload of the trucks as checked is
practically the same as that of the trucks checked at
Balanga. The checking also indicates that Oppositors
operate their service in accordance with the schedules
prescribed in their certificates and that the service which
they render together with that of other operators provide the
public with buses at frequent intervals so that we find it
difficult to believe the assertion of applicant’s witnesses
that passengers cannot be accommodated due to insufficient
trips or that buses which arrive are so loaded that they are
not allowed to ride.”
The above-quoted findings are obviously supported by
more than substantial evidence and therefore binding upon
this Court, which is not required to examine the proof de
novo and determine for itself whether or not the
preponderance of evidence really justifies the decision
below. Moreover, such doubt as might arise from the
conflict of evidence appears to be dissipated by the reports
of the two checkers sent out to observe by the Commission.
As pointed out in the decision, an examination of those
reports “will show that on an average from 12 to 15
passengers were carried by each bus checked and in many
instances the number of passengers carried was between
two and ten.” Needless to say, the sending of the two
checkers for purposes of observation appears to be justified,
for as this Court has already said, “where the evidence was
conflicting as to whether existing service of the holder of a
certificate of convenience for land transportation was
inadequate, so that another certificate should be granted to
Petitioner, the Public Service Commission acted with
prudence in sending two of its inspectors to investigate and
report on the situation. (Gilles vs. Halili, 65 Phil., 738.)
It is, however, contended that the Commission erred in
denying Petitioner’s four applications for direct service
specially to those places where the two Respondents have
no authority to operate a direct service to and from Manila,
and in sustaining Respondent’s opposition notwithstanding
the fact that they themselves have filed applications for
direct service on the lines proposed to be served by
Petitioner in the present case, in which applications they
allege the necessity for additional service. It is argued in
this connection that the two Oppositors are serving only
three of the nine lines applied for by Petitioner, that is,
Limay-Manila, Lamao-Manila, and Balanga-Manila, and
dispatch early morning trips from Dinalupihan, Orion,
Cabcaben, and Mariveles to Manila when neither of them
has authority to operate direct service from these places to
Manila and that this unauthorized operation cannot be
considered as evidence in support of the finding of
adequate and sufficient facilities to warrant denial of
applications for direct service to those places for which
none is authorized.
We find no merit in Petitioner’s contention. While it is true
that the two Oppositors have authority to operate direct
service only on three of the nine lines applied for by
Petitioner, in reality these direct lines pass through the
other routes applied for like Orani and Orion, and the two
Oppositors have sufficient and convenient trips going to the
other points like Mariveles, Moron, Cabcaben, and
Dinalupihan, whose hours of departure and arrival are
coordinated with those on the direct trips to Manila. And
for a clearer apprehension of the situation in this case, it
should be noted that there is only one main highway in the
province. From its Mariveles end, the route of this highway
towards Manila traverses in consecutive order the barrios of
Cabcaben and Lamao, the towns of Limay, Orion, Pilar,
Balanga, Abucay, Samal, Orani, Hermosa, and the barrio of
Layac, Dinalupihan. The only places not touched by this
highway, to where lines are also proposed by Petitioner, are
Dinalupihan, which lies along the Zambales highway two
kilometers from the Layac junction, and Moron, which lies
southwest of Balanga and is connected to the highway by a
road which passes through Bagac and intersects it at Pilar.
Evidently, Respondents’ 15 trips from Lamao, 27 trips from
Limay, and the 6 trips from Balanga direct to Manila, as
well as Petitioner’s own 8 trips from Bagac to Manila, all
pass along this main highway so that in truth Lamao is
served with 15 trips; chan roblesvirtualawlibraryLimay and
Orion 42 trips; chan roblesvirtualawlibraryPilar, Balanga,
Abucay, Samal, Orani, Hermosa, and Layac, 56 trips daily
to and from Manila, not to mention the trips furnished by
local operators within the province. With the Commission’s
finding that the average payload per bus on the Bataan line
is less than 50 per cent and Respondents’ evidence, not
contradicted by Petitioner, that they are not getting a
reasonably fair margin of profit on their lines, the granting
of authority to operate the proposed additional services
would undoubtedly crowd the routes presently served both
by the Respondents and the Petitioner and decrease the
already low average payload per bus, thereby provoking
cut-throat competition, which ultimately results in
deterioration of service due to heavy losses or diminution in
income.
The discriminatory attitude imputed to the Commission by
reason of its having, to Petitioner’s prejudice, allegedly
deviated from its consistent policy of approving
applications for direct service since such kind of service is
more convenient to the traveling public than the broken
trips, is more fancied than real, considering the finding that
the present authorized trips are more than adequate to take
care of the passenger traffic along the routes in question.
Highly desirable as direct trips undoubtedly are, there
would be no sense in unnecessarily increasing their number
on lines already amply served by equally direct service
supplemented by the local services.
The fact that Respondents have dispatched trips without
previous authority may call for some kind of disciplinary
action. But we don’t think it would be a good ground for
authorizing additional trips where the Commission has
found that there is already more than adequate service
along the main highway and to and from communities with
easy access thereto.
It is true that subsequent to the filing of Petitioner’s
applications Respondents themselves have filed similar
applications for direct service on the same lines and in
those applications they allege the need for additional
service. But as to that we can believe Respondents’
explanation at the hearing that the filing of their own
applications was merely a tactical move calculated to
secure for themselves, as prewar operators with a heavy
investment on the Bataan line, preference in the grant of
authority for additional service, should the Commission
decide after hearing that there is need for such additional
service.
The law, in investing the Public Service Commission with
the power of supervision and control over public
transportation, has also clothed it with broad discretion in
the exercise of that power. With that discretion this Court is
not supposed to interfere except in case of clear abuse.
Such has not been shown to be the case here. What appears
is that the Commission, faced with the conflict of evidence
on the adequacy or inadequacy of the present service, has
sought to discover the truth through an on-the-ground
inspection and observation by its own agents and has, on
the basis of information thus obtained, arrived at the
conclusion that the additional service applied for is
uncalled for because there is already amplitude, if not
superabundance, in the number of authorized trips. That
conclusion is amply supported by the record and is far from
being the product of partiality or unfair discrimination. And
it not clearly appearing that discretion has been abused or
that the Commission has illegally used its powers, we have
to respect its judgment and not to try to replace it with our
own.
Wherefore, the decision below is affirmed, with costs
against the petition.
Paras, C.J., Bengzon, Padilla, Montemayor, Bautista
Angelo, Concepcion, Reyes, J.B.L., and Endencia, JJ.,
concur.
.R. No. L-20993 September 28, 1968
RIZAL LIGHT & ICE CO., INC., petitioner,
vs.
THE MUNICIPALITY OF MORONG, RIZAL and
THE PUBLIC SERVICE COMMISSION, respondents.
----------------------------
G.R. No. L-21221 September 28, 1968
RIZAL LIGHT & ICE CO., INC., petitioner,
vs.
THE PUBLIC SERVICE COMMISSION and
MORONG ELECTRIC CO., INC., respondents.
Amado A. Amador, Jr. for petitioner.
Atilano C. Bautista and Pompeyo F. Olivas for
respondents.
ZALDIVAR, J.:
These two cases, being interrelated, are decided together.
Case G.R. No. L-20993 is a petition of the Rizal Light &
Ice Co., Inc. to review and set aside the orders of
respondent Public Service Commission, 1 dated August 20,
1962, and February 15, 1963, in PSC Case No. 39716,
cancelling and revoking the certificate of public
convenience and necessity and forfeiting the franchise of
said petitioner. In the same petition, the petitioner prayed
for the issuance of a writ of preliminary injunction ex parte
suspending the effectivity of said orders and/or enjoining
respondents Commission and/or Municipality of Morong,
Rizal, from enforcing in any way the cancellation and
revocation of petitioner's franchise and certificate of public
convenience during the pendency of this appeal. By
resolution of March 12, 1963, this Court denied the petition
for injunction, for lack of merit.
Case G. R. L-21221 is likewise a petition of the Rizal Light
& Ice Co., Inc. to review and set aside the decision of the
Commission dated March 13, 1963 in PSC Case No. 62-
5143 granting a certificate of public convenience and
necessity to respondent Morong Electric Co., Inc. 2 to
operate an electric light, heat and power service in the
municipality of Morong, Rizal. In the petition Rizal Light
& Ice Co., Inc. also prayed for the issuance of a writ of
preliminary injunction ex parte suspending the effectivity
of said decision. Per resolution of this Court, dated May 6,
1963, said petition for injunction was denied.
The facts, as they appear in the records of both cases, are as
follows:
Petitioner Rizal Light & Ice Co., Inc. is a domestic
corporation with business address at Morong, Rizal. On
August 15, 1949, it was granted by the Commission a
certificate of public convenience and necessity for the
installation, operation and maintenance of an electric light,
heat and power service in the municipality of Morong,
Rizal.
In an order dated December 19, 1956, the Commission
required the petitioner to appear before it on February 18,
1957 to show cause why it should not be penalized for
violation of the conditions of its certificate of public
convenience and the regulations of the Commission, and
for failure to comply with the directives to raise its service
voltage and maintain them within the limits prescribed in
the Revised Order No. 1 of the Commission, and to acquire
and install a kilowattmeter to indcate the load in kilowatts
at any particular time of the generating unit. 3
For failure of the petitioner to appear at the hearing on
February 18, 1957, the Commission ordered the
cancellation and revocation of petitioner's certificate of
public convenience and necessity and the forfeiture of its
franchise. Petitioner moved for reconsideration of said
order on the ground that its manager, Juan D. Francisco,
was not aware of said hearing. Respondent municipality
opposed the motion alleging that petitioner has not
rendered efficient and satisfactory service and has not
complied with the requirements of the Commission for the
improvement of its service. The motion was set for hearing
and Mr. Pedro S. Talavera, Chief, Industrial Division of the
Commission, was authorized to conduct the hearing for the
reception of the evidence of the parties. 4
Finding that the failure of the petitioner to appear at the
hearing set for February 18, 1957 — the sole basis of the
revocation of petitioner's certificate — was really due to the
illness of its manager, Juan D. Francisco, the Commission
set aside its order of revocation. Respondent municipality
moved for reconsideration of this order of reinstatement of
the certificate, but the motion was denied.
In a petition dated June 25, 1958, filed in the same case,
respondent municipality formally asked the Commission to
revoke petitioner's certificate of public convenience and to
forfeit its franchise on the ground, among other things, that
it failed to comply with the conditions of said certificate
and franchise. Said petition was set for hearing jointly with
the order to show cause. The hearings had been postponed
several times.
Meanwhile, inspections had been made of petitioner's
electric plant and installations by the engineers of the
Commission, as follows: April 15, 1958 by Engineer
Antonio M. Alli; September 18, 1959, July 12-13, 1960,
and June 21-24, 1961, by Engineer Meliton S. Martinez.
The inspection on June 21-24, 1961 was made upon the
request of the petitioner who manifested during the hearing
on December 15, 1960 that improvements have been made
on its service since the inspection on July 12-13, 1960, and
that, on the basis of the inspection report to be submitted, it
would agree to the submission of the case for decision
without further hearing.
When the case was called for hearing on July 5, 1961,
petitioner failed to appear. Respondent municipality was
then allowed to present its documentary evidence, and
thereafter the case was submitted for decision.
On July 7, 1961, petitioner filed a motion to reopen the case
upon the ground that it had not been furnished with a copy
of the report of the June 21-24, 1961 inspection for it to
reply as previously agreed. In an order dated August 25,
1961, petitioner was granted a period of ten (10) days
within which to submit its written reply to said inspection
report, on condition that should it fail to do so within the
said period the case would be considered submitted for
decision. Petitioner failed to file the reply. In consonance
with the order of August 25, 1961, therefore, the
Commission proceeded to decide the case. On July 29,
1962 petitioner's electric plant was burned.
In its decision, dated August 20, 1962, the Commission, on
the basis of the inspection reports of its aforenamed
engineers, found that the petitioner had failed to comply
with the directives contained in its letters dated May 21,
1954 and September 4, 1954, and had violated the
conditions of its certificate of public convenience as well as
the rules and regulations of the Commission. The
Commission concluded that the petitioner "cannot render
the efficient, adequate and satisfactory electric service
required by its certificate and that it is against public
interest to allow it to continue its operation." Accordingly,
it ordered the cancellation and revocation of petitioner's
certificate of public convenience and the forfeiture of its
franchise.
On September 18, 1962, petitioner moved for
reconsideration of the decision, alleging that before its
electric plant was burned on July 29, 1962, its service was
greatly improved and that it had still existing investment
which the Commission should protect. But eight days
before said motion for reconsideration was filed, or on
September 10, 1962, Morong Electric, having been granted
a municipal franchise on May 6, 1962 by respondent
municipality to install, operate and maintain an electric
heat, light and power service in said municipality —
approved by the Provincial Board of Rizal on August 31,
1962 — filed with the Commission an application for a
certificate of public convenience and necessity for said
service. Said application was entitled "Morong Electric Co.,
Inc., Applicant", and docketed as Case No. 62-5143.
Petitioner opposed in writing the application of Morong
Electric, alleging among other things, that it is a holder of a
certificate of public convenience to operate an electric light,
heat and power service in the same municipality of
Morong, Rizal, and that the approval of said application
would not promote public convenience, but would only
cause ruinous and wasteful competition. Although the
opposition is dated October 6, 1962, it was actually
received by the Commission on November 8, 1962, or
twenty four days after the order of general default was
issued in open court when the application was first called
for hearing on October 15, 1962. On November 12, 1962,
however, the petitioner filed a motion to lift said order of
default. But before said motion could be resolved,
petitioner filed another motion, dated January 4, 1963, this
time asking for the dismissal of the application upon the
ground that applicant Morong Electric had no legal
personality when it filed its application on September 10,
1962, because its certificate of incorporation was issued by
the Securities and Exchange Commission only on October
17, 1962. This motion to dismiss was denied by the
Commission in a formal order issued on January 17, 1963
on the premise that applicant Morong Electric was a de
facto corporation. Consequently, the case was heard on the
merits and both parties presented their respective evidence.
On the basis of the evidence adduced, the Commission, in
its decision dated March 13, 1963, found that there was an
absence of electric service in the municipality of Morong
and that applicant Morong Electric, a Filipino-owned
corporation duly organized and existing under the laws of
the Philippines, has the financial capacity to maintain said
service. These circumstances, considered together with the
denial of the motion for reconsideration filed by petitioner
in Case No. 39715 on February, 15, 1963, such that as far
as the Commission was concerned the certificate of the
petitioner was already declared revoked and cancelled, the
Commission approved the application of Morong Electric
and ordered the issuance in its favor of the corresponding
certificate of public convenience and necessity.1awphîl.nèt
On March 8, 1963, petitioner filed with this Court a petition
to review the decision in Case No. 39715 (now G. R. No.
L-20993). Then on April 26, 1963, petitioner also filed a
petition to review the decision in Case No. 62-5143 (now
G. R. No. L-21221).
In questioning the decision of the Commission in Case No.
39715, petitioner contends: (1) that the Commission acted
without or in excess of its jurisdiction when it delegated the
hearing of the case and the reception of evidence to Mr.
Pedro S. Talavera who is not allowed by law to hear the
same; (2) that the cancellation of petitioner's certificate of
public convenience was unwarranted because no sufficient
evidence was adduced against the petitioner and that
petitioner was not able to present evidence in its defense;
(3) that the Commission failed to give protection to
petitioner's investment; and (4) that the Commission erred
in imposing the extreme penalty of revocation of the
certificate.
In questioning the decision in Case No. 62-5143, petitioner
contends: (1) that the Commission erred in denying
petitioner's motion to dismiss and proceeding with the
hearing of the application of the Morong Electric; (2) that
the Commission erred in granting Morong Electric a
certificate of public convenience and necessity since it is
not financially capable to render the service; (3) that the
Commission erred when it made findings of facts that are
not supported by the evidence adduced by the parties at the
trial; and (4) that the Commission erred when it did not
give to petitioner protection to its investment — a
reiteration of the third assignment of error in the other
case.1awphîl.nèt
We shall now discuss the appeals in these two cases
separately.
G.R. No. L-20993
1. Under the first assignment of error, petitioner contends
that while Mr. Pedro S. Talavera, who conducted the
hearings of the case below, is a division chief, he is not a
lawyer. As such, under Section 32 of Commonwealth Act
No. 146, as amended, the Commission should not have
delegated to him the authority to conduct the hearings for
the reception of evidence of the parties.
We find that, really, Mr. Talavera is not a lawyer. 5 Under
the second paragraph of Section 32 of Commonwealth Act
No. 146, as amended, 6 the Commission can only authorize
a division chief to hear and investigate a case filed before it
if he is a lawyer. However, the petitioner is raising this
question for the first time in this appeal. The record
discloses that petitioner never made any objection to the
authority of Mr. Talavera to hear the case and to receive the
evidence of the parties. On the contrary, we find that
petitioner had appeared and submitted evidence at the
hearings conducted by Mr. Talavera, particularly the
hearings relative to the motion for reconsideration of the
order of February 18, 1957 cancelling and revoking its
certificate. We also find that, through counsel, petitioner
had entered into agreements with Mr. Talavera, as hearing
officer, and the counsel for respondent municipality,
regarding procedure in order to abbreviate the proceedings.
7 It is only after the decision in the case turned out to be
adverse to it that petitioner questioned the proceedings held
before Mr. Talavera.
This Court in several cases has ruled that objection to the
delegation of authority to hear a case filed before the
Commission and to receive the evidence in connection
therewith is a procedural, not a jurisdictional point, and is
waived by failure to interpose timely the objection and the
case had been decided by the Commission. 8 Since
petitioner has never raised any objection to the authority of
Mr. Talavera before the Commission, it should be deemed
to have waived such procedural defect, and consonant with
the precedents on the matter, petitioner's claim that the
Commission acted without or in excess of jurisdiction in so
authorizing Mr. Talavera should be dismissed. 9
2. Anent the second assigned error, the gist of petitioner's
contention is that the evidence — consisting of inspection
reports — upon which the Commission based its decision is
insufficient and untrustworthy in that (1) the authors of said
reports had not been put to test by way of cross-
examination; (2) the reports constitute only one side of the
picture as petitioner was not able to present evidence in its
defense; (3) judicial notice was not taken of the testimony
of Mr. Harry B. Bernardino, former mayor of respondent
municipality, in PSC Case No. 625143 (the other case, G.
R. No. L-21221) to the effect that the petitioner had
improved its service before its electric power plant was
burned on July 29, 1962 — which testimony contradicts the
inspection reports; and (4) the Commission acted both as
prosecutor and judge — passing judgment over the very
same evidence presented by it as prosecutor — a situation
"not conducive to the arrival at just and equitable
decisions."
Settled is the rule that in reviewing the decision of the
Public Service Commission this Court is not required to
examine the proof de novo and determine for itself whether
or not the preponderance of evidence really justifies the
decision. The only function of this Court is to determine
whether or not there is evidence before the Commission
upon which its decision might reasonably be based. This
Court will not substitute its discretion for that of the
Commission on questions of fact and will not interfere in
the latter's decision unless it clearly appears that there is no
evidence to support it. 10 Inasmuch as the only function of
this Court in reviewing the decision of the Commission is
to determine whether there is sufficient evidence before the
Commission upon which its decision can reasonably be
based, as it is not required to examine the proof de novo,
the evidence that should be made the basis of this Court's
determination should be only those presented in this case
before the Commission. What then was the evidence
presented before the Commission and made the basis of its
decision subject of the present appeal? As stated earlier, the
Commission based its decision on the inspection reports
submitted by its engineers who conducted the inspection of
petitioner's electric service upon orders of the Commission.
11 Said inspection reports specify in detail the deficiencies
incurred, and violations committed, by the petitioner
resulting in the inadequacy of its service. We consider that
said reports are sufficient to serve reasonably as bases of
the decision in question. It should be emphasized, in this
connection that said reports, are not mere documentary
proofs presented for the consideration of the Commission,
but are the results of the Commission's own observations
and investigations which it can rightfully take into
consideration, 12 particularly in this case where the
petitioner had not presented any evidence in its defense,
and speaking of petitioner's failure to present evidence, as
well as its failure to cross-examine the authors of the
inspection reports, petitioner should not complain because
it had waived not only its right to cross-examine but also its
right to present evidence. Quoted hereunder are the
pertinent portions of the transcripts of the proceedings
where the petitioner, through counsel, manifested in clear
language said waiver and its decision to abide by the last
inspection report of Engineer Martinez:
Proceedings of December 15, 1960
COMMISSION:
It appears at the last hearing of this case on September 23,
1960, that an engineer of this Commission has been ordered
to make an inspection of all electric services in the province
of Rizal and on that date the engineer of this Commission is
still undertaking that inspection and it appears that the said
engineer had actually made that inspection on July 12 and
13, 1960. The engineer has submitted his report on
November 18, 1960 which is attached to the records of this
case.
ATTY. LUQUE (Councel for Petitioner):
... (W)e respectfully state that while the report is, as I see it
attached to the records, clear and very thorough, it was
made sometime July of this year and I understand from the
respondent that there is some improvement since this report
was made ... we respectfully request that an up-to-date
inspection be made ... . An inspector of this Commission
can be sent to the plant and considering that the engineer of
this Commission, Engineer Meliton Martinez, is very
acquainted to the points involved we pray that his report
will be used by us for the reason that he is a technical man
and he knows well as he has done a good job and I think
our proposition would expedite the matter. We sincerely
believe that the inspection report will be the best evidence
to decide this matter.
xxx xxx xxx
ATTY. LUQUE:
... This is a very important matter and to show the good
faith of respondent in this case we will not even cross-
examine the engineer when he makes a new report. We will
agree to the findings and, your honor please, considering as
we have manifested before that Engineer Martinez is an
experienced engineer of this Commission and the points
reported by Engineer Martinez on the situation of the plant
now will prevent the necessity of having a hearing, of us
bringing new evidence and complainant bringing new
evidence. ... .
xxx xxx xxx
COMMISSION (to Atty. Luque):
Q Does the Commission understand from
the counsel for applicant that if the motion is
granted he will submit this order to show cause
for decision without any further hearing and the
decision will be based on the report of the
engineer of this Commission?
A We respectfully reply in this manner that
we be allowed or be given an opportunity just to
read the report and 99%, we will agree that the
report will be the basis of that decision. We just
want to find out the contents of the report,
however, we request that we be furnished with a
copy of the report before the hearing so that we
will just make a manifestation that we will agree.
COMMISSION (to Atty. Luque):
Q In order to prevent the delay of the
disposition of this case the Commission will
allow counsel for the applicant to submit his
written reply to the report that the engineer of this
Commission. Will he submit this case without
further hearing upon the receipt of that written
reply?
A Yes, your honor.
Proceedings of August 25, 1961
ATTY. LUQUE (Counsel for petitioner):
In order to avoid any delay in the consideration of this case
we are respectfully move (sic) that instead of our witnesses
testifying under oath that we will submit a written reply
under oath together with the memorandum within fifteen
(15) days and we will furnish a copy and upon our
submission of said written reply under oath and
memorandum we consider this case submitted. This
suggestion is to abbreviate the necessity of presenting
witnesses here which may prolong the resolution of this
case.
ATTY. OLIVAS (Counsel for respondent municipality):
I object on the ground that there is no resolution by this
Commission on the action to reopen the case and second
this case has been closed.
ATTY. LUQUE:
With regard to the testimony on the ground for opposition
we respectfully submit to this Commission our motion to
submit a written reply together with a memorandum. Also
as stated to expedite the case and to avoid further hearing
we will just submit our written reply. According to our
records we are furnished with a copy of the report of July
17, 1961. We submit your honor.
xxx xxx xxx
COMMISSION:
To give applicant a chance to have a day in court the
Commission grants the request of applicant that it be given
10 days within which to submit a written reply on the report
of the engineer of the Commission who inspected the
electric service, in the municipality of Morong, Rizal, and
after the submission of the said written reply within 10 days
from today this case will be considered submitted for
decision.
The above-quoted manifestation of counsel for the
petitioner, specifically the statement referring to the
inspection report of Engineer Martinez as the "best
evidence to decide this matter," can serve as an argument
against petitioner's claim that the Commision should have
taken into consideration the testimony of Mr. Bernardino.
But the primary reasons why the Commission could not
have taken judicial cognizance of said testimony are: first,
it is not a proper subject of judicial notice, as it is not a
"known" fact — that is, well established and authoritatively
settled, without qualification and contention; 13 second, it
was given in a subsequent and distinct case after the
petitioner's motion for reconsideration was heard by the
Commission en banc and submitted for decision, 14 and
third, it was not brought to the attention of the Commission
in this case through an appropriate pleading. 15
Regarding the contention of petitioner that the Commission
had acted both as prosecutor and judge, it should be
considered that there are two matters that had to be decided
in this case, namely, the order to show cause dated
December 19, 1956, and the petition or complaint by
respondent municipality dated June 25, 1958. Both matters
were heard jointly, and the record shows that respondent
municipality had been allowed to present its evidence to
substantiate its complaint. It can not be said, therefore, that
in this case the Commission had acted as prosecutor and
judge. But even assuming, for the sake of argument, that
there was a commingling of the prosecuting and
investigating functions, this exercise of dual function is
authorized by Section 17(a) of Commonwealth Act No.
146, as amended, under which the Commission has power
"to investigate, upon its own initiative or upon complaint in
writing, any matter concerning any public service as
regards matters under its jurisdiction; to, require any public
service to furnish safe, adequate, and proper service as the
public interest may require and warrant; to enforce
compliance with any standard, rule, regulation, order or
other requirement of this Act or of the Commission ... ."
Thus, in the case of Collector of Internal Revenue vs.
Estate of F. P. Buan, L-11438, July 31, 1958, this Court
held that the power of the Commission to cancel and
revoke a certificate of public convenience and necessity
may be exercised by it even without a formal charge filed
by any interested party, with the only limitation that the
holder of the certificate should be given his day in court.
It may not be amiss to add that when prosecuting and
investigating duties are delegated by statute to an
administrative body, as in the case of the Public Service
Commission, said body may take steps it believes
appropriate for the proper exercise of said duties,
particularly in the manner of informing itself whether there
is probable violation of the law and/or its rules and
regulations. It may initiate an investigation, file a
complaint, and then try the charge as preferred. So long as
the respondent is given a day in court, there can be no
denial of due process, and objections to said procedure
cannot be sustained.
3. In its third assignment of error, petitioner invokes the
"protection-of-investment rule" enunciated by this Court in
Batangas Transportation Co. vs. Orlanes 16 in this wise:
The Government having taken over the control
and supervision of all public utilities, so long as
an operator under a prior license complies with
the terms and conditions of his license and
reasonable rules and regulations for its operation
and meets the reasonable demands of the public,
it is the duty of the Commission to protect rather
than to destroy his investment by the granting of
the second license to another person for the same
thing over the same route of travel. The granting
of such a license does not serve its convenience
or promote the interests of the public.
The above-quoted rule, however, is not absolute, for
nobody has exclusive right to secure a franchise or a
certificate of public convenience. 17 Where, as in the present
case, it has been shown by ample evidence that the
petitioner, despite ample time and opportunity given to it
by the Commission, had failed to render adequate,
sufficient and satisfactory service and had violated the
important conditions of its certificate as well as the
directives and the rules and regulations of the Commission,
the rule cannot apply. To apply that rule unqualifiedly is to
encourage violation or disregard of the terms and
conditions of the certificate and the Commission's
directives and regulations, and would close the door to
other applicants who could establish, operate and provide
adequate, efficient and satisfactory service for the benefit
and convenience of the inhabitants. It should be
emphasized that the paramount consideration should
always be the public interest and public convenience. The
duty of the Commission to protect investment of a public
utility operator refers only to operators of good standing —
those who comply with the laws, rules and regulations —
and not to operators who are unconcerned with the public
interest and whose investments have failed or deteriorated
because of their own fault. 18
4. The last assignment of error assails the propriety of the
penalty imposed by the Commission on the petitioner —
that is, the revocation of the certificate and the forfeiture of
the franchise. Petitioner contends that the imposition of a
fine would have been sufficient, as had been done by the
Commission in cases of a similar nature.
It should be observed that Section 16(n) of Commonwealth
Act No. 146, as amended, confers upon the Commission
ample power and discretion to order the cancellation and
revocation of any certificate of public convenience issued
to an operator who has violated, or has willfully and
contumaciously refused to comply with, any order, rule or
regulation of the Commission or any provision of law.
What matters is that there is evidence to support the action
of the Commission. In the instant case, as shown by the
evidence, the contumacious refusal of the petitioner since
1954 to comply with the directives, rules and regulations of
the Commission, its violation of the conditions of its
certificate and its incapability to comply with its
commitment as shown by its inadequate service, were the
circumstances that warranted the action of the Commission
in not merely imposing a fine but in revoking altogether
petitioner's certificate. To allow petitioner to continue its
operation would be to sacrifice public interest and
convenience in favor of private interest.
A grant of a certificate of public convenience
confers no property rights but is a mere license or
privilege, and such privilege is forfeited when the
grantee fails to comply with his commitments
behind which lies the paramount interest of the
public, for public necessity cannot be made to
wait, nor sacrificed for private convenience.
(Collector of Internal Revenue v. Estate of F. P.
Buan, et al., L-11438 and Santiago Sambrano, et
al. v. PSC, et al., L-11439 & L-11542-46, July
31, 1958)
(T)he Public Service Commission, ... has the
power to specify and define the terms and
conditions upon which the public utility shall be
operated, and to make reasonable rules and
regulations for its operation and the
compensation which the utility shall receive for
its services to the public, and for any failure to
comply with such rules and regulations or the
violation of any of the terms and conditions for
which the license was granted, the Commission
has ample power to enforce the provisions of the
license or even to revoke it, for any failure or
neglect to comply with any of its terms and
provisions. (Batangas Trans. Co. v. Orlanes, 52
Phil. 455, 460; emphasis supplied)
Presumably, the petitioner has in mind Section 21 of
Commonwealth Act No. 146, as amended, which provides
that a public utility operator violating or failing to comply
with the terms and conditions of any certificate, or any
orders, decisions or regulations of the Commission, shall be
subject to a fine and that the Commission is authorized and
empowered to impose such fine, after due notice and
hearing. It should be noted, however, that the last sentence
of said section states that the remedy provided therein
"shall not be a bar to, or affect any other remedy provided
in this Act but shall be cumulative and additional to such
remedy or remedies." In other words, the imposition of a
fine may only be one of the remedies which the
Commission may resort to, in its discretion. But that
remedy is not exclusive of, or has preference over, the other
remedies. And this Court will not substitute its discretion
for that of the Commission, as long as there is evidence to
support the exercise of that discretion by the Commission.
G. R. No. L-21221
Coming now to the other case, let it be stated at the outset
that before any certificate may be granted, authorizing the
operation of a public service, three requisites must be
complied with, namely: (1) the applicant must be a citizen
of the Philippines or of the United States, or a corporation
or co-partnership, association or joint-stock company
constituted and organized under the laws of the Philippines,
sixty per centum at least of the stock or paid-up capital of
which belongs entirely to citizens of the Philippines or of
the United States; 19 (2) the applicant must be financially
capable of undertaking the proposed service and meeting
the responsibilities incident to its operation; 20 and (3) the
applicant must prove that the operation of the public service
proposed and the authorization to do business will promote
the public interest in a proper and suitable manner. 21
As stated earlier, in the decision appealed from, the
Commission found that Morong Electric is a corporation
duly organized and existing under the laws of the
Philippines, the stockholders of which are Filipino citizens,
that it is financially capable of operating an electric light,
heat and power service, and that at the time the decision
was rendered there was absence of electric service in
Morong, Rizal. While the petitioner does not dispute the
need of an electric service in Morong, Rizal, 22 it claims, in
effect, that Morong Electric should not have been granted
the certificate of public convenience and necessity because
(1) it did not have a corporate personality at the time it was
granted a franchise and when it applied for said certificate;
(2) it is not financially capable of undertaking an electric
service, and (3) petitioner was rendering efficient service
before its electric plant was burned, and therefore, being a
prior operator its investment should be protected and no
new party should be granted a franchise and certificate of
public convenience and necessity to operate an electric
service in the same locality.
1. The bulk of petitioner's arguments assailing the
personality of Morong Electric dwells on the proposition
that since a franchise is a contract, 23 at least two competent
parties are necessary to the execution thereof, and parties
are not competent except when they are in being. Hence, it
is contended that until a corporation has come into being, in
this jurisdiction, by the issuance of a certificate of
incorporation by the Securities and Exchange Commission
(SEC) it cannot enter into any contract as a corporation.
The certificate of incorporation of the Morong Electric was
issued by the SEC on October 17, 1962, so only from that
date, not before, did it acquire juridical personality and
legal existence. Petitioner concludes that the franchise
granted to Morong Electric on May 6, 1962 when it was not
yet in esse is null and void and cannot be the subject of the
Commission's consideration. On the other hand, Morong
Electric argues, and to which argument the Commission
agrees, that it was a de facto corporation at the time the
franchise was granted and, as such, it was not incapacitated
to enter into any contract or to apply for and accept a
franchise. Not having been incapacitated, Morong Electric
maintains that the franchise granted to it is valid and the
approval or disapproval thereof can be properly determined
by the Commission.
Petitioner's contention that Morong Electric did not yet
have a legal personality on May 6, 1962 when a municipal
franchise was granted to it is correct. The juridical
personality and legal existence of Morong Electric began
only on October 17, 1962 when its certificate of
incorporation was issued by the SEC. 24 Before that date, or
pending the issuance of said certificate of incorporation, the
incorporators cannot be considered as de facto corporation.
25 But the fact that Morong Electric had no corporate
existence on the day the franchise was granted in its name
does not render the franchise invalid, because later Morong
Electric obtained its certificate of incorporation and then
accepted the franchise in accordance with the terms and
conditions thereof. This view is sustained by eminent
American authorities. Thus, McQuiuin says:
The fact that a company is not completely
incorporated at the time the grant is made to it by
a municipality to use the streets does not, in most
jurisdictions, affect the validity of the grant. But
such grant cannot take effect until the corporation
is organized. And in Illinois it has been decided
that the ordinance granting the franchise may be
presented before the corporation grantee is fully
organized, where the organization is completed
before the passage and acceptance. (McQuillin,
Municipal Corporations, 3rd Ed., Vol. 12, Chap.
34, Sec. 34.21)
Fletcher says:
While a franchise cannot take effect until the
grantee corporation is organized, the franchise
may, nevertheless, be applied for before the
company is fully organized.
A grant of a street franchise is valid although the
corporation is not created until afterwards.
(Fletcher, Cyclopedia Corp. Permanent Edition,
Rev. Vol. 6-A, Sec. 2881)
And Thompson gives the reason for the rule:
(I)n the matter of the secondary franchise the
authorities are numerous in support of the
proposition that an ordinance granting a privilege
to a corporation is not void because the
beneficiary of the ordinance is not fully organized
at the time of the introduction of the ordinance. It
is enough that organization is complete prior to
the passage and acceptance of the ordinance. The
reason is that a privilege of this character is a
mere license to the corporation until it accepts the
grant and complies with its terms and conditions.
(Thompson on Corporations, Vol. 4, 3rd Ed., Sec.
2929) 26
The incorporation of Morong Electric on October 17, 1962
and its acceptance of the franchise as shown by its action in
prosecuting the application filed with the Commission for
the approval of said franchise, not only perfected a contract
between the respondent municipality and Morong Electric
but also cured the deficiency pointed out by the petitioner
in the application of Morong EIectric. Thus, the
Commission did not err in denying petitioner's motion to
dismiss said application and in proceeding to hear the same.
The efficacy of the franchise, however, arose only upon its
approval by the Commission on March 13, 1963. The
reason is that —
Under Act No. 667, as amended by Act No. 1022,
a municipal council has the power to grant
electric franchises, subject to the approval of the
provincial board and the President. However,
under Section 16(b) of Commonwealth Act No.
146, as amended, the Public Service Commission
is empowered "to approve, subject to
constitutional limitations any franchise or
privilege granted under the provisions of Act No.
667, as amended by Act No. 1022, by any
political subdivision of the Philippines when, in
the judgment of the Commission, such franchise
or privilege will properly conserve the public
interests and the Commission shall in so
approving impose such conditions as to
construction, equipment, maintenance, service, or
operation as the public interests and convenience
may reasonably require, and to issue certificates
of public convenience and necessity when such is
required or provided by any law or franchise."
Thus, the efficacy of a municipal electric
franchise arises, therefore, only after the approval
of the Public Service Commission. (Almendras
vs. Ramos, 90 Phil. 231) .
The conclusion herein reached regarding the validity of the
franchise granted to Morong Electric is not incompatible
with the holding of this Court in Cagayan Fishing
Development Co., Inc. vs. Teodoro Sandiko 27 upon which
the petitioner leans heavily in support of its position. In said
case this Court held that a corporation should have a full
and complete organization and existence as an entity before
it can enter into any kind of a contract or transact any
business. It should be pointed out, however, that this Court
did not say in that case that the rule is absolute or that under
no circumstances may the acts of promoters of a
corporation be ratified or accepted by the corporation if and
when subsequently organized. Of course, there are
exceptions. It will be noted that American courts generally
hold that a contract made by the promoters of a corporation
on its behalf may be adopted, accepted or ratified by the
corporation when organized. 28
2. The validity of the franchise and the corporate
personality of Morong Electric to accept the same having
been shown, the next question to be resolved is whether
said company has the financial qualification to operate an
electric light, heat and power service. Petitioner challenges
the financial capability of Morong Electric, by pointing out
the inconsistencies in the testimony of Mr. Jose P. Ingal,
president of said company, regarding its assets and the
amount of its initial investment for the electric plant. In this
connection it should be stated that on the basis of the
evidence presented on the matter, the Commission has
found the Morong Electric to be "financially qualified to
install, maintain and operate the proposed electric light,
heat and power service." This is essentially a factual
determination which, in a number of cases, this Court has
said it will not disturb unless patently unsupported by
evidence. An examination of the record of this case readily
shows that the testimony of Mr. Ingal and the documents he
presented to establish the financial capability of Morong
Electric provide reasonable grounds for the above finding
of the Commission.
It is now a very well-settled rule in this
jurisdiction that the findings and conclusions of
fact made by the Public Service Commission,
after weighing the evidence adduced by the
parties in a public service case, will not be
disturbed by the Supreme Court unless those
findings and conclusions appear not to be
reasonably supported by evidence. (La Mallorca
and Pampanga Bus Co. vs. Mercado, L-19120,
November 29, 1965)
For purposes of appeal, what is decisive is that
said testimonial evidence provides reasonable
support for the Public Service Commission's
findings of financial capacity on the part of
applicants, rendering such findings beyond our
power to disturb. (Del Pilar Transit vs. Silva, L-
21547, July 15, 1966)
It may be worthwhile to mention in this connection that per
inspection report dated January 20, 1964 29 of Mr. Meliton
Martinez of the Commission, who inspected the electric
service of Morong on January 15-16, 1964, Morong
Electric "is serving electric service to the entire area
covered by its approved plan and has constructed its line in
accordance with the plans and specifications approved by
the Commission." By reason thereof, it was recommended
that the requests of Morong Electric (1) for the withdrawal
of its deposit in the amount of P1,000.00 with the Treasurer
of the Philippines, and (2) for the approval of Resolution
No. 160 of the Municipal Council of Morong, Rizal,
exempting the operator from making the additional
P9,000.00 deposit mentioned in its petition, dated
September 16, 1963, be granted. This report removes any
doubt as to the financial capability of Morong Electric to
operate and maintain an electric light, heat and power
service.
3. With the financial qualification of Morong Electric
beyond doubt, the remaining question to be resolved is
whether, or not, the findings of fact of the Commission
regarding petitioner's service are supported by evidence. It
is the contention of the petitioner that the Commission
made some findings of fact prejudicial to its position but
which do not find support from the evidence presented in
this case. Specifically, petitioner refers to the statements or
findings that its service had "turned from bad to worse,"
that it miserably failed to comply with the oft-repeated
promises to bring about the needed improvement, that its
equipment is unserviceable, and that it has no longer any
plant site and, therefore, has discredited itself. Petitioner
further states that such statements are not only devoid of
evidentiary support but contrary to the testimony of its
witness, Mr. Harry Bernardino, who testified that petitioner
was rendering efficient and satisfactory service before its
electric plant was burned on July 29, 1962.
On the face of the decision appealed from, it is obvious that
the Commission in describing the kind of service petitioner
was rendering before its certificate was ordered revoked
and cancelled, took judicial notice of the records of the
previous case (PSC Case No. 39715) where the quality of
petitioner's service had been squarely put in issue. It will be
noted that the findings of the Commission were made
notwithstanding the fact that the aforementioned testimony
of Mr. Bernardino had been emphasized and pointed out in
petitioner's Memorandum to the Commission. 30 The
implication is simple: that as between the testimony of Mr.
Bernardino and the inspection reports of the engineers of
the Commission, which served as the basis of the
revocation order, the Commission gave credence to the
latter. Naturally, whatever conclusion or finding of fact that
the Commission arrived at regarding the quality of
petitioner's service are not borne out by the evidence
presented in this case but by evidence in the previous case.
31 In this connection, we repeat, the conclusion, arrived at
by the Commission after weighing the conflicting evidence
in the two related cases, is a conclusion of fact which this
Court will not disturb.
And it has been held time and again that where
the Commission has reached a conclusion of fact
after weighing the conflicting evidence, that
conclusion must be respected, and the Supreme
Court will not interfere unless it clearly appears
that there is no evidence to support the decision
of the Commission. (La Mallorca and Pampanga
Bus Co., Inc. vs. Mercado, L-19120, November
29, 1965 citing Pangasinan Trans. Co., Inc. vs.
Dela Cruz, 96 Phil. 278)
For that matter, petitioner's pretension that it has a prior
right to the operation of an electric service in Morong,
Rizal, is not tenable; and its plea for protection of its
investment, as in the previous case, cannot be entertained.
WHEREFORE, the two decisions of the Public Service
Commission, appealed from, should be, as they are hereby
affirmed, with costs in the two cases against petitioner
Rizal Light & Ice Co., Inc. It is so ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
Sanchez, Castro, Angeles and Fernando, JJ., concur.
G.R. No. L-16487 July 31, 1964
MANUEL BORJA, petitioner-appellee,
vs.
HON. FLORENCIO MORENO, ET AL., respondents,
HON. FLORENCIO MORENO as Secretary of the
Department of Public Works and Communications, and
BENJAMIN YONZON, respondents-appellants.
Martin B. Laurea and Associates for petitioner-appellee.
Office of the Solicitor General for respondents-appellants.
MAKALINTAL, J.:
This is an appeal by respondents Secretary of Public Works
and Communications and Benjamin Yonzon from the
decision of the Court of First Instance of Pampanga dated
November 9, 1959 in Civil Case No. 1508 of said Court,
which was initiated by a petition of herein appellee, Manuel
Borja, for certiorari, mandamus and prohibition with
preliminary injunction.
Borja is the owner of a parcel of land with an area of some
104 hectares in barrio Consuelo, municipality of Macabebe,
province of Pampanga. This land, utilized as a fishpond,
was acquired by him from Ayala and Company in 1937. On
August 15, 1958 an administrative complaint was filed with
the office of respondent Secretary by Benigno Musni and
others, including then Senator de la Rosa, against a number
of landowners, among them petitioner Borja, for abatement
of nuisance and demolition of illegally constructed dams,
dikes or any other works in the public navigable rivers in
Macabebe, pursuant to the provisions of Republic Act No.
2056. In the particular case of Borja, he was alleged to have
closed the stream called Matlaue supposedly public, which
runs through his land.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this
Honorable Court, without prejudice to the parties adducing
other evidence to prove their case not covered by this
stipulation of facts. 1äwphï1.ñët
Benjamin Yonzon, an attorney in the Department of Public
Works and Communications, was designated by the
Secretary to investigate the charges in the complaint. A
copy of the decision, purportedly signed by the
Undersecretary, M. B. Bautista, and dated April 3, 1959,
was served upon counsel for Borja on June 12, 1959,
ordering the latter as follows: to "remove the dams and/or
dike found across the channel bordering the properties
owned by respondent and Maxima Vda. de Blas, and
restore the bed to its original condition within thirty (30)
days from the date of receipt of this decision; otherwise, the
removal thereof shall be effected by this office or its duly
authorized representative at the expense of the respondent
within ten (10) days after the expiration of the thirty-day
(30) period, without prejudice to whatever judicial action
that may be instituted against them pursuant to Section 3 of
Republic Act No. 2056.
The foregoing decision of respondent Secretary was
assailed by petitioner Borja in the latter's petition before the
court a quo on several grounds; that it was based on
erroneous findings of fact; that it was contrary to law; that
the investigation constituted a usurpation of judicial power
and hence beyond the jurisdiction of respondent Secretary;
that the delegation to Benjamin Yonzon of the authority to
investigate was illegal and therefore null and void; and that
the investigation was conducted with grave abuse of
discretion and in violation of due process. Respondents
raised a number of defenses in their answer to the petition,
and after trial the court rendered the judgment now subject
of the present appeal, granting the writs prayed for by
petitioner; declaring null and void and of no legal effect all
proceedings had by respondents in the administrative
investigation, including the decision entered on April 3,
1959; restraining and prohibiting respondent Secretary
from enforcing said decision, and declaring the injunction
previously issued to be permanent.
The issues raised by appellants in this appeal are
formulated in the errors assigned in their brief, as follows:
I originally allowed. The same section adds that the
The lower court erred in holding in effect that Republic Act
No. 2056 is unconstitutional in that it constitutes an undue
delegation of judicial power to an administrative official.
II
The lower court erred in holding that here was no duty on
the part of petitioner to exhaust his administrative remedies.
III
The lower Court erred in not finding the decision of the
Secretary of Public Works and Communications supported
by evidence.
IV
The lower Court erred in holding that the Matlaue river is a
private stream.
V provisions of said statute covers only cases where there is
The lower Court erred in finding that respondent Benjamin
Yonzon gravely used his discretion and acted capriciously.
The provisions of Republic Act No. 2056 referred to by
appellants in their first assignment of error are Sections 1
and 2. Section 1 provides that the construction or building
of dams, dikes or any other works which encroaches into
any public navigable river, stream, coastal waters and any
other navigable public waters or waterways as well as the
construction or building of dams, dikes or any other works
in areas declared as communal fishing grounds shall be
ordered removed as public nuisances or as prohibited
construction, but authorizes the Secretary of Public Works
and Communications to allow the construction of any such
works when public interest or safety so requires, or when it
is absolutely necessary for the protection of private
property. Section 2 provides for due notice and hearing to
establish the facts mentioned in Section 1, after which the
Secretary, upon an affirmative finding as to their existence,
is authorized to order the removal of the works declared as
nuisances or prohibited constructions, giving the party
concerned a period of not more than 30 days to do so,
failing which such removal should be carried out by the
Secretary within 10 days after the expiration of the period
investigation to be conducted by the Secretary must be
terminated and decided, by him within a period not
exceeding 90 days from the time a complaint in writing is
filed with him by any interested party apprising him of the
existence of the illegal works or constructions. Failure on
his part, without justifiable reason, to terminate or decide a
case or to effect the removal of the works or constructions
within the time limit is considered an offense, for which the
corresponding penalty is prescribed.
With respect to the first error assigned by appellants, it is
not true that the trial court ruled the foregoing provisions
unconstitutional. On the contrary, it declined to pass upon
the constitutional question on the ground that those
provisions do not apply to the facts of the instant case. As
far as may be gathered from the court's opinion, the
particular fact which removes this case from the purview of
Republic Act No. 2056 and which it considered duly
established by the evidence is that the Matlaue stream
which runs through the land of petitioner-appellee is not a
public navigable river but his private property. The
implication is that the authority of the Secretary of Public
Works and Communications to proceed under the
no dispute as to the public navigable character of the river
or waterway alleged to be illegally obstructed, but that
when this is precisely a basic fact in contention the matter
should be left to the courts for determination.
To the writer of this opinion the view thus taken by the
court a quo and now urged upon us by petitioner-appellee
has cogent reasons behind it. There is a certain danger in
leaving the adjudication of a claim of private ownership of
property, vis-a-vis the Government, in the hands of an
executive official. This danger is demonstrated by the very
argument of appellants under their third and fourth
assignments of error. They point to the evidence submitted
at the administrative investigation and, invoking the
"substantial evidence" rule, assail the lower court's
conclusion that the Matlaue stream is privately owned. The
said rule, indeed, which has been applied in a number of
cases in this jurisdiction, is that if there is substantial
evidence to support the findings of an administrative
official in matters within his competence, that is, "such
relevant evidence as a reasonable mind might accept as
adequate to support a conclusions" (Ang Tibay v. CIR 69
Phil. 635, 642), the courts are bound to look no further, not
even to consider contrary evidence of a preponderant
nature. If the decision of the administrative official carries
with it, as the premise upon which it rests, a finding that
certain property claimed by a private party to be his in fact
part of the public domain, it does not seem fair to take that
finding as conclusive upon the courts just because it is
supported by substantial evidence, although there may be
evidence to the contrary which, if properly considered and
evaluated, would lead them to a different conclusion.
The other members of this Court, however, hold that the
authority of the Secretary of Public Works and
Communications to inquire into and decide the question of
the public or private character of a river or stream is
incidental to the power conferred upon him by the statute to
conduct the necessary investigation and to order the
removal of any works which constitute obstructions therein.
This authority recognized, the next question posed by
appellants is with respect to the correctness of the trial
court's finding that the Matlaue stream is privately owned
by petitioner-appellee. Under the "substantial evidence"
rule (laying aside for the moment the question of whether
or not such evidence may properly be considered at all, in
view of the manner in which the administrative
investigation was conducted) we find appellants' third and
fourth assignments of error to be well-taken: there is
substantial evidence to support the conclusion of
respondent Secretary that the Matlaue stream is a public
navigable river. This evidence consists of the testimony of
two witnesses, one a farmer and the other a fisherman, and
of the result of the ocular inspection conducted by the
investigator, appellant Yonzon, as embodied in the report
subsequently submitted by him and depicted in a sketch
prepared by the assistant engineer of the Pampanga River
Control Project.
Nevertheless, we do not feel justified in affirming, for
purposes of adjudication, the aforesaid conclusion of
respondent Secretary, and reversing that of the trial court,
for the investigation wherein the evidence was received
was conducted with manifest disregard of the requirements
of due process. And it is solely on this ground that the
members of this Court are agreed that this decision should
be predicated.
The administrative complaint was filed with respondent
Secretary on August 15, 1958. On October 22, 1958
Yonzon issued a subpoena to Borja ordering him to appear
at the hearing of the case on October 24, 1958. That was
the first time Borja had notice of the complaint. Acting on
his request that the hearing be postponed for at least two
weeks, Yonzon deferred it, but only up to October 27,
1958. When that day arrived Attorney Vicente V. Mendoza,
a member of the law firm Carlos, Laurea & Associates, in
representation of appellee, attended the investigation at
Macabebe, Pampanga, but for the sole purpose of
delivering to Yonzon appellee's motion to quash and
dismiss on the grounds that complainants Musni, et al., did
not have the capacity to file the complaint and that
Republic Act 2056 would be unconstitutional if it should be
given retroactive effect. Without acting on the motion
Yonzon proceeded with the examination of the two
witnesses for the complaints. Attorney Mendoza repeatedly
manifested that he was not prepared for the hearing and
was not in a position to cross-examine complainants'
witnesses because the law firm of which he was a member
had not had time to confer with appellee on account of the
limited time given by Yonzon. Attorney Mendoza,
however, sought to reserve his right to cross-examine, but
Yonzon ruled that his failure to cross-examine was in effect
a waiver of the right.
On October 28, 1958 appellant Yonzon, upon a mere oral
notice, conducted an ocular inspection of the questioned
stream without giving appellee Borja sufficient time to
prepare therefor. Furthermore, Yonzon did not limit himself
to inspecting the premises but proceeded to conduct a
hearing by questioning the witnesses who had testified the
day before.
On the next hearing date, October 30, 1958, Attorney
Clemente Madarang, Jr., of the law firm representing
appellee, was present. He asked for reconsideration of
Yonzon's ruling that Attorney Mendoza's request for
reservation to cross-examine amounted to a waiver of the
right to do so. Yonzon refused to reconsider. When
Attorney Madarang reiterated his request, Yonzon relented
and agreed to allow him to cross-examine the witnesses
who had previously testified, but without waiting for the
transcription of the stenographic notes of the hearing
previously had. Attorney Madarang agreed to cross-
examine even if only on the notes taken by Attorney
Mendoza. But when he was about to do so Yonzon again
changed his mind and refused to let him cross-examine. On
that same day, Attorney Madarang sought to take the stand
as witness for appellee in order to identify certain
documents which he had secured for the latter, but Yonzon
prevented him from doing so. In addition, during that same
hearing Yonzon called to the witness stand a certain
engineer Manangan of the Pampanga River Control Project,
allegedly as witness for the Government, which was not a
party to the case. And then Yonzon denied to Attorney
Madarang the right to object to any question propounded to
Manangan, even if the same were prejudicial to appellee's
interest.
On November 17, 1958 appellant Yonzon, at the request of
appellee, issued a subpoena to Eliseo Panopio to attend the
hearing the next day. When Yonzon delivered the subpoena
he found out that Panopio was in the province. In spite of
Attorney Madarang's insistence that Panopio's testimony
would not be limited to identifying the latter's report
(Exhibit S) Yonzon refused to grant continuance, reasoning
out that Panopio's testimony only corroborate that of
Valderrama, who had identified certain documents which
were in the custody of his office. The Panopio report, it
may be mentioned, was prepared by him in 1931 when, as a
surveyor of the Bureau of Public Works, he investigated the
different streams and rivers situated in Macabebe,
Pampanga, and found that Matlaue in particular had been
artificially dug, and subsequently increased in width, length
and depth by the owner at the time, from whom Borja
acquired the land in 1937.
On November 18, 1958, Yonzon terminated the hearing
without giving counsel for Borja opportunity to present
other witnesses and in spite of vigorous objection on his
part.
Appellant Yonzon clearly abused his discretion in riding
roughshod over appellee's right to a fair hearing. His acts of
(1) proceeding with the hearing without first acting on
appellee's motion to dismiss; (2) ruling that appellee's
attempt to reserve his right to cross-examine was a waiver
of said right; (3) conducting an ocular inspection motu
proprio and interrogating witness during the same; (4) not
allowing Attorney Madarang to cross-examine the
complainants' witnesses during the hearing of October 30,
1958; (5) calling to the witness stand a person who was not
a witness for either the complainants or the respondents,
and asking him questions to which he refused to entertain
any objection from counsel; (6) arbitrarily refusing appellee
opportunity to present Eliseo Panopio on the ground that
his testimony was merely corroborative, although as it later
turned out in court Panopio's testimony was important to
appellee's defense; and (7) terminating the hearing without
giving appellee full opportunity to present his other
witnesses — all these are indicative of the capricious and
arbitrary manner in which the administrative investigation
was conducted.
By way of justification Yonzon repeatedly invoked the
ninety-day period prescribed by R.A. 2056 within which an
administrative case for abatement of nuisance thereunder
must be terminated. Noteworthy, however, is the fact that
while the complaint for abatement was filed on August 15,
1958, it was only on October 22, 1958 — more than two
months later — that appellant officials informed appellee
thereof and, strangely enough, by means of a subpoena.
The latter did not have sufficient time to prepare his
defense when appellant Yonzon started rushing the
proceedings, evidently to make up for lost time.
As it was, even with all that undue haste, the last day of the
hearing was still beyond the deadline sought to be met. The
decision was dated April 3, 1959, eight months after the
complaint was filed; and copy was, served on appellee's
counsel only on June 12, 1959.
The manner the investigation was conducted was a virtual
denial of due process. This is one of the exceptions to the
rule requiring exhaustion of administrative remedies — in
this case by appeal to the President, if otherwise it was
necessary at all — before resort to the courts may be had.
The judgment appealed from is affirmed in so far as it sets
aside the administrative investigation conducted by
respondents-appellants and the decision therein against
petitioner-appellee, but not in so far as said judgment
declares the Matlaue stream or river the private property of
said petitioner-appellee, the question of ownership thereof
being left for determination in such other proceeding,
administrative or judicial, as respondents-appellants may
deem proper to initiate. No pronouncement as to costs.
Bengzon, C.J., Padilla, Bautista Angelo, Concepcion,
Reyes, J.B.L., Paredes and Regala, JJ., concur.
G.R. No. 96266 July 18, 1991
ERNESTO M. MACEDA, petitioner,
vs.
ENERGY REGULATORY BOARD, CALTEX
(Philippines), INC., PILIPINAS SHELL PETROLEUM
CORPORATION AND PETRON CORPORATION,
respondents.
G.R. No. 96349 July 18, 1991
EUGENIO O. ORIGINAL, IRENEO N. AARON, JR.,
RENE LEDESMA, ROLANDO VALLE, ORLANDO
MONTANO, STEVE ABITANG, NERI JINON,
WILFREDO DELEONIO, RENATO BORRO,
RODRIGO DE VERA, ALVIN BAYUANG, JESUS
MELENDEZ, NUMERIANO CAJILIG JR., RUFINO
DE LA CRUZ AND JOVELINO G. TIPON, petitioners,
vs.
ENERGY REGULATORY BOARD, CALTEX
(Philippines), INC., PILIPINAS SHELL PETROLEUM
CORPORATION AND PETRON CORPORATION,
respondents.
G.R. No. 96284 July 18,1991
CEFERINO S. PAREDES, JR., petitioner,
vs.
ENERGY REGULATORY BOARD, CALTEX
(Philippines), INC., PILIPINAS SHELL, INC. AND
PETROPHIL CORPORATION, respondents.
RESOLUTION
MEDIALDEA, J.:
In G.R. No. 96266, petitioner Maceda seeks nullification of
the Energy Regulatory Board (ERB) Orders dated
December 5 and 6, 1990 on the ground that the hearings
conducted on the second provisional increase in oil prices
did not allow him substantial cross-examination, in effect,
allegedly, a denial of due process.
The facts of the case are as follows:
Upon the outbreak of the Persian Gulf conflict on August 2,
1990, private respondents oil companies filed with the ERB
their respective applications on oil price increases
(docketed as ERB Case Nos. 90-106, 90-382 and 90-384,
respectively).
On September 21, 1990, the ERB issued an order granting a
provisional increase of P1.42 per liter. Petitioner Maceda
filed a petition for Prohibition on September 26, 1990 (E.
Maceda v. ERB, et al., G.R. No. 95203), seeking to nullify
the provisional increase. We dismissed the petition on
December 18, 1990, reaffirming ERB's authority to grant
provisional increase even without prior hearing, pursuant to
Sec. 8 of E.O. No. 172, clarifying as follows:
What must be stressed is that while under
Executive Order No. 172, a hearing is
indispensable, it does not preclude the Board
from ordering, ex-parte, a provisional increase, as
it did here, subject to its final disposition of
whether or not: (1) to make it permanent; (2) to
reduce or increase it further; or (3) to deny the
application. Section 3, paragraph (e) is akin to a
temporary restraining order or a writ of
preliminary attachment issued by the courts,
which are given ex-parte and which are subject to
the resolution of the main case.
Section 3, paragraph (e) and Section 8 do not
negate each other, or otherwise, operate
exclusively of the other, in that the Board may
resort to one but not to both at the same time.
Section 3(e) outlines the jurisdiction of the Board
and the grounds for which it may decree a price
adjustment, subject to the requirements of notice
and hearing. Pending that, however, it may order,
under Section 8, an authority to increase
provisionally, without need of a hearing, subject
to the final outcome of the proceeding. The
Board, of course, is not prevented from
conducting a hearing on the grant of provisional
authority-which is of course, the better procedure
— however, it cannot be stigmatized later if it
failed to conduct one. (pp. 129-130, Rollo)
(Emphasis supplied)
In the same order of September 21, 1990, authorizing
provisional increase, the ERB set the applications for
hearing with due notice to all interested parties on October
16, 1990. Petitioner Maceda failed to appear at said hearing
as well as on the second hearing on October 17, 1990.
To afford registered oppositors the opportunity to cross-
examine the witnesses, the ERB set the continuation of the
hearing to October 24, 1990. This was postponed to
November 5, 1990, on written notice of petitioner Maceda.
On November 5, 1990, the three oil companies filed their
respective motions for leave to file or admit
amended/supplemental applications to further increase the
prices of petroleum products.
The ERB admitted the respective supplemental/amended
petitions on November 6, 1990 at the same time requiring
applicants to publish the corresponding Notices of Public
Hearing in two newspapers of general circulation (p. 4,
Rollo and Annexes "F" and "G," pp. 60 and 62, Rollo).
Hearing for the presentation of the evidence-in-chief
commenced on November 21, 1990 with ERB ruling that
testimonies of witnesses were to be in the form of
Affidavits (p. 6, Rollo). ERB subsequently outlined the
procedure to be observed in the reception of evidence, as
follows:
CHAIRMAN FERNANDO:
Well, at the last hearing, applicant Caltex
presented its evidence-in-chief and there is an
understanding or it is the Board's wish that for
purposes of good order in the presentation of the
evidence considering that these are being heard
together, we will defer the cross-examination of
applicant Caltex's witness and ask the other
applicants to present their evidence-in-chief so
that the oppositors win have a better Idea of what
an of these will lead to because as I mentioned
earlier, it has been traditional and it is the
intention of the Board to act on these applications
on an industry-wide basis, whether to accept,
reject, modify or whatever, the Board win do it
on an industry wide basis, so, the best way to
have (sic) the oppositors and the Board a clear
picture of what the applicants are asking for is to
have all the evidence-in-chief to be placed on
record first and then the examination will come
later, the cross-examination will come later. . . .
 (pp. 5-6, tsn., November 23, 1990, ERB Cases
Nos. 90-106, 90382 and 90-384). (p. 162, Rollo)
Petitioner Maceda maintains that this order of proof
deprived him of his right to finish his cross-examination of
Petron's witnesses and denied him his right to cross-
examine each of the witnesses of Caltex and Shell. He
points out that this relaxed procedure resulted in the denial
of due process.
We disagree. The Solicitor General has pointed out:
. . . The order of testimony both with respect to
the examination of the particular witness and to
the general course of the trial is within the
discretion of the court and the exercise of this
discretion in permitting to be introduced out of
the order prescribed by the rules is not improper
(88 C.J.S. 206-207).
Such a relaxed procedure is especially true in
administrative bodies, such as the ERB which in
matters of rate or price fixing is considered as
exercising a quasi-legislative, not quasi-judicial,
function As such administrative agency, it is not
bound by the strict or technical rules of evidence
governing court proceedings (Sec. 29, Public
Service Act; Dickenson v. United States, 346,
U.S. 389, 98 L. ed. 132, 74 S. St. 152). (Emphasis
supplied)
In fact, Section 2, Rule I of the Rules of Practice
and Procedure Governing Hearings Before the
ERB provides that —
These Rules shall govern pleadings, practice and
procedure before the Energy Regulatory Board in
all matters of inquiry, study, hearing,
investigation and/or any other proceedings within
the jurisdiction of the Board. However, in the
broader interest of justice, the Board may, in any
particular matter, except itself from these rules
and apply such suitable procedure as shall
promote the objectives of the Order.
(pp. 163-164, Rollo)
Petitioner Maceda also claims that there is no substantial
evidence on record to support the provisional relief.
We have, in G.R. Nos. 95203-05, previously taken judicial
notice of matters and events related to the oil industry, as
follows:
. . . (1) as of June 30, 1990, the OPSF has
incurred a deficit of P6.1 Billion; (2) the
exchange rate has fallen to P28.00 to $1.00; (3)
the country's balance of payments is expected to
reach $1 Billion; (4) our trade deficit is at P2.855
Billion as of the first nine months of the year.
. . . (p. 150, Rollo)
The Solicitor General likewise commented:
Among the pieces of evidence considered by
ERB in the grant of the contested provisional
relief were: (1) certified copies of bins of lading
issued by crude oil suppliers to the private
respondents; (2) reports of the Bankers
Association of the Philippines on the peso-dollar
exchange rate at the BAP oil pit; and (3) OPSF
status reports of the Office of Energy Affairs. The
ERB was likewise guided in the determination of
international crude oil prices by traditional
authoritative sources of information on crude oil
and petroleum products, such as Platt's Oilgram
and Petroleum Intelligence Weekly. (p. 158,
Rollo)
Thus, We concede ERB's authority to grant the provisional
increase in oil price, as We note that the Order of December
5, 1990 explicitly stated:
in the light, therefore, of the rise in crude oil
importation costs, which as earlier mentioned,
reached an average of $30.3318 per barrel at
$25.551/US $ in September-October 1990; the
huge OPSF deficit which, as reported by the
Office of Energy Affairs, has amounted to P5.7
Billion (based on filed claims only and net of the
P5 Billion OPSF) as of September 30, 1990, and
is estimated to further increase to over P10
Billion by end December 1990; the decision of
the government to discontinue subsidizing oil
prices in view of inflationary pressures; the
apparent inadequacy of the proposed additional
P5.1 Billion government appropriation for the
OPSF and the sharp drop in the value of the peso
in relation to the US dollar to P28/US $, this
Board is left with no other recourse but to grant
applicants oil companies further relief by
increasing the prices of petroleum products sold
by them. (p. 161, Rollo)
Petitioner Maceda together with petitioner Original (G.R.
No. 96349) also claim that the provisional increase
involved amounts over and above that sought by the
petitioning oil companies.
The Solicitor General has pointed out that aside from the
increase in crude oil prices, all the applications of the
respondent oil companies filed with the ERB covered
claims from the OPSF.
We shall thus respect the ERB's Order of December 5, 1990
granting a provisional price increase on petroleum products
premised on the oil companies' OPSF claims, crude cost
peso differentials, forex risk for a subsidy on sale to NPC
(p. 167, Rollo), since the oil companies are "entitled to as
much relief as the fact alleged constituting the course of
action may warrant," (Javellana v. D.O. Plaza Enterprises,
Inc., G.R. No. L-28297, March 30, 1970, 32 SCRA 261
citing Rosales v. Reyes, 25 Phil. 495; Aguilar v. Rubiato,
40 Phil. 470) as follows:
Per Liter
Weighted
Petron Shell Caltex Average
Crude Cost P3.11 P3.6047 P2.9248 P3.1523
Peso Cost
Diffn'l 2.1747 1.5203 1.5669 1.8123
Forex Risk
Fee -0.1089 -0,0719 -0.0790 -0.0896
Subsidy on
Sales to NPC 0.1955 0.0685 0.0590 0.1203
Total Price
 Increase Diesel Oil 1.4100
Applied for P59.3713 P5.1216 P4.4717 P4.9954 Fuel Oil/Feedstock 0.2405
Less: September 21 Price LPG 1.2200
Relief Asphalt 2.5000
Actual Price Increase P1.42 Thinner 2.5000
Actual Tax Reduction: In G.R. No. 96349, petitioner Original additionally claims
that if the price increase will be used to augment the OPSF
Ad Valorem Tax this will constitute illegal taxation. In the Maceda case,
(G.R. Nos. 95203-05, supra) this Court has already ruled
that "the Board Order authorizing the proceeds generated
(per Sept. 1, 1990 by the increase to be deposited to the OPSF is not an act of
taxation but is authorized by Presidential Decree No. 1956,
price build-up) P1.3333 as amended by Executive Order No. 137.
Specific Tax (per The petitions of E.O. Original et al. (G.R. No. 96349) and
C.S. Povedas, Jr. (G.R. No. 96284), insofar as they question
Oct. 5, 1990 price the ERB's authority under Sec. 8 of E.O. 172, have become
moot and academic.
build-up) .6264 .7069 2.1269
We lament Our helplessness over this second provisional
increase in oil price. We have stated that this "is a question
Net Price Increase best judged by the political leadership" (G.R. Nos. 95203-
05, G.R. Nos. 95119-21, supra). We wish to reiterate Our
Applied for 2.8685 previous pronouncements therein that while the
government is able to justify a provisional increase, these
findings "are not final, and it is up to petitioners to
Nonetheless, it is relevant to point out that on December
demonstrate that the present economic picture does not
10, 1990, the ERB, in response to the President's appeal,
warrant a permanent increase."
brought back the increases in Premium and Regular
gasoline to the levels mandated by the December 5, 1990
Order (P6.9600 and P6.3900, respectively), as follows: In this regard, We also note the Solicitor General's
comments that "the ERB is not averse to the idea of a
presidential review of its decision," except that there is no
Product In Pesos Per Liter
law at present authorizing the same. Perhaps, as pointed out
by Justice Padilla, our lawmakers may see the wisdom of
OPSF allowing presidential review of the decisions of the ERB
since, despite its being a quasi-judicial body, it is still "an
administrative body under the Office of the President
Premium Gasoline 6.9600
whose decisions should be appealed to the President under
the established principle of exhaustion of administrative
Regular Gasoline 6.3900
remedies," especially on a matter as transcendental as oil
price increases which affect the lives of almost an Filipinos.
Avturbo 4.9950
ACCORDINGLY, the petitions are hereby DISMISSED.
Kerosene 1.4100
SO ORDERED.
Narvasa, Melencio-Herrera, Feliciano, Gancayco, Bidin,
Griño-Aquino and Regalado, JJ., concur.
Davide, J., concurs in the result.
Fernan, C.J., took no part.
PRUDENCIO BANTOLINO, NESTOR ROMERO,
NILO ESPINA, EDDIE LADICA, ARMAN
QUELING, ROLANDO NIETO, RICARDO
BARTOLOME, ELUVER GARCIA,
EDUARDO GARCIA and NELSON
MANALASTAS, petitioners, vs. COCA-COLA
BOTTLERS PHILS., INC., respondent.
DECISION
BELLOSILLO, J.:
This is a Petition for Review on Certiorari under
Rule 45 of the Rules of Court assailing the Decision of the
Court of Appeals[1] dated 21 December 2001 which
affirmed with modification the decision of the National
Labor Relations Commission promulgated 30 March
2001.[2]
On 15 February 1995 sixty-two (62) employees of
respondent Coca-Cola Bottlers, Inc., and its officers,
Lipercon Services, Inc., Peoples Specialist Services, Inc.,
and Interim Services, Inc., filed a complaint against
respondents for unfair labor practice through illegal
dismissal, violation of their security of tenure and the
perpetuation of the Cabo System. They thus prayed for
reinstatement with full back wages, and the declaration of
their regular employment status.
For failure to prosecute as they failed to either attend
the scheduled mandatory conferences or submit their
respective affidavits, the claims of fifty-two (52)
complainant-employees were dismissed. Thereafter, Labor
Arbiter Jose De Vera conducted clarificatory hearings to
elicit information from the ten (10) remaining complainants
(petitioners herein) relative to their alleged employment
with respondent firm.
In substance, the complainants averred that in the
performance of their duties as route helpers, bottle
segregators, and others, they were employees of respondent
Coca-Cola Bottlers, Inc. They further maintained that when
respondent company replaced them and prevented them
from entering the company premises, they were deemed to
have been illegally dismissed.
In lieu of a position paper, respondent company filed
a motion to dismiss complaint for lack of jurisdiction and
cause of action, there being no employer-employee
relationship between complainants and Coca-Cola Bottlers,
Inc., and that respondents Lipercon Services, Peoples
Specialist Services and Interim Services being bona fide
independent contractors, were the real employers of the
complainants.[3] As regards the corporate officers,
respondent insisted that they could not be faulted and be
held liable for damages as they only acted in their official
capacities while performing their respective duties.
On 29 May 1998 Labor Arbiter Jose De Vera
rendered a decision ordering respondent company to
reinstate complainants to their former positions with all the
rights, privileges and benefits due regular employees, and
to pay their full back wages which, with the exception of
Prudencio Bantolino whose back wages must be computed
upon proof of his dismissal as of 31 May 1998, already
amounted to an aggregate of P1,810,244.00.[4]
In finding for the complainants, the Labor Arbiter
ruled that in contrast with the negative declarations of
respondent companys witnesses who, as district sales
supervisors of respondent company denied knowing the
complainants personally, the testimonies of the
complainants were more credible as they sufficiently
supplied every detail of their employment, specifically
identifying who their salesmen/drivers were, their places of
assignment, aside from their dates of engagement and
dismissal.
On appeal, the NLRC sustained the finding of the
Labor Arbiter that there was indeed an employer-employee
relationship between the complainants and respondent
company when it affirmed in toto the latters decision.
In a resolution dated 17 July 2001 the NLRC
subsequently denied for lack of merit respondents motion
for consideration.
Respondent Coca-Cola Bottlers appealed to the Court
of Appeals which, although affirming the finding of the
NLRC that an employer-employee relationship existed
between the contending parties, nonetheless agreed with
respondent that the affidavits of some of the complainants,
namely, Prudencio Bantolino, Nestor Romero, Nilo Espina,
Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and
Nelson Manalastas, should not have been given probative
value for their failure to affirm the contents thereof and to
undergo cross-examination. As a consequence, the
appellate court dismissed their complaints for lack of
sufficient evidence. In the same Decision however,
complainants Eddie Ladica, Arman Queling and Rolando
Nieto were declared regular employees since they were the
only ones subjected to cross-examination.[5] Thus -
x x x (T)he labor arbiter conducted clarificatory hearings to
ferret out the truth between the opposing claims of the
parties thereto. He did not submit the case based on
position papers and their accompanying documentary
evidence as a full-blown trial was imperative to establish
the parties claims. As their allegations were poles apart, it
was necessary to give them ample opportunity to rebut each
others statements through cross-examination. In fact,
private respondents Ladica, Quelling and Nieto were
subjected to rigid cross-examination by petitioners counsel.
However, the testimonies of private respondents Romero,
Espina, and Bantolino were not subjected to cross-
examination, as should have been the case, and no
explanation was offered by them or by the labor arbiter as
to why this was dispensed with. Since they were
represented by counsel, the latter should have taken steps
so as not to squander their testimonies. But nothing was
done by their counsel to that effect.[6]
Petitioners now pray for relief from the adverse
Decision of the Court of Appeals; that, instead, the
favorable judgment of the NLRC be reinstated.
In essence, petitioners argue that the Court of
Appeals should not have given weight to respondents claim
of failure to cross-examine them. They insist that, unlike
regular courts, labor cases are decided based merely on the
parties position papers and affidavits in support of their
allegations and subsequent pleadings that may be filed
thereto. As such, according to petitioners, the Rules of
Court should not be strictly applied in this case specifically
by putting them on the witness stand to be cross-examined
because the NLRC has its own rules of procedure which
were applied by the Labor Arbiter in coming up with a
decision in their favor.
In its disavowal of liability, respondent commented
that since the other alleged affiants were not presented in
court to affirm their statements, much less to be cross-
examined, their affidavits should, as the Court of Appeals
rightly held, be stricken off the records for being self-
serving, hearsay and inadmissible in evidence. With respect
to Nestor Romero, respondent points out that he should not
have been impleaded in the instant petition since he already
voluntarily executed a Compromise Agreement, Waiver and
Quitclaim in consideration of P450,000.00. Finally,
respondent argues that the instant petition should be
dismissed in view of the failure of petitioners[7] to sign the
petition as well as the verification and certification of non-
forum shopping, in clear violation of the principle laid
down in Loquias v. Office of the Ombudsman.[8]
The crux of the controversy revolves around the
propriety of giving evidentiary value to the affidavits
despite the failure of the affiants to affirm their contents
and undergo the test of cross-examination.
The petition is impressed with merit. The issue
confronting the Court is not without precedent in
jurisprudence. The oft-cited case of Rabago v. NLRC[9]
squarely grapples a similar challenge involving the
propriety of the use of affidavits without the presentation of
affiants for cross-examination. In that case, we held that the
argument that the affidavit is hearsay because the affiants
were not presented for cross-examination is not persuasive
because the rules of evidence are not strictly observed in
proceedings before administrative bodies like the NLRC
where decisions may be reached on the basis of position
papers only.
In Rase v. NLRC,[10] this Court likewise sidelined a
similar challenge when it ruled that it was not necessary for
the affiants to appear and testify and be cross-examined by
counsel for the adverse party. To require otherwise would
be to negate the rationale and purpose of the summary
nature of the proceedings mandated by the Rules and to
make mandatory the application of the technical rules of
evidence.
Southern Cotabato Dev. and Construction Co. v.
NLRC[11] succinctly states that under Art. 221 of the Labor
Code, the rules of evidence prevailing in courts of law do
not control proceedings before the Labor Arbiter and the
NLRC. Further, it notes that the Labor Arbiter and the
NLRC are authorized to adopt reasonable means to
ascertain the facts in each case speedily and objectively and
without regard to technicalities of law and procedure, all in
the interest of due process. We find no compelling reason
to deviate therefrom.
To reiterate, administrative bodies like the NLRC are
not bound by the technical niceties of law and procedure
and the rules obtaining in courts of law. Indeed, the
Revised Rules of Court and prevailing jurisprudence may
be given only stringent application, i.e., by analogy or in a
suppletory character and effect. The submission by
respondent, citing People v. Sorrel,[12] that an affidavit not
testified to in a trial, is mere hearsay evidence and has no
real evidentiary value, cannot find relevance in the present
case considering that a criminal prosecution requires a
quantum of evidence different from that of an
administrative proceeding. Under the Rules of the
Commission, the Labor Arbiter is given the discretion to
determine the necessity of a formal trial or hearing. Hence,
trial-type hearings are not even required as the cases may
be decided based on verified position papers, with
supporting documents and their affidavits.
As to whether petitioner Nestor Romero should be
properly impleaded in the instant case, we only need to
follow the doctrinal guidance set by Periquet v. NLRC[13]
which outlines the parameters for valid compromise
agreements, waivers and quitclaims -
Not all waivers and quitclaims are invalid as against public
policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the
parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its
face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim
is credible and reasonable, the transaction must be
recognized as a valid and binding undertaking.
In closely examining the subject agreements, we find
that on their face the Compromise Agreement[14] and
Release, Waiver and Quitclaim[15] are devoid of any
palpable inequity as the terms of settlement therein are fair
and just. Neither can we glean from the records any attempt
by the parties to renege on their contractual agreements, or
to disavow or disown their due execution. Consequently,
the same must be recognized as valid and binding
transactions and, accordingly, the instant case should be
dismissed and finally terminated insofar as concerns
petitioner Nestor Romero.
We cannot likewise accommodate respondents
contention that the failure of all the petitioners to sign the
petition as well as the Verification and Certification of
Non-Forum Shopping in contravention of Sec. 5, Rule 7, of
the Rules of Court will cause the dismissal of the present
appeal. While the Loquias case requires the strict
observance of the Rules, it however provides an escape
hatch for the transgressor to avoid the harsh consequences
of non-observance. Thus -
x x x x We find that substantial compliance will not suffice Quisumbing, Austria-Martinez, and Callejo, Sr., JJ.,
in a matter involving strict observance of the rules. The concur.
attestation contained in the certification on non-forum
shopping requires personal knowledge by the party who
executed the same. Petitioners must show reasonable cause CIVIL SERVICE COMMISSION , G.R. No.
for failure to personally sign the certification. Utter 174935
disregard of the rules cannot justly be rationalized by Petitioner,
harking on the policy of liberal construction (underscoring P
supplied). r
e
In their Ex Parte Motion to Litigate as Pauper s
Litigants, petitioners made a request for a fifteen (15)-day e
extension, i.e., from 24 April 2002 to 8 May 2002, within n
which to file their petition for review in view of the absence t
of a counsel to represent them.[16] The records also reveal :
that it was only on 10 July 2002 that Atty. Arnold Cacho,
through the UST Legal Aid Clinic, made his formal entry
of appearance as counsel for herein petitioners. Clearly, at PUNO, C.J.,
the time the instant petition was filed on 7 May 2002
petitioners were not yet represented by counsel. Surely, QUISUMBING,
petitioners who are non-lawyers could not be faulted for the
procedural lapse since they could not be expected to be YNARES-SANTIAGO,
conversant with the nuances of the law, much less
knowledgeable with the esoteric technicalities of procedure. CARPIO,*
For this reason alone, the procedural infirmity in the filing
of the present petition may be overlooked and should not be AUSTRIA-MARTINEZ,
taken against petitioners.
WHEREFORE, the petition is GRANTED. The CORONA,
-versus-
Decision of the Court of Appeals is REVERSED and SET
ASIDE and the decision of the NLRC dated 30 March 2001 CARPIO MORALES,
which affirmed in toto the decision of the Labor Arbiter
dated 29 May 1998 ordering respondent Coca-Cola Bottlers AZCUNA,
Phils., Inc., to reinstate Prudencio Bantolino, Nilo Espina,
Eddie Ladica, Arman Queling, Rolando Nieto, Ricardo TINGA,
Bartolome, Eluver Garcia, Eduardo Garcia and Nelson
Manalastas to their former positions as regular employees, CHICO-NAZARIO,
and to pay them their full back wages, with the exception of
Prudencio Bantolino whose back wages are yet to be VELASCO,
computed upon proof of his dismissal, is REINSTATED,
with the MODIFICATION that herein petition is DENIED NACHURA,
insofar as it concerns Nestor Romero who entered into a
valid and binding Compromise Agreement and Release, REYES,
Waiver and Quitclaim with respondent company.
LEONARDO-DE CASTRO and
SO ORDERED.
BRION, JJ.
TRISTAN C. COLANGGO,
 Respondent.
Promulgated:
April 30, 2008
x----------------------------------------
----------x
DECISION
CORONA, J.:
This petition for review on certiorari1 seeks to set
aside the February 22, 2006 decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 79047 and its resolution
denying reconsideration.3
On October 25, 1992, respondent Tristan C.
Colanggo took the Professional Board Examination for
Teachers (PBET) and obtained a passing rate of 75.98%.
On October 1, 1993, he was appointed Teacher I and was
assigned to Don Ruben E. Ecleo, Sr. Memorial National
High School in San Jose, Surigao del Norte.
Subsequently, a complaint questioning the
eligibility of teachers in Surigao del Norte was filed in the
Civil Service Commission (CSC) CARAGA Regional
Office No. XIII (CSC-CARAGA) in Butuan City. The
CSC-CARAGA immediately investigated the matter.
In the course of its investigation, the CSC-
CARAGA discovered significant irregularities in
respondents documents. The photographs of Tristan C.
Colanggo attached respectively to the PBET application
form and to the October 25, 1992 picture seat plan did not
resemble
respondent. Furthermore, the signature found in the PBET
application form was markedly different from that affixed
on respondents personal data sheet (PDS). It appeared that
someone other than respondent filed his PBET application
and still another person took the exam on his behalf. Thus,
the CSC-CARAGA filed a formal charge for dishonesty
and conduct prejudicial to the best interest of service
against respondent on January 13, 1999.4
On September 27, 2000, respondent filed an
answer denying the charges against him and moved for a
formal hearing and investigation. The CSC granted the
motion and scheduled a hearing on October 31, 2000.
Respondent failed to appear on the said date but
subsequently filed an omnibus motion for the production of
original documents relative to the charges against him and
the presentation of persons who supervised the October 25,
1992 PBET. His motion was granted and the concerned
proctor and examiners were subpoenaed.
After evaluating the evidence, the CSC found:
On the basis of the
photographs attached [to] the PBET
application form and the picture seat
plan, it is evident that the person who
filed the application form for the PBET
is not the same person who actually
took the said examination on October
25, 1992. This disparity of physical
features of the former and latter are
evident. The person who filed the
PBET has fuller cheekbones and
slanted eyes, thinner lips and has a
different hairstyle from that of the John
Doe who took the said examination. On
the other hand, the latter has thinner
cheekbones, elongated chin, full lips
with a moustache and round eyes. Also,
the signatures appearing of the PBET
applicant and that of the PBET
examinee are also in different strokes,
curves and slants.
Comparing the signatures on
the [PBET application form] and
[picture seat plan] vis--vis those affixed
on the PDS of respondent more
evidently reveals that the three are
different persons. The photographs and
signatures appearing on the [PBET
application form] and [picture seat
 plan] are far and different from the
facial features and signatures from both
John Does. Respondent looks older, has
full cheekbones, flatter nose and thin
lips. In other words, the picture and
signatures affixed on the PBET
application form, picture seat plan
and PDS undoubtedly belong to three
different persons which clearly serve
a ground to establish a just cause for
CSC-CARAGA to issue a formal
charge on January 13, 1999 against
respondent.5 (emphasis supplied)
The CSC concluded that respondent did not apply for and
take the PBET exam. Thus, in Resolution No. 021412, the
CSC found respondent guilty of dishonesty and conduct
prejudicial to the best interest of service and ordered his
dismissal. 6
Respondent moved for reconsideration but his
motion was denied.7
Aggrieved, respondent filed a petition for
certiorari in the CA alleging that the CSC committed grave
abuse of discretion in issuing Resolution No. 021412.8 He
pointed out that the pieces of evidence against him were
inadmissible as they were unauthenticated photocopies of
the PBET application form, picture seat plan and PDS.
On February 22, 2006, the CA granted the
petition.9 It ruled that the photocopies of the PBET
application form, picture seat plan and PDS should have
been authenticated.10 Only documents or public records
duly acknowledged or certified as such in accordance with
law could be presented in evidence without further proof.11
Consequently, the CA annulled and set aside Resolution
No. 021412 and ordered the dismissal of charges against
respondent.12
The CSC moved for reconsideration13 but was
denied.14 Hence, this petition.
The CSC essentially avers that the CA erred in
finding that it committed grave abuse of discretion in
rendering Resolution No. 021412.15 The Uniform Rules on
Administrative Cases in the Civil Service16 (Uniform
Rules) does not require strict adherence to technical rules of
evidence. Thus, it validly considered the photocopies of the
PBET application form, picture seat plan and PDS in
resolving the formal charge against respondent in spite of
the fact that they were not duly authenticated.
The petition is meritorious.
Administrative rules of procedure are construed
liberally to promote their objective and to assist parties in
obtaining just, speedy and inexpensive determination of
their respective claims and defenses.17 Section 39 of the The provision above clearly states that the CSC, in Moreover, it exhaustively discussed the differences in

Uniform Rules provides: investigating complaints against civil servants, is not bound appearances of respondent and the persons whose

by technical rules of procedure and evidence applicable in photographs were attached to the PBET application form
Section 39. The direct
evidence for the complainant and the judicial proceedings. and the picture seat plan. It likewise compared the various
respondent consist of the sworn
statement and documents submitted in signatures on the said documents.
support of the complaint or answer as The CSC correctly appreciated the photocopies of
the case may be, without prejudice to
the presentation of additional evidence PBET application form, picture seat plan and PDS (though Resolution No. 021412 reveals that the CSC
deemed necessary but was unavailable
at the time of the filing of the complaint not duly authenticated) in determining whether there was carefully evaluated the allegations against respondent and
and the answer upon which the cross-
examination, by the respondent and the sufficient evidence to substantiate the charges against the thoroughly examined and weighed the evidence submitted
complainant respectively, shall be
based. Following the cross- respondent. Worth noting was that respondent never for its consideration. The penalty (of dismissal) imposed on
examination, there may be re-direct or
re-cross examination. objected to the veracity of their contents. He merely respondent was therefore fully in accord with law20 and
Either party may avail
himself of the services of counsel and disputed their admissibility on the ground that they were jurisprudence.21 We find no grave abuse of discretion on
may require the attendance of witnesses
and the production of documentary not authenticated. the part of the CSC.
evidence in his favor through the
compulsory process of subpoena or
subpoena duces tecum. As a general rule, a finding of guilt in ACCORDINGLY, the petition is hereby

The investigation shall be
conducted for the purpose of
ascertaining the truth without
necessarily adhering to technical
rules applicable in judicial
proceedings. It shall be conducted by
the disciplining authority concerned or
his authorized representatives.
(emphasis supplied)
administrative cases, if supported by substantial evidence
(or that amount of evidence which a reasonable mind might
accept as adequate to justify a conclusion),18 will be
sustained by this Court.19
The CSC graciously granted respondents motions
GRANTED. The February 22, 2006 decision and August
17, 2006 resolution of the Court of Appeals in CA-S.P. No.
79047 are REVERSED and SET ASIDE.
Resolution No. 021412 dated October 22, 2002
and the May 19, 2003 resolution of the Civil Service

to ensure that he was accorded procedural due process. Commission finding respondent Tristan C. Colanggo
GUILTY of dishonesty and conduct prejudicial to the best

interest of service and dismissing him from the service with

forfeiture of leave credits and retirement benefits and

disqualifying him from reemployment in the government

service are REINSTATED.