LUZON DEVELOPMENT BANK vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES PLDT paid a franchise tax equal to three percent (3%) of its gross receipts. The franchise tax was paid
[G.R. No. 120319. October 6, 1995.]
FACTS:
At a conference, the parties agreed on the submission of their respective Position Papers. Atty. Ester
Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper. LDB, on the other
hand, failed to submit its Position Paper. The Voluntary Arbitrator rendered a decision finding that
the bank has not adhered to the CBA nor the MOA. LDB sought to set aside the decision of the Arbiter
with the SC.
ISSUE:
Whether or not, the company has violated the CBA provision and the MOA on promotion.
HELD:
An "instrumentality" is anything used as a means or agency. Thus, the terms governmental "agency"
or "instrumentality" are synonymous in the sense that either of them is a means by which a
government acts, or by which a certain government act or function is performed. The word
"instrumentality," with respect to a state, contemplates an authority to which the state delegates
governmental power for the performance of a state function. An individual person, like an
administrator or executor, is a judicial instrumentality in the settling of an estate, in the same manner
that a sub-agent appointed by a bankruptcy court is an instrumentality of the court, and a trustee in
bankruptcy of a defunct corporation is an instrumentality of the state.
IRON AND STEEL AUTHORITY vs. COURT OF APPEALS
[G.R. No. 102976. October 25, 1995.]
FACTS:
Petitioner Iron and Steel Authority ("ISA") had powers and functions which include the initiation of
expropriation proceedings. The National Steel Corporation ("NSC") embarked on an expansion
program for the construction of an integrated steel mill. But the land was occupied by a non-
operational chemical fertilizer plant owned by private respondent Maria Cristina Fertilizer
Corporation ("MCFC"). The President ordered the negotiations for the occupancy of the land, or for
ISA to initiate expropriation proceedings. Negotiations did fail. ISA commenced eminent domain
proceedings against MCFC. While the trial was on-going, the existence of ISA expired. MCFC then filed
for dismissal which the trial court granted. The CA held that ISA did not have the same rights as an
ordinary corporation and was not entitled to a period for winding up its affairs and that the action for
expropriation could not prosper because the exercise of the expropriation had become ineffective as
a result of ISA's dissolution. The Solicitor General opined that the Republic, as principal of ISA, is
entitled to be substituted after ISA's term had expired.
ISSUE:
Whether or not, the Republic of the Philippines is entitled to be substituted for ISA.
HELD:
The term "Authority" has been used to designate both incorporated and non-incorporated agencies
or instrumentalities of the Government. When the statutory term of a non-incorporated agency
expires, the powers, duties and functions as well as the assets and liabilities of that agency revert back
to, and are re-assumed by, the Republic of the Philippines, in the absence of special provisions of law
specifying some other disposition thereof to some other identified successor agency or
instrumentality of the Republic of the Philippines. When the expiring agency is an incorporated one,
the consequences of such expiry must be looked for, in the first instance, in the charter of that agency
and, by way of supplementation, in the provisions of the Corporation Code. The general rule is that an
action must be prosecuted and defended in the name of the real party-in-interest.
PLDT vs. CITY OF BACOLOD
[G.R. No. 143867. March 25, 2003.]
FACTS:
“in lieu of all taxes on this franchise or earnings thereof” pursuant to RA 7082. The exemption from
“all taxes on this franchise or earnings thereof” was subsequently withdrawn by RA 7160 (LGC),
which at the same time gave local government units the power to tax businesses enjoying a franchise
on the basis of income received or earned by them within their territorial jurisdiction. The LGC took
effect on January 1992.
The City of Davao enacted Ordinance No. 519, Series of 1992, which in pertinent part provides:
Notwithstanding any exemption granted by law or other special laws, there is hereby imposed a tax
on businesses enjoying a franchise, a rate of seventy-five percent (75%) of one percent (1%) of the
gross annual receipts for the preceding calendar year based on the income receipts realized within
the territorial jurisdiction of Davao City.
Subsequently, Congress granted in favor of Globe Mackay Cable and Radio Corporation (Globe) and
Smart Information Technologies, Inc. (Smart) franchises which contained “in leiu of all taxes”
provisos.
In 1995, it enacted RA 7925, or the Public Telecommunication Policy of the Philippines, Sec. 23 of
which provides that any advantage, favor, privilege, exemption, or immunity granted under existing
franchises, or may hereafter be granted, shall ipso facto become part of previously granted
telecommunications franchises and shall be accorded immediately and unconditionally to the
grantees of such franchises. The law took effect on March 16, 1995.
In January 1999, when PLDT applied for a mayor’s permit to operate its Davao Metro exchange, it was
required to pay the local franchise tax which then had amounted to P3,681,985.72. PLDT challenged
the power of the city government to collect the local franchise tax and demanded a refund of what
had been paid as a local franchise tax for the year 1997 and for the first to the third quarters of 1998.
ISSUE:
Whether or not by virtue of RA 7925, Sec. 23, PLDT is again entitled to the exemption from payment
of the local franchise tax in view of the grant of tax exemption to Globe and Smart.
HELD:
Petitioner contends that because their existing franchises contain “in lieu of all taxes” clauses, the
same grant of tax exemption must be deemed to have become ipso facto part of its previously granted
telecommunications franchise. But the rule is that tax exemptions should be granted only by a clear
and unequivocal provision of law “expressed in a language too plain to be mistaken” and assuming
for the nonce that the charters of Globe and of Smart grant tax exemptions, then this runabout way of
granting tax exemption to PLDT is not a direct, “clear and unequivocal” way of communicating the
legislative intent.
Nor does the term “exemption” in Sec. 23 of RA 7925 mean tax exemption. The term refers to
exemption from regulations and requirements imposed by the National Telecommunications
Commission (NTC). For instance, RA 7925, Sec. 17 provides: The Commission shall exempt any
specific telecommunications service from its rate or tariff regulations if the service has sufficient
competition to ensure fair and reasonable rates of tariffs. Another exemption granted by the law in
line with its policy of deregulation is the exemption from the requirement of securing permits from
the NTC every time a telecommunications company imports equipment.
Tax exemptions should be granted only by clear and unequivocal provision of law on the basis of
language too plain to be mistaken.
SOLID HOMES, INC. vs. TERESITA PAYAWAL
[G.R. No. 84811. August 29, 1989.]
FACTS:
The complaint was filed by Teresita Payawal against Solid Homes, Inc. Payawal alleged that Solid
Homes contracted to sell to her a subdivision lot for P28,080.00, and that she had already paid the
total amount of P38,949.87 in monthly installments and interests. Solid Homes subsequently
executed a deed of sale over the land but failed to deliver the corresponding certificate of title despite
her repeated demands because the defendant had mortgaged the property to a financing company.
Payawal asked for delivery of the title to the lot or, alternatively, the return of all the amounts paid by
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her plus interest. Solid Homes moved to dismiss the complaint on the ground that the court had no
jurisdiction, this being vested in the National Housing Authority under PD No. 957. The motion was
denied. After trial, judgment was rendered in favor of Payawal. Solid Homes appealed but the decision
was affirmed by the respondent court. The CA held that the trial court had jurisdiction, referring to
Section 41 of PD No. 957 itself providing that “the rights and remedies in this Decree shall be in addition
to any and all rights and remedies that may be available under existing laws.”
ISSUE:
Whether or not, the RTC had jurisdiction over the matter instead of the NHA.
HELD:
In case of conflict between a general law and a special law, the latter must prevail regardless of the
dates of their enactment. It is obvious that the general law in this case is BP No. 129 and PD No. 1344
the special law. Section 41 of PD No. 957 do not read as vesting concurrent jurisdiction on the RTC
and the Board over the complaint. The only purpose of this section is to reserve such other remedies
such as prosecution for the act complained of under the Revised Penal Code.
As a result of the growing complexity of the modern society, it has become necessary to create more
and more administrative bodies to help in the regulation of its ramified activities. Specialized in the
particular fields assigned to them, they can deal with the problems thereof with more expertise and
dispatch than can be expected from the legislature or the courts of justice. This is the reason for the
increasing vesture of quasi-legislative and quasi-judicial powers in what is now not unreasonably
called the fourth department of the government. Statutes conferring powers on their administrative
agencies must be liberally construed to enable them to discharge their assigned duties in accordance
with the legislative purpose.
CHRISTIAN GENERAL ASSEMBLY, INC. vs. SPS. IGNACIO
[G.R. No. 164789. August 27, 2009.]
FACTS:
CGA entered into a Contract to Sell a subdivision lot with spouses Avelino and Priscilla Ignacio, the
registered owners and developers of a subdivision known as Villa Priscilla Subd. At the time of the
execution of the amended Contract to Sell, the lot was already covered by a TCT in the name of
Iluminada Soneja and the spouses as co-owners. The spouses represented themselves to be the
absolute owners, as in fact it was annotated in the title that they were empowered to sell the same.
CGA paid the installments until its administrative pastor discovered that the property was actually
part of two consolidated lots that the spouses Ignacio had acquired from Nicanor Adriano and
Ceferino Sison. Adriano and Sison were former tenants of Purificacion Imperial who acquired the
property under P.D. No. 27. CGA filed a complaint against the spouses for the rescission of the
contract. The spouses filed a motion to dismiss asserting that the RTC had no jurisdiction over the
case, claiming that the case falls within the exclusive jurisdiction of the HLURB. The RTC ordered the
rescission of the contract, holding that CGA is the rightful owners of the subject property, free from
all liens and encumbrances, is therefore, outside the HLURB's jurisdiction. The CA set the RTC order
aside ruling that the HLURB had exclusive jurisdiction over the subject matter since it involved a
contract to sell a subdivision lot.
ISSUE:
Whether or not, the HLURB has jurisdiction over the case.
HELD:
PD No. 957 - “The Subdivision and Condominium Buyer’s Protective Decree” - granted the National
Housing Authority (NHA) the exclusive jurisdiction of the NHA includes cases involving: (a) Unsound
real estate business practices; (b) claims involving refund and any other claims filed by subdivision
lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and
(c) cases involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman. E.O.
No. 648 transferred the functions of the NHA to the Human Settlements Regulatory Commission
(HSRC) which was renamed as the HLURB pursuant to E.O. No. 90.
The expansive grant of jurisdiction to the HLURB does not mean, however, that all cases involving
subdivision lots automatically fall under its jurisdiction. The mere relationship between the parties,
as subdivision owner/developer and subdivision lot buyer, does not automatically vest jurisdiction
in the HLURB. For an action to fall within the exclusive jurisdiction of the HLURB, the decisive element
is the nature of the action as enumerated in Section 1 of P.D. 1344.
DADUBO vs. CIVIL SERVICE COMMISSION
[G.R. No. 106498. June 28, 1993.]
FACTS:
Erlinda Veloso presented a withdrawal slip for P60,000. Lolita Dadubo, as teller, disbursed the
amount to Veloso. After banking hours, another withdrawal slip in the amount of P60,000, was
presented by Feliciano Bugtas, Jr. The withdrawal slip was approved but no posting was actually
made because the passbook was not presented. The following day, prior to the payment of the
withdrawal, Veloso presented another undated withdrawal slip for P60,000 and P40,000. Cidro paid
this withdrawal to Veloso, who thought that what she was collecting was the P60,000 corresponding
to the 3rd withdrawal. A balance of P60,000 was left unaccounted for and directly imputable to
Dadubo. DBP found Dadubo guilty of dishonesty for embezzlement, dismissing her from the service.
Dadubo appealed to the Merit Systems Protection Board (MSPB), which affirmed the decision of the
DBP, declaring that there was no abuse of discretion on the part of the Senior Manager and Vice-
Chairman. DBP was reversed by the Civil Service Commission which reduced Dadubo's penalty to
suspension and holding that Cidro is held responsible and found guilty of Gross Neglect of Duty.
However, the Commission acting favorably on the motion of DBP, affirmed the earlier findings as to
Dadubo's guilt. Dadubo brought her case to the SC, claiming that the CSC Resolution failed to comply
with the constitutional requirement to state clearly and distinctly the facts and the law on which the
decision is based. The Solicitor General argued that the CSC Resolution did not need to restate the
legal and factual bases of the original decision which already explained the relevant facts and the
applicable law.
ISSUE:
Whether or not, the appellate court may change the factual findings of administrative bodies.
HELD:
The rule is that the findings of fact of administrative bodies, if based on substantial evidence, are
controlling on the reviewing authority. It is settled that it is not for the appellate court to substitute it
own judgment for that of the administrative agency on the sufficiency of the evidence and the
credibility of the witnesses. Administrative decisions on matters within their jurisdiction are entitled
to respect and can only be set aside on proof of grave abuse of discretion, fraud or error of law.
The constitutional requirement to state clearly and distinctly the facts and the law on which a decision
is based applies only to courts of justice and not to administrative bodies like the Civil Service
Commission.
LIANGA BAY LOGGING, CO., INC. vs. ENAGE
[G.R. No. L-30637. July 16, 1987.]
FACTS:
The concession of Lianga Bay Logging Corporation Co., Inc. is located in various municipalities of the
Province of Surigao, while that of respondent Ago Timber Corp. The latter was a part of a forest area
originally licensed to Narciso Lansang. The concessions shared a common boundary. Because of
reports of encroachment on each other's concession areas, the Director of Forestry ordered a survey
to establish the common boundary. The common boundary was fixed, which Ago protested claiming
that "its boundary should be the provincial boundary line of Agusan-Surigao as described in Section
1 of Art. 1693 of the Philippine Commission. The Director of Forestry ruled that the claim of the Ago
runs counter to the license of Narciso Lansang and the Timber License to the Lianga. In an appeal to
the Department of Agriculture and Natural Resources, then Acting Secretary, set aside the decision of
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the Director and ruled that the boundary line should be that indicated by Ago. Lianga elevated the
case to the Office of the President, where the ruling of the Secretary was affirmed. On motion for
reconsideration, the Office of the President overturned the decision of the the Secretary and affirming
in toto the decision of the Director of Forestry.

A new action was commenced by Ago in the CFI against Lianga, Asst. Executive Secretaries Jose Leido,
Jr. and Gilberto Duavit and Dir. of Forestry, as defendants, for "Determination of Correct Boundary
Line of License Timber Areas." Lianga moved for dismissal of the complaint on grounds that the
complaint states no cause of action and that the court has no jurisdiction. The lower court denied the
motion to dismiss and granted the writ of preliminary injunction enjoining the defendants from
enforcing the decision of the Office of the President.

ISSUE:
Whether or not, the Director of Forestry has jurisdiction over the issue of determination of
boundaries.

HELD:
The general rule, under the principles of administrative law in force in this jurisdiction, is that
decisions of administrative officers shall not be disturbed by the courts, except when the former have
acted without or in excess of their jurisdiction, or with grave abuse of discretion. Findings of
administrative officials and agencies who have acquired expertise because their jurisdiction is
confined to specific matters are generally accorded not only respect but at times even finality of such
findings are supported by substantial evidence.

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