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Matuguina Integrated Wood

Products Inc. vs Court of Appeals

G.R. No. 98310 – 263 SCRA 490 – Political Law – Due Process – Right to Be Heard – Not Being
Party to a Case

In 1973, license was issued to Milagros Matuguina to operate logging businesses under her
group Matuguina Logging Enterprises. MIWPI was established in 1974 with 7 stockholders.
Milagros Matuguina became the majority stockholder later on. Milagros later petitioned to
have MLE be transferred to MIWPI. Pending approval of MLE’s petition, Davao Enterprises
Corporation filed a complaint against MLE before the District Forester (Davao) alleging that
MLE has encroached upon the area allotted for DAVENCOR’s timber concession. The
Investigating Committee found MLE guilty as charged and had recommended the Director
to declare that MLE has done so. MLE appealed the case to the Ministry of Natural
Resources. Â During pendency, Milagrosa withdrew her shares from MIWPI. Later, MNR
Minister Ernesto Maceda found MLE guilty as charged. Pursuant to the finding, DAVENCOR
and Philip Co requested Maceda to order MLE and/or MIWPI to comply with the ruling to
pay the value in pesos of 2352.04 m3 worth of timbers. The Minister then issued a writ of
execution against MIWPI. MIWPI filed a petition for prohibition before the Davao RTC. The
RTC ruled in favor of MIWPI and has ordered to enjoin the Minister from pursuing the
execution of the writ. DAVENCOR appealed and the CA reversed the ruling of the RTC.
MIWPI averred that it is not a party to the original case (as it was MLE that was sued – a
separate entity). That the issuance of the order of execution by the Minister has been made
not only without or in excess of his authority but that the same was issued patently without
any factual or legal basis, hence, a gross violation of MIWPI’s constitutional rights under the
due process clause.

ISSUE: Whether or not MIWPI’s right to due process has been violated.

HELD: The SC ruled in favor of MIWPI. Generally accepted is the principle that no man shall
be affected by any proceeding to which he is a stranger, and strangers to a case not bound
by judgment rendered by the court. In the same manner an execution can be issued only
against a party and not against one who did not have his day in court. There is no basis for
the issuance of the Order of Execution against the MIWPI. The same was issued without
giving MIWPI an opportunity to defend itself and oppose the request of DAVENCOR for the
issuance of a writ of execution against it. In fact, it does not appear that MIWPI was at all
furnished with a copy of DAVENCOR’s letter requesting for the Execution of the Minister’s
decision against it. MIWPI was suddenly made liable upon the order of execution by the
respondent Secretary’s expedient conclusions that MLE and MIWPI are one and the same,
apparently on the basis merely of DAVENCOR’s letter requesting for the Order, and without
hearing or impleading MIWPI. Until the issuance of the Order of execution, MIWPI was not
included or mentioned in the proceedings as having any participation in the encroachment
in DAVENCOR’s timber concession. This action of the Minister disregards the most basic
tenets of due process and elementary fairness. The liberal atmosphere which pervades the
procedure in administrative proceedings does not empower the presiding officer to make
conclusions of fact before hearing all the parties concerned. (1996 Oct 24)