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103982 / 216 SCRA 500)


Mecano is a Director II of the NBI. He was hospitalized and on account of which he incurred medical and
hospitalization expenses, the total amount of which he is claiming from the COA.

In a memorandum to the NBI Director, Director Lim requested reimbursement for his expenses on the ground
that he is entitled to the benefits under Section 699 of the RAC, the pertinent provisions of which read:

Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of duty. — When a
person in the service of the national government of a province, city, municipality or municipal district is so
injured in the performance of duty as thereby to receive some actual physical hurt or wound, the proper
Head of Department may direct that absence during any period of disability thereby occasioned shall be on
full pay, though not more than six months, and in such case he may in his discretion also authorize the
payment of the medical attendance, necessary transportation, subsistence and hospital fees of the injured
person. Absence in the case contemplated shall be charged first against vacation leave, if any there be.
xxx xxx xxx

In case of sickness caused by or connected directly with the performance of some act in the line of duty, the
Department head may in his discretion authorize the payment of the necessary hospital fees. Director Lim then
forwarded petitioner’s claim, to the Secretary of Justice. Finding petitioner’s illness to be service-connected, the
Committee on Physical Examination of the Department of Justice favourably recommended the payment of
petitioner’s claim.

However, then Undersecretary of Justice Bello III returned petitioner’s claim to Director Lim, having
considered the statements of the Chairman of the COA to the effect that the RAC being relied upon was
repealed by the Administrative Code of 1987.

Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 1991 of then Secretary
of Justice Drilon stating that “the issuance of the Administrative Code did not operate to repeal or abregate in its
entirety the Revised Administrative Code, including the particular Section 699 of the latter”.

Director Lim transmitted anew Mecano’s claim to then Undersecretary Bello for favorable consideration;
Secretary Drilon forwarded petitioner’s claim to the COA Chairman, recommending payment of the same. COA
Chairman however, denied petitioner’s claim on the ground that Section 699 of the RAC had been repealed by
the Administrative Code of 1987, solely for the reason that the same section was not restated nor re-enacted in
the Administrative Code of 1987. He commented, however, that the claim may be filed with the Employees’
Compensation Commission, considering that the illness of Director Mecano occurred after the effectivity of the
Administrative Code of 1987.

Eventually, petitioner’s claim was returned by Undersecretary of Justice Montenegro to Director Lim with the
advice that petitioner “elevate the matter to the Supreme Court if he so desires”.
Hence this petition for certiorari.

ISSUE: Whether or not the Administrative Code of 1987 repealed or abrogated Section 699 of the RAC


NO. The question of whether a particular law has been repealed or not by a subsequent law is a matter of
legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing provision
which expressly and specifically cites the particular law or laws, and portions thereof, that are intended to be
repealed. A declaration in a statute, usually in its repealing clause, that a particular and specific law, identified
by its number or title, is repealed is an express repeal; all others are implied repeals…

In the case of the two Administrative Codes in question, the ascertainment of whether or not it was the intent of
the legislature to supplant the old Code with the new Code partly depends on the scrutiny of the repealing
clause of the new Code. This provision is found in Section 27, Book VII (Final Provisions) of the
Administrative Code of 1987 which reads:
Sec. 27. Repealing Clause. — All laws, decrees, orders, rules and regulations, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.

The question that should be asked is: What is the nature of this repealing clause?

It is certainly not an express repealing clause because it fails to identify or designate the act or acts that are
intended to be repealed. Rather, it is an example of a general repealing provision. It is a clause which predicates
the intended repeal under the condition that substantial conflict must be found in existing and prior acts. This
latter situation falls under the category of an implied repeal.

There are two categories of repeal by implication.

1. Where provisions in the two acts on the same subject matter are in an irreconcilable conflict, the later act
to the extent of the conflict constitutes an implied repeal of the earlier one.
2. If the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will
operate to repeal the earlier law.

Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover the entire
subject matter of the old Code. There are several matters treated in the old Code which are not found in the new
Code, such as the provisions on notaries public, the leave law, the public bonding law, military
reservations, claims for sickness benefits under Section 699, and still others.

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to cover only
those aspects of government that pertain to administration, organization and procedure, understandably because
of the many changes that transpired in the government structure since the enactment of the RAC decades of
years ago.

Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the subject
claim are in an irreconcilable conflict. In fact, there can be no such conflict because the provision on sickness
benefits of the nature being claimed by petitioner has not been restated in the Administrative Code of 1987.
Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not
favored. 20 The presumption is against inconsistency and repugnancy for the legislature is presumed to know the
existing laws on the subject and not to have enacted inconsistent or conflicting statutes.

1. the COA would have Us consider that the fact that Section 699 was not restated in the Administrative Code
of 1987 meant that the same section had been repealed. The COA anchored this argument on the whereas clause
of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code which
incorporate in a unified document the major structural, functional and procedural principles and rules of
governance; and
xxx xxx xxx

It argues, in effect, that what is contemplated is only one Code — the Administrative Code of 1987. This
contention is untenable.

The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself
sufficient to cause an implied repeal of the prior act, since the new statute may merely be cumulative or a
continuation of the old one. What is necessary is a manifest indication of legislative purpose to repeal.

2. Regarding COA contention that recovery under this subject section (699) shall bar the recovery of benefits
under the Employees’ Compensation Program, the same cannot be upheld. The second sentence of Article 173,
Chapter II, Title II (dealing on Employees’ Compensation and State Insurance Fund), Book IV of the Labor
Code, as amended by P.D. 1921, expressly provides that “the payment of compensation under this Title shall
not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code . . . whose
benefits are administered by the system (meaning SSS or GSIS) or by other agencies of the government.”
02 LEVERIZA VS IAC (GR No. L-66614 / 157 SCRA 282)


Around three contracts of lease resolve the basic issues in the instant case:
Contract A — a lease contract of April 2, 1965 between the Republic of the Philippines, represented by Civil
Aeronautics Administration (CAA) and. Leveriza over a parcel of land containing an area of
4,502 square meters, for 25 years.
Contract B — a lease contract (in effect a sublease) of May 21, 1965 between Leveriza and Mobil Oil
Philippines, Inc., over the same parcel of land, but reduced to 3,000 square meters for 25
years; and
Contract C — a lease contract of June 1, 1968 between defendant CAA and plaintiff Mobil Oil over the same
parcel of land, but reduced to 3,000 square meters, for 25 years.

There is no dispute among the parties that the subject matter of the three contracts of lease above mentioned,
Contract A, Contract B, and Contract C, is the same parcel of land, with the noted difference that while in
Contract A, the area leased is 4,502 square meters, in Contract B and Contract C, the area has been reduced to
3,000 square meters.

It is important to note, for a clear understanding of the issues involved, that it appears that defendant CAA as
LESSOR, leased the same parcel of land, for durations of time that overlapped to two lessees, to wit: (1)
Leveriza and Mobil Oil, and the latter, as LESSEE, leased the same parcel of land from two lessors, to wit: (1)
Leveriza and (2) CAA for durations of time that also overlapped.

Leveriza, the lessee in Contract A and the lessor in Contract B, is now deceased. This is the reason why her
successor-in-interest, her heirs, are sued. For purposes of brevity, these defendants shall be referred to
hereinafter as Defendants Leveriza.

Mobil Oil seeks the rescission or cancellation of Contract A and Contract B on the ground that Contract A from
which Contract B is derived and depends has already been cancelled by the defendant CAA and maintains that
Contract C with the defendant CAA is the only valid and subsisting contract insofar as the parcel of land,
subject to the present litigation is concerned.

Defendants Leverizas’ claim that Contract A which is their contract with CAA has never been legally cancelled
and still valid and subsisting; that it is Contract C between plaintiff and defendant CAA which should be
declared void.

CAA asserts that Contract A is still valid and subsisting because its cancellation by Jurado was ineffective and
asks the court to annul Contract A because of the violation committed by Leveriza in leasing the parcel of land
to plaintiff by virtue of Contract B without the consent of CAA. CAA further asserts that Contract C not having
been approved by the Director of Public Works and Communications is not valid.

After trial, the lower courts rendered judgment:

1. Declaring Contract A as having been validly cancelled on June 28, 1966, and has therefore ceased to have
any effect as of that date;
2. Declaring that Contract B has likewise ceased to have any effect as of June 28, 1966 because of the
cancellation of Contract A;
3. Declaring that Contract C was validly entered into on June 1, 1968, and that it is still valid and subsisting;
CAA filed a Motion for Reconsideration, averring that because the lot lease was properly registered in the
name of the Republic of the Philippines, it was only the President of the Philippines or an officer duly
designated by him who could execute the lease contract pursuant to Sec. 567 of the Revised
Administrative Code; that the Airport General Manager has no authority to cancel Contract A, the contract
entered into between the CAA and Leveriza, and that Contract C between the CAA and Mobil was void
for not having been approved by the Secretary of Public Works and Communications. Said motion was
however denied.

On appeal, the IAC affirmed in toto the decision of the lower court. Hence this petition for Review on certiorari.
ISSUE: There is no dispute that Contract A at the time of its execution was a valid contract. The issue
therefore is whether or not said contract is still subsisting after its cancellation by CAA on the ground of a
sublease executed by petitioners with Mobil Oil (CONTRACT B) without the consent of CAA and the
execution of another contract of lease between CAA and Mobil Oil (CONTRACT C)
ISSUE: Whether or not there is a valid ground for the cancellation of Contract A


YES. Contract A was entered into by CAA as the lessor and the Leverizas as the lessee specifically “for the
purpose of operating and managing a gasoline station by the latter, to serve vehicles going in and out of the

As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of paragraph
7 of said Contract reads in full:
7. The Party of the Second part may transfer her rights to the leased premises but in such eventuality, the
consent of the Party of the First Part shall first be secured. In any event, such transfer of rights shall have
to respect the terms and conditions of this agreement.

Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of the contract.
Said paragraph reads:
8. Failure on the part of the Party of the Second Part to comply with the terms and conditions herein agreed
upon shall be sufficient for revocation of this contract by the Party of the First Part without need of
judicial demand.

It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract B) with Mobil Oil
without the consent of CAA (lessor). The cancellation of the contract was made in a letter by Jurado, Airport
General Manager of CAA addressed to Rosario Leveriza.

Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the Airport General
Manager had no legal authority to make the cancellation. They maintain that it is only the (1)Secretary of Public
Works and Communications, acting for the President, or by delegation of power, the (2)Director of CCA who
could validly cancel the contract. Petitioners argue that cancelling or setting aside a contract approved by the
Secretary is, in effect, repealing an act of the Secretary which is beyond the authority of the Administrator.

Such argument is untenable. The terms and conditions under which such revocation or cancellation may be
made, have already been specifically provided for in Contract “A” which has already been approved by the
Department Head, It is evident that in the implementation of aforesaid contract, the approval of said Department
Head is no longer necessary if not redundant

1. It is further contended that even granting that such cancellation was effective, a subsequent billing by the
Accounting Department of the CAA has in effect waived or nullified the rescission of Contract “A.”

The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after the
cancellation of Contract “A” is obviously an error. However, this Court has already ruled that the mistakes of
government personnel should not affect public interest.

2. Petitioners further assail the interpretation of Contract “A”, claiming that Contract “B” was a mere sublease
to Mobil Oil and requires no prior consent of CAA to perfect the same. Citing Article 1650 of the Civil
Code, they assert that the prohibition to sublease must be expressed and cannot be merely implied or

As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a prior consent
interprets the first sentence of paragraph 7 of Contract “A” to refer to an assignment of lease under Article
1649 of the Civil Code and not to a mere sublease. A careful scrutiny of said paragraph of Contract “A”
clearly shows that it speaks of transfer of rights of Rosario Leveriza to the leased premises and not to
assignment of the lease.

3. Petitioners likewise argued that it was contemplated by the parties to Contract “A” that Mobil Oil would be
the owner of the gasoline station it would construct on the leased premises during the period of the lease,
hence, it is understood that it must be given a right to use and occupy the lot in question in the form of a sub-
In Contract “A”, it was categorically stated that it is the lessee (petitioner) who will manage and operate the
gasoline station. The fact that Mobil Oil was mentioned in that contract was clearly not intended to give
approval to a sublease between petitioners and said company but rather to insure that in the arrangements to
be made between them, it must be understood that after the expiration of the lease contract, whatever
improvements have been constructed in the leased premises shall be relinquished to CAA. Thus, this Court
held that “the primary and elementary rule of construction of documents is that when the words or language
thereof is clear and plain or readily understandable by any ordinary reader thereof, there is absolutely no
room for interpretation or construction anymore.

4. ADMINISTRATIVE LAW: Finally, petitioners contend that the administrator of CAA cannot execute
without approval of the Department Secretary, a valid contract of lease over real property owned by the
Republic of the Philippines, citing the Revised Administrative Code, which provide that Under 567 of the
Revised Administrative Code, such contract of lease must be executed:
(1) by the President of the Philippines, or
(2) by an officer duly designated by him or
(3) by an officer expressly vested by law.

On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease real property
belonging to the RP under its administration even without the approval of the Secretary of Public Works and
Communications, which authority is expressly vested in it by law, more particularly Section 32 (24) of Republic
Act 776, which reads:

Sec. 32. Powers and Duties of the Administrator. — Subject to the general control and supervision of the
Department Head, the Administrator shall have, among others, the following powers and duties:
xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila International Airport and all
government aerodromes except those controlled or operated by the Armed Forces of the Philippines
including such power and duties as: … (b) to enter into, make and execute contracts of any kind with any
person, firm, or public or private corporation or entity; (c) to acquire, hold, purchase, or lease any personal
or real property; right of ways, and easements which may be proper or necessary: Provided, that no real
property thus acquired and any other real property of the Civil Aeronautics Administration shall be sold
without the approval of the President of the Philippines. …

There is no dispute that the Revised Administrative Code is a general law while Republic Act 776 is a special
law nor in the fact that the real property subject of the lease in Contract “C” is real property belonging to the
Republic of the Philippines.

It is readily apparent that in the case at bar, the CAA has the authority to enter into Contracts of Lease for the
government under the third category (Art. 567. )Thus, as correctly ruled by the Court of Appeals, the CAA has
the power to execute the deed or contract involving leases of real properties belonging to the RP, not because it
is an entity duly designated by the President but because the said authority to execute the same is, by law
expressly vested in it, which in this case is RA 776.

Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the CAA by
reason of its creation and existence, administers properties belonging to the RP and it is on these properties that
the Administrator must exercise his vast power and discharge his duty to enter into, make and execute contract
of any kind with any person, firm, or public or private corporation or entity and to acquire, hold, purchase, or
lease any personal or real property, right of ways and easements which may be proper or necessary. (The
exception, however, is the sale of properties acquired by CAA or any other real properties of the same which
must have the approval of the President of the Philippines.) The Court of appeals took cognizance of the
striking absence of such proviso in the other transactions contemplated in paragraph (24) and is convinced as
we are, that the Director of the CAA does not need the prior approval of the President or the Secretary of Public
Works and Communications in the execution of Contract “C.”

In this regard, this Court, ruled that another basic principle of statutory construction mandates that general
legislation must give way to special legislation on the same subject, and generally be so interpreted as to
embrace only cases in which the special provisions are not applicable; that specific statute prevails over a
general ; and that where two statutes are of equal theoretical application to a particular case, the one designed
therefor specially should prevail
03 LUZON DEV’T BANK VS ASSOC OF LDB (GR No. 120319 / 249 SCRA 162)


From a submission agreement of the LDB and the Association of Luzon Development Bank Employees
(ALDBE) arose an arbitration case to resolve the following issue: Whether or not the company has violated the
CBA provision and the MOA on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers. Atty. Garcia, in her
capacity as Voluntary Arbitrator, received ALDBE’s Position Paper ; LDB, on the other hand, failed to submit
its Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995
no Position Paper had been filed by LDB.

Without LDB’s Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the CBA provision nor the MOA
on promotion.

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator
and to prohibit her from enforcing the same.

ISSUE: Whether or not a voluntary arbiter’s decision is appealable to the CA and not the SC


YES. The jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited
compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the NLRC for that
matter. The “(d)ecision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission …” Hence, while there is an express mode of appeal from the decision of a labor arbiter, Republic
Act No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not, elevated to the
SC itself on a petition for certiorari, in effect equating the voluntary arbitrator with the NLRC or the CA. In the
view of the Court, this is illogical and imposes an unnecessary burden upon it.

In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of courts and awards
of quasi-judicial agencies must become final at some definite time, this Court ruled that the awards of voluntary
arbitrators determine the rights of parties; hence, their decisions have the same legal effect as judgments of a
court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., this Court ruled that “a voluntary arbitrator by the
nature of her functions acts in a quasi-judicial capacity.” Under these rulings, it follows that the voluntary
arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to the latter.

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of
RTC s and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and
Exchange Commission, the Employees Compensation Commission and the Civil Service Commission,
except those falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.

Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be
considered as a quasi-judicial agency, board or commission, still both he and the panel are comprehended
within the concept of a “quasi-judicial instrumentality.”

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.

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him
under the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term
“instrumentality” in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers are provided for
in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein.

It will be noted that, although the Employees Compensation Commission is also provided for in the Labor
Code, Circular No. 1-91, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid
down the procedure for the appealability of its decisions to the CA under the foregoing rationalization, and this
was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129. A fortiori, the decision or award of
the voluntary arbitrator or panel of arbitrators should likewise be appealable to the CA, in line with the
procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies,
boards and commissions enumerated therein.

In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the
Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or
submission, or if none be specified, the RTC for the province or city in which one of the parties resides or is
doing business, or in which the arbitration is held, shall have jurisdiction.

In effect, this equates the award or decision of the voluntary arbitrator with that of the RTC. Consequently, in a
petition for certiorari from that award or decision, the CA must be deemed to have concurrent jurisdiction with
the SC. As a matter of policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature
for proper disposition.


1. In labor law context, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have bound themselves
to accept the decision of the arbitrator as final and binding. Arbitration may be classified, on the basis of the
obligation on which it is based, as either compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego
their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third
party. 1 The essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested
third party whose decision is final and binding on the parties, but in compulsory arbitration, such a third party is
normally appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a
voluntary arbitration clause in their collective agreement, to an impartial third person for a final and binding
resolution. 2 Ideally, arbitration awards are supposed to be complied with by both parties without delay, such
that once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply
with the same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for that
particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide
their case. Above all, they have mutually agreed to de bound by said arbitrator’s decision.

2. Article 261 of the Labor Code accordingly provides for exclusive original jurisdiction of such voluntary
arbitrator or panel of arbitrators over
(1) the interpretation or implementation of the CBA and
(2) the interpretation or enforcement of company personnel policies.

Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over other labor

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following
enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties
for decision without extension, even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of
strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.

04 MALAGA VS PENACHOS (GR No. 86695 / 213 SCRA 516)


The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids and Awards Committee
(PBAC) caused the publication in the November 25, 26 and 28, 1988 issues of the Western Visayas Daily an
Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF. The notice announced that the
last day for the submission of pre-qualification requirements was on December 2, 1988, and that the bids would
be received and opened on December 12, 1988 at 3 o'clock in the afternoon.

Petitioners Malaga and Najarro, doing business under the name of BE Construction and Best Built
Construction, respectively, submitted their pre-qualification documents at two o'clock in the afternoon of
December 2, 1988. Petitioner Occeana submitted his own PRE-C1 on December 5, 1988. All three of them
were not allowed to participate in the bidding as their documents were considered late.

On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the officers of PBAC for
their refusal without just cause to accept them resulting to their non-inclusion in the list of pre-qualified bidders.
They sought to the resetting of the December 12, 1988 bidding and the acceptance of their documents. They
also asked that if the bidding had already been conducted, the defendants be directed not to award the project
pending resolution of their complaint.

On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding
and award the project. The defendants filed a motion to lift the restraining order on the ground that the court is
prohibited from issuing such order, preliminary injunction and preliminary mandatory injunction in government
infrastructure project under Sec. 1 of P.D. 1818. They also contended that the preliminary injunction had
become moot and academic as it was served after the bidding had been awarded and closed.

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction.
It declared that the building sought to be constructed at the ISCOF was an infrastructure project of the
government falling within the coverage of the subject law.

ISSUE: Whether or not ISCOF is a government instrumentality subject to the provisions of PD 1818?


The 1987 Administrative Code defines a government instrumentality as follows:

Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy, usually through a charter. This
term includes regulatory agencies, chartered institutions, and government-owned or controlled
corporations. (Sec. 2 (5) Introductory Provisions).

The same Code describes a chartered institution thus:

Chartered institution - refers to any agency organized or operating under a special charter, and vested by
law with functions relating to specific constitutional policies or objectives. This term includes the state
universities and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in
pursuance of the integrated fisheries development policy of the State, a priority program of the government to
effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines shall also
be the ex-officio Treasurer of the state college with its accounts and expenses to be audited by the Commission
on Audit or its duly authorized representative. Third, heads of bureaus and offices of the National Government
are authorized to loan or transfer to it, upon request of the president of the state college, such apparatus,
equipment, or supplies and even the services of such employees as can be spared without serious detriment to
public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of the National
Treasury and it was also decreed in its charter that the funds and maintenance of the state college would
henceforth be included in the General Appropriations Law.

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree as
there are irregularities present surrounding the transaction that justified the injunction issued as regards to the
bidding and the award of the project (citing the case of Datiles vs. Sucaldito).



Accused is a project manager/consultant of the Chemical Mineral Division, Industrial Technology Development
Institute, Department of Science and Technology, a component of the Industrial Development Institute which is
an agency of the DOST.

He is to supervise the construction of the ITDI-CMD building, while the Jaime Sta. Maria Construction
undertook the construction. The structure is jointly funded by the Philippine and Japanese Governments.

While the said construction has not yet been completed, accused either directly requested and/or demanded for
himself the sum of P200,000.00, claimed as part of the expected profit of the contractor.

Petitioner was charged for violation of the Anti-Graft and Corrupt Practices Act for committing said offense in
relation to the performance of his official duties.

Petitioner asserts in a petition for review that he is not a public officer because he was neither elected nor
appointed to a public office, but merely a private individual hired by the ITDI on contractual basis for a
particular project and for a specified period. Hence the Sandiganbayan erred in taking cognizance of the case.

Section 2 (b) of RA 3019 defines a public officer to “include elective and appointive officials and employees,
permanent or temporary, whether in the classified or unclassified or exemption service receiving compensation,
even nominal, from the government…”


Whether or not a private individual hired on a contractual basis by the government is a public officer.


Yes. The word “includes” used in defining a public officer indicates that the definition is not restrictive. The
terms “classified, unclassified or exemption service” were the old categories of position in the civil service
which have been reclassified into Career Service and Non-Career Service by PD 807 providing for the
organization of the Civil Service Commission by the Administrative Code of 1987.

A private individual hired on a contractual basis as Project Manager for a government undertaking falls under
the non-career service category of the Civil Service and thus is a public officer as defined by Sec 2(b) of RA
Under Book V, Title I, Subtitle A, Chapter 2, Sec 6(2) of the Administrative Code of 1987, non-career service
in particular is characterized by 1) entrance other than those of the usual test of merit and fitness utilized for the
career service; and 2) tenure which is limited to a period specified by law, or which is coterminous with that of
the appointing authority or subject to his pleasure, or which is limited to the duration of a particular project for
which purpose employment was made.

Section 9(4) of the same provides that Non-Career Service It shall include Contractual personnel or those
employment in the government is in accordance with a special contract to undertake a specific work or job,
requiring special or technical skills not available in the employing agency, to be accomplished within a specific
period, which in no case shall exceed one year, and performs or accomplishes the specific work or job, under
his own responsibility with a minimum of direction and supervision from the hiring agency.



 Petitioners Anak Mindanao Party-List Group (AMIN) and Mamalo Descendants Organization, Inc.
(MDOI) assail the constitutionality of Executive Order (E.O.) Nos. 364 and 379, both issued in 2004, via
the present Petition for Certiorari and Prohibition with prayer for injunctive relief.
 EO. 364, as amended by EO. 379, among other things, orders that the Presidential Commission for the
Urban Poor (PCUP) placed under the supervision and control of the Department of Land Reform, and the
National Commission on Indigenous Peoples (NCIP) shall be an attached agency of the Department of
Land Reform.
 Why is this important?
o For AMIN: It alleges that by issuing Eos 364 and 379, the Executive has impaired the powers of
Congress. AMIN contends that since the DAR, PCUP and NCIP were created by statutes, they can
only be transformed, merged or attached by statutes, not by mere executive orders.
o For MDOI: It alleges that it is concerned with the negative impact of NCIP becoming an attached
agency of the DAR on the processing of ancestral domain claims.
 On the issue of Locus Standi
o AMIN: YES. As a member of Congress, it has the standing to maintain the prerogatives, powers, and
privileges vested by the constitution in his office
o MDOI: NO. No direct interest shown; Raises no issue of transcendental importance; Too abstract to
be considered judicially cognizable


WON the placing of the Presidential Commission for the Urban Poor (PCUP) under the supervision and control
of the DAR, and the National Commission on Indigenous Peoples (NCIP) under the DAR as an attached agency
is within the ambit of Executive powers.


 The Constitution confers, by express provision, the power of control over executive departments, bureaus
and offices in the President alone. And it lays down a limitation on the legislative power.
 The Constitution’s express grant of the power of control in the President justifies an executive action to
carry out reorganization measures under a broad authority of law.
 Administrative Code of 1987 Sec. 31: “The President, subject to the policy in the Executive Office and in
order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the
administrative structure of the Office of the President”
o The consolidation of functions in E.O. 364 aims to attain the objectives of simplicity, economy and
efficiency as gathered from the provision granting PCUP and NCIP access to the range of services
provided by the DARs technical offices and support systems.
 In the present case, AMIN glaringly failed to show how the reorganization by executive fiat would hamper
the exercise of citizens’ rights and privileges.
o A law is presumed constitutional unless proved otherwise
 On the issue of Sec 16 Art. 13 of the Constitution (The right of the people and their organizations to
effective and reasonable participation at all levels of social, political, and economic decision-making shall
not be abridged. The State shall, by law, facilitate the establishment of adequate consultation
mechanisms) being violated: the state merely facilitates this participation, and not necessarily create these
mechanisms. The State provides the support, but eventually it is the people, properly organized in their
associations, who can assert the right and pursue the objective.
Topics sir may discuss:
 The Administrative Code of 1987 categorizes administrative relationships into
o (1) supervision and control
o (2) administrative supervision
o (3) attachment: most independent form


08 BEJA VS CA (GR No. 97149 / 207 SCRA 689)

09 BALICAS VS FFIB (GR No. 145972)


In the development of the Cherry Hills Subdivision (CHS), Philjas applied for the issuance of ECC from the
DENR-Region IV

Respondent BALICAS, PENRO senior environmental management specialist, monitored the implementation of
the CHS Project Development to check compliance with the terms and conditions in the ECC. She conducted
another monitoring on the project for the same purpose. In both instances, she noted that the project was still in
the construction stage hence, compliance with the stipulated conditions could not be fully assessed, and
therefore, a follow-up monitoring is proper. It appeared from the records that this August 23, 1995 monitoring
inspection was the last one conducted by the DENR.

Immediately after the tragic incident on August 3, 1999, a fact-finding investigation was conducted by the
Office of the Ombudsman through its Fact-Finding and Intelligence Bureau (FFIB), which duly filed an
administrative complaint with the Office of the Ombudsman against several officials of the Housing and Land
Use Regulatory Board (HLURB), Department of Environment and Natural Resources (DENR), and the local
government of Antipolo.

The charge against petitioner involved a supposed failure on her part to monitor and inspect the development of
CHS, which was assumed to be her duty as DENR senior environmental management specialist assigned in the
province of Rizal.

For her part, petitioner belied allegations that monitoring was not conducted, claiming that she monitored the
development of CHS as evidenced by 3 monitoring reports .She further claimed good faith and exercise of due
diligence, insisting that the tragedy was a fortuitous event. She reasoned that the collapse did not occur in
Cherry Hills, but in the adjacent mountain eastern side of the subdivision.

The Office of the Ombudsman rendered a decision imposing upon petitioner the supreme penalty of dismissal
from office for gross neglect of duty.

Petitioner seasonably filed a petition for review of the Ombudsmans decision with the CA. The Court of
Appeals dismissed the petition for lack of merit and affirmed the appealed decision. It found that the landslide
was a preventable occurrence and that petitioner was guilty of gross negligence in failing to closely monitor
Philjas compliance with the conditions of the ECC given the known inherent instability of the ground where the
subdivision was developed. The appellate court likewise denied petitioners motion for reconsideration.

This petition for review on certiorari

ISSUE: Whether or not Balicas is guilty of gross neglect of duty


NO. In order to ascertain if there had been gross neglect of duty, we have to look at the lawfully prescribed
duties of petitioner. Unfortunately, DENR regulations are silent on the specific duties of a senior environmental
management specialist. Internal regulations merely speak of the functions of the Provincial Environment and
Natural Resources Office (PENRO) to which petitioner directly reports.
The monitoring duties of the PENRO mainly deal with broad environmental concerns, particularly pollution
abatement. This general monitoring duty is applicable to all types of physical developments that may adversely
impact on the environment, whether housing projects, industrial sites, recreational facilities, or scientific

However, a more specific monitoring duty is imposed on the HLURB as the sole regulatory body for housing
and land development.

P.D. No. 1586 prescribes the following duties on the HLURB (then Ministry of Human Settlements) in
connection with environmentally critical projects requiring an ECC:

SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The President of the
Philippines may, on his own initiative or upon recommendation of the National Environment Protection
Council, by proclamation declare certain projects, undertakings or areas in the country as environmentally
critical. No person, partnership or corporation shall undertake or operate any such declared environmentally
critical project or area without first securing an Environmental Compliance Certificate issued by the
President or his duly authorized representative. For the proper management of said critical project or area, the
President may by his proclamation reorganize such government offices, agencies, institutions, corporations
or instrumentalities including the re-alignment of government personnel, and their specific functions and

For the same purpose as above, the Ministry of Human Settlements [now HLURB] shall:
(a) prepare the proper land or water use pattern for said critical project(s) or area(s);
(b) establish ambient environmental quality standards;
(c) develop a program of environmental enhancement or protective measures against calamitous factors such as
earthquake, floods, water erosion and others; and
(d) perform such other functions as may be directed by the President from time to time.

The legal duty to monitor housing projects, like the CHP, against calamities such as landslides due to
continuous rain, is clearly placed on the HLURB, not on the petitioner as PENRO senior environmental
management specialist. In fact, the law imposes no clear and direct duty on petitioner to perform such narrowly
defined monitoring function.

10 IRON AND STEEL AUTHORITY VS CA (GR No. 102976 / 249 SCRA 538)


Petitioner ISA was created by PD No. 272 in order, generally, to develop and promote the iron and steel

PD No. 272 initially created ISA for a term of 5 years counting from August 9, 1973. When ISA’s original term
expired on October 10, 1978, its term was extended for another 10 years by EO No. 555 dated August 31, 1979.

The National Steel Corporation (NSC) then a wholly owned subsidiary of the National Development
Corporation which is itself an entity wholly owned by the National Government, embarked on an expansion
program embracing, among other things, the construction of an integrated steel mill in Iligan City. The
construction of such steel mill was considered a priority and major industrial project of the government.
Pursuant to the expansion program of the NSC, Proclamation No. 2239 was issued by the President of the
Philippines on November 16, 1982 withdrawing from sale or settlement a large tract of public land located in
Iligan City, and reserving that land for the use and immediate occupancy of NSC.

Since certain portions of the aforesaid public land were occupied by a non-operational chemical fertilizer plant
and related facilities owned by Maria Cristina Fertilizer Corporation (MCFC), LOI No. 1277, also dated
November 16, 1982, was issued directing the NSC to “negotiate with the owners of MCFC, for and on behalf of
the Government, for the compensation of MCFC’s present occupancy rights on the subject land.

Negotiations between NSC and MCFC failed.


Whether or not the Government is entitled to be substituted for ISA in view of the expiration of ISA’s term.


Yes. Clearly, ISA was vested with some of the powers or attributed normally associated with juridical
personality. There is, however, no provision in PD No. 272 recognizing ISA as possessing general or
comprehensive juridical personality separate and distinct from that of the government. The ISA in fact appears
to the Court to be a non-incorporated agency or instrumentality of the RP, or more precisely of the Government
of the Philippines. It is common knowledge that other agencies or instrumentalities of the Government of the
Republic are cast in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes
with and at other times without capital stock, and accordingly vested with a juridical personality distinct from
the personality of the Republic.

We consider that the ISA is properly regarded as an agent or delegate of the RP. The Republic itself is a body
corporate and juridical person vested with the full panoply of powers and attributes which are compendiously
described as “legal personality.”

When the statutory term of non-incorporated agency expires, the powers, duties and functions as well as the
assets and liabilities of that agency revert back to, and are reassumed by the RP, in the absence of special
provisions of law specifying some other disposition thereof, e.g., devolution or transmission of such powers,
duties and functions, etc. to some other identified successor agency or instrumentality of the RP.

When the expiring agency is an incorporated one, the consequence of such expiry must be looked for, in the
first instance, in the charters and, by way of supplementation, the provisions of the Corporation Code. Since in
the instant case, ISA is a non-incorporated agency or instrumentality of the Republic, its powers, duties and
functions, assets and liabilities are properly regarded as folded back into the Government and hence assumed
once again by the Republic, no special statutory provision having been shown to have mandated succession
thereto by some other entity or agency of the Republic.

In the instant case, ISA substituted the expropriation proceedings in its capacity as an agent or delegate or
representative of the Republic of the Philippines pursuant to its authority under PD 272.
The principal or the real party in interest is thus the Republic of the Philippines and not the NSC, even though
the latter may be an ultimate user of the properties involved.

From the foregoing premises, it follows that the Republic is entitled to be substituted in the expropriation
proceedings in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the expiration of
ISA’s statutory term did not by itself require or justify the dismissal of the eminent domain proceedings.