[168] CARINO v. CHR 2.

The MCA were done after the protest rally staged at the DECS
GR No. 96681 | December 2, 1991 | Quasi-Judicial Powers – Fact-finding/ premises 3 days before without disrupting classes as a last call for
Investigatory/ Inquisitorial | Menghrajani the government to negotiate the granting of demands had elicited no
response from the Secretary of Education. It consisted in staying
away from their classes, and gathering in peaceable assemblies, etc.
Petitioner: HON. ISIDRO CARIÑO, in his capacity as Secretary of the
3. The teachers participating in the MCA were served with an order of
Department of Education, Culture & Sports (DECS), DR. ERLINDA LOLARGA,
the DECS Secretary to return to work in 24 hours or face dismissal.
in her capacity as Superintendent of City Schools of Manila
The MCA continued into the week, with more teachers joining in the
Respondents: THE COMMISSION ON HUMAN RIGHTS, GRACIANO
days that followed.
BUDOY, JULIETA BABARAN, ELSA IBABAO, HELEN LUPO, AMPARO
4. Budoy et al were administratively charged on the basis of the
GONZALES, LUZ DEL CASTILLO, ELSA REYES and APOLINARIO ESBER
principal's report and given five (5) days to answer the charges for
failure to heed the return to work order by the DECS. They were also
Recit-Ready Facts: Budoy et al initiated a complaint with the CHR after they
preventively suspended for ninety (90) days "pursuant to Section 41
were suspended from work due to their participation in mass concerted actions
of P.D. 807" and temporarily replaced.
to air teachers’ grievances to the DECS. The CHR was investigating the
5. Budoy et al submitted sworn statements to the CHR to complain that
matter and subpoenaed the Secretary of Education (Carino) but the latter did
while they were participating in peaceful mass actions, they suddenly
not comply and hence, the CHR decided that there was a violation of the civil
learned of their replacements as teachers, allegedly without notice
and political rights of Budoy et al.
and consequently for reasons completely unknown to them.
6. The CHR scheduled a "dialogue" on October 11, 1990, and sent a
The OSG sought to dismiss the case with the CHR claiming that the CHR
subpoena to Secretary Cariño requiring his attendance therein.
does not have adjudicatory powers. The SC ruled that the CHR does not have
7. On the day of the "dialogue," although it said that it was "not certain
adjudicatory powers based on the powers of the CHR as enumerated in the
whether Sec. Cariño received the subpoena which was served at his
Constitution. Further, the most that may be conceded to the Commission in
office. The CHR proceeded to hear the case;" it heard the Budoy et
the way of adjudicative power is that it may investigate, i.e., receive evidence
al's counsel (a) explain that his clients had been "denied due process
and make findings of fact as regards claimed human rights violations involving
and suspended without formal notice, and unjustly, since they did not
civil and political rights. Instead, the power to adjudicate matters involving
join the mass leave," and (b) expatiate on the grievances which were
teachers was lodged with the Secretary of Education (Carino). The decision of
the cause of the mass leave of MPSTA teachers, (and) with which
the Secretary of Education, in the event of an adverse verdict, may be
causes they (CHR complainants) sympathize.
reviewed by the Civil Service Commission and eventually the Supreme Court.
8. The CHR thereafter issued an Order for Sec. Carino to appear.
9. Sec. Carino did not comply and the CHR held that the "striking
Doctrine:
teachers were denied due process of law; . . . they should not have
The function of receiving evidence and ascertaining therefrom the facts of a
been replaced without a chance to reply to the administrative
controversy is not a judicial function, properly speaking. To be considered
charges;" there had been a violation of their civil and political rights
such, the faculty of receiving evidence and making factual conclusions in a
which the Commission was empowered to investigate.
controversy must be accompanied by the authority of applying the law to those
10. Hence, this petition by the Solicitor General on behalf of DECS.
factual conclusions to the end that the controversy may be decided or
determined authoritatively, finally and definitively, subject to such appeals or
ISSUE:
modes of review as may be provided by law.
Does the CHR have adjudicatory powers to try and decide or hear and
determine cases like alleged human rights violations involving civil or political
FACTS: rights? No, the most that may be conceded to the Commission in the
1. Budoy et al were CHR complainants who participated in the mass way of adjudicative power is that it may investigate.
concerted actions [MCA] by the members of the Manila Public
School Teachers Association (MPSTA) and Alliance of Concerned RATIO:
Teachers (ACT) to "dramatize and highlight" their plight resulting The CHR was not meant by the fundamental law to be another court or
from the alleged failure of the public authorities to act upon quasi-judicial agency in this country, or duplicate much less take over
grievances that had time. the functions of the latter.
 1. But fact finding is not adjudication, and cannot be likened to the
judicial function of a court of justice, or even a quasi-judicial agency
or official.
2. The proposition is made clear by the constitutional provisions
1
specifying the powers of the Commission on Human Rights.
3. Only the first of the enumerated powers and functions bears any
resemblance to adjudication or adjudgment. The Constitution clearly
and categorically grants to the Commission the power to investigate
all forms of human rights violations involving civil and political rights.
But it cannot try and decide cases (or hear and determine causes) as
courts of justice, or even quasi-judicial bodies do.
The most that may be conceded to the Commission in the way of
adjudicative power is that it may investigate, i.e., receive evidence and
make findings of fact as regards claimed human rights violations
involving civil and political rights.
1. The function of receiving evidence and ascertaining therefrom the
facts of a controversy is not a judicial function, properly speaking.
2. To be considered such, the faculty of receiving evidence and making
factual conclusions in a controversy must be accompanied by the
authority of applying the law to those factual conclusions to the end
that the controversy may be decided or determined authoritatively,
finally and definitively, subject to such appeals or modes of review as
may be provided by law.
1
The Commission was created by the 1987 Constitution as an independent office. Upon its
constitution, it succeeded and superseded the Presidential Committee on Human Rights existing
at the time of the effectivity of the Constitution. Its powers and functions are the following:
(1) Investigate, on its own or on complaint by any party, all forms of human rights violations
involving civil and political rights;
(2) Adopt its operational guidelines and rules of procedure, and cite for contempt for violations
thereof in accordance with the Rules of Court;
(3) Provide appropriate legal measures for the protection of human rights of all persons within
the Philippines, as well as Filipinos residing abroad, and provide for preventive measures and
legal aid services to the underprivileged whose human rights have been violated or need
protection;
(4) Exercise visitorial powers over jails, prisons, or detention facilities;
(5) Establish a continuing program of research, education, and information to enhance respect
for the primacy of human rights;
(6) Recommend to the Congress effective measures to promote human rights and to provide for
compensation to victims of violations of human rights, or their families;
(7) Monitor the Philippine Government's compliance with international treaty obligations on
human rights;
(8) Grant immunity from prosecution to any person whose testimony or whose possession of
documents or other evidence is necessary or convenient to determine the truth in any
investigation conducted by it or under its authority;
(9) Request the assistance of any department, bureau, office, or agency in the performance of
its functions;
(10) Appoint its officers and employees in accordance with law; and
(11) Perform such other duties and functions as may be provided by law.
To investigate is not to adjudicate or adjudge. Whether in the popular
or the technical sense, these terms have well understood and quite
distinct meanings.
1. "Investigate," means to examine, explore, inquire or delve or probe
into, research on, study. The purpose is to discover, to find out, to
learn, obtain information. Nowhere included is the notion of settling,
deciding or resolving a controversy involved in the facts inquired into
by application of the law to the facts established by the inquiry.
2. “Adjudicate" means: "To settle in the exercise of judicial authority. To
determine finally. Synonymous with adjudge in its strictest sense;"
3. "Adjudge" means: "To pass on judicially, to decide, settle or decree,
or to sentence or condemn. . . . Implies a judicial determination of a
fact, and the entry of a judgment."
The matters claimed by CHR to be within their jurisdiction are
undoubtedly and clearly within the original jurisdiction of the Secretary
of Education.
1. The CHR having merely the power "to investigate," cannot and
should not "try and resolve on the merits" (adjudicate) the matters
involved in Striking Teachers HRC Case No. 90-775, as it has
announced it means to do; and it cannot do so even if there be a
claim that in the administrative disciplinary proceedings against the
teachers in question, initiated and conducted by the DECS, their
human rights, or civil or political rights had been transgressed.
2. Matters within the scope of the disciplinary powers granted to the
Secretary of Education under the Civil Service Law, and also, within
the appellate jurisdiction of the Civil Service Commission.
3. The Secretary of Education has already taken cognizance of the
issues and resolved them, and it appears that the aggrieved parties
have seasonably taken appeals to the Civil Service Commission; and
even this Court itself has had occasion to pass upon said issues.
4. The decision of the Secretary of Education, in the event of an
adverse verdict, may be reviewed by the Civil Service Commission
and eventually the Supreme Court.
5. The investigation by the CHR would serve no useful purpose. If its
investigation should result in conclusions contrary to those reached
by Secretary Cariño, it would have no power anyway to reverse the
Secretary's conclusions. Reversal thereof can only by done by the
Civil Service Commission and lastly by this Court. The only thing the
Commission can do, if it concludes that Secretary Cariño was in
error, is to refer the matter to the appropriate Government agency or
tribunal for assistance; that would be the Civil Service Commission. It
cannot arrogate unto itself the appellate jurisdiction of the Civil
Service Commission.

[169] LASTIMOSA v. VASQUEZ
GR No. 116801 | April 6, 1995 | Fact-Finding, Investigatory Power | Mart
Petitioner: GLORIA G. LASTIMOSA, First Assistant Provincial Prosecutor
of Cebu
Respondents: HONORABLE OMBUDSMAN CONRADO VASQUEZ,
HONORABLE ARTURO V. MOJICA, DEPUTY OMBUDSMAN FOR THE
VISAYAS, and HONORABLE FRANKLIN DRILON, SECRETARY OF
JUSTICE, and UNDERSECRETARY OF JUSITCE RAMON J. LIWAG
Recit-Ready Facts: Dayon, a public health nurse, filed an administrative
complaint for immoral acts and abuse of authority against the Mayor of Santa
Fe, Cebu. The complaint was assigned to a graft investigation who found no
prima facie evidence and recommended the dismissal of the complaint.
However, upon review, the Ombudsman for Visayas directed that the Mayor be
charged with attempted rape. The Deputy Ombudsman referred the case to
Cebu Provincial Prosecutor Kintanar, who assigned the case to Lastimosa.
Lastimosa conducted a preliminary investigation but found that only acts of
lasciviousness had been committed. Hence, an information for such acts was
filed before the RTC of Danao. Menchavez, a resident, filed an administrative
complaint against the prosecutors for violation of RA 6713 and the Civil Service
Law. Deputy Ombudsman Mojica placed them under preventive suspension.
Hence, this petition.
CAN THE OMBUDSMAN CALL ON THE PROSECUTORS TO ASSIST HIM IN
THE PROSECUTION AGAINST THE MAYOR – YES.
Doctrine: Section 31 of the Ombudsman Act provides that The Ombudsman
may utilize the personnel of his office and/or designate of deputize any fiscal,
state prosecutor or lawyer in the government service to act as special
investigator or prosecutor to assist in the investigation and prosecution of certain
cases. Those designated or deputized to assist him as herein provided shall be
under his supervision and control.
Application to the case:
Even if the preliminary investigation had been given over to the Provincial
Prosecutor to conduct, his determination of the nature of the offense to be
charged would still be subject to the approval of the Office of the Ombudsman.
This is because under Section 31 of the Ombudsman's Act, when a prosecutor
is deputized, he comes under the "supervision and control" of the Ombudsman
which means that he is subject to the power of the Ombudsman to direct,
review, approve, reverse or modify his (prosecutor's) decision.
FACTS:
1. On February 18, 1993, Jessica Dayon, a public health nurse of Santa
Fe, Cebu, filed a criminal complaint for frustrated rape and an
administrative complaint for immoral acts, abuse of authority and
grave misconduct against the Mayor of Sante Fe, Rogelio Ilustrisimo.
The cases were filed with the Office of the Ombudsman-Visayas and
were docketed as OMB-VIS-(CRIM)-93-140 and OMB-VIS-(ADM)-93-
0036, respectively.
2. The complaint was assigned to a graft investigation officer who, after
an investigation, found no prima facie evidence and recommended the
dismissal of the complaint. After reviewing the matter, however, the
Ombudsman, Hon. Vasquez directed that Mayor Ilustrisimo be
charged with attempted rape in the RTC.
3. The Deputy Ombudsman for Visayas (Mojica) referred the case to
Cebu Provincial Prosecutor Kintanar for the filing of the appropriate
information with the RTC of Danao City. The case was eventually
assigned to Lastimosa.
4. Lastimosa conducted a preliminary investigation, but only found that
Acts of Lasciviousness had been committed. With Kintanar’s approval,
an information for Acts of lasciviousness was filed against the Mayor
with the Municipal Circuit Trial Court of Santa Fe.
5. Mojica inquired as to any action taken on the directive of the
Ombudsman to charge the Mayor with attempted rape. As no such
case was filed, Mojica ordered Kintanar and Lastimosa to show cause
why they should not be punished for contempt for refusing and failing
to obey the lawful directives of the Office of the Ombudsman.
6. It appears that earlier (After the inquiry but before the charge for
contempt), two cases had been filed against the two prosecutors with
the Office of the Ombudsman for Visayas by Menchavez, a resident
 of Santa Fe. One was an administrative complaint for violation of RA
No. 6713 and the Civil Service Law. The other was a criminal
complaint for violation of Section 3(e) of RA No. 3019 and Art. 208 of
the Revised Penal Code.
7. In the administrative case, Mojica placed Lastimosa and Kintanar
under preventive suspension for 6 months. This was approved by
Ombudsman Vasquez.
8. Hence, this petition by Lastimosa to set aside the orders of the
Ombudsman and the Department of Justice to file the action for
attempted rape with the RTC of Danao, the order placing her and
Kintanar under preventive suspension, among others.
Contentious Points/Arguments
Petitioner - LASTIMOSA
• The Ombudsman and the prosecutor’s office have concurrent
authority to investigate public officers or employees and that when
the former took cognizance of the case against the Mayor, it did so
at the exclusion of the latter. It then became the duty of the
Ombudsman’s office to finish the preliminary investigation by filing
the information in court instead of asking the Office of the
Provincial Prosecutor to do so. Her (Lastimosa) preliminary
investigation was necessary by the insistence of the Ombudsman
to delegate the filing of the case to her office.
ISSUES:
W/N THE OFFICE OF THE OMBUDSMAN HAS THE POWER TO CALL ON
THE PROVINCIAL PROSECUTOR TO ASSIST IT IN THE PROSECUTION
OF THE CASE FOR ATTEMPTED RAPE AGAINST THE MAYOR – YES.
RATIO:
(RELEVANT) IT IS ENOUGH THAT THE ACT OR MISSION WAS
COMMITTED BY A PUBLIC OFFICIAL FOR THE OMBUDSMAN TO HAVE
THE POWER TO INVESTIGATE AND PROSECUTE.
Relevant Laws/Rules
The office of the Ombudsman has the power to "investigate and prosecute
on its own or on complaint by any person, any act or omission of any public
officer or employee, office or agency, when such act or omission appears to
be illegal, unjust, improper or inefficient." This power has been held to
include the investigation and prosecution of any crime committed by a public
official regardless of whether the acts or omissions complained of are related
to, or connected with, or arise from, the performance of his official duty.
In the existence of his power, the Ombudsman is authorized to call on
prosecutors for assistance. Section 31 of the Ombudsman Act of 1989
provides that:
Designation of Investigators and Prosecutors. — The Ombudsman may utilize the personnel of
his office and/or designate of deputize any fiscal, state prosecutor or lawyer in the government
service to act as special investigator or prosecutor to assist in the investigation and prosecution
of certain cases. Those designated or deputized to assist him as herein provided shall be under
his supervision and control.
It was on the basis of this provision that Ombudsman Conrado Vasquez and
Deputy Ombudsman Arturo C. Mojica ordered the Provincial Prosecutor of
Cebu to file an information for attempted rape against Mayor Rogelio
Ilustrismo.
It does not matter that the Office of the Provincial Prosecutor had already
conducted the preliminary investigation and all that remained to be done was
for the Office of the Provincial Prosecutor to file the corresponding case in
court. Even if the preliminary investigation had been given over to the
Provincial Prosecutor to conduct, his determination of the nature of the
offense to be charged would still be subject to the approval of the Office of
the Ombudsman. This is because under Section 31 of the Ombudsman's
Act, when a prosecutor is deputized, he comes under the "supervision and
control" of the Ombudsman which means that he is subject to the power of
the Ombudsman to direct, review, approve, reverse or modify his
(prosecutor's) decision. Petitioner cannot legally act on her own and refuse to
prepare and file the information as directed by the Ombudsman.
(NOT RELEVANT) THE OMBUDSMAN ACT GIVES THE OFFICE OF THE
OMBUDSMAN THE POWER TO PUNISH FOR CONTEMPT.
The records show that despite repeated orders of the Ombudsman, petitioner
refused to file an information for attempted rape against Mayor Ilustrisimo,
insisting that after investigating the complaint in the case she found that he
had committed only acts of lasciviousness.
There is no merit in the argument that petitioner and Provincial Prosecutor
Kintanar cannot be held liable for contempt because their refusal arose out of
an administrative, rather than judicial, proceeding before the Office of the
Ombudsman. As petitioner herself says in another context, the preliminary
investigation of a case, of which the filing of an information is a part, is quasi-
judicial in character.
Whether petitioner's refusal to follow the Ombudsman's orders constitutes a
defiance, disobedience or resistance of a lawful process, order or command
of the Ombudsman thus making her liable for indirect contempt under Rule
71, Section 3 of the Rules of Court is for respondents to determine after
appropriate hearing. At this point it is important only to note the existence of
the contempt power of the Ombudsman as a means of enforcing his lawful
orders.
(NOT RELEVANT) THE OMBUDSMAN HAS THE POWER TO DISCIPLINE
LASTIMOSA SHOULD IT BE FOUND THAT SHE IS GUILTY OF GRAVE
MISCONDUCT, INSUBORDINATION, AND/OR NEGLECT OF DUTY. THE
OMBUDSMAN ALSO HAS THE POWER TO PLACE HER UNDER
PREVENTIVE SUSPENSION.
The Ombudsman Act states that:
The Office of the Ombudsman shall have disciplinary authority over all elective and appointive
officials of the Government and its subdivisions, instrumentalities and agencies, including
Members of the Cabinet, local government, government-owned or controlled corporations and
their subsidiaries, except over officials who may be removed only by impeachment or over
Members of Congress, and the Judiciary.
The Ombudsman or his Deputy may suspend any officer or employee under his authority
pending an investigation, if in his judgment the evidence of guilt is strong, and (a) the charge
against such officer or employee involves dishonesty, oppression or grave misconduct or neglect
in the performance of duty; (b) the charges would warrant removal from the service; or (c) the
respondent's continued stay in office may prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated by the Office of the
Ombudsman but not more than six months, without pay, except when the delay in the disposition
of the case by the Office of the Ombudsman is due to the fault, negligence or petition of the
respondent, in which case the period of such delay shall not be counted in computing the period
of suspension herein provided.
Petitioner contentds that her suspension is invalid because the order was
issued without giving her and Kintanar the opportunity to refute the charges
against them. However, prior notice and hearing is not required, as such
suspension is not a penalty, but only a preliminary step in an administrative
investigation.
It is true that, under Section 24 of the Ombudsman's Act, to justify the
preventive suspension of a public official, the evidence against him should be
strong, and any of the following circumstances is present:
(a) the charge against such officer or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty;
(b) the charges would warrant removal from the service; or
(c) the respondent's continued stay in office may prejudice the case filed against him.
However, whether the evidence of guilt is strong is left to the determination of
the Ombudsman by taking into account the evidence before him. A
preliminary hearing as in bail petitions in cases involving capital offenses is
not required.
In this case, respondent Deputy Ombudsman Mojica justified the preventive
suspension of petitioner and Provincial Prosecutor Kintanar. Moreover,
considering the unabashed attitude of respondents in openly announcing
various false pretexts and alibis to justify their stubborn disregard for the
lawful directives of the Ombudsman as their official position in their pleadings
filed in OMB-VIS-0-94-0478 and in print and broadcast media, the probability
is strong that public service more particularly in the prosecution of cases
referred by the Office of the Ombudsman to the Cebu Provincial Prosecutor's
office will be disrupted and prejudiced and the records of said cases even be
tampered with if respondents [Provincial Prosecutor Kintanar and herein
petitioner] are allowed to stay in the Cebu Provincial Prosecutor's Office
during the pendency of these proceedings.
Petitioner questions her preventive suspension for six (6) months without pay
and contends that it should only be for ninety (90) days on the basis of cases
decided by this Court. Petitioner is in error. She is referring to cases where
the law is either silent or expressly limits the period of suspension to ninety
(90) days. However, petitioner and the Provincial Prosecutor were placed
under preventive suspension pursuant to §24 of the Ombudsman Act which
expressly provides that "the preventive suspension shall continue until the
case is terminated by the Office of the Ombudsman but not more than six
months, without pay." Their preventive suspension for six (6) months without
pay is thus according to law.

Nor is there merit in petitioner's claim that the contempt charge should first
be resolved before any action in the administrative complaint case can be
taken because the contempt case involves a prejudicial question. There is
simply no basis for this contention. The two cases arose out of the same act
or omission and may proceed hand in hand, or one can be heard before the
other. Whatever order is followed will not really matter.

Disposition of the Court

WHEREFORE, the petition is DISMISSED for lack of merit and the Motion to
Lift Order of Preventive Suspension is DENIED. SO ORDERED.
 [169] Secretary of Justice vs. Lantion
G.R. No. 139465. January 18, 2000 |Fact-finding | Sha
Petitioner: SECRETARY OF JUSTICE
Respondents: HON. RALPH C. LANTION, Presiding Judge, Regional Trial Court of
Manila, Branch 25, and MARK B. JIMENEZ
Recit-Ready Facts:
DOJ received from the DFA U.S. Note Verbale No. 0522 containing a request for the
extradition of private respondent Mark Jimenez to the United States. Attached to the Note
Verbale were the Grand Jury Indictment, the warrant of arrest issued by the U.S. District
Court and other supporting documents for said extradition. On the same day, Sec. of
Justice issued Department Order No. 249 designating and authorizing a panel of
attorneys to take charge of and to handle the case. Pending evaluation, Jimenez through
counsel, wrote a letter to petitioner requesting copies of the official extradition request
from the U.S. Government, as well as all documents and papers submitted therewith;
and that he be given ample time to comment on the request after he shall have received
copies of the requested papers. Jimenez also requested that the proceedings on the
matter be held in abeyance in the meantime. These requests were denied. Thus,
Jimenez filed with the RTC a petition against the Secretary of Justice, the Secretary of
Foreign Affairs, and the Director of the NBI. RTC ruled in favor of Jimenez. Hence this
petition.
The issue is WON the evaluation of DOJ is a criminal investigation (NO)
In Ruperto v. Torres, the Court ruled on the functions of an investigatory body with the
sole power of investigation. It does not exercise judicial functions and its power is limited
to investigating the facts and making findings in respect thereto.
This applies to an administrative body authorized to evaluate extradition documents (in
this case DOJ). The body has no power to adjudicate in regard to the rights and
obligations of both the Requesting State and the prospective extraditee. Its only power
is to determine whether the papers comply with the requirements of the law and the treaty
and, therefore, sufficient to be the basis of an extradition petition. Such finding is thus
merely initial and not final. The body has no power to determine whether or not the
extradition should be effected. That is the role of the court. The body’s power is limited
to an initial finding of whether or not the extradition petition can be filed in court.
Doctrine: The Court laid down the test of determining whether an administrative body is
exercising judicial functions or merely investigatory functions: Adjudication signifies the
exercise of power and authority to adjudicate upon the rights and obligations of the
parties before it. Hence, if the only purpose for investigation is to evaluate evidence
submitted before it based on the facts and circumstances presented to it, and if the
agency is not authorized to make a final pronouncement affecting the parties, then there
is an absence of judicial discretion and judgment.
FACTS:
1. President Marcos issued PD No. 1069 “Prescribing the Procedure for the
Extradition of Persons Who Have Committed Crimes in a Foreign Country.”
(Extradition Law)
2. Then Sec. of Justice Drilon, representing the Philippines, signed the
“Extradition Treaty Between the Government of the Republic of the Philippines
and the Government of the United States of America”
3. On June 18, 1999, the DOJ received from the Department of Foreign Affairs
(DFA) U.S. Note Verbale No. 0522 containing a request for the extradition of
private respondent Mark Jimenez to the United States. Attached to the Note
Verbale were the Grand Jury Indictment, the warrant of arrest issued by the
U.S. District Court, Southern District of Florida, and other supporting
documents for said extradition. Jimenez appears to be charged in the United
States with the ff violations:
1. Conspiracy to commit offense or to defraud the United States;
2. Attempt to evade or defeat tax;
3. Fraud by wire, radio, or television;
4. False statement or entries;
5. Election contributions in name of another,
4. On the same day, Sec. of Justice issued Department Order No. 249
designating and authorizing a panel of attorneys to take charge of and to
handle the case
5. Pending evaluation, Jimenez through counsel, wrote a letter to petitioner
requesting copies of the official extradition request from the U.S. Government,
as well as all documents and papers submitted therewith; and that he be given
ample time to comment on the request after he shall have received copies of
the requested papers. Jimenez also requested that the proceedings on the
matter be held in abeyance in the meantime.
6. In response to such, petitioner denied the foregoing requests.
a. One of the reasons given was the formal request for extradition of
the United States contains grand jury information and documents
obtained through grand jury process covered by strict secrecy rules
under United States law...Any further disclosure of the said
information is not authorized by the United States District Courts.
7. Thus, Jimenez filed with the RTC a petition against the Secretary of Justice,
the Secretary of Foreign Affairs, and the Director of the NBI, for the ff:
a. mandamus (to compel petitioner to furnish extradition documents,
to give him access thereto, and to afford him an opportunity to
 comment on, or oppose, the extradition request, and thereafter to
evaluate the request impartially, fairly and objectively);
b. certiorari (to set aside herein petitioner’s letter dated July 13, 1999);
c. and prohibition (to restrain petitioner from considering the extradition
request and from filing an extradition petition in court;
d. and to enjoin the Secretary of Foreign Affairs and the Director of the
NBI from performing any act directed to the extradition of private
respondent to the United States), with an application for the issuance
of a temporary restraining order and a writ of preliminary injunction
8. RTC ruled in favor of Jimenez. Hence the present petition. (no mention of CA)
The evaluation process, just like the extradition proceedings proper, belongs to
a class by itself. It is sui generis. It is not a criminal investigation, but it is also
erroneous to say that it is purely an exercise of ministerial functions. At such
stage, the executive authority has the power: (a) to make a technical assessment of
the completeness and sufficiency of the extradition papers; (b) to outrightly deny the
request if on its face and on the face of the supporting documents the crimes indicated
are not extraditable; and (c) to make a determination whether or not the request is
politically motivated, or that the offense is a military one which is not punishable under
non-military penal legislation. Hence, said process may be characterized as an
investigative or inquisitorial process in contrast to a proceeding conducted in
the exercise of an administrative body’s quasi-judicial power.

ISSUES:
Quasi-judicial proceeding
1. IMPT: WON the evaluation is a criminal investigation (NO)
Involves:
2. WON notice and hearing requirements of administrative due process can be
dispensed with (NO)
a. taking and evaluation of
evidence;
RATIO: (see last page for the Extradition process)
b. determining facts based upon
the evidence presented; and
1. The evaluation process, just like the extradition proceedings proper, c. rendering an order or decision
supported by the facts proved.
belongs to a class by itself. It is not a criminal investigation, but it is also
erroneous to say that it is purely an exercise of ministerial functions.
Inquisitorial power
- one of the determinative powers of an
administrative body which better enables it to
exercise its quasi-judicial authority
- allows the administrative body to inspect the
records and premises, and investigate the
activities, of persons or entities coming under
its jurisdiction, or to require disclosure of
information by means of accounts, records,
reports, testimony of witnesses, production of
documents, or otherwise.

Extradition Law (PD 1069) indicates that the only duty of the Secretary of Justice is to
file the extradition petition after the request and all the supporting papers are forwarded
to him by the Secretary of Foreign Affairs. It is the latter official who is authorized to
evaluate the extradition papers, to assure their sufficiency, and to determine whether
or not the request is politically motivated, or that the offense is a military offense which
is not punishable under non-military penal legislation. The Secretary of Justice has the
ministerial duty of filing the extradition papers.
However, it would appear that there was failure to abide by the Extradition Law. For
while it is true that the extradition request was delivered to the DFA, the following day
or less than 24 hours later, the DOJ received the request, apparently without the DFA
discharging its duty of thoroughly evaluating the same and its accompanying
documents. Thereafter, the DOJ took it upon itself to determine the completeness of
the documents and to evaluate the same to find out whether they comply with the
requirements laid down in the Extradition Law and the RP-US Extradition Treaty.
The two Departments seem to have misread the scope of their duties and authority,
one abdicating its powers and the other enlarging its commission.
Plainly then, the record cannot support the presumption of regularity that the DFA
thoroughly reviewed the extradition request and supporting documents and that it
arrived at a well-founded judgment that the request and its annexed documents satisfy
the requirements of law. The Secretary of Justice could not privately review the papers
all by himself. He had to officially constitute a panel of attorneys.
The power of investigation consists in gathering, organizing, and analyzing evidence,
which is a useful aid or tool in an administrative agency’s performance of its rule-
making or quasi-judicial functions. Investigation is indispensable to prosecution.
In Ruperto v. Torres, the Court ruled on the functions of an investigatory body with the
sole power of investigation. It does not exercise judicial functions and its power is
limited to investigating the facts and making findings in respect thereto. The
Court laid down the test of determining whether an administrative body is
exercising judicial functions or merely investigatory functions: Adjudication
signifies the exercise of power and authority to adjudicate upon the rights and
obligations of the parties before it. Hence, if the only purpose for investigation is
to evaluate evidence submitted before it based on the facts and circumstances
presented to it, and if the agency is not authorized to make a final pronouncement
affecting the parties, then there is an absence of judicial discretion and
judgment.
The above description in Ruperto applies to an administrative body authorized to
evaluate extradition documents. The body has no power to adjudicate in regard to
the rights and obligations of both the Requesting State and the prospective
extraditee. Its only power is to determine whether the papers comply with the
requirements of the law and the treaty and, therefore, sufficient to be the basis
of an extradition petition. Such finding is thus merely initial and not final. The
body has no power to determine whether or not the extradition should be
effected. That is the role of the court. The body’s power is limited to an initial
finding of whether or not the extradition petition can be filed in court.
 2. Notice and hearing requirements of administrative due process cannot
be dispensed with and shelved aside.
True to the mandate of the due process clause, the basic rights of notice and hearing
pervade not only in criminal and civil proceedings, but in administrative proceedings as
well. Non-observance of these rights will invalidate the proceedings. Individuals are
entitled to be notified of any pending case affecting their interests, and upon notice,
they may claim the right to appear therein and present their side and to refute the
position of the opposing parties.
The evaluation procedure sets into motion the wheels of the extradition process.
Ultimately, it may result in the deprivation of liberty of the prospective extraditee. This
deprivation can be effected at two stages: First, the provisional arrest of the prospective
extraditee pending the submission of the request. Second, the temporary arrest of the
prospective extraditee during the pendency of the extradition petition in court. Clearly,
there is an impending threat to a prospective extraditee’s liberty as early as during the
evaluation stage.
Because of these possible consequences, we conclude that the evaluation process is
akin to an administrative agency conducting an investigative proceeding, the
consequences of which are essentially criminal since such technical assessment sets
off or commences the procedure for, and ultimately, the deprivation of liberty of a
prospective extraditee.
There can be no dispute over petitioner’s argument that extradition is a tool of criminal
law enforcement. To be effective, requests for extradition or the surrender of accused
or convicted persons must be processed expeditiously. In this light, it should be
observed that the DOJ exerted notable efforts in assuring compliance with the
requirements of the law and the treaty since it even informed the U.S. Government of
certain problems in the extradition papers.
Petitioner contends that the United States requested the Philippine Government to
prevent unauthorized disclosure of confidential information. Hence, the secrecy
surrounding the action of the Department of Justice Panel of Attorneys. The
confidentiality argument is, however, overturned by petitioner’s revelation that
everything it refuses to make available at this stage would be obtainable during trial.
The Department of Justice states that the U.S. District Court concerned has authorized
the disclosure of certain grand jury information. If the information is truly confidential,
the veil of secrecy cannot be lifted at any stage of the extradition proceedings. Not even
during trial.
The basic principles of administrative law instruct us that “the essence of due process
in administrative proceedings is an opportunity to explain one’s side or an opportunity
to seek reconsideration of the actions or ruling complained of”
In the case at bar, private respondent does not only face a clear and present danger of
loss of property or employment, but of liberty itself, which may eventually lead to his
forcible banishment to a foreign land. The convergence of petitioner’s favorable action
on the extradition request and the deprivation of private respondent’s liberty is easily
comprehensible.
The constitutional issue in the case at bar does not even call for “justice outside legality”
since private respondent’s due process rights, although not guaranteed by statute or
by treaty, are protected by constitutional guarantees.
WHEREFORE, in view of the foregoing premises, the instant petition is hereby
DISMISSED for lack of merit. Petitioner is ordered to furnish private respondent copies
of the extradition request and its supporting papers, and to grant him a reasonable
period within which to file his comment with supporting evidence.
Process of Extradition
1. The request is made by the Foreign Diplomat of the Requesting State,
addressed to the Secretary of Foreign Affairs.
2. Upon a finding made by the Secretary of Foreign Affairs that the extradition
request and its supporting documents are sufficient and complete in form and
substance, he shall deliver the same to the Secretary of Justice, who shall
immediately designate and authorize an attorney in his office to take charge
of the case
3. The lawyer designated shall then file a written petition with the proper regional
trial court of the province or city, with a prayer that the court take the extradition
request under consideration.
4. The presiding judge of the regional trial court, upon receipt of the petition for
extradition, shall, as soon as practicable, issue an order summoning the
prospective extraditee to appear and to answer the petition on the day and
hour fixed in the order. The judge may issue a warrant of arrest if it appears
that the immediate arrest and temporary detention of the accused will best
serve the ends of justice
5. Upon conclusion of the hearing, the court shall render a decision granting the
extradition and giving the reasons therefor upon a showing of the existence of
a prima facie case, or dismiss the petition. Said decision is appealable to the
Court of Appeals, whose decision shall be final and immediately executory
6. The trial court determines whether or not the offense mentioned in the petition
is extraditable based on the application of the dual criminality rule and other
conditions mentioned in Article 2 of the RP-US Extradition Treaty. The trial
court also determines whether or not the offense for which extradition is
requested is a political one.
 on suspicion that the law is being violated or even just because it wants
[171] Evangelista v. Jarencio
assurance that it is not. When investigate and accusatory duties are delegated
GR No L-29274.| November 27, 1975 | Fact-finding, by statute to an administrative body, it, too may take steps to inform itself as to
Investigatory/Inquisitorial; purpose of investigation| Vince whether there is probable violation of the law. In sum, it may be stated that
subpoena meets the requirements for enforcement if the inquiry is (1) within
*note, short, but very meaty* the authority of the agency; (2) the demand is not too indefinite; and (3) the
information is reasonably relevant.
Petitioner: ​SEC. QUIRICO P. EVANGELISTA, in his capacity as Secretary of
the Presidential Agency on Reforms and Government Operations, and the Application to the case:
PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT
OPERATIONS (PARGO),
Respondents: ​HON. HILARION U. JARENCIO, as Presiding Judge, Court of
First Instance of Manila, Branch XXIII, and FERNANDO MANALASTAS, FACTS:
Assistant City Public Service Officer of Manila, and ALL OTHER CITY
OFFICIALS AND EMPLOYEES SIMILARLY SITUATED, Assailed Law: ​Presidential Agency on Reforms and Government
Operations (PARGO)​ - ​EO 4.
Recit-Ready Facts:
1. Passed by President Marcos (ironic)
President Marcos issued EO4 which created the President Agency on 2. The functions of the PARGO are as follows
Reforms on Government Operations (PARGO) which has investigatory powers
regarding graft and corruption among others. One of the powers granted to it ● Investigate graft and corruption cases… and
is the power to issue subpoenas. Par B to submit proper recommendations to the
president
The respondent was the acting city public service officer of manila was issued
a subpoena to testify regarding anomalies in city of manila. Instead of obeying ● Investigate violations of Anti-graft law and
the subpoena, he petitioned before the CFI for an injunction, assailing the Forfeiture Law
Par E
● Gather evidence for that purpose
validity of EO 4. This was granted by respondent judge Jarencio.

The respondents argue that administrative agencies can only issue subpoenas ● Receive and evaluate
in the exercise of quasi-judicial functions. Par H ● Conduct fact-finding
● File and prosecute the proper charges
Issue
W/N the PARGO can issue subpoenas in the exercise of its fact-finding Par (b) - Investigate graft and corruption cases… and to submit
functions. ​YES proper recommendations to the president

Doctrine: Controversy

​ n administrative agency has the power of inquisition which is not dependent

A 1. Evangelista, the undersecretary of the PARGO issued a subpoena
upon a case or controversy in order to get evidence, but an investigate merely ad testificandum to Manalastas, who was the Acting City Public
 Service Officer of Manila. This was to testify in certain investigations ● In fact-finding investigations, the agency may require the attendance
conducted by PARGO of witnesses
2. Manalastas filed a petition before the CFI for an injunction against
the implementation of EO 4. This was ​granted​ by Judge Jarencio EO 4
a. The injunction prohibited the further fact finding by the ● The PARGO gets is subpoena powers from Paragraph 5 of the EO
PARGO ● It allows it so summon witnesses
3. Hence this petition before the SC. ● It authorizes it also to “require the production of documents under a
subpoena duces tecum or otherwise, subject in all respects to the
Contentious Points/Arguments same restrictions and qualifications as apply in judicial proceedings
Evangelista - Petitioner Manalastas - Respondent of a similar character”
● A reasonable interpretation of such powers is that the power to
● The power to issue subpoenas issue said subpoenas does not only apply to quasi-judicial
only apply to paragraph B of the proceedings.​ To hold otherwise would impede the PARGO’s
EO 4 investigatory functions
● The power to issue subpoenas then should apply to pars b, e, and f
because the law does not distinguish.

ISSUES:
W/N respondent judge erred in issuing the injunction against the PARGO.
YES​. (this is merely the overall conclusion)
W/N the PARGO can issue subpoenas in the conduct of its fact-finding
investigations. ​YES ​*IMPORTANT*
Meaning of the phrase “subject in all respects to the same restrictions
and qualifications as apply in judicial proceedings of a similar
character”
● The respondent argues that there needs to be a case before a court
because the provision makes a reference to the Rules of Court
● However, ​an administrative subpoena is different from a judicial
subpoena​.

RATIO:
Judicial Administrative
The PARGO can issue subpoenas in the conduct of fact-finding
Governing Rules of Court Admin Code, or
investigations
Law Special Law

Relevant Laws/Rules Need for YES NO

Pending
Discussion on the nature of investigations Case?
● An agency can conduct investigations in the following kinds of
proceedings ● The restrictions referred to means ​restraints against
○ Legislative ○ Infringement of constitutional rights
○ Judicial ○ When it the subpoena is unreasonable
○ Fact-finding ○ The thing being subpoenaed is irrelevant to the case
● The purpose of fact-finding is to obtain information upon which future
action of a legislative or judicial proceeding may be taken Subpoenas and Administrative investigations
 ● Admin agencies can issue subpoenas for investigations, whether or
not adjudication is involved
● Can be done even before a complaint is filed
● It is enough that
○ The investigation is for a lawful purpose
○ The purpose is to discover evidence
● Requisites for a valid subpoena by an admin agency in the
exercise of investigatorial functions
○ Agency has authority regarding the matter
○ Demand is not too indefinite
○ Information is reasonably relevant

Application
● Information sought to be sought by the PARGO is within its
jurisdiction
● It involves anomalous transactions involving officials of the city
government of Manila
● THEREFORE, the subpoena is valid.

Right against self-incrimination

● The privilege ​extends to administrative investigations
● In this case, Manalastas is only a witness in connection with the
investigation. He is not facing an administrative charge.
● There is no need to apply the right against self-incrimination the
purpose of investigation is to discover facts
● HOWEVER​, Manalastas may invoke such right if there are
incriminating questions asked of him.

Disposition of the Court

WHEREFORE, the aforequoted order of respondent Judge dated July 1,

1968 is hereby set aside and declared of no force and effect

[173] People v Ayson
GR No. 85215 | July 7, 1989 | Fact-Finding| Ma. Hazel Joy M. Faco
Petitioner: THE PEOPLE OF THE PHILIPPINES
Respondents: HON. JUDGE RUBEN AYSON, Presiding over Branch 6,
Regional Trial Court, First Judicial Region, Baguio City, and FELIPE RAMOS
Recit-Ready Facts: Felipe Ramos was a ticket freight clerk of PAL Baguio. It
having allegedly come to light that he was involved in irregularities in the sales
of plane tickets, the PAL management notified him of an investigation to be
conducted into the matter. Ramos gave to his superiors a handwritten note that
he is willing to settle irregularities by paying Php 76,000. At the investigation, he
admitted that he had not indeed made disclosure of the tickets mentioned in the
Audit Team’s findings, that the proceeds have been “misused” by him. Two
months later, an information was filed against Felipe Ramos charging him with
the crime of estafa. The private prosecutors made a written offer of evidence
which included the statement of Felipe Ramos at the PAL Baguio City Ticket
Office which had been marked as Exhibit A, as well as his handwritten
admission, which had been marked as Exhibit K. Respondent Judge declared
Exhibit A and K inadmissible as evidence since “it did not appear that the
accused was reminded of his constitutional rights to remain silent and to have
counsel, and that when he waived the same and have his statement, it was with
the assistance actually of a counsel.” The issue in this case is WON the Judge
committed GADALEJ in declaring the Exhibits inadmissible as evidence. The
Court ruled that the Judge misapprehended the nature and import of the rights
set forth in Section 20, Article IV of the 1973 Constitution.
Doctrine:
The constitutional rights in a custodial investigation cannot be invoked in an
administrative inquiry.
Application to the case:
It is clear from the undisputed facts of this case that Felipe Ramos was not in
any sense under custodial interrogation, as the term should be properly
understood, prior to and during the administrative inquiry into the discovered
1
No person shall be compelled to be a witness against himself. Any person under investigation for the
commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right.
irregularities in ticket sales in which he appeared to have had a hand. The
constitutional rights of a person under custodial interrogation under Section 20,
Article IV of the 1973 Constitution1 did not therefore come into play, were of no
relevance to the inquiry.
It is also clear, too, that Ramos had voluntarily answered questions posed to
him on the first day of the administrative investigation and agreed that the
proceedings should be recorded, the record having thereafter been marked
during the trial of the criminal action subsequently filed against him as Exhibit
A, just as it is obvious that the note that he sent to his superiors offering to
compromise his liability in the alleged irregularities, was a free and even
spontaneous act on his part. They may not be excluded on the ground that the
so-called "Miranda rights" had not been accorded to Ramos.
FACTS:
1. Felipe Ramos was a ticket freight clerk of the Philippine Airlines (PAL),
assigned at its Baguio City station. It having allegedly come to light
that he was involved in irregularities in the sales of plane tickets, the
PAL management notified him of an investigation to be conducted into
the matter.
2. That investigation was scheduled in accordance with PAL’s Code of
Conduct and Discipline, and the Collective Bargaining Agreement
signed by it with the Philippine Airlines Employees Association to
which Ramos pertained.
3. Ramos gave to his superiors a handwritten note reading as follows:
The undersigned would like to state that he is willing to settle irregularities allegedly
charged against him in the amount of Php 76,000 subject to conditions as may be
imposed by PAL.
4. At the investigation, Felipe Ramos was informed of the finding of the
audit team. His answers in response to questions were taken down in
writing. Ramos’s answers were to the effect that he had not indeed
made disclosure of the tickets mentioned in the Audit Team’s findings,
that the proceeds have been “misused” by him, that although he had
planned on paying back the money, he had been prevented from doing
so “perhaps by shame,” that he was still willing to settle his obligation
No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against
him. Any confession obtained in violation of this section shall be inadmissible in evidence.
 and proffered a compromise to pay on a staggered basis. But no
compromise agreement was reached.
5. Two months later, an information was filed against Felipe Ramos
charging him with the crime of estafa.
6. The private prosecutors made a written offer of evidence which
included the statement of Felipe Ramos at the PAL Baguio City Ticket
Office which had been marked as Exhibit A, as well as his handwritten
admission, which had been marked as Exhibit K.
7. The defendant’s attorneys filed their objections to the plaintiff’s
evidence particularly as regard to Exhibit A, the objection was that said
document which appears to be confession was taken without the
accused being represented by a lawyer.
8. The respondent judge rejected Exhibit A and J and declared them
inadmissible in evidence since “it did not appear that the accused was
reminded of his constitutional rights to remain silent and to have
counsel, and that when he waived the same and have his statement,
it was with the assistance actually of a counsel.”
ISSUES:
Whether it was grave abuse of discretion for respondent Judge to have
excluded Exhibits A and K
HELD: No
RATIO:
1. It is clear from the undisputed facts of this case that Felipe Ramos was
not in any sense under custodial interrogation, as the term should be
properly understood, prior to and during the administrative inquiry into
the discovered irregularities in ticket sales in which he appeared to
have had a hand. The constitutional rights of a person under custodial
interrogation under Section 20, Article IV of the 1973 Constitution2 did
not therefore come into play, were of no relevance to the inquiry. It is
also clear, too, that Ramos had voluntarily answered questions posed
to him on the first day of the administrative investigation and agreed
that the proceedings should be recorded, the record having thereafter
been marked during the trial of the criminal action subsequently 􀀿led
against him as Exhibit A, just as it is obvious that the note (later
2
No person shall be compelled to be a witness against himself. Any person under investigation for the
commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right.
marked as Exhibit K) that he sent to his superiors on February 8, 1986,
the day before the investigation, offering to compromise his liability in
the alleged irregularities, was a free and even spontaneous act on his
part. They may not be excluded on the ground that the so-called
"Miranda rights" had not been accorded to Ramos.
[A Review of Concepts in Constitutional Law]
A. Right Against Self Incrimination
• The first right, against self-incrimination is accorded to every person
who gives evidence, whether voluntarily or under compulsion of
subpoena, in any civil, criminal, or administrative proceeding. The right
is NOT to "be compelled to be a witness against himself."
• The precept set out in that first sentence has a settled meaning. It
prescribes an "option of refusal to answer incriminating questions and
not a prohibition of inquiry." It simply secures to a witness, whether he
be a party or not, the right to refuse to answer any particular
incriminatory question, i.e., one the answer to which tends to
incriminate him for some crime. However, the right can be claimed
only when the specific question, incriminatory in character is actually
put to the witness. It cannot be claimed at any other time.
B. Rights in Custodial Investigation
• Section 20, Article IV of the 1973 Constitution also treats of a second
right, or better said, group of rights. These rights apply to persons
"under investigation for the commission of an offense," i.e., "suspects"
under investigation by police authorities.
• This right exists only in "custodial interrogations," or "in-custody
interrogation of accused persons." And, as this Court has already
stated, by custodial interrogation is meant "questioning initiated by law
enforcement officers after a person has been taken into custody or
otherwise deprived of his freedom of action in any significant way."
To summarize, a person suspected of having committed a crime and
subsequently charged with its commission in court, has the following rights in
that matter of his testifying or producing evidence:
No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against
him. Any confession obtained in violation of this section shall be inadmissible in evidence.
 I. BEFORE THE CASE IS FILED IN COURT (or with the public
prosecutor, for preliminary investigation), but after having been taken
into custody or otherwise deprived of his liberty in some signi􀀿cant
way, and on being interrogated by the police: the continuing right to
remain silent and to counsel, and to be informed thereof, not to be
subjected to force, violence, threat, intimidation or any other means
which vitiates the free will; and to have evidence obtained in violation
of these rights rejected; and

II. AFTER THE CASE IS FILED IN COURT

• to refuse to be a witness;
• not to have any prejudice whatsoever result to him by such
refusal;
• to testify to his own behalf, subject to cross-examination by
the prosecution;

III. WHILE TESTIFYING, to refuse to answer a specific question which

tends to incriminate him for some time other than that for which he is
prosecuted.

Digester’s Note: Following these guidelines, there was NO violation of the right
against self-incrimination (kasi it should be invoked against specific questions
only) and the rights under custodial investigation (kasi there was no
deprivation of liberty by the police at kusa siyang umamin eh).

Disposition of the Court

WHEREFORE, the writ of certiorari is granted annulling and setting aside the
Orders of the respondent Judge in Criminal Case No. 3488-R, dated August
9, 1988 and September 14, 1988, and he is hereby ordered to admit in
evidence Exhibits "A" and "K" of the prosecution in said Criminal Case No.
3488-R, and thereafter proceed with the trial and adjudgment thereof. The
temporary restraining order of October 26, 1988 having become functus oficio,
is now declared of no further force and effect. Cruz, Gancayco, Griño-Aquino
and Medialdea, JJ., concur.
 [174] Pefianco vs. Moral
G.R 132248|January 19, 2000|Fact-finding, Investigatory/Inquisitorial| Gab E.
Petitioner: HON. ERLINDA C. PEFIANCO, in her capacity as
Secretary of the Department of Education, Culture and Sports
Respondents: MARIA LUISA C. MORAL
Recit-Ready Facts:
DECS Secretary filed an administrative complaint against
respondent which found Moral guilty for the pilferage of some 41
historical documents from the vaults of the Filipiniana and Asian
Division (FAD) of the National Library. Moral filed a petition for
mandamus to compel DECS Sec. to furnish her a copy of the
DECS Investigation Committee Report.
The issue is W/N Moral has a legal right to the DECS Investigation
Committee Report, such that failure to be furnished the report
invalidates her dismissal? — NO. Primarily, Moral did not appeal to
the Civil Service Commission the DECS Resolution dismissing her
from the service. By her failure to do so, the DECS Resolution
became final and executory.
As correctly stated by the DEC Sec: “the Report remains an
internal and confidential matter… to be used as part —although
not controlling—of the basis for the decision…It is only when the
party adversely affected by the decision has filed and perfected an
appeal to the Civil Service Commission when the respondent’s
counsel may be allowed to read and/or be given a copy of the
Report”.
Doctrine:
A respondent in an administrative case is not entitled to be
informed of the findings and recommendations of any investigating
committee created to inquire into charges filed against him —he is
entitled only to the administrative decision based on substantial
evidence made of record, and a reasonable opportunity to meet
the charges and the evidence presented against her during the
hearings of the investigation committee.
FACTS:
1. Ricardo T. Gloria, then Secretary for Department of Education, Culture and
Sports (DECS) filed a complaint against respondent Maria Luisa C. Moral,
then Chief Librarian, Catalog Division, of the National Library. The charge
was for dishonesty, grave misconduct and conduct prejudicial to the best
interest of the service.
2. After hearings by the DECS Investigating Committee, Secretary Gloria
issued a Resolution which found Moral guilty for the pilferage of some 41
historical documents from the vaults of the Filipiniana and Asian Division
(FAD) of the National Library.
3. Moral was dismissed from the government service with prejudice to
reinstatement and forfeiture of all her retirement benefits and other
remunerations, through an Order by Sec. Gloria [See Ratio for Order]
4. Moral received two copies of the Resolution, the former simply being
changed for mere typographical errors. Moral did not appeal the judgment to
the Civil Service Commission. Instead, Moral filed the following:
A. Petition for the Production of the DECS Investigation
Committee Report (Purportedly to “guide” her on whatever
action would be most appropriate to take under the
circumstances. This was DENIED)
B. Reiteration for DECS Committee Report and DECS Resolution
(Both DENIED by Sec. Gloria)
5. Moral’s MR to Sec. Gloria for the aforementioned motions was merely
“noted” in view that the the denial of the request for the production of the
Investigation Committee Report was final.
6. Moral then instituted an action for mandamus and injunction before the
regular courts against Sec. Gloria praying that she be furnished a copy of the
DECS Investigation Committee Report and that the DECS Secretary be
enjoined from enforcing the order of dismissal until she received a copy of
the said report.
7. Meanwhile, Secretary Gloria was replaced by Secretary Erlinda C.
Pefianco (petitioner in this case).
ISSUES:
W/N Moral has a legal right to the DECS Investigation Committee Report, enable the appellant to file an intelligent and exhaustive appellant’s
such that failure to be furnished the report invalidates her dismissal? — NO. Brief Memorandum.”

RATIO:
In her petition for mandamus, respondent miserably failed to
demonstrate that she has a clear legal right to the DECS Investigation
Committee Report and that it is the ministerial duty of petitioner DECS
Secretary to furnish her with a copy thereof.
Primarily, respondent did not appeal to the Civil Service Commission the
DECS Resolution dismissing her from the service. By her failure to do so,
nothing prevented the DECS Resolution from becoming final and executory.
Obviously, it will serve no useful purpose now to compel petitioner to furnish
her with a copy of the investigation report.
Moreover, there is no law or rule which imposes a legal duty on petitioner to
furnish respondent with a copy of the investigation report. In Ruiz v. Drilon:
a respondent in an administrative case is not entitled to be informed of the
findings and recommendations of any investigating committee created to
inquire into charges filed against him. He is entitled only to the administrative
decision based on substantial evidence made of record, and a reasonable
opportunity to meet the charges and the evidence presented against her
during the hearings of the investigation committee. Respondent no doubt had
been accorded these rights.
Lastly, the DECS Resolution is complete in itself for purposes of appeal to
the Civil Service Commission, that is, it contains sufficient findings of fact and
conclusion of law upon which respondent’s removal from office was
grounded. This Resolution, and not the investigation report, should be the
basis of any further remedies respondent might wish to pursue, and we
cannot see how she would be prejudiced by denying her access to the
investigation report.
Disposition
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals of 24 November 1997 sustaining the trial court’s denial of
petitioner’s motion to dismiss, as well as its Resolution dated 13 January
1998 denying reconsideration, is REVERSED and SET ASIDE. The petition
for mandamus filed by respondent before the court a quo to compel petitioner
to furnish her a copy of the DECS Investigation Committee Report is
DISMISSED for want of cause of action.
SO ORDERED.


As correctly ruled by Secretary Gloria in his Order:

“Moral’s counsel is reminded that the Report of the DECS
Investigating Committee is not an integral part of the Decision itself x
x x x [t]he report is an internal communication between the
Investigating Committee and the DECS Secretary, and, therefore,
confidential until the latter had already read and used the same in
making his own determination of the facts and applicable law of the
case, to be expressed in the Decision he may make.

The Report remains an internal and confidential matter to be used as

part —although not controlling—of the basis for the decision. Only
when the party adversely affected by the decision has filed and
perfected an appeal to the Civil Service Commission may all the
records of the case, including the aforesaid Report be forwarded to
the CSC. In the latter appellate tribunal, the respondent’s counsel
may be allowed to read and/or be given a copy of the Report to

[175] MIRO V. MENDOZA
GR No. 172532 172544-45 | Nov. 20, 2013 | Investigatory | Endozo (based
on digest of Dee)
Petitioner: PRIMO C. MIRO, in his capacity as Deputy Ombudsman for the
Visayas
Respondents: MARILYN MENDOZA VDA. DE EREDEROS, CATALINA
ALINGASA and PORFERIO I. MENDOZA
Recit-Ready Facts:
Respondents Mendoza, Enderos, Alingasa, and Peque were administratively
charged with Grave Misconduct before the Deputy Ombudsman on the ground
that they were selling confirmation certificates for P2,500, which are supposed
to be issued by the LTO free of charge. The Deputy Ombudsman found the
respondents guilty. The respondents appealed to the CA. The CA granted their
appeal and reversed the Deputy OMB’s decision and ruled that the finding of
grave misconduct was not supported by substantial evidence. The issue is
whether or not substantial evidence exists to hold the respondents liable for
grave misconduct. The SC held NO. In the case at bar, the only pieces of
evidence presented by the complainants to establish the respondents' guilt of
the act charged are: (1) their complaint-affidavits and the (2) NBl/Progress
report. These pieces of evidence do not meet the quantum of proof required in
administrative cases. The affidavits show that the complainants lack personal
knowledge of the participation of Mendoza and Erederos in the allegedly
anomalous act. Any evidence, whether oral or documentary, is hearsay if its
probative value is not based on the personal knowledge of the witness.
Doctrine:
When the findings of fact of the Ombudsman are supported by substantial
evidence, it should be considered as conclusive.
This Court recognizes the expertise and independence of the Ombudsman and
will avoid interfering with its findings absent a finding of grave abuse of
discretion. The Doctrine of conclusiveness of administrative factual findings,
however, is not absolute. Despite the respect given to administrative findings of
fact, the CA may resolve factual issues, review and re-evaluate the evidence on
record and reverse the administrative agency’s findings if not supported by
substantial evidence.
Substantial evidence is defined as such amount of relevant evidence which a
reasonable mind might accept as adequate to support a conclusion. It is more
than a mere scintilla of evidence. The standard of substantial evidence is
satisfied when there is reasonable ground to believe, based on the evidence
submitted, that the respondent is responsible for the misconduct complained of.
While administrative or quasi-judicial bodies, such as the Office of the
Ombudsman, are not bound by the technical rules of procedure, this rule cannot
be taken as a license to disregard fundamental evidentiary rules; the decision
of the administrative agencies and the evidence it relies upon must, at the very
least, be substantial.
Application of doctrine to the case: In the present case, the CA found no
substantial evidence to support the conclusion that the respondents are guilty
of the administrative charges against them. Mere allegation and speculation is
not evidence, and is not equivalent to proof. Since the Deputy Ombudsman’s
findings were found wanting by the CA of substantial evidence, the same shall
not bind this Court.
Note: This is a repeat case. It was already included in Sir’s lecture.
FACTS:
1. Mendoza, Director of the Regional Office VII of the Land Transportation
Office, Cebu City (LTO Cebu), Erederos, Mendoza's niece and secretary,
Alingasa, LTO clerk, and Peque, Officer-in-Charge, Operation Division of
LTO Cebu, were administratively charged with Grave Misconduct before
the Deputy Ombudsman by private complainants, Huete et al. They were
likewise charged with criminal complaints for violation of Section 3(e) of
Republic Act No. 3019, otherwise known as the Anti Graft and Corrupt
Practices Act."
2. The administrative and criminal charges arose from the alleged anomalies
in the distribution at the LTO Cebu of confirmation certificates, an
indispensable requirement in the processing of documents for the
registration of motor vehicle with the LTO. Specifically, the private
complainants accused Alingasa of selling the confirmation certificates for
P2,500, supposed to be issued by the LTO free of charge. This scheme
allegedly existed upon Mendoza's assumption in office as Regional
Director of LTO Cebu.
3. The NBI/Progress report submitted to the LTO Manila also revealed that
the confirmation certificates were given to the representatives of car
dealers, who were authorized to supply the needed data therein.
4. In the complaints, the complainants commonly alleged that they had to
pay ₱2,500.00 per pad to Alingasa before they could be issued
confirmation certificates by the LTO Cebu. Alingasa would give her
 collections to Erederos and to Mendoza. When they protested, Erederos
and Alingasa pointed to Mendoza as the source of the instructions. They
were also told that the confirmation certificates processed during the
previous administration would no longer be honored under Mendoza s
administration; hence, they had to buy new sets of confirmation certificates
to process the registration of their motor vehicles with the LTO.
5. The Deputy Ombudsman rendered a joint decision and found Mendoza,
Erederos and Alingasa guilty of grave misconduct and imposed the
penalty of dismissal from the service. Peque, on the other hand, was only
found guilty of simple misconduct and was meted the penalty of reprimand.
6. The Deputy Ombudsman believed the complainants allegations. He relied
largely on the affidavits supporting the respondents guilt. He found
the affidavits and the NBI/Progress report strong enough to establish
the respondents guilt. The Deputy Ombudsman also explained that while
the distribution of confirmation certificates to authorized car dealers is not
prohibited, the demand and the collection of payment during their
distribution are anomalous.
7. The respondents moved for reconsideration, but the Deputy Ombudsman
denied their motions.
CA Ruling: On appeal, CA granted the respondents’ petition and reversed the
Deputy Ombudsman’s joint decision in the administrative aspect. The CA ruled
that the Deputy Ombudsman’s finding of grave misconduct was not
supported by substantial evidence because the affidavits, on which the
decision was mainly anchored, were not corroborated by any other
documentary evidence. The Deputy Ombudsman moved for the
reconsideration, but the CA denied. Hence, this petition.
Contentious Points/Arguments
Petitioner Deputy OMB Miro Respondents Mendoza et al.
anomalies. He posits that these
pieces of evidence, taken together,
more than satisfy the required
quantum of proof to hold the
respondents administratively liable
for grave misconduct.
ISSUES:
Whether or not substantial evidence exists to hold the respondents liable for
the charge of grave misconduct. (NO)
RATIO:
The CA committed no reversible error in setting aside the findings and
conclusions of the Deputy Ombudsman on the ground that they were not
supported by substantial evidence.
When the findings of fact of the Ombudsman are supported by substantial
evidence, it should be considered as conclusive. This Court recognizes the
expertise and independence of the Ombudsman and will avoid interfering with
its findings absent a finding of grave abuse of discretion.
The Doctrine of conclusiveness of administrative factual findings,
however, is NOT absolute. Despite the respect given to administrative findings
of fact, the CA may resolve factual issues, review and re-evaluate the evidence
on record and reverse the administrative agency’s findings if not supported by
substantial evidence. Thus, when the findings of fact by the administrative or
quasi-judicial agencies (like the Office of the Ombudsman/Deputy
Ombudsman) are not adequately supported by substantial evidence, they shall
not be binding upon the courts.

posits that the evidence adduced by
the complainants satisfied the
requisite quantum of proof. He
argues that the complainants
personal knowledge can be gleaned
from the preface of their narration;
hence, their affidavits could not have
been hearsay.
He also argues that his joint decision
was not solely based on the
complainants affidavits since he also
took into account the NBI/Progress
report, which uncovered the alleged
argue that the complainants’
statements in their affidavits lack
material details and particulars,
particularly on the time, the date, and
the specific transactions.
They commonly alleged that the
affidavits, which contained general
averments, and the NBI/Progress
report that was based on the same
affidavits, failed to meet the quantum
of proof required to hold them
administratively liable.
In the present case, the CA found no substantial evidence to support the
conclusion that the respondents are guilty of the administrative charges
against them. Mere allegation and speculation is not evidence, and is not
equivalent to proof. Since the Deputy Ombudsman’s findings were found
wanting by the CA of substantial evidence, the same shall not bind this Court.
The findings of fact of the Deputy Ombudsman are not supported by
substantial evidence on record.
Substantial evidence is defined as such amount of relevant evidence which a
reasonable mind might accept as adequate to support a conclusion. The
standard of substantial evidence is satisfied when there is reasonable ground
to believe, based on the evidence submitted, that the respondent is
responsible for the misconduct complained of.
Section 27 of The Ombudsman Act of 1989 provides that:
Findings of fact by the Officer of the Ombudsman when supported by
substantial evidence are conclusive. Any order, directive or
decision imposing the penalty of public censure or reprimand,
suspension of not more than one (1) month’s salary shall be final and
unappealable.
The only pieces of evidence presented by the complainants to establish the
respondents’ guilt of the act charged are: (1) their complaint -affidavits and the
(2) NBI/Progress report. As correctly found by the CA, these pieces of
evidence do not meet the quantum of proof required in administrative cases.
Complaint-affidavits. The affidavits show that the complainants lack personal
knowledge of the participation of Mendoza and Erederos in the allegedly
anomalous act. These affidavits indicate that the complainants have
commonly “noticed and witnessed” the anomalous sale transaction concerning
the confirmation certificates.
It is a basic rule in evidence that a witness can testify only on the facts that he
knows of his own personal knowledge, i.e., those which are derived from his
own perception. Hearsay evidence is evidence, not of what the witness knows
himself but, of what he has heard from others; it is not only limited to oral
testimony or statements but likewise applies to written statements, such as
affidavits. The records show that not one of the complainants actually
witnessed the transfer of money from Alingasa to Erederos and
Mendoza. Nowhere in their affidavits did they specifically allege that they saw
Alingasa remit the collections to Erederos. In fact, there is no specific
allegation that they saw or witnessed Erederos or Mendoza receive money.
Their testimonies are still “evidence not of what the witness knows himself but
of what he has heard from others.” Mere uncorroborated hearsay or rumor
does not constitute substantial evidence.
With respect to Pedroza’s allegation in her affidavit that Alingasa and Erederos
categorically told them that it was Mendoza who instructed them to collect the
P2,500.00 for the confirmation certificates, we once again draw a distinction
between utterances or testimonies that are merely hearsay in character or
“non-hearsay,” and those that are considered as legal hearsay. Pedroza’s
allegation belongs to the non-hearsay; hence, it is inadmissible to prove the
truth of the facts asserted in the statement.
Non-hearsay Legal hearsay
the fact that utterances or consists of the truth of the facts
statements were made; this class of asserted in the statement; this kind
extrajudicial utterances or pertains to extrajudicial utterances
statements is offered not as an and statements that are offered as
assertion to prove the truth of the
matter asserted, but only as to the evidence of the truth of the fact
fact of the utterance made asserted.
not covered by the hearsay rule covered by the hearsay rule
NBI Progress Report. With regard to the NBI/Progress report submitted by
the complainants as corroborating evidence, the same should not be given any
weight. Contrary to the Ombudsman’s assertions, the report cannot help its
case under the circumstances of this case as it is insufficient to serve as
substantial basis. A portion of the report constitutes double hearsay because
the material facts recited were not within the personal knowledge of the
officers who conducted the investigation.
While administrative or quasi-judicial bodies, such as the Office of the
Ombudsman, are not bound by the technical rules of procedure, this rule
cannot be taken as a license to disregard fundamental evidentiary rules; the
decision of the administrative agencies and the evidence it relies upon must,
at the very least, be substantial.
There are three requisites for admissibility under Sec. 44, Rule 130 of the
Rules of Court: (a) that the entry was made by a public officer, or by another
person specially enjoined by law to do so; (b) that it was made by the public
officer in the performance of his duties, or by such other person in the
performance of a duty specially enjoined by law; and (c) that the public officer
or other person had sufficient knowledge of the facts by him stated, which must
have been acquired by him personally or through official information.
Additional: Before proceeding to the merits of the case, the Court emphasized
that a petition for review under Rule 45 is limited only to questions of law.
Factual questions are not the proper subject of an appeal by certiorari. The
“errors” which may be reviewed in a petition for review on certiorari are those
of the CA, and not directly those of the trial court or the quasi-judicial
agency, tribunal, or officer which rendered the decision in the first
instance.
 [176] Carlito Encinas vs. PO1 Alfredo Agustin & PO1 Joel Caubang
GR 187317 | Apr. 1, 2013 | Issa
(Long case and many concepts were discussed)
Petitioners: Carlito Encinas
Respondent: PO1 Alfredo Agustin & PO1 Joel Caubang
1. Summary: Respondents both hold the position Fire Officer 1. Around 9pm,
Encinas, who was the provincial Fire Marshall of Nueva Ecija informed them
that unless they gave him P5,000, they would be relieved from their station at
Cabanatuan City and transferred to far-flung areas. Fearing the reassignment,
they decided to pay Encinas, however they only managed to give P2,000,
prompting Encinas to direct them to come up with the balance within a week.
When they failed to deliver the balance, Encinas issued instructions effectively
reassigning respondents Agustin and Caubang to Cuyapo and Talugtug,
respectively. Respondents filed with the Bureau of Fire Protection (BFP) a letter-
complaint for illegal transfer of personnel under RA No. 6975 or the Department
of Interior and Local Government (DILG) Act of 1990. On the basis of similar
facts, respondents likewise filed with the CSC Regional Office in San Fernando,
Pampanga (CSCRO), as well as with the CSC Field Office in Cabanatuan City,
their Joint Affidavit/Complaint. This time, they accused Encinas of violation of
Section 4(c) of R.A. No. 6713 or the Code of Conduct and Ethical Standards for
Public Officials and Employees. BFP: recommended that the admin charges be
dismissed. CSCRO: guilty. CSC: guilty. CA: guilty. Hence the appeal to SC.
Issue: 1. WON respondents are guilty of forum shopping – NO; 2. WON CA
erred in holding that there was substantial evidence for Encinas to be guilty –
NO HELD: Petitioner argues that respondents are guilty of forum-shopping for
filing two allegedly identical Complaints in violation of the rules on forum-
shopping. We rule that the dismissal of the BFP Complaint does not
constitute res judicata in relation to the CSCRO Complaint. Thus, there is
no forum-shopping on the part of respondents. Res judicata means "a matter
adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment. The requisites are: (a) the former judgment must be final; (b) it must
have been rendered by a court having jurisdiction over the subject matter and
the parties; (c) it must be a judgment on the merits; and (d) there must be
between the first and the second actions (i) identity of parties, (ii) identity of
subject matter, and (iii) identity of cause of action. In this case, there is no
"judgment on the merits". The dismissal of the BFP Complaint was the
result of a fact-finding investigation for purposes of determining whether a
formal charge for an administrative offense should be filed. Hence, no rights
and liabilities of parties were determined therein with finality. The CA was
correct in ruling that the doctrine of res judicata applies only to judicial or
quasi-judicial proceedings, and not to the exercise of administrative
powers. Quasi-judicial or administrative adjudicatory power on the other hand
is the power of the administrative agency to adjudicate the rights of persons
before it. It is the power to hear and determine questions of fact to which the
legislative policy is to apply and to decide in accordance with the standards laid
down by the law itself in enforcing and administering the same law. Hence, if
the only purpose of an investigation is to evaluate the evidence submitted
to an agency based on the facts and circumstances presented to it, and if
the agency is not authorized to make a final pronouncement affecting the
parties, then there is an absence of judicial discretion and judgment. In
this case, an analysis of the proceedings before the BFP yields the conclusion
that they were purely administrative in nature and constituted a fact-finding
investigation for purposes of determining whether a formal charge for an
administrative offense should be filed against petitioner. In view of the
documents on record, the undersigned investigator finds no sufficient ground to
warrant the filing of appropriate administrative offense against the respondent.
The proceedings before the BFP were merely investigative, aimed at
determining the existence of facts for the purpose of deciding whether to
proceed with an administrative action. This process can be likened to a public
prosecutor's preliminary investigation, which entails a determination of whether
there is probable cause to believe that the accused is guilty, and whether a crime
has been committed. The prosecutor in a preliminary investigation does not
determine the guilt or innocence of the accused. Preliminary investigation is
merely inquisitorial, and is often the only means of discovering the persons who
may be reasonably charged with a crime and to enable the fiscal to prepare his
complaint or information. It is not a trial of the case on the merits and has no
purpose except that of determining whether a crime has been committed and
whether there is probable cause to believe that the accused is guilty thereof.
With the above disquisition, we rule that the dismissal of the BFP
Complaint cannot operate as res judicata. Therefore, forum-shopping is
unavailing in this case. CA was correct in ruling that there was substantial
evidence to hold petitioner administratively liable for grave misconduct
and conduct prejudicial to the best interest of the service. This Court will
not disturb the factual findings of both the CSC and the CA, absent any
compelling reason to do so. The conclusion reached by the administrative
agencies involved after their own thorough investigations and hearings, as well
as their consideration of the evidence presented before them and their findings
thereon, especially when affirmed by the CA must now be regarded with great
respect and finality by this Court. Scrutinizing the testimonies of respondents,
we find, as did both the CSC and the CA, that these testimonies carry more
weight than petitioner's self-serving statements and blanket denials. Even
assuming that an Affidavit of Desistance was indeed executed by respondents,
petitioner is still not exonerated from liability. The subsequent reconciliation of
the parties to an administrative proceeding does not strip the court of its
jurisdiction to hear the administrative case until its resolution. Atonement, in
administrative cases, merely obliterates the personal injury of the parties and
does not extend to erase the offense that may have been committed against the
public service
2.
3.
Doctrine: If the only purpose of an investigation is to evaluate the evidence
submitted to an agency based on the facts and circumstances presented to it, 5. CSCRO Complaint: CSCRO issued its Decision finding Encinas
and if the agency is not authorized to make a final pronouncement affecting the
parties, then there is an absence of judicial discretion and judgment. This
process can be likened to a public prosecutor's preliminary investigation, which
entails a determination of whether there is probable cause to believe that the
accused is guilty, and whether a crime has been committed. The prosecutor in
a preliminary investigation does not determine the guilt or innocence of the
accused. Preliminary investigation is merely inquisitorial
FACTS:
1. Respondents both hold the position Fire Officer 1. Around 9pm,
Encinas, who was the provincial Fire Marshall of Nueva Ecija
informed them that unless they gave him P5,000, they would be
relieved from their station at Cabanatuan City and transferred to far-
flung areas. Fearing the reassignment, they decided to pay Encinas,
however they only managed to give P2,000, prompting Encinas to
direct them to come up with the balance within a week. When they
failed to deliver the balance, Encinas issued instructions effectively
reassigning respondents Agustin and Caubang to Cuyapo and
Talugtug, respectively
2. Respondents filed with the Bureau of Fire Protection (BFP) a letter-
complaint for illegal transfer of personnel under RA No. 6975 or the
Department of Interior and Local Government (DILG) Act of 1990.
The record is not clear as to why this Complaint was later docketed
by the BFP for preliminary investigation for violation of R.A. No. 3019
or the Anti-Graft and Corrupt Practices Act
3. On the basis of similar facts, respondents likewise filed with the CSC
Regional Office in San Fernando, Pampanga (CSCRO), as well as
with the CSC Field Office in Cabanatuan City, their Joint
Affidavit/Complaint. This time, they accused Encinas of violation of
Section 4(c) of R.A. No. 6713 or the Code of Conduct and Ethical
Standards for Public Officials and Employees1
4. BFP Complaint: The Internal Audit Services (IAS) of the BFP issued
a Resolution recommending that the administrative complaint against
Encinas be dismissed for insufficiency of evidence. The IAS ruled that
1
extortion activities, petitioner was formally charged with dishonesty, grave
misconduct, and conduct prejudicial to the best interest of service.
the reassignment of respondents was within the ambit of authority of
the head of office. Thus, said reassignment may have been ordered
as long as the exigencies of the service so required.
administratively liable for grave misconduct and conduct prejudicial
to the best interest of service, and ordered his dismissal from service.
The consistency of their oral testimonies already constituted
substantial evidence. Granting that they committed illegal acts prior
to their reassignment, this allegation nevertheless did not rebut their
claims that Encinas had extorted money from them. The admission
of Supt. Tutaan that he gave instructions for their reassignment did
not disprove the accusation of extortion, but merely established that
there was indeed an order to reassign them
6. MR denied: Statements of Encinas witnesses were incompetent and
immaterial, having failed to disprove that Encinas had indeed
extorted money from respondents. It likewise rejected the argument
of res judicata proffered by Encinas and ruled that the dismissal of
the BFP Complaint by virtue of the Confidential Report was not a
judgment on the merits rendered by a competent tribunal.
Furthermore, the Confidential Report was the result of the
recommendation of a fact-finding committee formed to determine the
veracity of the Complaint charging Encinas with extortion, unjustified
transfer of BFP personnel, and malversation of funds. Res judicata
cannot be raised as a defense, since the dismissal of the BFP
Complaint did not constitute a bar by former judgment.
7. Aggrieved, Encinas filed an appeal to the CSC main office. Encinas
alleged that CSCRO should not have entertained the Complaint filed
before it, considering that it already knew of the then-pending
investigation conducted by the BFP/DILG. CSCRO only had
appellate jurisdiction or authority to decide cases brought before it by
the head of agency or, in this case, the BFP. He explained that the
administrative Complaint was investigated and heard by the
BFP/DILG. On the basis of the dismissal of the case, and there being
no appeal or petition filed, the CSCRO Complaint should have been
dismissed as well. Encinas further argued that the CSCRO erred in
concluding that the resolution of the fact-finding committee was not a
judgment on the merits. The BFP being an agency of the government,
 any decision or resolution it arrives at is also a judgment on the
merits.
8. CSC main office: denied Encinas’ appeal. The CSC explained that
the CSCRO Complaint was for violation of R.A. No. 6713, while the
BFP Complaint was for violation of R.A. No. 6975. It further ruled that,
although both Complaints were anchored on a similar set of facts,
there was no identity of causes of action: thus, even if they were
successively filed before different fora, no forum-shopping existed.
Although an investigation was then ongoing at the BFP when the
CSCRO took cognizance of the case, no forum-shopping resulted. A
perusal of the proceedings conducted at the BFP shows that only a
preliminary investigation was initiated by the IAS-BFP, a fact-finding
committee that recommended the dismissal of the case, which was
accordingly approved by the fire director. The approval of this
recommendation cannot be regarded as one based on merits.
Otherwise, it would bar the filing of another case, particularly, with the
CSCRO. With regard to petitioner's administrative liability, the CSC
found that because of the nature of the case extortion of money
hardly any documentary evidence could be gathered to prove the act
complained of. As expected, the CSCRO based its findings on the
written and oral testimonies of the parties and their witnesses, as well
as on the circumstances surrounding the incident. Respondents
clearly established that petitioner had demanded P5,000 in exchange
for their reassignment.
9. Encinas appealed to CA. He argued that the causes of action in the
two Complaints were similar. With regard to the proceedings before
the CSC, aside from respondents' sole charge of violation of R.A. No.
6713, also included were charges of dishonesty, grave misconduct,
and conduct prejudicial to the best interest of service. Petitioner
reasoned that the additional offenses charged were equivalent to a
violation of R.A. No. 6975, so the issues investigated were
substantially the same. Also, respondents had already withdrawn
their Complaints against him, as stated in their Affidavit of
Desistance, in which they admitted that the cases were filed out of a
misapprehension of facts and a misunderstanding between the
parties
10. CA: denied. Ruled that it was not the letter-complaint filed by
respondents that commenced the administrative proceedings;
instead, it was the formal charge filed by Atty. Marasigan-De Lima.
The letter-complaint merely triggered the CSCRO's fact-finding
investigation. Considering that the Complaint was initiated by the
proper disciplining authority, it need not contain a certification of non-
forum-shopping. CA similarly ruled that respondents' act of
simultaneously filing Complaints against petitioner both at the CSC
and the BFP did not constitute forum-shopping. While it was
conceded that the two Complaints were founded on the same set of
facts involving the same parties, they were nonetheless based on
different causes of action more specifically, the BFP Complaint was
for alleged violation of R.A. No. 3019, while the CSC Complaint was
for violation of the provisions of R.A. No. 6713. Furthermore, the
doctrine of res judicata applies only to judicial or quasi-judicial
proceedings, not to the exercise of administrative powers.
ISSUE/S:
1. WON respondents are guilty of forum shopping – NO (Ratio 1-10)
2. WON CA erred in ruling that substantial evidence exists – NO (Ratio 11
onwards)
DECISION: WHEREFORE, in view of the foregoing, this petition is hereby
DENIED. The Decision dated 20 November 2008 and the Resolution dated 30
March 2009 issued by the CA in CA-G.R. SP No. 104074 are hereby AFFIRMED.
RATIO:
4. Petitioner argues that respondents are guilty of forum-shopping for
filing two allegedly identical Complaints in violation of the rules on
forum-shopping.
5. Forum-shopping exists when the elements of litis pendentia are
present or where a final judgment in one case will amount to res
judicata in another. Litis pendentia requires the concurrence of: (1)
identity of parties, or at least such parties as those representing the
same interests in both actions; (2) identity of rights asserted and
reliefs prayed for, the reliefs being founded on the same facts; and
(3) identity with respect to the two preceding particulars in the two
cases, such that any judgment that may be rendered in the pending
case, regardless of which party is successful, would amount to res
judicata in the other case.
6. Applying the foregoing requisites to this case, we rule that the
dismissal of the BFP Complaint does not constitute res judicata
in relation to the CSCRO Complaint. Thus, there is no forum-
shopping on the part of respondents.
7. Res judicata means "a matter adjudged; a thing judicially acted upon
or decided; a thing or matter settled by judgment. The requisites are:
(a) the former judgment must be final; (b) it must have been rendered
by a court having jurisdiction over the subject matter and the parties;
(c) it must be a judgment on the merits; and (d) there must be
between the first and the second actions (i) identity of parties, (ii)
identity of subject matter, and (iii) identity of cause of action.
8. In this case, there is no "judgment on the merits". The dismissal
of the BFP Complaint was the result of a fact-finding
investigation for purposes of determining whether a formal charge
for an administrative offense should be filed. Hence, no rights and
liabilities of parties were determined therein with finality.
9. The CA was correct in ruling that the doctrine of res judicata applies
only to judicial or quasi-judicial proceedings, and not to the
exercise of administrative powers.
10. In administrative law, a quasi-judicial proceeding involves (a) taking
and evaluating evidence; (b) determining facts based upon the
evidence presented; and (c) rendering an order or decision supported
by the facts proved. Quasi-judicial or administrative adjudicatory
power on the other hand is the power of the administrative agency to
adjudicate the rights of persons before it. It is the power to hear and
determine questions of fact to which the legislative policy is to apply
and to decide in accordance with the standards laid down by the law
itself in enforcing and administering the same law. Hence, if the only
purpose of an investigation is to evaluate the evidence
submitted to an agency based on the facts and circumstances
presented to it, and if the agency is not authorized to make a
final pronouncement affecting the parties, then there is an
absence of judicial discretion and judgment.
11. In this case, an analysis of the proceedings before the BFP yields the
conclusion that they were purely administrative in nature and
constituted a fact-finding investigation for purposes of determining
whether a formal charge for an administrative offense should be filed
against petitioner. In view of the documents on record, the
undersigned investigator finds no sufficient ground to warrant the
filing of appropriate administrative offense against the respondent.
The proceedings before the BFP were merely investigative, aimed at
determining the existence of facts for the purpose of deciding whether
to proceed with an administrative action.
12. This process can be likened to a public prosecutor's preliminary
investigation, which entails a determination of whether there is
probable cause to believe that the accused is guilty, and whether a
crime has been committed. The prosecutor in a preliminary
investigation does not determine the guilt or innocence of the
accused. Preliminary investigation is merely inquisitorial, and is often
the only means of discovering the persons who may be reasonably
charged with a crime and to enable the fiscal to prepare his complaint
or information. It is not a trial of the case on the merits and has no
purpose except that of determining whether a crime has been
committed and whether there is probable cause to believe that the
accused is guilty thereof.
13. With the above disquisition, we rule that the dismissal of the
BFP Complaint cannot operate as res judicata. Therefore, forum-
shopping is unavailing in this case.
14. CA was correct in ruling that there was substantial evidence to
hold petitioner administratively liable for grave misconduct and
conduct prejudicial to the best interest of the service.
15. This Court will not disturb the factual findings of both the CSC and
the CA, absent any compelling reason to do so. The conclusion
reached by the administrative agencies involved after their own
thorough investigations and hearings, as well as their consideration
of the evidence presented before them and their findings thereon,
especially when affirmed by the CA must now be regarded with great
respect and finality by this Court. Scrutinizing the testimonies of
respondents, we find, as did both the CSC and the CA, that these
testimonies carry more weight than petitioner's self-serving
statements and blanket denials.
16. Even assuming that an Affidavit of Desistance was indeed executed
by respondents, petitioner is still not exonerated from liability. The
subsequent reconciliation of the parties to an administrative
proceeding does not strip the court of its jurisdiction to hear the
administrative case until its resolution. Atonement, in administrative
cases, merely obliterates the personal injury of the parties and does
not extend to erase the offense that may have been committed
against the public service

[177] Republic v. Manila Electric
G.R. No. 141314 & 141369 | November 15, 2002 | Rate-Fixing | Dela Cruz
Petitioner (1): ​REPUBLIC OF THE PHILIPPINES, REPRESENTED BY
ENERGY REGULATORY BOARD
Petitioners (2): ; LAWYERS AGAINST MONOPOLY AND POVERTY (LAMP)
consisting of CEFERINO PADUA, Chairman, G. FULTON ACOSTA, GALILEO
BRION, ANATALIA BUENAVENTURA, PEDRO CASTILLO, NAPOLEON
CORONADO, ROMEO ECHAUZ, FERNANDO GAITE, ALFREDO DE
GUZMAN, ROGELIO KARAGDAG, JR., MA. LUZ ARZAGA-MENDOZA,
ANSBERTO PAREDES, AQUILINO PIMENTEL III, MARIO REYES,
EMMANUEL SANTOS, RUDEGELIO TACORDA, members, and ROLANDO
ARZAGA, Secretary-General, JUSTICE ABRAHAM SARMIENTO, SENATOR
AQUILINO PIMENTEL, JR. and COMMISSIONER BARTOLOME
FERNANDEZ, JR., Board of Consultants, and Lawyer GENARO LUALHATI
Respondent: ​MANILA ELECTRIC COMPANY
MERALCO filed with the ERB an application for an average increase of
P00.21 per kwh in its distribution charge, i.e., revision for its rates schedules,
and for a provisional increase of P0.184 per kwh. The ERB granted the
provisional increase on the condition that MERALCO shall either return
(through refund credit) all excess amounts collected should the ERB deny their
application OR grant a lower average increase.
Based on the audit report and recommendation of COA, ERB authorized
MERALCO to implement a rate adjustment in the average amount of P0.017
per kwh and ordered MERALCO to return the excess average amount of
P0.167 per kwh to their customers. The lower average increased than that
applied for by MERALCO can be attributed to the fact that ERB adopted
COA’s recommendation to NOT to include 1) income taxes paid by MERALCO
as part of its operating expenses for purposes of rate determination and 2) the
use of the net average investment method for the computation of the
proportionate value of the properties used by MERALCO during the test year.
Issues:
1. W/N the income tax paid by Meralco should be treated as part of its
operating expenses and thus considered in determining the amount of
increase in the electric rates. ​NO
2. W/N the use of net average investment method is unreasonable.​ NO
On the first issue, the Court ruled in the negative. Income tax paid by a public
utility is inconsistent with the nature of operating expenses. Operating
expenses are those which are reasonably incurred in connection with business
operations to yield revenue or income. Income tax is imposed on the entity, for
the privilege of earning income and for the benefits received by the taxpayer
from the State.
On the second issue, the Court ruled on the propriety of using the net average
investment method in the determination of the rate base. The ERB did not
abuse its discretion when it applied the method as its reasonableness is borne
by the records of the case. Meralco had not adequately shown that the rates
prescribed by the ERB are unjust or confiscatory as to deprive its stockholders
a reasonable return on investment.
Doctrine:
The factual findings of administrative bodies on technical matters within their
area of expertise should be accorded not only respect but even finality if they
are supported by substantial evidence even if not overwhelming or
preponderant.
Application of doctrine to the case:
In this case, the factual finding involved is the determination of whether the
rates so fixed are reasonable and just.
MERALCO has not adequately shown that the rates prescribed by the ERB
are unjust or confiscatory as to deprive its stockholders a reasonable return on
investment. Moreover, there is a legal presumption that the rates fixed by an
administrative agency are reasonable. Hence, the SC Court finds no
reasonable basis to overturn the recommendation of COA and the decision of
the ERB.
FACTS:
1. MERALCO filed with the ERB1 an ​application for the revision of its
rate schedules​. The application reflected an ​average increase of
21 centavos per kilowatt hour (kwh) in its distribution charge
and a ​prayer for provisional approval of the increase pursuant to
Sec. 16(c) of the Public Service Act and Sec. 8 of EO No. 172.
2. On January 28, 1994, the ​ERB issued an Order granting a
provisional increase of P0.184 per kwh​, subject to the condition
that if Board finds​, after hearing and submission by the COA2 of an
audit report on MERALCO’s books and records ​that MERALCO is
entitled to a lesser increase in rates​, ​all excess amounts
collected ​from their customers as a result of the provisional increase
shall either be​: a) refunded to them; OR b) correspondingly credited
in their favor for application to electric bills covering future
consumptions.
3. ERB requested the COA to conduct an audit and examination of their
books and other records of account and to submit a copy thereof to
the ERB. ​COA then submitted its Audit Report SAO No. 95-07
(COA Report) which recommended NOT to include:
a. income taxes paid by MERALCO as part of its operating
expenses for purposes of rate determination and
b. the use of the net average investment method for the
computation of the proportionate value of the properties
used by MERALCO during the test year
for the determination of the ​rate base​.
4. The ​ERB then ​rendered its decision adopting the above
recommendations and ​authorized MERALCO to implement a
rate adjustment in the average amount of P0.017 per kwh​,
effective with respect to MERALCO's billing cycles beginning
February 1994.
5. The ​ERB further ordered that the provisional relief in the
amount of P0.184 per kilowatt hour granted was hereby
superseded and modified, and ​the ​excess average amount of
P0.167 per kwh starting with MERALCO's billing cycles
beginning February 1994 until its billing cycles beginning
February 1998, be returned to MERALCO's customers​.
1
Energy Regulatory Board - It was ​created under ​EO No. 172 to regulate, among others, the
distribution of energy resources and to fix rates to be charged by public utilities involved in the
distribution of electricity.
2
Commission on Audit
6. MERALCO appealed to the CA, and the CA set aside ERB's
decision. The ERB filed a MR, but it was denied. Hence, the present
petition.
ISSUES:
1. W/N the income tax paid by Meralco should be treated as part of its
operating expenses. ​NO
2. W/N the use of net average investment method is unreasonable.​ NO
RATIO:
1. While the power to fix rates is a legislative function, unless
delegated, a ​determination of whether the rates so fixed are
reasonable and just is a purely judicial question and is subject
to the review of the courts​.
2. In the fixing of rates, the ​only standard which the legislature is
required to prescribe for the guidance of the administrative
authority ​is that the​ r​ ate be reasonable and just​.
3. The ​factual findings of administrative bodies on technical
matters within their area of expertise should be accorded not
only respect but even finality if they are supported by
substantial evidence​ even if not overwhelming or preponderant.
4. In the cases at bar, ​findings and conclusions of the ERB on the
rate that can be charged by MERALCO to the public should be
respected. ​The ​function of the court, in exercising its power of
judicial review, ​is to determine whether under the facts and
circumstances, the final order entered by the administrative
agency is unlawful or unreasonable.
5. The ​principle of separation of powers dictates that courts
should hesitate to review the acts ​of administrative officers ​except
in clear cases of grave abuse of discretion​.
6. In ​determining the just and reasonable rates ​to be charged by a
public utility, ​three major factors are considered by the regulating
agency:
a. rate of return (the SC has consistently adopted 12% rate);3
b. rate base; and
c. the return itself or the computed revenue to be earned by the
public utility based on the rate of return and rate base.
3
a judgment percentage which, if multiplied with the rate base, provides a fair return on the
public utility for the use of its property for service to the public
 7. The ​rate base is an evaluation of the property devoted by the
utility to the public service or the value of invested capital or
property which the utility is entitled to a return.
8. In the cases at bar, the resolution of the issues involved hinges on
the ​determination of the kind and the amount of ​operating
expenses​ that should be the ​proper valuation of the rate base​.
Income tax should NOT be treated as part of operating expenses.
1. The ​ERB correctly ruled that income tax should not be included
in the ​computation of operating expenses of a public utility.
Income tax paid by a public utility is inconsistent with the
nature of operating expenses​. In general, operating expenses are
items of expenses which are attributable to the production of income
or revenue. As correctly put by the ERB, operating expenses should
be a requisite of or necessary in the operation of a utility, recurring,
and that it redounds to the service or benefit of customers.
2. Income tax​, it should be stressed, is imposed on an individual or
entity as a form of excise tax or a ​tax on the privilege of earning
income​. In exchange for the protection extended by the State to the
taxpayer, the government collects taxes as a source of revenue to
finance its activities.
3. Clearly, by its nature, ​income tax payments of a public utility are
NOT expenses which contribute to or are incurred in connection
with the production of profit of a public utility. They ​should be
borne by the taxpayer alone as they are payments ​made in
exchange for benefits received by the taxpayer from the State​.
No benefit is derived by the customers of a public utility for the taxes
paid by such entity and no direct contribution is made by the
payment of income tax to the operation of a public utility for purposes
of generating revenue or profit.
4. Accordingly, the burden of paying income tax should be
Meralco's alone and should not be shifted to the consumers by
including the same in the computation of its operating expenses.
5. The ​principle behind the inclusion of operating expenses in the
determination of a just and reasonable rate is to ​allow the public
utility to recoup the reasonable amount of expenses it has
incurred in connection with the services it provides. It does ​not give
the public utility the license to indiscriminately charge any and
all types of expenses incurred without regard to the nature thereof,
i.e., whether or not the expense is attributable to the production of
services by the public utility. ​To charge consumers for expenses
incurred by a public utility which are not related to the service
or benefit derived by the customers from the public utility is
unjustified and inequitable.
6. While the ​public utility is entitled to a reasonable return on the
fair value of the property being used for the service of the public,
the ​public cannot properly be subjected to unreasonable rates
in order simply that stockholders may earn dividends​.
7. With regard to rate-determination, the ​government is not
hidebound to apply any particular method or formula. The
question of what constitutes a reasonable return for the public
utility is necessarily determined and controlled by its peculiar
environmental milieu. Aside from the financial condition of the
public utility, there are other critical factors to consider for purposes
of rate regulation. Among others, they are: particular reasons
involved for the request of the rate increase, the quality of services
rendered by the public utility, the existence of competition, the
element of risk or hazard involved in the investment, the capacity of
consumers, etc. For these reasons, the SC CANNOT blindly apply
the methods used in previous cases.
The use of net average investment method is reasonable.
1. In the determination of the ​rate base​, property used in the
operation of the public utility ​must be subject to appraisal and
evaluation to determine the fair value thereof entitled to a fair
return​.
2. With respect to those ​properties which have not been used by the
public utility for the entire duration of the test year​, i.e., the year
subject to audit examination for rate-making purposes, ​a valuation
method must be adopted to determine the proportionate value
of the property​.
3. Under the ​"net average investment method," properties and
equipment used in the operation of a public utility are entitled to a
return only on the actual number of months they are in service during
the period. In contrast, the "​average investment method" (the
method MERALCO wanted) computes the proportionate value of the
property by adding the value of the property at the beginning and at
the end of the test year with the resulting sum divided by two.
4. The ERB ​did not abuse its discretion when it applied the net
average investment method​. The ​reasonableness of net average
investment method​ is borne by the records of the case​.
5. By using the net average investment method, the ERB and the COA
considered for determination of the rate base the value of
properties and equipmen​t used by MERALCO in proportion to
the ​period that the same were actually used during the period in
question. ​This treatment is consistent with the settled rule in rate
regulation that the ​determination of the rate base ​of a public utility
entitled to a return ​must be based on properties and equipment
 actually being used or are useful ​to the operations of the public February 1998 is ordered to be refunded to MERALCO's customers or
utility. correspondingly credited in their favor for future consumption.
6. MERALCO contended that immediate recordal in its books of the
property or equipment is not possible, as MERALCO's franchise
covers a wide area and volume of properties and equipment put into
service and the amount of paper work required are huge; thus
making the net average investment method difficult for them.
HOWEVER, this is belied by the COA Report and the ocular
inspection of the ERB which ​disprove MERALCO's contention that
the date of recordal in the books does not reflect the date when
the asset is placed in service.
7. Moreover, the application of the ​average investment method
allows a public utility to easily manipulate the valuation of its
property entitled to a return (rate base) by simply ​including a
highly capitalized asset in the computation of the rate base
even if the same was used for a limited period of time during the
test year.
8. Furthermore, contrary to MERALCO’s contention, the use of the
average investment method CANNOT be sustained simply because
it has been upheld in a case before. What is a just and reasonable
rate cannot be fixed by any immutable method or formula. Hence, it
has been held that no public utility has a vested right to any
particular method of valuation.
9. At any rate, MERALCO has not adequately shown that the rates
prescribed by the ERB are unjust or confiscatory. Since the ​burden
is upon the oppositor, MERALCO, to prove that the rates fixed
by the ERB are unreasonable or otherwise confiscatory as to
merit the reversal of the ERB. In the instant cases, MERALCO was
unable to discharge this burden. With the inexactness and the
susceptibility to manipulation of the average investment method, the
SC Court finds no reasonable basis to overturn the
recommendation of COA and the decision of the ERB.

Relevant Laws/Rules
The only cited laws are the Public Service Act and EO No. 172 (law creating
the ERB) because the case heavily relied on jurisprudence.

Disposition of the Court

The SC GRANTED the instant petitions and REVERSED the decision of the
CA. Respondent MERALCO is authorized to adopt a rate adjustment in the
amount of P0.017 per kilowatt hour, effective with respect to MERALCO's
billing cycles beginning February 1994. Further, in accordance with the
decision of the ERB dated February 16, 1998, the excess average amount of
P0.167 per kilowatt hour starting with the applicant's billing cycles beginning

[178] PHILIPPINE CONSUMERS FOUNDATION, INC. V. SECRETARY OF
EDUCATION, CULTURE, AND SPORTS
GR No. 78285 | Aug. 31, 1987 | Regulatory/Rate-fixing | Dee
Petitioner: Philippine Consumers Foundation, Inc.
Respondents: Secretary of Education, Culture, and Sports
Recit-Ready Facts:
The Task Force on Private Higher Education, created by the Department of
Education, Culture and Sports, recommended to the DECS an increase in
school fees in private schools for the school year 1987-1988. Pursuant to this,
the DECS issued Department Order 37 authorizing the 10-15% increase in
school fees. Phil. Consumers Foundation assails said DO-37 contending that it
was issued without legal basis as the power to regulate does not always include
the power to increase such fees. Issue is W/N DECS’ authority to regulate
school fees in educational institutions includes the power to increase school
fees (YES). The SC ruled that Section 57 (3) of Batas Pambansa Blg. 232,
otherwise known as The Education Act of 1982, vests the DECS with the power
to regulate the educational system in the country. Section 70 of the same Act
grants the DECS the power to issue rules which are likewise necessary to
discharge its functions and duties under the law. In the absence of a statute
stating otherwise, this power includes the power to prescribe school fees.
Doctrine:
The Education Act of 1982, vests the DECS with the power to regulate the
educational system in the country. Section 70 of the same Act grants the DECS
the power to issue rules which are likewise necessary to discharge its functions
and duties under the law. In the absence of a statute stating otherwise, this
power includes the power to prescribe school fees. No other government
agency has been vested with the authority to fix school fees and as such, the
power should be considered lodged with the DECS if it is to properly and
effectively discharge its functions and duties under the law.
FACTS:
1. The Task Force on Private Higher Education created by the Department
of Education, Culture and Sports (DECS) submitted a report entitled
"Report and Recommendations on a Policy for Tuition and Other School
Fees." The report favorably recommended to the DECS the following
courses of action with respect to the Government's policy on increases in
school fees for the school year 1987 to 1988 —
(1) Private schools may be allowed to increase its total school fees by not
more than 15 per cent to 20 per cent, without the need for the prior approval
of the DECS. Schools that wish to increase school fees beyond the ceiling
would be subject to the discretion of the DECS;
(2) Any private school may increase its total school fees in excess of the
ceiling, provided that the total school fees will not exceed P1,000.00 for the
schoolyear in the elementary and secondary levels, and P50.00 per academic
unit on a semestral basis for the collegiate level.
2. The DECS took note of the report of the Task Force. The DECS issued an
Order authorizing, inter alia, the 15% to 20% increase in school fees as
recommended by the Task Force.
3. The petitioner sought a reconsideration of the said Order, apparently on
the ground that the increases were too high.
4. Thereafter, the DECS issued Department Order No. 37 modifying its
previous Order and reducing the increases to a lower ceiling of 10% to
15%, accordingly.
5. Despite this reduction, the petitioner still opposed. Petitioner sent a
telegram to the President of the Philippines urging the suspension of the
implementation of Department Order No. 37.4 No response appears to
have been obtained from the Office of the President.
6. Thus, the petitioner, allegedly on the basis of the public interest, went to
this Court and filed the instant Petition for prohibition, seeking that
judgment be rendered declaring the questioned Department Order
unconstitutional.
Petitioner’s Contention:
The said Department Order was issued without any legal basis. The petitioner
argues that while the DECS is authorized by law to regulate school fees in
educational institutions, the power to regulate does not always include the
power to increase school fees. The petitioner also maintains that the due
process clause requires that prior notice and hearing are indispensable for the
Department Order to be validly issued.
ISSUE:
1. Whether or not DECS’ authority to regulate school fees in
educational institutions includes the power to increase school fees.
(YES)
2. Whether or not the Department Order was violative of Due Process (NO)
RATIO:
1. DECS has the authority to fix school fees
Section 57 (3) of Batas Pambansa Blg. 232, otherwise known as The
Education Act of 1982, vests the DECS with the power to regulate the
educational system in the country, to wit:
'SEC. 57. Educations and powers of the Ministry. — The Ministry shall:

"(3) Promulgate rules and regulations necessary for the

administration, supervision and regulation of the educational system
in accordance with declared policy.

Section 70 of the same Act grants the DECS the power to issue rules which
are likewise necessary to discharge its functions and duties under the law, to
wit:
SEC. 70. Rule-making Authority. — The Minister of Education and
Culture, charged with the administration and enforcement of this Act,
shall promulgate the necessary implementing rules and regulations."

In the absence of a statute stating otherwise, this power includes the power to
prescribe school fees. No other government agency has been vested with the
authority to fix school fees and as such, the power should be considered
lodged with the DECS if it is to properly and effectively discharge its functions
and duties under the law.

2. The Department Order is not violative of Due Process

The function of prescribing rates by an administrative agency may be either a
legislative or an adjudicative function. If it were a legislative function, the grant
of prior notice and hearing to the affected parties is not a requirement of due
process. As regards rates prescribed by an administrative agency in the
exercise of its quasi-judicial function, prior notice and hearing are essential to
the validity of such rates. When the rules and/or rates laid down by an
administrative agency are meant to apply to all enterprises of a given kind
throughout the country, they may partake of a legislative character. Where the
rules and the rates imposed apply exclusively to a particular party, based upon
a finding of fact, then its function is quasi-judicial in character.

Department Order No. 37 issued by the DECS is in the exercise of its

legislative function. The assailed Department Order prescribes the maximum
school fees that may be charged by all private schools in the country for school
year 1987 to 1988. This being so, prior notice and hearing are not essential to
the validity of its issuance.

[179] MACEDA v ERB
G.R. Nos. 95203-05 | December 18, 1990 | Regulatory/Rate-Fixing |
De Jesus
Petitioner: SENATOR ERNESTO MACEDA
Respondents: ENERGY REGULATORY BOARD (ERB); MARCELO N.
FERNANDO, ALEJANDRO B. AFURONG; REX V. TANTIONGCO; and OSCAR E.
ALA, in their collective official capacities as Chairman and Members of the Board
(ERB), respectively; CATALINO MACARAIG, in his quadruple official capacities as
Executive Secretary, Chairman of Philippine National Oil Company; Office of the
Energy Affairs, and with MANUEL ESTRELLA, in their respective official capacities
as Chairman and President of the Petron Corporation; PILIPINAS SHELL
PETROLEUM CORPORATION; with CESAR BUENAVENTURA and REY GAMBOA
as chairman and President, respectively; CALTEX PHILIPPINES with FRANCIS
ABLAN, President and Chief Executive Officer; and the Presidents of Philippine
Petroleum Dealer's Association, Caltex Dealer's Co., Petron Dealer's Asso., Shell
Dealer's Asso. of the Phil., Liquefied Petroleum Gas Institute of the Phils., any and
all concerned gasoline and petrol dealers or stations; and such other persons,
officials, and parties, acting for and on their behalf; or in representation of and/or
under their authority
Recit-Ready Facts:
On September 10, 1990, Caltex (Philippines), Inc., Pilipinas Shell Petroleum
Corporation, and Petron Corporation submitted separate applications with the
Energy Regulatory Board (ERB) for permission to increase the wholesale
posted prices of petroleum products. Additionally, Caltex, Shell and Petron also
asked for provisional authority to increase temporarily such wholesale posted
prices pending further proceedings. ERB in a joint Order granted provisional
relief. It authorized said applicants a provisional increase of ONE PESO
AND FORTY-TWO CENTAVOS (P1.42) per liter in the sale of petroleum
products.
W/N notice and hearing is required in order to issue a temporary increase
in the prices of various petroleum products. – No, notice and hearing is not
necessary.
SC ruled that pursuant to Sec. 8 of EO 172 – ERB is vested with the authority
to grant “Provisional Relief”. Wherein, the “Board may upon the filing of an
application, petition or complaint or at any stage thereafter and without prior
hearing, on the basis of supporting papers duly verified or authenticated xxx”
SC ruled that, Section 3, paragraph (e) and Section 8 do not negate each other,
or operates exclusively. These provisions must be construed together. While
the final decree of price adjustment is pending which is subject to requirements
of notice of hearing – Sec 3e. ERB during said pendency has the authority to
increase provisionally, without need of a hearing. However, it is important to
note that ERB also has an option to conduct a hearing to grant provisional price
increase. But, if ERB chose not to conduct a hearing, its provisional increase is
still valid.
Doctrine:
Notice and Hearing is not necessary when the law grants a power to
provisionally increase price without said prior hearing.
Application to the case:
ERB is vested with the authority to grant “Provisional Relief”. Wherein, the
“Board may upon the filing of an application, petition or complaint or at any
stage thereafter and without prior hearing, on the basis of supporting papers
duly verified or authenticated xxx”
FACTS:
1. On September 10, 1990, Caltex (Philippines), Inc., Pilipinas Shell
Petroleum Corporation, and Petron Corporation submitted separate
applications with the Energy Regulatory Board (ERB) for permission
to increase the wholesale posted prices of petroleum products.
2. Additionally, Caltex, Shell and Petron also asked for provisional
authority to increase temporarily such wholesale posted prices
pending further proceedings.
3. On September 21, 1990, the Board, in a joint Order granted
provisional relief. It authorized said applicants “weighted average
provisional increase of ONE PESO AND FORTY-TWO CENTAVOS
(P1.42) per liter in the wholesale posted prices of their various
petroleum products enumerated below, refined and/or marketed by
them locally.”
Contentious Points/Arguments
Petitioner – Maceda et. al. Respondent - ERB
➢ Sen. Maceda – Order submits that the same Provisional increase
was issued without proper notice and of the price of
hearing in violation of Section 3, paragraph petroleum products
(e), of Executive Order No. 172; is valid
➢ ERB in decreeing an increase, had created a
new source for the Oil Price Stabilization
Fund (OPSF),
➢ ERB had levied a tax, a power vested in the
legislature,
➢ ERB had "re-collected", by an act of taxation,
ad valorem taxes on oil which Republic Act
No. 6965 had abolished.
➢ Atty. Oliver Lozano,argues that the Board's
Order was issued without notice and hearing,
and hence, without due process of law.
ISSUES:
1. W/N notice and hearing is required in order to issue a temporary
increase in the prices of various petroleum products. – No, notice
and hearing is not necessary
2. W/N the ERB Order of Provisional Increase constitutes an act of
taxation or negates the effects of RA. 6965. – No, said Order does
not constitutes taxation or negates the effects of RA 6965.
RATIO:
NOTICE AND HEARING IS NOT NECESSARY FOR ERB TO ORDER A
PROVISIONAL INCREASE IN THE PRICES OF PETROLEUM PRODUCTS
1. SC ruled that pursuant to Sec. 8 of EO 172 – ERB is vested with the
authority to grant “Provisional Relief”. Wherein, the “Board may upon
the filing of an application, petition or complaint or at any stage
thereafter and without prior hearing, on the basis of supporting
papers duly verified or authenticated xxx”
2. Sen. Maceda argued that the applicable provision is Sec 3 para. (3) of
EO 172 which 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.
3. SC ruled that, Section 3, paragraph (e) and Section 8 do not negate
each other, or operates exclusively. These provisions must be
construed together. While the final decree of price adjustment is
pending which is subject to requirements of notice of hearing – Sec
3e. ERB during said pendency has the authority to increase
provisionally, without need of a hearing.
4. SC ruled that while the case is still pending in the ERB regarding
permanent price adjustment. ERB is authorized under Sec. 8 to
decree an 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 37
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.
5. While under Executive Order No. 172, a hearing is indispensable,
it DOES NOT PREVENT the Board from ordering, ex parte, a
provisional increase,
6. However, said provisional increase is still subject to a final disposition
whether:
(1) to make it permanent;
(2) to reduce or increase it further; or
(3) to deny the application.
7. However, it is important to note that ERB also has an option to conduct
a hearing to grant provisional price increase. But, if ERB chose not to
conduct a hearing, its provisional increase is still valid.
ORDER DOES NOT CONSTITUTE TAXATION OR NEGATES THE EFFECT
OF RA NO. 6965
1. SC ruled that RA 6965 operated to lower taxes on petroleum and
petroleum products by imposing specific taxes rather than ad valorem
taxes. Said law is NOT an insurance against an "oil hike", whenever
needed. Also said law is also NOT a price control mechanism on
petroleum and petroleum products
2. Moreover, SC ruled that the assailed ERB Order authorizing the
proceeds generated by the increase to be deposited to the OPSF is
NOT an act of taxation. Since it is authorized by PD 1956.
3. SC took judicial notice of the facts: (1) OPSF has incurred a deficit of
P6.1 Billion; (2) the exchange rate has fallen (3) country’s balance of
 payment is expected to reach $1 Billion; (4) our trade deficit is at
$2.855 Billion
4. Due to this, authorities have been unable to collect enough taxes
necessary to replenish the OPSF as provided by Presidential Decree
No. 1956, and hence, there was no available alternative but to hike
existing prices.
5. SC ruled that the Government has made out a prima facie case to
justify the provisional increase in question. Therefore, there is no
grave of discretion committed by ERB in issuing the provisional Order.

Relevant Laws/Rules

SECTION 8. Authority to Grant Provisional Relief . — The Board may, upon

the filing of an application, petition or complaint or at any stage thereafter and
without prior hearing, on the basis of supporting papers duly verified or
authenticated, grant provisional relief on motion of a party in the case or on its
own initiative, without prejudice to a final decision after hearing, should the
Board find that the pleadings, together with such affidavits, documents and
other evidence which may be submitted in support of the motion, substantially
support the provisional order: Provided, That the Board shall immediately
schedule and conduct a hearing thereon within thirty (30) days thereafter, upon
publication and notice to all affected parties.

Citizens' Alliance for Consumer Protection v. Energy Regulatory Board

In the light of Section 8 quoted above, public respondent Board need not even
have conducted formal hearings in these cases prior to issuance of its Order
of 14 August 1987 granting a provisional increase of prices. The Board, upon
its own discretion and on the basis of documents and evidence submitted by
private respondents, could have issued an order granting provisional relief
immediately upon filing by private respondents of their respective applications

SECTION 8. There is hereby created a Trust Account in the books of accounts

of the Ministry of Energy to be designated as Oil Price Stabilization Fund
(OPSF) for the purpose of minimizing frequent price changes brought about
by exchange rate adjustments and/or changes in world market prices of crude
oil and imported petroleum products

Disposition of the Court

WHEREFORE, these petitions are DISMISSED. No costs.
  
[180] PADUA v. RANADA  FACTS: 
1. Citra  Metro  Manila  Tollways  Corporation  (CITRA)  filed  with  the  TRB  an 
GR 141949 | Oct. 14, 2002 | Regulatory/Rate-Fixing/Licensing | Reina   application  for  an interim adjustment of the toll rates at the Metro Manila Skyway 
Petitioner: ​CEFERINO PADUA (first case) and EDUARDO ZIALCITA (second case)  Project – Stage 1. 
Respondent:  ​HON. SANTIAGO RANADA, PRESIDING JUDGE OF MAKATI, RTC, BRANCH  2. CITRA  anchored  its  petition  on  the  provisions  of  the  "Supplemental  Toll 
137,  PHILIPPINE  NATIONAL  CONSTRUCTION  CORP.,  TOLL  REGULATORY  BOARD,  Operation  Agreement"  (STOA),  authorizing  it,  as  the  investor,  to  apply  for  and  if 
DEPARTMENT  OF  PUBLIC  WORKS  AND  HIGHWAYS,  and  REPUBLIC  OF  THE  warranted,  to  be  granted  an  interim  adjustment  of  toll  rates  in  the  event  of  a 
PHILIPPINES  "significant currency devaluation." 
 
3. Claiming  that  the  peso  exchange rate to a U.S. dollar had devaluated from P26 in 
Recit-Ready:   
1995  to  P48  in  2000,  CITRA  alleged  that  there  was  a  compelling  need  for  the 
Citra  Metro  Manila  Tollways  Corporation  filed  with  the  Toll  Regulatory  Board  an 
increase  of  the  toll  rates  to  meet  the  loan  obligations  of  the  Project  and  the 
application  for  an  interim  adjustment  of  the  toll  rates  at  the  Metro  Manila  Skyway 
substantial increase in debt-service burden. 
Project.  TRB  issued  a  resolution  authorizing  ​provisional  toll  rate  adjustments  at  the 
4. Due  to  heavy  opposition,  CITRA's  petition  remained  unresolved.  This  prompted 
Metro  Manila  Skyway.  Petitioners  assailed  before  this  Court  the validity and legality of 
CITRA  to  file  an  "Urgent  Motion  for  Provisional  Approval,"  this  time,  invoking 
the TRB Resolution as it was issued without the required publication. 
Section  3,  Rule  10  of  the  "Rules  of  Practice  and  Procedure  Governing  Hearing 
 
Before the Toll Regulatory Board": 
The  SC  ruled  that  Letter  of  Instruction  No.  1334-A  ​expressly  allowed the TRB to grant 
Upon  the  filing  of  an  application  or  petition  for  the  approval  of  the  initial  toll  rate  or  toll  rate 
ex-parte  provisional  or  temporary  increase  in toll rates​. It directs, orders and instructs  adjustment,  or  at  any  stage,  thereafter,  the  Board  may  grant on motion of the pleader 
the  TRB  to  issue  provisional  toll  rates  adjustment  ex-parte  ​without  the need of notice,  or  in  its  own  initiative,  the  relief  prayed  for  without  prejudice  to  a  final  decision  after 
hearing and publication​. All that is necessary is that it be issued upon:  completion of the hearing… 
(1) a finding that the main petition is sufficient in form and substance;   5. CITRA moved to withdraw its “Urgent Motion for Provisional Approval”. 
(2) the  submission  of  an  affidavit showing that the increase in rates substantially  6. CITRA  wrote  a  letter  to  TRB  expressing  its  concern  over  the  undue  delay  in  the 
conforms  to  the  formula,  if  any  is  stipulated  in  the  franchise  or toll operation  proceeding,  stressing  that  any  further  setback would bring the Project's financial 
agreement,  and  that  failure  to  immediately  impose and collect the increase in  condition, as well as the Philippine banking system, to a total collapse. 
rates would result in great irreparable injury to the petitioner; and   7. The  TRB  granted  CITRA’s  motion  to  withdraw  the  Urgent  Motion  for  Provisional 
(3) the submission of a bond.   Approval  and  at  the  same  time  ​issued  a  resolution  authorizing  provisional  toll 
  rate adjustments at the Metro Manila Skyway:  
Doctrine:  Board  hereby GRANTS to the Metro Manila Skyway Project, Provisional Relief in accordance with 
A  hearing  is  NOT  necessary  for  the  grant  of  provisional  toll  rate  adjustment. The TRB,  Rule  10,  Section  3  of  the  Rules  of  Practice  and  Procedure  Governing  Hearing  before 
as  the  agency  assigned  to  supervise  the collection of toll fees and the operation of toll  the  Toll  Regulatory  Board  which  states,  among  others  "that  the  Board  may  grant 
(provisional  relief)  in  its  own  initiative  without  prejudice  to  the  final  decision  after 
facilities,  has  the  necessary  expertise,  training  and  skills  to  judiciously  decide matters 
completion of the hearing 
of this kind. 
8. The  above  Resolution  approving provisional toll rate adjustments was published 
 
in the newspapers of general circulation. 
Application to the case: 
9. Petitioners  Padua  and  Zialcita  assail  the  validity  and  legality  of  the  TRB 
The  Court  has  ruled  in  a  number  of  cases  that  an  administrative  agency  may  be 
resolution. 
empowered  to  approve  provisionally,  when  demanded  by  urgent  public  need,  rates  of 
a. Padua: filed an "Urgent Motion for a Temporary Restraining Order to 
public  utilities  without  a  hearing.  The  reason  is  easily  discerned  from  the  fact  that 
Stop  Arbitrary  Toll  Fee  Increases”  as  the  resolution  was  issued 
provisional  rates are by their nature temporary, and subject to adjustment in conformity 
without  the  required  publication  and  the  TRB  could  not  authorize 
with the definitive rates approved after final hearing. The Court likewise ruled that in the 
the provisional toll rate adjustments  
case  at  bar  the  initial  proper  recourse  is  to  file  a petition for review of the adjusted toll 
b. Zialcita:  filed the present petition for prohibition 16 with prayer for a 
rates with the TRB. 
temporary  restraining  order  and/or  writ  of  preliminary  injunction 
 against  TRB  and  asserts  that  provisional  toll  rate  adjustments  are  provisional  toll  rates  adjustment  ex-parte  without  the  need  of  notice,  hearing  and 
exorbitant  and  TRB  violated  its  own  charter  when  it  promulgated  publication. All that is necessary is that it be issued upon  
the resolution without the benefit of any public hearing  (1) a finding that the main petition is sufficient in form and substance;  
  (2) the  submission  of an a davit showing that the increase in rates substantially 
ISSUES:  conforms  to  the  formula, if any is stipulated in the franchise or toll operation 
Whether or not the TRB has authority to issue the assailed Resolution. (YES)  agreement,  and  that  failure  to  immediately  impose  and  collect  the  increase 
  in rates would result in great irreparable injury to the petitioner; and  
RATIO:  (3) the  submission  of  a  bond.  Again,  whether  or not CITRA complied with these 
TRB HAS POWERS TO PROVISIONALLY INCREASE TOLL RATES  requirements is an issue that must be addressed to the TRB. 
Marcos  promulgated  P.D.  No.  1112  creating  the  TRB  on  March  31,  1977.  The  end in   
view  was  to  authorize  the  collection  of  toll  fees  for  the  use  of  certain  public  The  practice  is  not  something  peculiar.  We  have  ruled  in  a  number  of  cases  that  an 
improvements  in  order  to  attract  private  sector  investment  in  the  government  administrative  agency  may  be  empowered  to  approve  provisionally, when demanded 
infrastructure  projects.  The  TRB  was  tasked  to  supervise  the  collection  of  toll  fees  by  urgent  public  need,  rates  of  public  utilities  without  a  hearing.  The  reason is easily 
and  the  operation  of  toll  facilities.  One  of  its  powers  is  to  "issue,  modify  and  discerned  from  the  fact  that  provisional  rates  are  by  their  nature  temporary  and 
promulgate  from  time  to  time  the  rates  of  toll  that will be charged the direct users of  subject  to  adjustment  in  conformity  with  the  definitive  rates  approved  after  final 
toll  facilities  and  upon  notice  and  hearing,  to  approve  or  disapprove  petitions for the  hearing. 
increase thereof."   
  NECESSITY OF PUBLICATION 
To  clarify  the  intent  of  P.D.  No.  1112  as  to  the  extent  of  the  TRB's  power,  Marcos  To add, it is not true that the provisional toll rate adjustments were not published prior 
further  issued  Letter  of  Instruction  No.  1334-A  expressly  allowing  the  TRB  to  grant  to  its  implementation  on  Jan. 1, 2002. Records show that they were published on in 3 
ex-parte p ​ rovisional or temporary increase in toll rates​, thus:   newspapers  of  general  circulation,  particularly  the  Philippine  Star,  Philippine  Daily 
"…by  virtue of the powers vested in me by the Constitution, do hereby direct, order and  Inquirer  and  The  Manila  Bulletin.  Such  publications  sufficiently  complied  with  Sec.  5 
instruct  the  Toll  Regulatory  Board  to  grant  and  issue  ex-parte  to  any  of  PD  1112  which  mandates  that "no new rates shall be collected unless published in 
petitioner,  without  need  of  notice,  publication  or  hearing,  provisional  a newspaper of general publication at least once a week for 3 consecutive weeks." 
authority  to  collect,  pending  hearing  of  and  decision  on  the  merits  of  such   
petition,  the  increase  in  rates  prayed for or such lesser amount as the Board  WHEREFORE,  petitioner  Padua's  "Urgent  Motion  for  Temporary  Restraining  Order  to 
may  in  its  discretion  provisionally  grant…Any  provisional  toll  rate  increases  Stop  Arbitrary  Toll  Fee  Increases"  is  DENIED  and  petitioner  Zialcita's  "Petition  for 
shall be effective immediately upon approval without need of publication."  Prohibition" is DISMISSED. 
   
NECESSITY OF CONDUCTING A HEARING   
Thereafter,  the  TRB  promulgated  as  part  of  its  Rules  of  Procedure,  the  following   
provision:   
“Upon  initial  findings  of  the  Board  that  the  Petition  for  the  approval  of  initial toll rate 
or  the  petition for toll rate adjustment is in accordance with Sections 1 and 2 
of  Rule 2, Section 2 of Rule 3 and Section 1 of Rule 4 hereof, the Board within 
a  reasonable  time  after  the  ling  of  the  Petition,  may in an en banc decision 
provisionally  approve  the  initial  toll  rate or toll rate adjustment, without the 
necessity of any notice and hearing​." 
 
From  the  foregoing,  it  is  clear  that  a  ​hearing  is  NOT  necessary  for  the  grant  of 
provisional  toll  rate  adjustment.  The  language  of  the  letter  of  instruction  is  not 
susceptible  of  equivocation.  It  "directs,  orders  and  instructs"  the  TRB  to  issue 

[181] PHILCOMSAT v. Alcuaz
G.R. No. 84818 | December 18, 1989 | Regulatory/ Rate-Fixing/ Licensing |
Francis
Petitioner: PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION
Respondents: JOSE LUIS A. ALCUAZ, as NTC Commissioner, and
NATIONAL TELECOMMUNICATIONS COMMISSION
Recit-Ready Facts:
1. RA No. 5514 gave PHILCOMSAT the franchise to set up satellite
communications operations in the Philippines. Subsequently EO No.
196 was enacted which gave the NTC jurisdiction over PHILCOMSAT.
2. NTC required PHILCOMSAT to apply for a Certificate of Public
Convenience and Necessity which PHILCOMSAT did. Pending
hearing, PHILCOMSAT applied for Provisional Authority to continue its
operations. NTC granted PHILCOMSAT’s request but on the third
extension of the Provisional Authority, NTC directed PHILCOMSAT to
reduce its rates.
3. PHILCOMSAT assailed the Constitutionality of EO No. 546 which
gave N​TC the power to fix rates for public service communications for
not providing the necessary standards, and the validity of the order for
being issued without notice and hearing.
4. The SC upheld the Constitutionality of EO No. 546 which gave
sufficient standards such as public safety, public interest and
reasonable feasibility of maintaining effective competition.
FACTS:
5. The SC however ruled that the NTC’s order was Quasi-Judicial in
nature and should be issued only after notice and hearing. The order
1. RA No. 5514, granted PHILCOMSAT "​franchise to establish,
was applicable only to PHILCOMSAT, was predicated upon the
finding of fact based on a report, and PHILCOMSAT was deprived of
its right to cross-examine the maker and to introduce contrary
evidence.
2. However, pursuant to Executive Order No. 196 PHILCOMSAT was
Doctrine:
- Delegation of legislative power may be sustained only upon the
ground that some standard for its exercise is provided and that the
3. Implementing Executive Order No. 196, NTC required PHILCOMSAT
legislature in making the delegation has prescribed the manner of the
exercise of the delegated power. Therefore, when the administrative
agency establishes a rate, its act must both be non- confiscatory and
must have been established in the manner prescribed by the
legislature; otherwise, in the absence of a fixed standard, the
delegation of power becomes unconstitutional.
- In case of a delegation of rate-fixing power, the only standard which
the legislature is required to prescribe for the guidance of the
administrative authority is that the rate be reasonable and just.
However, it has been held that even in the absence of an express
requirement as to reasonableness, this standard may be implied.
- Although the rule-making power and even the power to fix rates- when
such rules and/or rates are meant to apply to all enterprises of a given
kind throughout the Philippines-may partake of a legislative character,
such is not the nature of the order complained of. Indeed, the same
applies exclusively to petitioner herein​. What is more, it is
predicated upon the finding of fact-based​ upon a report submitted
by the General Auditing Office-that petitioner is making a profit of
more than 12% of its invested capital, which is denied by petitioner.
Obviously, the latter is ​entitled to cross-examine the maker of said
report, and to introduce evidence to disprove the contents
thereof and/or explain or complement the same, as well as to
refute the conclusion drawn therefrom by the respondent​. In other
words, in making said finding of fact, respondent performed a function
partaking of a quasi-judicial character, the valid exercise of which
demands previous notice and hearing. (​Vigan Electric Light Co., Inc.
vs. Public Service Commission)
construct, maintain and operate in the Philippines facilities for
international satellite communications.​" Under Section 5 of the same
law, PHILCOMSAT was exempt from the jurisdiction of the then
Public Service Commission, now NTC.
placed under the jurisdiction, control and regulation of the NTC,
including all its facilities and services and the fixing of rates.
to apply for the requisite certificate of public convenience and
necessity covering its facilities and the services it renders, as well as
the corresponding authority to charge rates therefor.
 4. PHILCOMSAT filed with NTC an application for authority to continue
operating and maintaining the same facilities it has been
continuously operating and maintaining and to charge the current
rates applied for in rendering such services. Pending hearing, it also
applied for a provisional authority so that it can continue to operate
and maintain the above mentioned facilities, provide the services and
charge therefor the aforesaid rates therein applied for.
5. On September 16, 1987, PHILCOMSAT was granted a provisional
authority to continue operating its existing facilities, to render the
services it was then offering, and to charge the rates it was then
charging. This authority was valid for six (6) months from the date of
said order. When said provisional authority expired on March 17,
1988, it was extended for another six (6) months, or up to September
16, 1988.
6. The NTC order now in controversy further extended the provisional
authority of the petitioner for another six (6) months, counted from
September 16, 1988, but it ​directed the PHILCOMSAT to charge
modified reduced rates through a reduction of fifteen percent
(15%) on the present authorized rates​. The Commissioner ordered
said reduction after an initial evaluation by the Rates Regulation
Division of the Common Carriers Authorization Department of the
financial statements of PHILCOMSAT.
ISSUES:
1. WON EO ​Nos. 546 and 196 on the ground that the same do not fix a
standard for the exercise of the power therein conferred​; and
- NO
2. WON the ​order violates procedural due process because it was
issued motu proprio, without notice to petitioner and without the
benefit of a hearing
- YES
RATIO:
EO No. 546 is Constitutional
1. Delegation of legislative power may be sustained only upon the
ground that some standard for its exercise is provided and that the
legislature in making the delegation has prescribed the manner of
the exercise of the delegated power. Therefore, when the
administrative agency establishes a rate, its act must both be non-
confiscatory and must have been established in the manner
prescribed by the legislature; otherwise, in the absence of a fixed
standard, the delegation of power becomes unconstitutional.
2. In case of a delegation of rate-fixing power, the only standard which
the legislature is required to prescribe for the guidance of the
administrative authority is that the rate be reasonable and just.
However, it has been held that even in the absence of an express
requirement as to reasonableness, this standard may be implied.
3. Pursuant to Executive Orders Nos. 546 and 196, NTC is empowered
to determine and prescribe rates pertinent to the operation of public
service communications which necessarily include the power to
promulgate rules and regulations in connection therewith.
4. Under Section 15(g) of EO No. 546, ​NTC should be guided by the
requirements of public safety, public interest and reasonable
feasibility of maintaining effective competition of private entities in
communications and broadcasting facilities​. Likewise, in Section 6(d)
thereof, which provides for the creation of the Ministry of
Transportation and Communications with control and supervision
over respondent NTC, it is specifically provided that the ​national
economic viability of the entire network or components of the
communications systems contemplated therein should be maintained
at reasonable rates.
The order violates procedural due process for lack of notice and
hearing.
1. The order contains all the attributes of a quasi-judicial adjudication.
Foremost is the fact that said order pertains exclusively to
PHILCOMSAT and to no other. Further, it is premised on a finding of
fact that there is merit in a reduction of some of the rates charged-
based on an initial evaluation of petitioner's financial
statements-without affording PHILCOMSAT the benefit of an
explanation as to what particular aspect or aspects of the financial
statements warranted a corresponding rate reduction.
2. An immediate reduction in its rates would adversely affect its
operations and the quality of its service to the public considering the
maintenance requirements, the projects it still has to undertake and
the financial outlay involved. PHILCOMSAT was not even afforded
 the opportunity to cross-examine the inspector who issued the report
on which the NTC based its questioned order.
3. At any rate, NTC admitted that the questioned order was issued
pursuant to its quasi-judicial functions. It, however, insists that notice
and hearing are not necessary since the assailed order is merely
incidental to the entire proceedings and, therefore, temporary in
nature. While respondents may fix a temporary rate pending final
determination of the application of petitioner, such rate-fixing order,
temporary though it may be, is not exempt from the statutory
procedural requirements of notice and hearing, as well as the
requirement of reasonableness. Assuming that such power is vested
in NTC, it may not exercise the same in an arbitrary and confiscatory
manner. Categorizing such an order as temporary in nature does not
perforce entail the applicability of a different rule of statutory
procedure than would otherwise be applied to any other order on the
same matter unless otherwise provided by the applicable law.
4. The applicable statutory provision is Section 16(c) of the Public
Service Act which provides:

Section 16. Proceedings of the Commission, upon notice and hearing the
Commission shall have power, upon proper notice and hearing in accordance with the
rules and provisions of this Act, subject to the limitations and exceptions mentioned
and saving provisions to the contrary:

xxx xxx xxx

(c) To fix and determine individual or joint rates, ... which shall be
imposed, observed and followed thereafter by any public service; …

Disposition of the Court

WHEREFORE, the writ prayed for is GRANTED and the order of

respondents, dated September 2, 1988, in NTC Case No. 87-94 is hereby
SET ASIDE. The temporary restraining order issued under our resolution of
September 13, 1988, as specifically directed against the aforesaid order of
respondents on the matter of existing rates on petitioner's present authorized
services, is hereby made permanent. SO ORDERED.
 [182] FRANCISCO V TRB
to promulgate implementing rules and regulations ("IRR") to carry out declared
GR No. 166910| October 19, 2010 |Rate Fixing | Abi
statutory policies – provided that the IRR conforms to the terms and standards
Petitioner: ​ERNESTO B. FRANCISCO, JR. and JOSE MA. O. HIZON prescribed by that statute.
(Madaming Petitioners, pinili ko lang yun IMPT, Taxpayer suit ito sila)
The Court does not perceive an irreconcilable clash in the enumerated TRB’s
Respondents: ​TOLL REGULATORY BOARD, PHILIPPINE NATIONAL statutory powers, such that the exercise of one negates another. The
CONSTRUCTION CORPORATION, MANILA NORTH TOLLWAYS ascription of impartiality on the part of the TRB cannot, under the premises, be
CORPORATION, BENPRES HOLDINGS CORPORATION, FIRST accorded cogency. Petitioners have not shown that the TRB lacks the
PHILIPPINE INFRASTRUCTURE DEVELOPMENT CORPORATION, expertise, competence and capacity to implement its mandate of balancing the
TOLLWAY MANAGEMENT CORPORATION, PNCC SKYWAY interests of the toll-paying motoring public and the imperative of allowing the
CORPORATION, CITRA METRO MANILA TOLLWAYS CORPORATION and concessionaires to recoup their investment with reasonable profits. Notably,
HOPEWELL CROWN INFRASTRUCTURE, INC the PDs provide parameters

Recit-Ready Facts: Furthermore, a franchise is basically a legislative grant of a special privilege to

President Marcos issued PD 112, PD 113 and PD 1894 which created the Toll a person Particularly, the term, franchise, "includes not only authorizations
Regulatory Board and granted the franchise of Philippine National issuing directly from Congress in the form of statute, but also those granted by
Construction Corporation (PNCC). Notably, the decrees also vested TRB the administrative agencies to which the power to grant franchise has been
following powers: delegated by Congress.
1. Issue, modify and promulgate from time to time the rates of toll that
will be charged the direct users of toll facilities and upon notice and
hearing, to approve or disapprove petitions for the increase. Application to the case:
2. Subject to the approval of the President of the Philippines, to enter The presidential decrees granted the powers to grant toll contracts and fix toll
into contract for the construction, operation and maintenance of toll rates. TRB, as the designated administrative agency, is presumed to have the
facilities expertise to perform the function. The mere allegation of impartiality will not
3. To grant authority to operate a toll facility and to issue therefore the negate this assumption. Furthermore, it has been helf before that Congress
necessary "Toll Operation Certificate" can validly delegate their power to grant franchise.
After some time passed, PNCC with TRB entered into various contracts and
Supplemental Toll Operation Agreement (STOA) with different entities. As a
result of these contracts the following events happened:
FACTS:
1. TRB issued resolutions that fixed and modified the toll rates
MARCOS ERA
2. As a result of the contracts, new entities whom PNCC had
1. President Marcos issued P.D. 1112, authorizing the establishment of
agreements with were granted a franchise
toll facilities on public improvements. In order to attract private sector
3. PNCC assigned usufructuary rights as franchise holder to a JV
involvement, P.D. 1112 allowed "the collection of toll fees for the use
company to be formed by PNCC and FPIDC. Formed the Manila
of certain public improvements that would allow a reasonable rate of
North Tollway Corp. The franchise was subsequently extended by
return on investments." The same decree created the Toll Regulatory
TRB without congressional approval.
Board (TRB) and invested it with the power to enter, for the Republic,
into contracts for the construction, maintenance and operation of
Petitioners assail that by granting TRB the power to grant toll contracts at the
tollways, grant authority to operate a toll facility, issue therefor the
same time promulgate toll rates will lead to impartiality. They further assert
necessary Toll Operation Certificate ("TOC") and ​fix initial toll
that only Congress can grant franchises:
rates, and, from time to time, adjust the same after due notice
and hearing.
Doctrine:
a. On the same date, P.D. 1113 was issued, granting to the
Administrative bodies have expertise in specific matters within the purview of
Philippine National Construction Corporation ("PNCC"), for a
their respective jurisdictions. Accordingly, the law concedes to them the power
period of thirty years– a franchise to construct, maintain and
 operate toll facilities in the North Luzon and South Luzon divisible phase thereof, the TRB fixes or approves the initial toll
rate after which, it passes a board resolution prescribing the
Expressways, ​with the right to collect toll fees at such
periodic toll rate adjustment.
rates as the TRB may fix and/or authorize​.
SUBSEQUENT CONTRACTS AND RESOLUTIONS:
2. Subsequently, P.D. 1894 which further granted PNCC a franchise
1. CITRA STOA: PNCC entered into a JV partnership arrangement with
over the Metro Manila Expressway ("MMEX"), and the expanded and
P.T. Citra, an Indonesian company, and created, for the SMMS
delineated NLEX and SLEX.
project, the Citra Metro Manila Tollways Corporation. Approved by
a. Under Section 2 of P.D. 1894, "the franchise granted the
Ramos TRB passed a Resolution approving the periodic toll rate
[MMEX] and all extensions, linkages, stretches and
adjustment of the project
diversions after the approval of the decree that may be
2. MNTC STOA: PNCC assigned usufructuary rights as franchise
constructed after the approval of this decree shall likewise
holder to a JV company to be formed by PNCC and FPIDC. Formed
have a term of 30 years, commencing from the date of
the Manila North Tollway Corp. Approved by Ramos. Effective for 30
completion of the project.
years. TRB passed a Resolution approving the initial toll rates.
b. As expressly set out in P.D. 1113 and reiterated in P.D.
3. SLEX STOA: For the SLEX expansion project, PNCC and Hopewell
1894, PNCC may sell or assign its franchise thereunder
Holdings Limited (HHL), as JV partners, executed a Memorandum of
granted or cede the usufruct thereof upon the President’s
Agreement (MOA). The STOA was to rehabilitate and imporve the
approval. This same provision on franchise transfer and
SLEX project.
cession of usufruct is likewise found in P.D. 1112.
1987 CONSTITUTION
CONTENTIONS OF PETITIONERS​:
1. The Government Corporate Counsel (GCC), acting on PNCC’s
1. Francisco and Hizon, as taxpayers and expressway users, seek to
request, issued Opinion No. 224, affirmed by the Secretary of
nullify the various STOAs and the corresponding TRB resolutions,
Justice, which held: that PNCC may, subject to certain clearance and
which fixed initial rates and/or approving periodic toll rate
approval requirements, enter into a joint venture (JV) agreement
adjustments.
(JVA) with private entities without going into public bidding in the
a. Petitioners likewise assail the constitutionality of Sections 3
selection of its JV partners.
(a) and (d) of P.D. 1112 in relation to Section 8 (b) of P.D.
2. Subsequently, the Department of Public Works and Highways
1894 insofar as they vested the TRB, on one hand, toll
(DPWH), TRB, PNCC, Benpres Holdings Corporation ("Benpres")
operation awarding power while, on the other hand, granting
and First Philippine Holdings Corporation (FPHC), among other
it also the power to issue, modify and promulgate toll rate
private and government entities/agencies, executed a Memorandum
charges.
of Understanding (MOU) envisaged to open the door for the entry of
b. Additionally, petitioners also seek to nullify certain provisions
private capital in the rehabilitation, expansion and extension, as
of P.D. 1113 and P.D. 1894, which uniformly grant the
flagship projects, of the expressways north of Manila, over which
President the power to approve the transfer or assignment of
PNCC has a franchise. To carry out their undertakings under the
usufruct or the rights and privileges thereunder by the
MOU, Benpres and FPHC formed, as their infrastructure holding
tollway operator to third parties, particularly the transfer
arm, the First Philippine Infrastructure and Development Corporation
effected by PNCC to MNTC. As argued, the authority to
(FPIDC)
approve partakes of an exercise of legislative power under
a. Consequently, PNCC entered into financial and/or technical
Article VI, Section 1 of the Constitution.
JVAs with private entities/investors for the toll operation of its
2. Congressman Petitioners and Professional groups: Petitioners also
franchised areas following what may be considered as a
assail the MNTC STOA on the ground that it granted the lenders
standard pattern, viz.:
i. xxx(b) the Republic of the Philippines, through the TRB, as
(Asian Development Bank/World Bank) of MNTC, as project
grantor, PNCC, as operator, and the new corporation, as concessionaire, the unrestricted rights to appoint a substitute entity
investor/concessionaire, with its lender, as the case may be, then to replace MNTC in case of an MNTC Default before prepayment of
execute a Supplemental Toll Operation Agreement ("STOA") to the loans, while also granting said lenders, in appropriate cases, the
implement the TOA previously issued; and
option to extend the "concession or franchise" for a period not
ii. (c) once the requisite STOA approval is given, project prosecution
starts and upon the completion of the toll road project or of a exceeding fifty years coinciding with the full payment of the loans.
 a. assailed and sought to nullify the April 27, 2007 TOC, which
TRB issued to PNCC inasmuch as the TOC worked to
extend PNCC’s tollway operation franchise for the SLEX. As
YPES argued, only the Congress can extend the term of
PNCC’s franchise which expired on May 1, 2007.
ISSUES: ​Arranged based on topic relevance
1. Whether the TRB can enter into TOAs and, at the same time,
promulgate toll rates and rule on petitions for toll rate adjustments:
YES because the law permits TRB to do so.
2. Whether the TRB is vested with the power and authority to grant
what amounts to a franchise over tollway facilities; YES, because the
law validly delegated the power to grant franchise subject to
limitations imposed by law.
NOT IMPT:
3. Whether the President is duly authorized to approve contracts,
inclusive of assignment of contracts, entered into by the TRB relative
to tollway operations; YES
4. Whether the subject STOAs covering the NLEX, SLEX and SMMS
and their respective extensions, linkages, etc. are valid;
5. whether or not an actual case or controversy exists and, relevantly,
whether petitioners in the first three petitions have locus standi: YES
6. whether a public bidding is required or mandatory for these tollway
projects.: NO
RATIO:
A. THE TRB IS VESTED WITH THE POWER TO ENTER INTO
CONTRACTS AND PROMULGATE/MODIFY TOLL RATES1
1. Administrative bodies have expertise in specific matters within the
purview of their respective jurisdictions. Accordingly, the law concedes to
them the power to promulgate implementing rules and regulations
("IRR") to carry out declared statutory policies – provided that the IRR
conforms to the terms and standards prescribed by that statute.
a. NOTE: Petitioners submitted, granting the TRB the power to
award toll contracts is inconsistent with its quasi-judicial
1
P.D. 1112: (d) ​Issue, modify and promulgate from time to time the rates of toll that will be charged the direct
users of toll facilities and upon notice and hearing, to approve or disapprove petitions for the increase thereof.
xxx
P.D. 1894 :xxx(b) For the Metro Manila Expressway and such extensions, linkages, stretches and diversions
of the Expressways which may henceforth be constructed, maintained and operated by the GRANTEE, ​the
GRANTEE shall collect toll at such rates as shall initially be approved by the Toll Regulatory Board. The Toll
Regulatory Board shall have the authority to approve such initial toll rates without the necessity of any notice
and hearing, except as provided in the immediately succeeding paragraph of this Section​. For such purpose,
the GRANTEE shall submit for the approval of the Toll Regulatory Board the toll proposed to be charged the
users​. After approval of the toll rate(s) by the Toll Regulatory Board and publication thereof by the GRANTEE
once in a newspaper of general circulation, the toll shall immediately be enforceable and collectible upon
opening of the expressway to traffic use.xxx
function of adjudicating petitions for initial toll and periodic
toll rate adjustments. ​There cannot, so petitioners would
postulate, be impartiality in such a situation.
2. The Court does not perceive an irreconcilable clash in the enumerated
TRB’s statutory powers, such that the exercise of one negates another.
The ascription of impartiality on the part of the TRB cannot, under the
premises, be accorded cogency. Petitioners have not shown that the
TRB lacks the expertise, competence and capacity to implement its
mandate of balancing the interests of the toll-paying motoring public and
the imperative of allowing the concessionaires to recoup their investment
with reasonable profits. Notably, the PDs provide parameters
3. While not determinative of the issue immediately at hand, the grant to
and the exercise by an administrative agency of regulating and allowing
the operation of public utilities and, at the same time, fixing the fees that
they may charge their customers is now commonplace. It must be
presumed that the Congress, in creating said agencies and clothing them
with both adjudicative powers and contract-making prerogatives, must
have carefully studied such dual authority and found the same not
breaching any constitutional principle or concept So must it be for P.D.
Nos. 1112 and 1894.
B. TRB is vested with the power and authority to grant what
amounts to a franchise over tollway facilities
1. It is abundantly clear that Sections 3 (a) and (e) of P.D. 1112 in relation
to Section 4 of P.D. 1894 have invested the TRB with sufficient power to
grant a qualified person or entity with authority to construct, maintain,
and operate a toll facility and to issue the corresponding toll operating
permit or TOC.2
a. Petitioners Contention: petitioners maintain that only
Congress has, under the 1987 Constitution, the exclusive
prerogative to grant franchise to operate public utilities.3
b. SC: They are unable to agree with the Petitioners. The
limiting thrust of the foregoing constitutional provision on the
2
Section 3. Powers and Duties of the Board. The Board shall have in addition to its general powers of
administration the following powers and duties:
(a) Subject to the approval of the President of the Philippines, to enter into contracts in behalf of the Republic
of the Philippines with persons, natural or juridical, for the construction, operation and maintenance of toll
facilities such as but not limited to national highways, roads, bridges, and public thoroughfares. Said contract
shall be open to citizens of the Philippines and/or to corporations or associations qualified under the
Constitution and authorized by law to engage in toll operations;
xxxx
(e) To grant authority to operate a toll facility and to issue therefore the necessary "Toll Operation Certificate"
subject to such conditions as shall be imposed by the Board including inter alia the following:
3
SEC. 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall
be granted except to citizens of the Philippines or to corporations or associations organized under the laws of
the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise,
certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any
such franchise or right be granted except under the condition that it shall be subject to amendment, alteration,
or repeal by the Congress when the common good so requires
 grant of franchise or other forms of authorization to operate
public utilities may, in context, be stated as follows: (a) the
grant shall be made only in favor of qualified Filipino citizens
or corporations; (b) Congress can impair the obligation of
franchises, as contracts; and (c) no such authorization shall
be exclusive or exceed fifty years.
2. A franchise is basically a legislative grant of a special privilege to a
person Particularly, the term, franchise, "includes not only authorizations
issuing directly from Congress in the form of statute, but also those
granted by administrative agencies to which the power to grant franchise
has been delegated by Congress."
a. The power to authorize and control a public utility is
admittedly a prerogative that stems from the Legislature. Any
suggestion, however, that only Congress has the authority to
grant a public utility franchise is less than accurate. As
stressed in Albano v. Reyes—a case decided under the
aegis of the 1987 Constitution—there is nothing in the
Constitution remotely indicating the necessity of a
congressional franchise before "each and every public utility
may operate," thus:
That the Constitution provides x x x that the issuance of a
franchise, certificate or other form of authorization for the
operation of a public utility shall be subject to amendment,
alteration or repeal by Congress does not necessarily imply x x x
that only Congress has the power to grant such authorization. Our
statute books are replete with laws granting specified agencies in
the Executive Branch the power to issue such authorization for
certain classes of public utilities
b. In such a case, therefore, a special franchise directly
emanating from Congress is not necessary if the law already
specifically authorizes an administrative body to grant a
franchise or to award a contract.
3. In fine, the STOAs TRB entered with PNCC and its JV partners had
the effect of granting authorities to construct, operate and maintain
toll facilities, but with the injection of additional private sector
investments consistent with the intent of P.D. Nos. 1112, 1113 and
1894.
a. Note, there was a provision invalidated: The TRB does not
have the power to give back to PNCC the toll assets and
facilities which were automatically turned over to the
Government, by operation of law, upon the expiration of the
franchise of the PNCC on 1 May 2007. Whatever power the
TRB may have to grant authority to operate a toll facility or to
issue a "[TOC]," such power does not obviously include the
authority to transfer back to PNCC ownership of National
Government assets, like the toll assets and facilities, which
have become National Government property upon the expiry
of PNCC’s franchise
4. At this juncture, the Court wishes to express the observation that
P.D. Nos. 1112, 1113 and 1894, as couched and considered as a
package, very well endowed the TRB with extraordinary powers. For,
subject to well-defined limitations and approval requirements, the
TRB can, by way of STOAs, allow and authorize, as it has allowed
and authorized, a legislative franchisee, PNCC, to share its
concession with another entity or JV partners, the authorization
effectively covering periods beyond May 2007.
a. But to emphasize, the case of the TRB is quite peculiarly
unique as the special law conferring the legislative franchise
likewise vested the TRB with the power to impose conditions
on the franchise, albeit in a limited sense, by excluding from
the investiture the power to amend or modify the stated
lifetime of the franchise, its coverage and the ownership
arrangement of the toll assets following the expiration of the
legislative franchise
C. NOT IMPT: T ​ he President is duly authorized to approve
contracts, inclusive of assignment of contracts, entered into by
the TRB relative to tollway operations
1. The President’s approving authority is of statutory origin. To us, there
is nothing illegal, let alone unconstitutional, with the delegation to the
President of the authority to approve the assignment by PNCC of its
rights and interest in its franchise, the assignment and delegation
being circumscribed by restrictions in the delegating law itself. As the
Court stressed in Kilosbayan v. Guingona, Jr.,81 the rights and
privileges conferred under a franchise may be assigned if authorized
by a statute, subject to such restrictions as may be provided by law,
such as the prior approval of the grantor or a government agency
D. NOT IMPT: T ​ he subject STOAs covering the NLEX, SLEX and
SMMS and their respective extensions, linkages, etc. are valid
1. Petitioners’ presupposition that only Congress has the power to
directly grant franchises is misplaced. Time and again, We have held
that administrative agencies may be empowered by the Legislature
by means of a law to grant franchises or similar authorizations. And
this, We have sufficiently addressed in the present case. To
reiterate, We discussed in Albano that our statute books are replete
with laws granting administrative agencies the power to issue
authorizations. This delegation of legislative power to administrative
agencies is allowed "in order to adapt to the increasing complexity of
modern life."Consequently, We have held that the "privileges
conferred by grant by local authorities as agents for the state
constitute as much a legislative franchise as though the grant had
been made by an act of the Legislature.
Disposition of the Court
WHEREFORE, the petitions in are hereby DENIED for lack of merit. Accordingly, We declare as VALID
AND CONSTITUTIONAL the following:
1.STOA of North Luzon Tollway Project and the TRB Resolution
2. STOA covering the South Metro Manila Skyway and the TRB Resolution
3. the Supplemental Toll Operation Agreement covering the South Luzon Tollway Project or South
Luzon Expressway and the TRB Board resolutions issued pursuant to the said agreement, particularly
the TRB Board resolutions allowing the toll rate increases that are supposed to have been
implemented on June 30, 2010;
4. Section 3, paragraph (a) of Presidential Decree No. 1112, otherwise known as the "Toll Operation
Decree," in relation to Section 3, paragraph (d) thereof and Section 8, paragraph (b) of Presidential
Decree No. 1894; and
5. Section 3, paragraph (e) 3 of P.D. No. 1112 and Section 13 of P.D. No. 1894.
We however declare Clause 11.7 of the Supplemental Toll Operation Agreement between the Republic
of the Philippines, represented by respondent TRB, as grantor, the Philippine National Construction
Corporation, as franchisee, and the Manila North Tollways Corporation ("MNTC") dated April 30, 1998;
and the clause "including if necessary an extension of the CONCESSION PERIOD which in no case
shall exceed a maximum period of fifty (50) years" in Clause 17.5 of the same STOA, as VOID and
UNCONSTITUTIONAL for being contrary to Section 2, Article XII of the 1987 Constitution. We likewise
declare Clauses 8.08 (2) & (3) of the Supplemental Toll Operation Agreement between the Republic of
the Philippines, represented by respondent TRB, as grantor, the Philippine National Construction
Corporation as franchisee, the South Luzon Tollway Corporation as investor, and the Manila Toll
Expressway Systems, Inc. as operator, dated February 1, 2006, as VOID and UNCONSTITUTIONAL.
The petition in G.R. No. 169917 is likewise hereby DENIED for lack of merit. We declare as VALID and
CONSTITUTIONAL the following:
1. Notice of Approval dated May 16, 1995 by former President Fidel V. Ramos on the assignment of
PNCC’s usufructuary rights;
2. the Joint Venture Agreement dated August 29, 1995;
3. the Joint Investment Proposal, etc. dated June 16, 1996;
4. the Supplemental Toll Operation Agreement ("STOA") dated April 30, 1998 and the Notice of
Approval of said STOA dated June 15, 1998 by former President Fidel V. Ramos; and
5. the provisional toll rate increases published February 9, 2005, granted by the TRB.
The petition in G.R. No. 183599 is GRANTED. Accordingly, the Decision dated June 23, 2008 of the
Regional Trial Court, Branch 155 in Pasig City, docketed as SCA No. 3138-PSG, annulling the TOC
covering the SLEX, enjoining the original toll operating franchisee from collecting toll fees in the SLEX,
and ordering the turnover of related assets to the Government, is hereby REVERSED and SET ASIDE,
and the petition filed therein by the Young Professionals and Entrepreneurs of San Pedro, Laguna with
the RTC of Pasig is DISMISSED for lack of merit.
In view of the foregoing dispositions in the petitions at bar, the TRO issued by the Court on August 13,
2010 is hereby ordered lifted, with respect to the petitions in G.R. Nos. 166910, 169917, 173630 and
183599.
The challenge contained in the Supplemental Petition in G.R. No. 166910 against the toll rates subject
of the TRB Notice of Toll Rates published on June 6, 2010, for the SLEX projects, Toll Road Projects 1
and 2 of the new SLTC STOA, and the expanded and rehabilitated SLEX, is remanded to the TRB for
a review of the assailed toll rates to determine whether SLTC and MATES are entitled to the toll fees.