G.R. No. 178647

February 13, 2009

GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS, Petitioner, vs. COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, Respondents. RESOLUTION NACHURA, J.: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil Procedure, petitioner General Santos Coca-Cola Plant Free Workers Union-Tupas (Union) is seeking the reversal of the April 18, 2006 Decision1and May 30, 2007 Resolution2 of the Court of Appeals in CA-G.R. SP No. 80916. The CA affirmed the January 31, 2003 and August 29, 2003 Resolutions3 of the National Labor Relations Commission (NLRC) in favor of respondent Coca-Cola Bottlers Phil., Inc. (CCBPI). Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due to the Asian economic crisis, decrease in sales, and tougher competition. To curb the negative effects on the company, it implemented three (3) waves of an Early Retirement Program.4 Meanwhile, there was an inter-office memorandum sent to all of CCBPIs Plant Human Resources Managers/Personnel Officers, including those of the CCBPI General Santos Plant (CCBPI Gen San) mandating them to put on hold "all requests for hiring to fill in vacancies in both regular and temporary positions in [the] Head Office and in the Plants." Because several employees availed of the early retirement program, vacancies were created in some departments, including the production department of CCBPI Gen San, where members of petitioner Union worked. This prompted petitioner to negotiate with the Labor Management Committee for filling up the vacancies with permanent employees. No resolution was reached on the matter.5 Faced with the "freeze hiring" directive, CCBPI Gen San engaged the services of JLBP Services Corporation (JLBP), a company in the business of providing labor and manpower services, including janitorial services, messengers, and office workers to various private and government offices.6 On January 21, 2002, petitioner filed with the National Conciliation and Mediation Board (NCMB), Regional Branch 12, a Notice of Strike on the ground of alleged unfair labor practice committed by CCBPI Gen San for contracting-out services regularly performed by union members ("union busting"). After conciliation and mediation proceedings before the NCMB, the parties failed to come to an amicable settlement. On July 3, 2002, CCBPI filed a Petition for Assumption of Jurisdiction with the Office of the Secretary of Labor and Employment. On July 26, 2002, the Secretary of Labor issued an Order enjoining the threatened strike and certifying the dispute to the NLRC for compulsory arbitration.71avv phi1

In a Resolution8 dated January 31, 2003, the NLRC ruled that CCBPI was not guilty of unfair labor practice for contracting out jobs to JLBP. The NLRC anchored its ruling on the validity of the "Going-to-the-Market" (GTM) system implemented by the company, which called for restructuring its selling and distribution system, leading to the closure of certain sales offices and the elimination of conventional sales routes. The NLRC held that petitioner failed to prove by substantial evidence that the system was meant to curtail the right to selforganization of petitioners members. Petitioner filed a motion for reconsideration, which the NLRC denied in a Resolution9 dated August 29, 2003. Hence, petitioner filed a Petition for Certiorari before the CA. The CA issued the assailed Decision10 on April 18, 2006 upholding the NLRCs finding that CCBPI was not guilty of unfair labor practice. The CA based its decision on the validity of CCBPIs contracting out of jobs in its production department. It held that the contract between CCBPI and JLBP did not amount to labor-only contracting. It found that JLBP was an independent contractor and that the decision to contract out jobs was a valid exercise of management prerogative to meet exigent circumstances. On the other hand, petitioner failed to adduce evidence to prove that contracting out of jobs by the company resulted in the dismissal of petitioners members, prevented them from exercising their right to self-organization, led to the Unions demise or that their

group was singled out by the company. Consequently, the CA declared that CCBPI was not guilty of unfair labor practice. Its motion for reconsideration having been denied,11 petitioner now comes to this Court seeking the reversal of the CA Decision. The petition is bereft of merit. Hence, we deny the Petition. Under Rule 45 of the Revised Rules on Civil Procedure, only questions of law may be raised in a Petition for Review on Certiorari.12 There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. The resolution of the issue must rest solely on what the law provides on a given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. If the query requires a re-evaluation of the credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation to one another, the issue in that query is factual.13 An examination of the issues raised by petitioner reveals that they are questions of fact. The issues raised, i.e., whether JLBP is an independent contractor, whether CCBPIs contracting-out of jobs to JLBP amounted to unfair labor practice, and whether such action was a valid exercise of management prerogative, call for a reexamination of evidence, which is not within the ambit of this Courts jurisdiction. Moreover, factual findings of the NLRC, an administrative agency deemed to have acquired expertise in matters within its jurisdiction, are generally accorded not only respect but finality especially when such factual findings are affirmed by the CA.14 Furthermore, we find no reversible error in the assailed Decision.1 avvp hi1

It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San was due to the GTM system, which actually affected CCBPIs sales and marketing departments, and had nothing to do with petitioners complaint. However, this does not diminish the NLRCs finding that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged the services of JLBP to meet business exigencies created by the freeze-hiring directive of the CCBPI Head Office. On the other hand, the CA squarely addressed the issue of job contracting in its assailed Decision and Resolution. The CA itself examined the facts and evidence of the parties15 and found that, based on the evidence, CCBPI did not engage in labor-only contracting and, therefore, was not guilty of unfair labor practice. The NLRC found and the same was sustained by the CA that the companys action to contract-out the services and functions performed by Union members did not constitute unfair labor practice as this was not directed at the members right to self-organization. Article 248 of the Labor Code provides: ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS. It shall be unlawful for an employer to commit any of the following unfair labor practices: xxx (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to self-organization; xxx

Unfair labor practice refers to "acts that violate the workers right to organize." The prohibited acts are related to the workers right to self-organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices.16 Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor practice. It was the Union that had the burden of adducing substantial evidence to support its allegations of unfair labor practice,17which burden it failed to discharge. WHEREFORE, the foregoing premises considered, the Petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 80916 are AFFIRMED. SO ORDERED. G.R. No. 161910 June 17, 2008

DEPARTMENT OF AGRARIAN REFORM, rep. by OIC SECRETARY JOSE MARI B. PONCE, petitioner, vs. MA. REGINA I. SAMSON, J. DOMINIC SAMSON, ANNE-MARIE SAMSON and LIESL MARIE EUGENIE SAMSON, respondents. G.R. No. 161930 June 17, 2008

LEOLITO EDA, MARCELO DE CLARO, TORIBIO BENZUELA, DONATA MENDOZA, ARSENIO MACASADIA, FELICIANO DE CLARO, FELICIDAD C. DE CLARO, SALVACION BALONDO, PETRA LEZARDO, CONSOLACION L. DE CLARO, LEONARDO C. DE CLARO, AGRIPINO DE CLARO, VIRGILIO ESTRECOMIN, ELVIE GALANO, EVARESTO DE CLARO, represented by LEOLITO EDA as their attorney-in-fact, REGISTRY OF DEEDS, CALAMBA, LAGUNA PROVINCE and HON. HORACIO R. MORALES, JR., in his capacity as Secretary of Agrarian Reform, petitioners, vs. MA. REGINA I. SAMSON, J. DOMINIC SAMSON, ANNE-MARIE SAMSON and LIESL MARIE EUGENIE SAMSON, respondents. DECISION YNARES-SANTIAGO, J.: These consolidated petitions assail the October 10, 2003 Decision1 of the Court of Appeals in CA-G.R. SP No. 60036, reversing and setting aside the June 29, 20002 Decision of the Office of the President and enjoining the Secretary of the Department of Agrarian Reform (DAR) and the Register of Deeds of Calamba, Laguna from implementing the same. Also assailed is the January 27, 20043 Resolution denying the motion for reconsideration. During his lifetime, Enrique T. Samson4 applied for exemption from the coverage of the Comprehensive Agrarian Reform Program (CARP) over nine (9) parcels of land with an aggregate area of 27.7359 hectares, located in Barangays Pansol and Sukol, Calamba, Laguna, and covered by Transfer Certificate of Title Nos. T151979, T-151980, T-94607, T-94605, T-94606, T-60653, T-203493, T-203494, T-203495 issued by the Register of Deeds for Calamba, Laguna in the name of Samson. In an undated Order issued sometime in 1995, the subject lots were declared exempt from CARP coverage by DAR Regional Director Percival C. Dalugdug.5 The dispositive portion of said Order reads: WHEREFORE, premises considered and pursuant to AO No. 10, Series of 1994, Order is hereby issued approving the exclusion from CARP Coverage of the subject nine (9) parcels of land provided, however, that their disposition or any project to be implemented therein shall be subject to DENRs

clearance and to the Moratorium contained in Section 5 of Executive Order 121 dated August 24, 1993. SO ORDERED.6 On March 19, 1997, petitioners-farmers filed an Opposition/Petition alleging that they received the undated Order of DAR only on January 27, 1997. They prayed that the same be set aside and nullified because although the lands covered by the Order have a slope of more than 18%, the same were fully developed and planted with variety of plants, and to which some of them have their farm houses built.7 In an Order8 dated March 4, 1998, DAR considered the Opposition/Petition filed as an appeal and disposed of the same as follows: WHEREFORE, premises considered order is hereby issued, ordering the Regional Office No. IV to segregate the areas with agricultural developments and cover the same (under) the Comprehensive Agrarian Reform Program (CARP) and exempting the balance. SO ORDERED.9 DAR found no evidence that the subject lots are within the Makiling Forest Reserve Area; and the fact that these are titled lands supports the contention that these are neither public lands nor within the reservation area. It also noted that the ocular inspection report submitted by their team confirms the presence of agriculturally developed portions in the area. Hence, portions of the subject landholding even with a slope of more than 18% may still be covered by CARP due to the presence of agriculturally developed areas. On July 12, 1999, Samson learned that a group of surveyors inspected the subject properties for the purpose of determining which portions should be distributed to his tenants. When he sought clarification from the DAR Provincial Agrarian Reform Officer, Felixberto Kagahastian, as to the purpose of the survey, he was informed for the first time about the "Appeal" filed by the farmers which was subsequently granted by DAR. Samson was able to secure a copy of the March 4, 1998 Order only on July 16, 1999. On August 9, 1999, Samson assailed the Order before the Office of the President arguing that he was not notified of the appeal; that had he been properly apprised, he could have presented evidence to prove that the properties have a slope of 18% or over and are not developed; and that petitioner-farmers are not qualified beneficiaries of the CARP. He denied that he was represented during the alleged ocular inspection conducted by DAR on February 17, 1998.10 On June 29, 2000, the Office of the President rendered a Decision,11 the dispositive portion of which reads: WHEREFORE, foregoing premises considered, the assailed DAR order dated March 4, 1998 is hereby AFFIRMED and the instant appeal DISMISSED. SO ORDERED.12 The Office of the President ruled that any alleged procedural lapses committed in the proceedings before the DAR were cured when Samson interposed the appeal before it which gave him an opportunity to present evidence and to substantiate the claim that the subject land is exempt from CARP coverage. Likewise, the DAR Secretary considered all available records including Samsons application for exemption thus, there is no denial of due process. The Office of the President sustained DARs ruling that the subject properties were within the coverage of CARP after finding that although the land has a slope of more than 18%, there are portions which are agriculturally developed. These findings were based on the supplemental report submitted by Marino A. Austria, DARs Senior Agrarian Reform Technologist on August 23, 1994 and the report of the DAR team who

conducted the ocular inspection on February 17, 1998. The Office of the President also ruled that the Order granting Samsons application for exemption was not supported by evidence.13 Samson appealed to the Court of Appeals which rendered the assailed Decision reversing and setting aside the Decision of the Office of the President and enjoining the DAR Secretary and the Register of Deeds for Calamba, Laguna, from implementing the June 29, 2000 Decision of the Office of the President. The dispositive portion of the Decision reads: WHEREFORE, the instant petition is given DUE COURSE and GRANTED. The respondent DAR Secretary, his successors, agents and representatives, and the Register of Deeds for Calamba, Laguna are hereby enjoined from implementing the Decision dated June 29, 2000 of the Office of the President in O.P. Case No. 99-D-889 as well as those from which it was derived. SO ORDERED.14 The Court of Appeals ruled that there was a final decree of CARP exemption issued in favor of Samson and its reversal by DAR and the Office of the President is grossly irregular. It ruled that DAR committed grave abuse of discretion in entertaining the belated appeal of the farmers. Though technical rules of procedure and evidence are not strictly applied in administrative proceedings, entertaining an appeal filed after more than a year had lapsed is a total disregard of the rules, an abuse of discretion to favor one party. Petitioners filed separate motions for reconsideration which were denied by the Court of Appeals in a Resolution15dated January 27, 2004. Thereafter, they filed separate petitions for review on certiorari which was ordered consolidated by the Court in its Resolution dated March 10, 2004.16 In G.R. No. 161910, petitioner DAR alleged that the Court of Appeals erred: 1. WHEN IT RULED THAT PETITIONER COMMITTED A FAUX PAS WHICH WAS FATAL AND DAMAGING TO THE DEFENSE OF BOTH PUBLIC AND PRIVATE RESPONDENTS AND FAILED TO CONSIDER THE ESTABLISHED FACT, AND EXISTING JURISPRUDENCE, THAT RESPONDENT OR THEIR PREDECESSOR WERE ALLOWED TO BE HEARD AND THERE WAS AVAILMENT THEREOF. 2. WHEN IT REVERSED THE DECISIONS OF THE OFFICE OF THE PRESIDENT AND OF DAR ON THE GROUND THAT PETITIONER COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT ENTERTAINED THE 1997 APPEAL OF THE FARMERS.17 On the other hand, in G.R. No. 161930, petitioners-farmers raised the following issues: I. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE OFFICE OF THE PRESIDENT AS WELL AS THAT OF THE DEPARTMENT OF AGRARIAN REFORM. II. WHETHER THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENTS WERE DENIED DUE PROCESS OF LAW.18 The resolution of these consolidated cases revolves around the propriety of the appeal interposed by farmerspetitioners before the DAR. Petitioners insist there was no grave abuse of discretion when DAR entertained the appeal and that respondents were not denied due process during the proceedings. On the other hand, respondents argue that they were denied due process because they were not able to participate in the

proceedings before the DAR and that their appeal with the Office of the President did not cure the said procedural lapse. Administrative Order No. 13 series of 1990 (A.O. No. 13-90)19 as revised by Administrative Order No. 10 series of 1994 (A.O. No. 10-94)20 provides that the Order of the Regional Director approving or denying the application for exemption shall become final 15 days from receipt of the same unless an appeal is made to the Secretary.21Though the undated Order of Regional Director Dalugdug appears to have been issued sometime in 1995, the farmers-petitioners alleged that they were notified of said Order only on January 27, 1997. Hence, when petitioners-farmers filed their Opposition/Petition on March 19, 1997, the period to appeal had expired. However, we find no error on the part of petitioner DAR when it entertained the appeal of farmers-petitioners after finding the same meritorious, consistent with the declared policies of RA 6657 in giving the welfare of the landless farmers and farm workers the highest consideration. In several instances, even the Court entertained and allowed lapsed appeals in the higher interest of justice.22 Moreover, proceedings before the DAR are summary and pursuant to Section 50 of RA 6657, the department is not bound by technical rules of procedure and evidence, to the end that agrarian reform disputes and other issues will be adjudicated in a just, expeditious and inexpensive action or proceeding.23 It is important to reiterate that administrative agencies are not bound by the technical niceties of law and procedure and the rules obtaining in the courts of law. It is well-settled that rules of procedure are construed liberally in proceedings before administrative bodies and are not to be applied in a very rigid and technical manner, as these are used only to help secure and not to override substantial justice.24 Besides, we find that respondents were not denied due process. In administrative proceedings, a fair and reasonable opportunity to explain ones side suffices to meet the requirements of due process.25 In Casimiro v. Tandog,26 the Court held: The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. In administrative proceedings, such as in the case at bar, procedural due process simply means the opportunity to explain ones side or the opportunity to seek a reconsideration of the action or ruling complained of. "To be heard" does not mean only verbal arguments in court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process. In administrative proceedings, procedural due process has been recognized to include the following: (1) the right to actual or constructive notice of the institution of proceedings which may affect a respondents legal rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in ones favor, and to defend ones rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected.27 In the instant case, it was not shown that farmers-petitioners sent notices or copies of their Opposition/Petition to respondents. However, as correctly ruled by the Office of the President, there is no denial of due process because the DAR Secretary, in issuing the assailed Order, considered all available records of the case at the DAR Regional Office, including respondents application for exemption and its supporting documents, as well as the farmers-petitioners petition/opposition. Neither can the DAR be faulted for sending its notices to respondents predecessors previous address in Quezon City as it was the same address appearing in the undated Order of Director Dalugdug. Thus, it was proper for the said agency to rely on the last known address appearing in their records. In any event, the Court agrees with petitioners that any procedural defect in the proceedings before the DAR was cured when Samson appealed before the Office of the President. In Gonzales v. Civil Service Commission,28 the Court ruled that any seeming defect in the observance of due process is cured by the filing

of a motion for reconsideration and that denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard thereon.29 Likewise, in Autencio v. City Administrator Maara and the City of Cotabato,30the Court ruled that where the party has the opportunity to appeal or seek reconsideration of the action or ruling complained of, defects in procedural due process may be cured.31 It should be noted that although the March 4, 1998 ruling of the DAR had attained finality, the Office of the President still entertained respondents appeal thus giving them the opportunity to be heard. Courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency. Administrative agencies are given wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions, latitude which includes the authority to take judicial notice of facts within their special competence.32 As to whether the subject properties are exempt from CARP coverage, the Court of Appeals did not make any findings inasmuch as it limited its discussion in resolving the procedural issues raised before it. Considering that these issues involve an evaluation of the DARs findings of facts, this Court is constrained to accord respect to such findings. It is settled that factual findings of administrative agencies are generally accorded respect and even finality by this Court, if such findings are supported by substantial evidence. The factual findings of the Secretary of DAR who, by reason of his official position, has acquired expertise in specific matters within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered, modified or reversed.33 The DAR and the Office of the President ruled that only certain portions of the subject properties may be placed under the coverage of the CARP due to the agricultural developments they found thereon. Hence, it ordered that these areas be segregated for CARP coverage while the rest of the subject properties shall remain exempt. The Court notes however that there is no final determination yet as to which portions of the properties are to be covered and whether the farmers-petitioners herein are qualified beneficiaries. As such, respondents may still participate in the segregation of these areas and exercise other rights provided for landowners under RA 6657. WHEREFORE, the instant petitions for review on certiorari are GRANTED. The assailed Decision of the Court Appeals dated October 10, 2003 and the Resolution dated January 27, 2004, in CA-G.R. SP No. 60036 areREVERSED and SET ASIDE. The Order of the Department of Agrarian Reform dated March 4, 1998, as affirmed by the Office of the President, ordering the Regional Office No IV (of the DAR) to segregate the areas with agricultural developments and place the same under the CARP coverage and exempting the rest of the subject properties, is hereby REINSTATED and AFFIRMED. SO ORDERED. G.R. No. 124915 February 18, 2008

RIZAL SECURITY & PROTECTIVE SERVICES INC., and/or RUFINO S. ANTONIO, JR., petitioners, vs. HON. DIRECTOR ALEX E. MARAAN, Regional Sheriff of DOLE, Cordillera Administrative Region, and RICO GOMEZ, ROLANDO TUPAS, DETECIO VICENTE, EDWIN TUPAS, ROBERTO RUIZ, RONNIE LEABRES, DENNIS LEABRES, and SANDY FIGER, respondents. DECISION CHICO-NAZARIO, J.: The Petition brought before this Court is a special civil action under Rule 65 of the Revised Rules of Court, with petitioners praying for the issuance of a writ of certiorari and a temporary restraining order (TRO) enjoining from execution the Order1 dated 24 January 1996 issued by public respondent Alex E. Maraan, then Department of Labor and Employment (DOLE) Regional Director for the Cordillera Administrative Region (CAR), in CAR00-9507-CI-25.

Petitioner Rizal Security and Protective Service, Inc. (Rizal Security) is a corporation organized under Philippine laws and is doing business as a security agency. Petitioner Rufino S. Antonio, Jr. (Antonio) is the president of the aforesaid corporation. On the other hand, private respondents were formerly employed by petitioner Rizal Security as security guards detailed at Rainbow End Village in Baguio City. The instant case arose on 19 May 1995, when private respondents Rico Gomez (Gomez) and Edwin O. Tupas (Tupas), who were then still employed as security guards of petitioner Rizal Security, filed a Complaint with the DOLE-CAR Regional Office, docketed as CAR00-9507-CI-25, to seek assistance regarding petitioners alleged violation of laws on labor standards, to wit: 1. Illegal deduction of wages 2. Underpayment of night shift differential 3. Underpayment of minimum wage 4. Nonpayment of overtime pay and legal holiday pay 5. Nonpayment of 13th month pay Pursuant to the visitorial and enforcement powers of the Secretary of Labor and Employment or his duly authorized representative under Article 128 of the Labor Code, as amended, an inspection was conducted on petitioner Rizal Securitys establishment by the Labor Inspector on 1 June 1995. The said inspection yielded the following violations as indicated in the Notice of Inspection Results dated 9 October 1995: 1. Underpayment of wages 2. Underpayment of COLA 3. Nonpayment of overtime pay 4. Nonpayment of service incentive leave 5. Underpayment of Night-Shift Differential 6. Frequency of Payment 7. Nonpayment of 13th month pay 8. No emergency medicines2 Hearings were scheduled by the DOLE-CAR to give petitioners the opportunity to present their side. In the meantime, two significant events apparently took place. First, private respondents signed and submitted a resignation letter addressed to the personnel manager of petitioner Rizal Security on 10 July 1995, to be effective 1 September 1995.3 And second, a notice of Termination of Services dated 25 July 1995 was sent by Dominador N. Valmonte, Jr., Resident Manager of Rainbow End Village to petitioner Antonio, President of co-petitioner Rizal Security.4Through the said Notice, Rainbow End Village informed petitioner Rizal Security of the termination of their Security Services also effective 1 September 1995.

In a hearing conducted on 23 October 1995 before the DOLE-CAR Regional Office, petitioner Rizal Security submitted a Manifestation and Motion assailing the jurisdiction of the DOLE-CAR Regional Office over the case. Petitioner Rizal Security alleged that the DOLE-CAR Regional Office had lost its jurisdiction to try the case considering there was no longer any employer-employee relationship between petitioner Rizal Security and private respondents when the latter ceased to be employees of petitioner Rizal Security due to their resignation effective 1 September 1995. Thereafter, on 24 January 1996, the DOLE-CAR Regional Office, through public respondent Director Maraan, issued the assailed Order denying petitioner Rizal Securitys Manifestation and Motion. It further ordered the payment of the deficiencies owing the private respondents amounting to P560,989.70. The Order reads: WHEREFORE, in the light of the foregoing, the manifestation and motion filed by the respondent, Rizal Security & Protective Service, through Atty. Salvador M. Solis, is hereby DENIED and is hereby ORDERED to pay the computed deficiencies owing to the affected Security Guards in the total amount of FIVE HUNDRED SIXTY THOUSAND, NINE HUNDRED EIGHTY-NINE PESOS & 70/100 (P560,989.70) covering eight (8) guards which is hereto itemized as to the following employees, to wit: NAME 1. Rico E. Gomez 2. Rolando Tupas 3. Detecio S. Vicente 4. Edwin Tupas 5. Roberto P. Ruiz 6. Ronnie Llabres 7. Dennis Llabres 8. Sandy Figer TOTAL P 99,088.125 P110,377.170 P107,904.92 P113,532.67 P110,604.92 P 9,608.25 P 6,626.60 P 3,247.05 P560,989.705 This office further holds Mr. Dominador Valmonte, Resident Manager of Rainbow End Village, to be jointly and severally liable pursuant to Articles 107 and 109 of the Labor Code of the Philippines. In view hereof, respondents Mr. Rufino Antonio of Rizal Security and Protective Service and Mr. Dominador Valmonte, of Rainbow End Village, are directed to pay the above-stated amount within ten (10) calendar days from receipt hereof. Otherwise, this Office shall be constrained to issue a Writ of Execution resulting from noncompliance thereof.5 Petitioners deny that a copy of such Order was ever officially sent to their undersigned counsel. According to petitioners counsel: Despite the fact that the records of the said case disclose that the appearance of the undersigned as counsel for the petitioner has been duly acknowledged and recognized, no copy of such Order was ever sent officially to the undersigned counsel. The undersigned counsel was able to secure a copy thereof from the DOLE Regional Office in Baguio City only on June 18, 1996.6 On 8 May 1996, counsel for petitioners received a copy of the Writ of Execution dated 12 March 1996 issued by public respondent DOLE-CAR Director Maraan ordering the Regional Sheriff to enforce the Order dated 24 January 1996. Pertinent portions of the Writ of Execution are quoted below: WHEREAS, a copy of said Order was received by respondent on February 1, 1996. WHEREAS, the period for appeal has already expired without respondent having perfected an appeal from said decision.

WHEREAS, the Order has now become final and executory but respondent has not yet effected the necessary payments of the Monetary Awards due the employee/s concerned. NOW THEREFORE, pursuant to the provisions of the Labor Code as amended as well as the Rules in the disposition of Labor Standard Cases in the Regional Office, you are hereby directed to cause Messers. Rufino Antonio/ Dominador Valmonte and/or Rizal Security and Protective Service with business address at 37 Rainbow End Village, Tacay Road, Pinsao Proper, Baguio City or wherever they/he/it may be found to pay the amount of FIVE HUNDRED SIXTY THOUSAND NINE HUNDRED EIGHTY-NINE (P560,989.70) PESOS and 70/100 plus legal fee for execution in the amount of FIVE THOUSAND ONE HUNDRED (P5,100.00) PESOS from the goods, chattels or other properties of the respondent/s and to tender to the concerned employees through the Department of Labor and Employment their claims as aforementioned.7 Petitioners are now asking for the issuance of a writ of certiorari and a Temporary Restraining Order to enjoin public respondents from executing the Order of 24 January 1996 and from enforcing the Writ of Execution. Petitioners pray that this Court order that the case be endorsed, on the ground of lack of jurisdiction, from the DOLE-CAR Regional Office to the National Labor Relations Commission (NLRC) and that judgment be rendered annulling and setting aside the 24 January 1996 Order and quashing the 12 March 1996 Writ of Execution. Petitioners presented the following assignment of errors: I. THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN ISSUING THE ORDER DATED JANUARY 24, 1996 WITHOUT OR IN EXCESS OF HIS JURISDICTION AND IN NOT ENDORSING THE CASE TO THE APPROPRIATE BRANCH OF THE NATIONAL LABOR RELATIONS COMMISSION FOR HEARING. II. THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN ISSUING THE WRIT OF EXECUTION AGAINST PETITIONERS PREMATURELY AND CONTRARY TO LAW OR WITHOUT DUE PROCESS OF LAW. III. GRANTING FOR THE SAKE OF ARGUMENT THAT THE ORDER DATED JANUARY 24, 1996 IS VALID, THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN DECLARING PETITIONER RUFINO ANTONIO AS LIABLE JOINTLY AND SEVERALLY FOR THE PAYMENT OF THE MONETARY CLAIMS OF THE PRIVATE RESPONDENTS. The Petition was initially dismissed by this Court on 24 July 1996 for failure to comply strictly with the Rules of Court in not submitting a certified true copy of the questioned Writ of Execution dated 12 March 1996. However, upon Motion for Reconsideration and compliance with the foregoing requirement, this Court resolved to grant the reconsideration, thus reinstating the Petition. The pivotal issue to be resolved in this Petition is whether public respondent DOLE-CAR Regional Director Maraan acted without jurisdiction in issuing the Order dated 24 January 1996. Certiorari being a remedy narrow in its scope and inflexible in character, it is limited to the issue of jurisdiction and grave abuse of discretion.8 This is the same rule followed in applying the Supreme Courts power to review labor cases which is limited to the issue of jurisdiction and grave abuse of discretion.9 As this Court has eloquently explained in Condo Suite Club Travel, Inc. v. National Labor Relations Commission10: Resort to a special civil action for certiorari under Rule 65 of the Rules of Court is limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and grave abuse of discretion amounting to lack of jurisdiction. The respondent acts without jurisdiction if he does not have the legal power to determine the case. There is excess of jurisdiction where the respondent, being clothed with the power to determine the case, oversteps his authority as determined by law. And there is grave abuse of discretion where the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to be equivalent to lack of jurisdiction. x x x.

This Court has explained the role and function of Rule 65 as an extraordinary remedy in numerous pronouncements, among which is the case of Caltex Refinery Employees Association v. Brillantes11 citing Flores v. National Labor Relations Commission,12 to wit: It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases -- those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRCs evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. (Emphasis supplied.) After a careful scrutiny of petitioners arguments, this Court sustains the jurisdiction of public respondent DOLECAR Director Maraan over CAR00-9507-CI-25 and, thus, finds that the writ of certiorari does not lie herein. In support of their position, petitioners call the attention of this Court to the fact that Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices stipulates: Section 3. Complaints where no employer-employee relationship actually exists. Where employeremployee relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. Accordingly, if on the face of the complaint, it can be ascertained that employer-employee relationship no longer exists, the case, whether or not accompanied by an allegation of illegal dismissal, shall immediately be endorsed by the Regional Director to the appropriate Branch of the National Labor Relations Commission (NLRC). It follows, petitioners contend, that where the employer-employee relationship no longer exists by the fact of its severance, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the Labor Arbiters. Petitioners claim that the supervening event of private respondents voluntarily resigning from petitioners employ in the course of the proceedings in CAR00-9507-CI-25 automatically ousted public respondent DOLE-CAR Director Maraan of his jurisdiction to continue to hear and determine said case. Petitioners insist that public respondent DOLE-CAR Director Maraan should have desisted from further handling the case and should have instead indorsed it to the appropriate regional branch of the NLRC for further hearing, since the jurisdiction over the same belongs to the Labor Arbiter. Petitioners reliance on Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices is inappropriate. While it is true that the quoted provision states that where employee-employer relations have been severed, complaints or claims for payment of monetary benefits fall within the exclusive and original jurisdiction of Labor Arbiters; however, such is not the case in the present Petition. To emphasize, at the time private respondents instituted CAR00-9507-CI-25 by filing a complaint with the DOLE-CAR Regional Office, they were still employees of petitioners. Private respondents Gomez and Tupas filed the Complaint on 19 May 1995 before the DOLE-CAR Regional Office, seeking a routine inspection to be conducted on petitioner Rizal Security relative to underpayment in wages and nonpayment of other benefits under the Labor Code. At the time of filing of the Complaint on said date, the employer-employee relationship between private respondents and petitioner Rizal Security had not yet been severed. As alleged by petitioner Rizal Security itself, deemed as an admission on its part, the employer-employee relations between petitioner Rizal Security and private respondents were terminated on 1 September 1995, or more than three months after the institution of CAR00-9507-CI-25 before the DOLE Regional Office. Well-settled is the rule that the jurisdiction of a court over the subject matter of an action is determined by the allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to

recover upon all or some of the claims asserted therein.13 Time and again, this Court has held that the allegations in the complaint determine the nature of the action and, consequently, the jurisdiction of the courts.14 It is but axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein, the character of the relief prayed for, and the law existing at the time of the filing of the complaint or petition.15 It has already been established in a plethora of cases that once jurisdiction is vested, the same is retained up to the end of litigation.16 Neither can it be ousted by subsequent events, although of a character which would have prevented jurisdiction from attaching in the first instance. Even subsequent legislation vesting jurisdiction over such proceedings in another tribunal will not affect such jurisdiction.17 Considering that it is uncontroverted that there still existed an employer-employee relationship between petitioner Rizal Security and private respondents at the time of filing of the complaint on 19 May 1995, and that the case is one involving violations of labor standard provisions of the Labor Code, this Court finds that DOLE-CAR Director Maraan properly retained jurisdiction to hear and decide CAR00-9507-CI-25 and issue the assailed Order dated 24 January 1996, pursuant to the power vested in him by Article 128(b) of the Labor Code, which states: Art. 128. Visitorial and Enforcement Power. xxxx (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. Secondary to the issue of jurisdiction is the issue of whether or not public respondent DOLE-CAR Director Maraan acted without or in excess of his jurisdiction in issuing the Writ of Execution dated 12 March 1996. Petitioners insist that the issuance of the said Writ of Execution was unlawful and premature, without legal basis or due process of law, and implemented against a person not a party litigant. Petitioners maintain that since the DOLE-CAR Regional Office never furnished petitioners counsel a copy of the 24 January 1996 Order, then the said Order never became final with respect to them, and cannot be the subject of a Writ of Execution. Rule II, Section 4 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides that notices and copies of orders shall be served on the parties or their duly authorized representatives at their last known office or home addresses or, if they are represented by counsel, through the latter. This procedure on service of Orders and Decisions as provided under the Rules on the Disposition of Labor Standards Cases in the Regional Offices is in line with the established rule that notice to counsel is notice to party and when a party is represented by counsel, notices should be made upon the counsel of record at his given address to which notices of all kinds emanating from the court should be sent. Petitioners counsel never received an official copy of the 24 January 1996 Order and was only able to personally secure a copy thereof from the DOLE-CAR Regional Office in Baguio City on 18 June 1996.18 The

records support this allegation. The following is a quote from an internal DOLE correspondence attached to the records of the case: Is it okay with you if we will schedule this for another hearing despite the Dismissal of respondents petition for certiorari? In the interest of justice respondents did not receive a copy of our Order dated 1/24/96 as it was "returned to sender" by the post office.19 A Notice and a copy of the Order dated 24 January 1996 was sent by the DOLE-CAR Regional Office through registered mail to the address of petitioners then counsel-of-record Atty. Salvador Solis (Atty. Solis) on 29 January 1996. However, the same was not received by Atty. Solis. Indicated on the envelope containing the Notice of the Order dated 24 January 1996 were the following notations by the post office on 5 February 1996: RTS20 for better address No #5 at Sto. Nino Street Not at (illegible) No such number #5 at Sto. Nino St. 2-5-96 This Court notes that prior notices of the hearings were all sent to the very same address and were received always by petitioners counsel. It is a source of no little wonder, therefore, why the post office reported that there was "[n]o such number #5 at Sto. Nio St." We could only conclude, at this time, that the notice was not received by the petitioners not through their fault. Thus, we say that the post office failed to deliver the Notice and copy of the 24 January 1996 Order thereto. This fact was admitted by public respondent.21 Private respondents further argue that petitioners may already be deemed notified of the contents of the 24 January 1996 Order for it merely reiterated the findings in the report on the inspection conducted on 1 June 1995 which was served and duly received by petitioners. This Court is very much aware that the nature of proceedings before the DOLE Regional Office shall be summary and non-litigious in nature, and that the technicalities of law and procedure and the rules governing admissibility and sufficiency of evidence obtaining in the courts of law do not strictly apply thereto, subject, only to the requirements of due process.22 However, the foregoing is obviously not the notice contemplated under the Labor Code. The inspection report is undeniably a distinct and separate document from the Order dated 24 January 1996. More than merely restating the findings on the inspection report, the Order of 24 January 1996 ruled on the Manifestation and Motion of the petitioners assailing the jurisdiction of the DOLE-CAR Regional Office by refusing to dismiss and retaining jurisdiction over CAR00-9507-CI-25. Procedural rules are tools designed to facilitate the adjudication of cases and not defeat justice.23 While the Court, in some instances, allows a relaxation in the application of the rules, it was never intended to forge a bastion for a violation of due process. And although it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy administration of justice. The essence of due process is to provide an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or seek a reconsideration of the action or ruling complained of. Rule III, Section 17 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides that an aggrieved party may file a motion for reconsideration of the Order of the Regional Office within seven calendar days from receipt by him of a copy of said Order. The judgment becomes "final and executory" when the reglementary period to appeal lapses, and no appeal is perfected within such period. In this case, petitioners never had the opportunity to contest the Order of 24 January 1996 considering that they never received a notice of the issuance thereof nor were they provided with a copy of the same.

Without receipt by the petitioners of the notice and copy of the Order dated 24 January 1996, the same has not yet become final and executory and the Writ of Execution issued pursuant thereto on 12 March 1996 was premature and without legal basis. This renders the Writ of Execution fatally defective and, thus, null. Finally, the Court declines from addressing at this point the question of petitioner Antonios solidary liability with co-petitioner Rizal Security for the payment of the monetary awards granted to the private respondents. Considering that the Order dated 24 January 1996 has not yet attained finality and the Writ of Execution dated 12 March 1996 has been quashed by reason thereof, to resolve the last issue now would be injudicious and would pre-empt whatever action public respondent DOLE-CAR Director Maraan may still take on CAR00-9507CI-25. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly. Thus, for reasons of comity and convenience, our courts of justice will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case.24 WHEREFORE, premises considered, the Court PARTIALLY GRANTS the instant Petition and ISSUES a Writ of Certiorari to quash the Writ of Execution dated 12 March 1996 for being issued prematurely. The Department of Labor and Employment Cordillera Administrative Region is further DIRECTED to proceed with CAR00-9507-CI-25 with DISPATCH. No costs. SO ORDERED.

A.M. No. RTJ-06-2017

June 19, 2008

LT. GEN. ALFONSO P. DAGUDAG (Ret.), complainant, vs. JUDGE MAXIMO G.W. PADERANGA, Regional Trial Court, Branch 38, Cagayan de Oro City, respondent. DECISION PER CURIAM, J.: This is a complaint for gross ignorance of the law and conduct unbecoming a judge filed by retired Lt. Gen. Alfonso P. Dagudag (Gen. Dagudag), Head of Task Force Sagip Kalikasan, against Judge Maximo G. W. Paderanga (Judge Paderanga), Presiding Judge of the Regional Trial Court, Branch 38, Cagayan de Oro City. On or about 30 January 2005, the Region VII Philippine National Police Regional Maritime Group (PNPRMG) received information that MV General Ricarte of NMC Container Lines, Inc. was shipping container vans containing illegal forest products from Cagayan de Oro to Cebu. The shipments were falsely declared as cassava meal and corn grains to avoid inspection by the Department of Environment and Natural Resources (DENR).1 On 30 and 31 January 2005, a team composed of representatives from the PNPRMG, DENR, and the Philippine Coast Guard inspected the container vans at a port in Mandaue City, Cebu. The team discovered the undocumented forest products and the names of the shippers and consignees: Container Van No. NCLU 2000492-22GI IEAU 2521845-2210 NOLU 2000682-22GI INBU 3125757-BB2210 Shipper Polaris Chua Polaris Chua Rowena Balangot Rowena Balangot Consignee Polaris Chua Polaris Chua Rowena Balangot Rowena Balangot

NCLU 20001591-22GI GSTU 339074-US2210 CRXU 2167567 NCLU 2001570-22GI

Jovan Gomez Jovan Gomez Raffy Enriquez Raffy Enriquez

Jovan Gomez Jovan Gomez Raffy Enriquez Raffy Enriquez

The crew of MV General Ricarte failed to produce the certificate of origin forms and other pertinent transport documents covering the forest products, as required by DENR Administrative Order No. 07-94. Gen. Dagudag alleged that, since nobody claimed the forest products within a reasonable period of time, the DENR considered them as abandoned and, on 31 January 2005, the Provincial Environment and Natural Resources Office (PENRO) Officer-in-Charge (OIC), Richard N. Abella, issued a seizure receipt to NMC Container Lines, Inc.2 On 1 February 2005, Community Environment and Natural Resources Office (CENRO) OIC Loreto A. Rivac (Rivac) sent a notice to NMC Container Lines, Inc. asking for explanation why the government should not confiscate the forest products.3 In an affidavit4 dated 9 February 2005, NMC Container Lines, Inc.s Branch Manager Alex Conrad M. Seno stated that he did not see any reason why the government should not confiscate the forest products and that NMC Container Lines, Inc. had no knowledge of the actual content of the container vans. On 2, 9, and 15 February 2005, DENR Forest Protection Officer Lucio S. Canete, Jr. posted notices on the CENRO and PENRO bulletin boards and at the NMC Container Lines, Inc. building informing the unknown owner about the administrative adjudication scheduled on 18 February 2005 at the Cebu City CENRO. Nobody appeared during the adjudication.5 In a resolution6 dated 10 March 2005, Rivac, acting as adjudication officer, recommended to DENR Regional Executive Director Clarence L. Baguilat that the forest products be confiscated in favor of the government. In a complaint7 dated 16 March 2005 and filed before Judge Paderanga, a certain Roger C. Edma (Edma) prayed that a writ of replevin be issued ordering the defendants DENR, CENRO, Gen. Dagudag, and others to deliver the forest products to him and that judgment be rendered ordering the defendants to pay him moral damages, attorneys fees, and litigation expenses. On 29 March 2005, Judge Paderanga issued a writ of replevin8 ordering Sheriff Reynaldo L. Salceda to take possession of the forest products. In a motion to quash the writ of replevin,9 the defendants DENR, CENRO, and Gen. Dagudag prayed that the writ of replevin be set aside: (1) Edmas bond was insufficient; (2) the forest products were falsely declared as cassava meal and corn grains; (3) Edma was not a party-in-interest; (4) the forest products were not covered by any legal document; (5) nobody claimed the forest products within a reasonable period of time; (6) the forest products were already considered abandoned; (7) the forest products were lawfully seized under the Revised Forestry Code of the Philippines; (8) replevin was not proper; (9) courts could not take cognizance of cases pending before the DENR; (10) Edma failed to exhaust administrative remedies; and (11) the DENR was the agency responsible for the enforcement of forestry laws. In a motion to dismiss ad cautelam10 dated 12 April 2005, the defendants prayed that the complaint for replevin and damages be dismissed: (1) the real defendant is the Republic of the Philippines; (2) Edma failed to exhaust administrative remedies; (3) the State cannot be sued without its consent; and (4) Edma failed to allege that he is the owner or is entitled to the possession of the forest products. In an order11 dated 14 April 2005, Judge Paderanga denied the motion to quash the writ of replevin for lack of merit. Gen. Dagudag filed with the Office of the Court Administrator (OCA) an affidavit-complaint12 dated 8 July 2005 charging Judge Paderanga with gross ignorance of the law and conduct unbecoming a judge. Gen. Dagudag stated that: During the x x x hearing, [Judge Paderanga] showed manifest partiality in favor of x x x Edma. DENRs counsel was lambasted, cajoled and intimidated by [Judge Paderanga] using words such as "SHUT UP" and "THATS BALONEY."

xxxx Edma in the replevin case cannot seek to recover the wood shipment from the DENR since he had not sought administrative remedies available to him. The prudent thing for [Judge Paderanga] to have done was to dismiss the replevin suit outright. xxxx [Judge Paderangas] act[s] of taking cognizance of the x x x replevin suit, issuing the writ of replevin and the subsequent denial of the motion to quash clearly demonstrates [sic] ignorance of the law. In its 1st Indorsement13 dated 1 August 2005, the OCA directed Judge Paderanga to comment on the affidavitcomplaint. In his comment14 dated 6 September 2005, Judge Paderanga stated that he exercised judicial discretion in issuing the writ of replevin and that he could not delve into the issues raised by Gen. Dagudag because they were related to a case pending before him. In its Report15 dated 10 July 2006, the OCA found that Judge Paderanga (1) violated the doctrine of exhaustion of administrative remedies; (2) violated the doctrine of primary jurisdiction; and (3) used inappropriate language in court. The OCA recommended that the case be re-docketed as a regular administrative matter; that Judge Paderanga be held liable for gross ignorance of the law and for violation of Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary;16 and that he be fined P30,000. In its Resolution17 dated 16 August 2006, the Court re-docketed the case as a regular administrative matter and required the parties to manifest whether they were willing to submit the case for decision based on the pleadings already filed. Judge Paderanga manifested his willingness to submit the case for decision based on the pleadings already filed.18 Since Gen. Dagudag did not file any manifestation, the Court considered him to have waived his compliance with the 16 August 2006 Resolution.19 The Court finds Judge Paderanga liable for gross ignorance of the law and for conduct unbecoming a judge. The DENR is the agency responsible for the enforcement of forestry laws. Section 4 of Executive Order No. 192 states that the DENR shall be the primary agency responsible for the conservation, management, development, and proper use of the countrys natural resources. Section 68 of Presidential Decree No. 705, as amended by Executive Order No. 277, states that possessing forest products without the required legal documents is punishable. Section 68-A states that the DENR Secretary or his duly authorized representatives may order the confiscation of any forest product illegally cut, gathered, removed, possessed, or abandoned. In the instant case, the forest products were possessed by NMC Container Lines, Inc. without the required legal documents and were abandoned by the unknown owner. Consequently, the DENR seized the forest products. Judge Paderanga should have dismissed the replevin suit outright for three reasons. First, under the doctrine of exhaustion of administrative remedies, courts cannot take cognizance of cases pending before administrative agencies. In Factoran, Jr. v. Court of Appeals,20 the Court held that: The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. (Emphasis ours) In Dy v. Court of Appeals,21 the Court held that a party must exhaust all administrative remedies before he can resort to the courts. In Paat v. Court of Appeals,22 the Court held that:

This Court in a long line of cases has consistently held that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before courts judicial power can be sought. The premature invocation of courts intervention is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action. (Emphasis ours) In the instant case, Edma did not resort to, or avail of, any administrative remedy. He went straight to court and filed a complaint for replevin and damages. Section 8 of Presidential Decree No. 705, as amended, states that (1) all actions and decisions of the Bureau of Forest Development Director are subject to review by the DENR Secretary; (2) the decisions of the DENR Secretary are appealable to the President; and (3) courts cannot review the decisions of the DENR Secretary except through a special civil action for certiorari or prohibition. In Dy,23 the Court held that all actions seeking to recover forest products in the custody of the DENR shall be directed to that agency not the courts. In Paat,24 the Court held that: Dismissal of the replevin suit for lack of cause of action in view of the private respondents failure to exhaust administrative remedies should have been the proper course of action by the lower court instead of assuming jurisdiction over the case and consequently issuing the writ [of replevin]. Exhaustion of the remedies in the administrative forum, being a condition precedent prior to ones recourse to the courts and more importantly, being an element of private respondents right of action, is too significant to be waylaid by the lower court. xxxx Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and forfeiture issued by the DENR in pursuance to the authority given under P.D. 705, as amended. Section 8 of the said law is explicit that actions taken by the Director of the Bureau of Forest Development concerning the enforcement of the provisions of the said law are subject to review by the Secretary of DENR and that courts may not review the decisions of the Secretary except through a special civil action for certiorari or prohibition. (Emphasis ours) Second, under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative agencies of special competence. The DENR is the agency responsible for the enforcement of forestry laws. The complaint for replevin itself stated that members of DENRs Task Force Sagip Kalikasan took over the forest products and brought them to the DENR Community Environment and Natural Resources Office. This should have alerted Judge Paderanga that the DENR had custody of the forest products, that administrative proceedings may have been commenced, and that the replevin suit had to be dismissed outright. In Tabao v. Judge Lilagan25 a case with a similar set of facts as the instant case the Court held that: The complaint for replevin itself states that the shipment x x x [was] seized by the NBI for verification of supporting documents. It also states that the NBI turned over the seized items to the DENR "for official disposition and appropriate action." x x x To our mind, these allegations [should] have been sufficient to alert respondent judge that the DENR has custody of the seized items and that administrative proceedings may have already been commenced concerning the shipment. Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative agencies of special competence. x x x The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. (Emphasis ours) In Paat,26 the Court held that:

[T]he enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of the administrative agencys prerogative. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. (Emphasis ours) Third, the forest products are already in custodia legis and thus cannot be the subject of replevin. There was a violation of the Revised Forestry Code and the DENR seized the forest products in accordance with law. In Calub v. Court of Appeals,27 the Court held that properties lawfully seized by the DENR cannot be the subject of replevin: Since there was a violation of the Revised Forestry Code and the seizure was in accordance with law, in our view the [properties seized] were validly deemed in custodia legis. [They] could not be subject to an action for replevin. For it is property lawfully taken by virtue of legal process and considered in the custody of the law, and not otherwise. (Emphasis ours) Judge Paderangas acts of taking cognizance of the replevin suit and of issuing the writ of replevin constitute gross ignorance of the law. In Tabao,28 the Court held that: Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative of special competence. x x x [T]he plaintiff in the replevin suit who [sought] to recover the shipment from the DENR had not exhausted the administrative remedies available to him. The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. Under Section 78-A of the Revised Forestry Code, the DENR secretary or his authorized representatives may order the confiscation of forest products illegally cut, gathered, removed, or possessed or abandoned. xxxx Respondent judges act of taking cognizance of the x x x replevin suit clearly demonstrates ignorance of the law. x x x [J]udges are expected to keep abreast of all laws and prevailing jurisprudence. Judges are duty bound to have more than just a cursory acquaintance with laws and jurisprudence. Failure to follow basic legal commands constitutes gross ignorance of the law from which no one may be excused, not even a judge. (Emphasis ours) Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that competence is a prerequisite to the due performance of judicial office. Section 3 of Canon 6 states that judges shall take reasonable steps to maintain and enhance their knowledge necessary for the proper performance of judicial duties. Judges should keep themselves abreast with legal developments and show acquaintance with laws.29 The rule that courts cannot prematurely take cognizance of cases pending before administrative agencies is basic. There was no reason for Judge Paderanga to make an exception to this rule. The forest products were in the custody of the DENR and Edma had not availed of any administrative remedy. Judge Paderanga should have dismissed the replevin suit outright. In Espaol v. Toledo-Mupas,30 the Court held that: Being among the judicial front-liners who have direct contact with the litigants, a wanton display of utter lack of familiarity with the rules by the judge inevitably erodes the confidence of the public in the

competence of our courts to render justice. It subjects the judiciary to embarrassment. Worse, it could raise the specter of corruption. When the gross inefficiency springs from a failure to consider so basic and elemental a rule, a law, or a principle in the discharge of his or her duties, a judge is either too incompetent and undeserving of the exalted position and title he or she holds, or the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority. The OCA found Judge Paderanga liable for using inappropriate language in court: "We x x x find respondents intemperate use of "Shut up!" and "Baloney!" well nigh inappropriate in court proceedings. The utterances are uncalled for."31 Indeed, the 14 and 22 April 2005 transcripts of stenographic notes show that Judge Paderanga was impatient, discourteous, and undignified in court: Atty. Luego: Your Honor, we want to have this motion because that is... Judge Paderanga: I am asking you why did you not make any rejoinder[?] xxxx Atty. Luego: I apologize, Your Honor. We are ready to... Judge Paderanga: Ready to what? Proceed. Atty. Luego: Yes, Your Honor. We filed this motion to quash replevin, Your Honor, on the grounds, first and foremost, it is our contention, Your Honor, with all due respect of [sic] this Honorable Court, that the writ of replevin dated March 29, 2005 was improper, Your Honor, for the reasons that the lumber, subject matter of this case, were apprehended in accordance with... Judge Paderanga: Where is your proof that it was apprehended? Where is your proof? Is that apprehension proven by a seizure receipt? Where is your seizure receipt? Atty. Luego: Under the rules... Judge Paderanga: Where is your seizure receipt? You read your rules. What does [sic] the rules say? Where in your rules does it say that it does not need any seizure receipt? You look at your rules. You point out the rules. You take out your rules and then you point out. Do you have the rules? xxxx Atty. Luego: Your Honor, there was no seizure receipt, but during the apprehension, Your Honor, there was no claimant. Judge Paderanga: Answer me. Is there a seizure receipt? Atty. Luego: But during the apprehension, Your Honor, no owner has [sic] appeared. xxxx Atty. Luego: According to [the] rules, Your Honor, if there is no... Judge Paderanga: Whom are you seizing it from? To [sic] whom are you taking it from?

Atty. Luego: From the shipping company, Your Honor. xxxx Atty. Luego: Your Honor please, the shipping company denied the ownership of that lumber. xxxx Atty. Luego: But the shipping company, Your Honor,... Judge Paderanga: Shut up. Thats baloney. You are seizing it from nobody. Then how can you seize it from the shipping company. Are you not? You are a lawyer. Who is in possession of the property? The shipping company. Why did you not issue [a] seizure receipt to the shipping company? Atty. Luego: But the... May I continue, Your Honor? xxxx Judge Paderanga: Stop talking about the shipping company. Still you did not issue a seizure receipt here. Well, Im telling you you should have issued [a] seizure receipt to the shipping company. xxxx Judge Paderanga: You are a lawyer. You should know how to write pleadings. You write the pleadings the way it should be, not the way you think it should be. Atty. Luego: Im sorry, Your Honor. Judge Paderanga: You are an officer of the court. You should be careful with your language. You say that I am wrong. Its you who are [sic] wrong because you do not read the law. xxxx Judge Paderanga: Then you read the law. How dare you say that the Court is wrong. xxxx Judge Paderanga: Are you not representing [the DENR]? Atty. Luego: Yes, in this case, Your Honor. Judge Paderanga: Then you are representing them. They are your clients. What kind of a lawyer are you?32 xxxx Atty. Tiamson: Specifically it was stated in the [Factoran] versus Court of Appeals [case] that the Court should not interfere, Your Honor. Judge Paderanga: No. xxxx

Judge Paderanga: The problem with you people is you do not use your heads. Atty. Tiamson: We use our heads, your Honor. xxxx Atty. Tiamson: Your Honor, we would like to put on record that we use our heads, your Honor.33 (Emphasis ours) Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that judges shall be patient, dignified, and courteous in relation to lawyers. Rule 3.04, Canon 3 of the Code of Judicial Conduct states that judges should be patient and courteous to lawyers, especially the inexperienced. They should avoid the attitude that the litigants are made for the courts, instead of the courts for the litigants. Judicial decorum requires judges to be temperate in their language at all times. They must refrain from inflammatory, excessively rhetoric, or vile language.34 They should (1) be dignified in demeanor and refined in speech; (2) exhibit that temperament of utmost sobriety and self-restraint; and (3) be considerate, courteous, and civil to all persons who come to their court.35 In Juan de la Cruz v. Carretas,36 the Court held that: A judge who is inconsiderate, discourteous or uncivil to lawyers x x x who appear in his sala commits an impropriety and fails in his duty to reaffirm the peoples faith in the judiciary. He also violates Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary. xxxx It is reprehensible for a judge to humiliate a lawyer x x x. The act betrays lack of patience, prudence and restraint. Thus, a judge must at all times be temperate in his language. He must choose his words x x x with utmost care and sufficient control. The wise and just man is esteemed for his discernment. Pleasing speech increases his persuasiveness. Equanimity and judiciousness should be the constant marks of a dispenser of justice. A judge should always keep his passion guarded. He can never allow it to run loose and overcome his reason. He descends to the level of a sharp-tongued, ill-mannered petty tyrant when he utters harsh words x x x. As a result, he degrades the judicial office and erodes public confidence in the judiciary. Judge Paderangas refusal to consider the motion to quash the writ of replevin, repeated interruption of the lawyers, and utterance of "shut up," "thats baloney," "how dare you say that the court is wrong," "what kind of a lawyer are you?," and "the problem with you people is you do not use your heads" are undignified and very unbecoming a judge. In Office of the Court Administrator v. Paderanga,37 the Court already reprimanded Judge Paderanga for repeatedly saying "shut up," being arrogant, and declaring that he had "absolute power" in court. He has not changed. Section 8, Rule 140 of the Rules of Court classifies gross ignorance of the law as a serious offense. It is punishable by (1) dismissal from the service, forfeiture of benefits, and disqualification from reinstatement to any public office; (2) suspension from office without salary and other benefits for more than three months but not exceeding six months; or (3) a fine of more than P20,000 but not exceeding P40,000.38 Section 10 of Rule 140 classifies conduct unbecoming a judge as a light offense. It is punishable by (1) a fine of not less than P1,000 but not exceeding P10,000; (2) censure; (3) reprimand; or (4) admonition with warning.39 The Court notes that this is Judge Paderangas third offense. In Office of the Court Administrator v. Paderanga,40the Court held him liable for grave abuse of authority and simple misconduct for unceremoniously citing a lawyer in contempt while declaring himself as having "absolute power" and for repeatedly telling a lawyer to "shut up." InBeltran, Jr. v. Paderanga,41 the Court held him liable for undue delay in rendering an order for the delay of nine months in resolving an amended formal offer of exhibits. In both cases, the Court sternly warned Judge Paderanga that the commission of another offense shall be dealt with more severely. The

instant case and the two cases decided against him demonstrate Judge Paderangas arrogance, incorrigibility, and unfitness to become a judge. Judge Paderanga has two other administrative cases pending against him one42 for gross ignorance of the law, knowingly rendering an unjust judgment, and grave abuse of authority, and the other43 for gross misconduct, grave abuse of authority, and gross ignorance of the law. The Court will not hesitate to impose the ultimate penalty on those who have fallen short of their accountabilities. It will not tolerate any conduct that violates the norms of public accountability and diminishes the faith of the people in the judicial system.44 WHEREFORE, the Court finds Judge Maximo G.W. Paderanga, Regional Trial Court, Branch 38, Cagayan de Oro City, GUILTY of GROSS IGNORANCE OF THE LAW and UNBECOMING CONDUCT. Accordingly, the CourtDISMISSES him from the service, with forfeiture of all retirement benefits, except accrued leave credits, and with prejudice to reinstatement or appointment to any public office, including government-owned or controlled corporations. SO ORDERED. G.R. No. 180666 February 18, 2009

LEODEGARIO R. BASCOS, JR. and ELEAZAR B. PAGALILAUAN, Petitioners, vs. ENGR. JOSE B. TAGANAHAN and OFFICE OF THE OMBUDSMAN, Respondents. DECISION CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court challenging the Decision2dated 28 May 2007 and the Resolution3 dated 20 November 2007 of the Court of Appeals in CA-G.R. SP No. 92533. In its assailed Decision, the appellate court affirmed the Decision4 dated 19 July 2005 and the Order5dated 20 October 2005 of the Office of the Ombudsman in OMB-C-A-02-0379-I, which found herein petitioners Leodegario R. Bascos, Jr. (Bascos) and Eleazar B. Pagalilauan (Pagalilauan) guilty of Dishonesty and sentenced them to a penalty of dismissal from service. The assailed Resolution of the appellate court denied petitioners Motion for Reconsideration of its earlier Decision. The antecedents of the case, both factual and procedural, are set forth hereunder. The Contract On 14 December 2000, a Contract for the Supply, Delivery, Installation and Commissioning of Two (2) Units [of] 2.5 Tons Per Hour Rice Mill[s]6 (Contract) was entered into by the National Food Authority (NFA), represented by Acting Administrator Domingo F. Panganiban, as purchaser, and Alheed International Trading Corporation (Alheed Corp.), represented by its President Herculano C. Co, Jr., as supplier. The Contract provided, inter alia, that Alheed Corp. shall supply, deliver, install, test and commission two units of rice mills, including their standard tools, equipment and accessories, for a total contract price of P19,398,042.00. Seventy percent (70%) of the contract price shall be paid by the NFA upon the delivery of the equipment at the site, and the submission of delivery receipt(s)/original invoice(s) and of proof of payment of customs duties; while the remaining thirty percent (30%) shall be paid after the installation, testing, and commissioning of the equipment, and the issuance by the appropriate NFA Field Office of a Certificate of Final Acceptance upon the submission by Alheed Corp. of other documents which may be required. The requirements which Alheed Corp. must submit, before the appropriate NFA Field Office shall issue the Certificate of Final Acceptance, were identified as follows:

(1) Certificate of Final Acceptance by the Technical Services Directorate [TSD]7; (2) Certificate of conformity to specifications and inspection report by the TSD Project Engineer at the site; (3) Guarantee Bond posted by Alheed International Trading Corporation in favor of NFA in the amount equivalent to 10% of the Contract Price with a statement under oath of full payment of premium which shall be effective within a period of one year from the final acceptance. The payments to be made in favor of Alheed Corp. under the Contract shall be subject to NFA accounting and auditing rules and regulations. The Contract further provided that the labor materials, equipment, delivery and installation at the site, as well as the testing and commissioning of the rice mills, shall be undertaken by Alheed Corp. at its own account. Commissioning was defined therein as the completion of the mechanical and electrical systems of the rice mills, tested with and without load at the appropriate NFA Field Office. The testing with load shall be conducted for at least eight hours of continuous operation for three times. Special provisions were also incorporated in the Contract. One of these special provisions stated that no substitution of materials or equipment including brand and type shall be made, unless otherwise approved in writing by the purchaser NFA, as represented by its Administrator; and another which provided that the duly authorized representative of the purchaser may, at any time, inspect the basic unit as well as the progress of the installation. Said inspection shall not be interpreted as exempting or diminishing the liability of the supplier Alheed Corp. as provided in the Contract. Per the Contract, the two rice mills were initially set to be supplied and installed by Alheed Corp. at the NFA grain centers that were being constructed at Talavera, Nueva Ecija and Sablayan, Mindoro Occidental. Instead, the rice mills were eventually installed at San Jose, Occidental Mindoro and Pili, Camarines Sur. The Complaint-Affidavit On 23 August 2002, private respondent Jose B. Taganahan (Taganahan), an Engineer-III (with Salary Grade 19) at the TSD of NFA, filed a Complaint-Affidavit8 with the Office of the Ombudsman in connection with the allegedly anomalous acceptance and full payment of the two rice mills installed in San Jose, Occidental Mindoro and in Pili, Camarines Sur. The Complaint-Affidavit charged (1) herein petitioner Bascos, in his capacity as Director of the TSD (Salary Grade 26); (2) herein petitioner Pagalilauan, in his capacity as the Chief Grains Operations Officer (Salary Grade 24) of the NFA; (3) Tomas R. Escarez (Escarez), in his capacity as Provincial Manager (Salary Grade 24) of the NFA for the province of Occidental Mindoro; and (4) Alheed Corp., represented by its President Heculano C. Co, Jr., with Falsification of Public Documents, violation of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act), violation of Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees), and Perjury. Taganahan related that from 30 June to 6 July 2001, he went on an official travel to San Jose, Occidental Mindoro, to conduct the test-milling of a newly installed 2.5 ton per hour (TPH) rice mill. Upon returning to the NFA Central Office in Quezon City, Taganahan submitted on 9 July 2001 a Travel Accomplishment Report9 to petitioner Bascos, then TSD Director, through Acting Facility Installation and Maintenance Division (FIMD) Chief Ramoncito Padilla. Taganahan reported that: (1) the test milling could not be conducted on the newly installed rice mill because the electric generator at the site broke down during the initial hour of the rice mill operation; (2) some rice mill components which should be installed were either undelivered or uninstalled; and (3) some of the installed rice mill components did not conform with the plans and specifications. Based on the foregoing, Taganahan recommended that the payment of the thirty percent (30%) balance of the contract price of the rice mill be deferred until: (1) the supplier, Alheed Corp., shall have completed the delivery and installation of the rice mill components according to plans and specifications; (2) the rice mill commissioning, through proper milling tests, had been successfully completed; and (3) the training of NFA technicians and other contractual obligations of Alheed Corp. had been fully complied with.

The above violations notwithstanding, petitioners Bascos and Pagalilauan still submitted to the NFA Accounting Department on 3 July 2001 the voucher10 for the full payment of the rice mill installed at San Jose, Occidental Mindoro. Attached to the voucher were the following allegedly spurious documents, viz: a) Certificate of Inspection11 dated June 11, 2001 xxx signed by [herein petitioner] Eleazar B. Pagalilauan (who misrepresented himself as a "TSD Engineer," despite the fact that he never passed any board examination for engineers), falsely certifying to the complete installation of [the] contracted [rice mill]; b) Accomplishment Report12 dated 13 June 2001 xxx prepared by [petitioner] Eleazar B. Pagalilauan (who misrepresented himself this time as "Project Manager," despite the fact that such was not his position or designation), and duly noted by [herein petitioner] Leodegario R. Bascos, Jr., falsely certifying to the alleged 100% delivery and installation of the contracted [rice mill]; c) Certificate of Conformity to Specifications13 dated June 14, 2001 x x x issued by [petitioner] Leodegario R. Bascos, Jr., falsely attesting to the 100% installation of the [rice mill], and to its conformity with all specifications; and d) Letter14 of [Herculano C. Co, Jr.], dated June 05, 2002 xxx, addressed to then NFA Administrator Edgar S. Asuncion, falsely stating that Alheed Corp. had successfully installed and commissioned the Buivanngo [rice mill] at San Jose, Occidental Mindoro, and requesting payment of the 30% balance of the contract amount. Attached to the voucher were a Certificate of Complete Installation, Commissioning and Final Acceptance,15 dated 20 July 2001, signed by Escarez as NFA Provincial Manager for Occidental Mindoro, falsely certifying the complete installation and commissioning of the rice mill at San Jose, Occidental Mindoro. On the basis of the aforementioned documents, the check payment for the balance of the contract price of the rice mill was released in favor of Alheed Corp. on 17 August 2001. Taganahan claimed that the Certification dated 20 July 2001 by Escarez was spurious considering that the latter even sent a radio message16 to petitioner Bascos on 4 July 2001, stating that the test milling of the rice mill in San Jose, Occidental Mindoro could not proceed as scheduled because the electric generator malfunctioned during the test run. Subsequently, Escarez sent a fax message, dated 26 September 2001 and addressed to Melvin Co of Alheed Corp., which scheduled the commissioning of the said rice mill on 27 to 29 September 2001, or more than two months after Escarez certified that the rice mill was already duly commissioned. Taganahan asserted that the findings in his report were bolstered by an audit report IAS No. H-00617 dated 6 September 2001 of the Internal Audit Services (IAS) Department of the NFA, submitted to the NFA Administrator, which cited many violations of the Contract and the plans and specifications relative to the supply and installation of the rice mills in question. In reply to the audit report, petitioner Bascos sent a Memorandum18 dated 22 November 2001 to the NFA Administrator, untruthfully declaring therein that Alheed Corp. had complied with all the requirements of the Contract as certified by TSD Engineers. Taganahan averred, however, that contrary to petitioner Bascos claims, there was actually no issuance from any of the TSD Engineers certifying the completeness of the delivery, installation, and commissioning of the rice mill; hence, petitioner Pagalilauan "unprofessionally and anomalously" signed the needed certifications himself, as "TSD Engineer" in one and as "Project Manager" in another, attesting that the project had been completed. Insofar as the other rice mill was concerned, Taganahan asseverated that petitioner Pagalilauan inveigled TSD Engineers Bobby Quilit and James Vincent Del Valle to sign the pre-dated certifications of the supposedly complete installation of the rice mill in Pili, Camarines Sur and its conformity to NFA specifications. Subsequently, the IAS submitted another audit report, IAS No. A-002 dated 7 January 2002, which cited thirteen (13) other violations of the Contract and of the NFA specifications. Taganahan maintained that the second audit report, in effect, confirmed his allegations of the various violations of the Contract committed by Alheed Corp.

On account of the allegations in Taganahans Complaint-Affidavit, an administrative case for Dishonesty and Grave Misconduct, docketed as OMB-C-A-02-0379-I,19 was filed against petitioners Bascos and Pagalilauan, as well as Escarez. Decision of the Office of the Ombudsman On 19 July 2005, the Office of the Ombudsman promulgated its Decision20 in OMB-C-A-02-0379-I, making the following findings: Initially, this Office finds the absence of enough proof to hold the herein respondents responsible for the irregularities committed in the installation of the [rice mill] at Pili, Camarines Sur. Worth mentioning herein is the observation that the certificates relative to the completion of the project thereat were issued by the officials at the NFA Office therein. Hence, the anomaly therein, if any, is the responsibility of the latter. Viewed therewith, this Office in the instant decision shall deal solely on the alleged irregularities committed in the execution of the project for the installation of [the rice mill] at San Jose, Occidental Mindoro, and in the claimed anomalous full payment of the contract amount to Alheed Corporation. Significantly, [herein petitioner] Bascos is being held liable herein for the issuance of the Certificate of Conformity to Specifications on June 14, 2001, attesting to the 100% delivery and installation of the [rice mill] as of June 5, 2001, while [herein petitioner] Pagalilauan for his Certificate of Inspection, dated June 11, 2001, certifying to the supply, delivery, installation and commissioning of the [rice mill], and its compliance with the contract specifications, as per the inspection conducted on June 9, 2001, and finally, Escarez for having signed the Certificate of Complete Installation, Commissioning and Final Acceptance, dated July 20, 2001, of Acting Plant Engineer Agosto Quijano in the "Noted" portion thereof. Ruling on this case, records revealed that [petitioners] Bascos and Pagalilauan in their issuances committed falsification by causing it to appear in their individual certifications that the newly installed [rice mill] at the NFA San Jose Office in issue had been inspected and found in conformity with the NFA approved specifications, knowing fully (sic) well that the supplier, Alheed Corporation, violated certain provisions of the contract and/or committed deviations thereof without the approval of the NFA Administrator.21 (Emphasis ours.) The Office of the Ombudsman noted more specifically the transgressions committed by petitioners Bascos and Pagalilauan: The deficiencies/defects in the project were made known to [herein petitioner] Bascos prior to the release of the full payment to Alheed Corporation on August 17, 2001. Supporting the same was the observation that FIMD Officer-In-Charge Ramoncito Padilla in a letter, dated June 15, 2001, to [petitioner] Bascos submitted the [Travel/ Project Accomplishment Report] of TSD Engineers Carlito Castro and Placido Asprec who supervised the el