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Admin Law consolidated cases for Chapter 1 and 2

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Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 79956 January 29, 1990CORDILLERA BROAD COALITION,petitioner,vs.COMMISSION ON AUDIT,respondent.G.R. No. 82217 January 29, 1990LILIA YARANON and BONA BAUTISTA, assisted by their spouses, BRAULIO D. YARANON and DEMETRIO D. BAUTISTA, JR., respectively; JAMES BRETT and SINAI C. HAMADA, petitioners,vs.THE COMMISSION ON AUDIT, HON. CATALINO MACARAIG, Executive Secretary, HON. VICENTE JAYME, Secretary of Finance, HON. GUILLERMO N. CARAGUE, Secretary of Budget and Management, and HON. ROSALINA S. CAJUCOM, OIC National Treasurer, respondents.CORTES,J.:In these consolidated petitions, the constitutionality of Executive Order No. 220, dated July 15, 1987, which created the (Cordillera Administrative Region, is assailed on the primary ground that it pre-empts the enactment of an organic act by the Congress and the creation of' the autonomous region in the Cordilleras conditional on the approval of the act through a plebiscite.Relative to the creation of autonomous regions, the constitution, in Article X, provides:AUTONOMOUS REGIONSSec. 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.SEC. 16. The President shall exercise general supervision over autonomous regions to ensure that laws are faithfully executed.Sec. 17. All powers, functions, and responsibilities not granted Constitution or by law to the autonomous regions shall be vested in the National Government.Sec. 18. The Congress shall enact an organic act for each autonomous region with the assistance and participation of the regional consultative commission composed of representatives appointed by the President from a list of nominees from multi-sectoral bodies. The organic act shall define the basic structure of government for the region consisting of the executive department and legislative assembly, both of which shall be elective and representative of the constituent political units. The organic acts shall likewise provide for special courts with personal, family and property law jurisdiction consistent with the provisions of this Constitution and national laws.The creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region.Sec. 19. The first Congress elected under this Constitution shall, within eighteen months from the time of organization of both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and the Cordilleras.Sec. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over:(1) Administrative organization;(2) Creation of sources of revenues;(3) Ancestral domain and natural resources;(4) Personal, family and property relations;(5) Regional urban and rural planning development;(6) Economic, social and tourism development ;(7) Educational policies;(8) Preservation and development of the cultural heritage; and(9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region.Sec. 21. The preservation of peace and order within the regions shall be the responsibility of the local police agencies which shall be organized, maintained, supervised, and utilized in accordance with applicable laws. The defense and security of the regions shall be the responsibility of the National Government.A study of E.O. No. 220 would be incomplete Without reference to its historical background.In April 1986, just after the EDSA Revolution, Fr. Conrado M. Balweg, S.V.D., broke off on ideological grounds from the Communist Party of the Philippines (CPP) and its military arm the New People's Army. (NPA).After President Aquino was installed into office by People Power, she advocated a policy of national reconciliation. She called on all revolutionary forces to a peace dialogue. The CPLA heeded this call of the President. After the preliminary negotiations, President Aquino and some members of her Cabinet flew to Mt. Data in the Mountain Province on September 13, 1986 and signed with Fr. Conrado M. Balweg (As Commander of the CPLA and Ama Mario Yag-ao (as President of Cordillera Bodong Administration, the civil government of the CPLA a ceasefire agreement that signified the cessation of hostilities (WHEREAS No. 7, E.O. 220).The parties arrived at an agreement in principle: the Cordillera people shall not undertake their demands through armed and violent struggle but by peaceful means, such as political negotiations. The negotiations shall be a continuing process until the demands of the Cordillera people shall have been substantially granted.On March 27, 1987, Ambassador Pelaez [Acting as Chief Negotiator of the government], in pursuance of the September 13, 1986 agreement, flew to the Mansion House, Baguio City, and signed with Fr. Balweg (as Chairman of the Cordillera panel) a joint agreement, paragraphs 2 and 3 of which state:Par. 2- Work together in drafting an Executive Order to create a preparatory body that could perform policy-making and administrative functions and undertake consultations and studies leading to a draft organic act for the Cordilleras.Par. 3- Have representatives from the Cordillera panel join the study group of the R.P. Panel in drafting the Executive Order.Pursuant to the above joint agreement, E.O. 220 was drafted by a panel of the Philippine government and of the representatives of the Cordillera people.On July 15, 1987, President Corazon C. Aquino signed the joint draft into law, known now as E.O. 220. [Rejoinder G.R. No. 82217, pp. 2-3].Executive Order No. 220, issued by the President in the exercise of her legislative powers under Art. XVIII, sec. 6 of the 1987 Constitution, created the Cordillera Administrative Region (CAR) , which covers the provinces of Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio [secs. 1 and 2]. It was created to accelerate economic and social growth in the region and to prepare for the establishment of the autonomous region in the Cordilleras [sec. 3]. Its main function is to coordinate the planning and implementation of programs and services in the region, particularly, to coordinate with the local government units as well as with the executive departments of the National Government in the supervision of field offices and in identifying, planning, monitoring, and accepting projects and activities in the region [sec. 5]. It shall also monitor the implementation of all ongoing national and local government projects in the region [sec. 20]. The CAR shall have a Cordillera Regional Assembly as a policy-formulating body and a Cordillera Executive Board as an implementing arm [secs. 7, 8 and 10]. The CAR and the Assembly and Executive Board shall exist until such time as the autonomous regional government is established and organized [sec. 17].Explaining the rationale for the issuance of E.O. No. 220, its last "Whereas" clause provides:WHEREAS, pending the convening of the first Congress and the enactment of the organic act for a Cordillera autonomous region, there is an urgent need, in the interest of national security and public order, for the President to reorganize immediately the existing administrative structure in the Cordilleras to suit it to the existing political realities therein and the Government's legitimate concerns in the areas, without attempting to pre-empt the constitutional duty of the first Congress to undertake the creation of an autonomous region on a permanent basis.During the pendency of this case, Republic Act No. 6766 entitled "An Act Providing for an Organic Act for the Cordillera Autonomous Region," was enacted and signed into law. The Act recognizes the CAR and the offices and agencies created under E.O. No. 220 and its transitory nature is reinforced in Art. XXI of R.A. No. 6766, to wit:SEC. 3. The Cordillera Executive Board, the Cordillera Region Assembly as well as all offices and agencies created under Execute Order No. 220 shall cease to exist immediately upon the ratification of this Organic Act.All funds, properties and assets of the Cordillera Executive Board and the Cordillera Regional Assembly shall automatically be transferred to the Cordillera Autonomous Government.IIt is well-settled in our jurisprudence that respect for the inherent and stated powers and prerogatives of the law-making body, as well as faithful adherence to the principle of separation of powers, require that its enactment be accorded the presumption of constitutionality. Thus, in any challenge to the constitutionality of a statute, the burden of clearly and unequivocally proving its unconstitutionality always rests upon the challenger. Conversely, failure to so prove will necessarily defeat the challenge.We shall be guided by these principles in considering these consolidated petitions.In these cases, petitioners principally argue that by issuing E.O. No. 220 the President, in the exercise of her legislative powers prior to the convening of the first Congress under the 1987 Constitution, has virtually pre-empted Congress from its mandated task of enacting an organic act and created an autonomous region in the Cordilleras. We have carefully studied the Constitution and E.O. No. 220 and we have come to the conclusion that petitioners' assertions are unfounded. Events subsequent to the issuance of E.O. No. 220 also bear out this conclusion.1. A reading of E.O. No. 220 will easily reveal that what it actually envisions is the consolidation and coordination of the delivery of services of line departments and agencies of the National Government in the areas covered by the administrative region as a step preparatory to the grant of autonomy to the Cordilleras. It does not create the autonomous region contemplated in the Constitution. It merely provides for transitory measures in anticipation of the enactment of an organic act and the creation of an autonomous region. In short, it prepares the ground for autonomy. This does not necessarily conflict with the provisions of the Constitution on autonomous regions, as we shall show later.The Constitution outlines a complex procedure for the creation of an autonomous region in the Cordilleras. A regional consultative commission shall first be created. The President shall then appoint the members of a regional consultative commission from a list of nominees from multi-sectoral bodies. The commission shall assist the Congress in preparing the organic act for the autonomous region. The organic act shall be passed by the first Congress under the 1987 Constitution within eighteen months from the time of its organization and enacted into law. Thereafter there shall be held a plebiscite for the approval of the organic act [Art. X, sec. 18]. Only then, after its approval in the plebiscite, shall the autonomous region be created.Undoubtedly, all of these will take time. The President, in 1987 still exercising legislative powers, as the first Congress had not yet convened, saw it fit to provide for some measures to address the urgent needs of the Cordilleras in the meantime that the organic act had not yet been passed and the autonomous region created. These measures we find in E.O. No. 220. The steps taken by the President are obviously perceived by petitioners, particularly petitioner Yaranon who views E.O. No. 220 as capitulation to the Cordillera People's Liberation Army (CPLA) of Balweg, as unsound, but the Court cannot inquire into the wisdom of the measures taken by the President, We can only inquire into whether or not the measures violate the Constitution. But as we have seen earlier, they do not.2. Moreover, the transitory nature of the CAR does not necessarily mean that it is, as petitioner Cordillera Broad Coalition asserts, "the interim autonomous region in the Cordilleras" [Petition, G.R. No. 79956, p. 25].The Constitution provides for a basic structure of government in the autonomous region composed of an elective executive and legislature and special courts with personal, family and property law jurisdiction [Art. X, sec. 18]. Using this as a guide, we find that E.O. No. 220 did not establish an autonomous regional government. It created a region, covering a specified area, for administrative purposes with the main objective of coordinating the planning and implementation of programs and services [secs. 2 and 5]. To determine policy, it created a representative assembly, to convene yearly only for a five-day regular session, tasked with, among others, identifying priority projects and development programs [sec. 9]. To serve as an implementing body, it created the Cordillera Executive Board composed of the Mayor of Baguio City, provincial governors and representatives of the Cordillera Bodong Administration, ethno-linguistic groups and non-governmental organizations as regular members and all regional directors of the line departments of the National Government asex-officiomembers and headed by an Executive Director [secs. 10 and 11]. The bodies created by E.O. No. 220 do not supplant the existing local governmental structure, nor are they autonomous government agencies. They merely constitute the mechanism for an "umbrella" that brings together the existing local governments, the agencies of the National Government, the ethno-linguistic groups or tribes, and non-governmental organizations in a concerted effort to spur development in the Cordilleras.The creation of the CAR for purposes of administrative coordination is underscored by the mandate of E.O. No. 220 for the President and appropriate national departments and agencies to make available sources of funds for priority development programs and projects recommended by the CAR [sec. 21] and the power given to the President to call upon the appropriate executive departments and agencies of the National Government to assist the CAR [sec. 24].3. Subsequent to the issuance of E.O. No. 220, the Congress, after it was convened, enacted Republic Act No. 6658 which created the Cordillera Regional Consultative Commission. The President then appointed its members. The commission prepared a draft organic act which became the basis for the deliberations of the Senate and the House of Representatives. The result was Republic Act No. 6766, the organic act for the Cordillera autonomous region, which was signed into law on October 23, 1989. A plebiscite for the approval of the organic act, to be conducted shortly, shall complete the process outlined in the Constitution.In the meantime, E.O. No. 220 had been in force and effect for more than two years and we find that, despite E.O. No. 220, the autonomous region in the Cordilleras is still to be created, showing the lack of basis of petitioners' assertion. Events have shown that petitioners' fear that E.O. No. 220 was a "shortcut" for the creation of the autonomous region in the Cordilleras was totally unfounded.Clearly, petitioners' principal challenge has failed.IIA collateral issue raised by petitioners is the nature of the CAR: whether or not it is a territorial and political subdivision. The Constitution provides in Article X:Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided.xxx xxx xxxSec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.We have seen earlier that the CAR is not the autonomous region in the Cordilleras contemplated by the Constitution, Thus, we now address petitioners' assertion that E. 0. No. 220 contravenes the Constitution by creating a new territorial and political subdivision.After carefully considering the provisions of E.O. No. 220, we find that it did not create a new territorial and political subdivision or merge existing ones into a larger subdivision.1. Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does not have a separate juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the powers that are normally granted to public corporations,e.g. the power to sue and be sued, the power to own and dispose of property, the power to create its own sources of revenue, etc. As stated earlier, the CAR was created primarily to coordinate the planning and implementation of programs and services in the covered areas.The creation of administrative regions for the purpose of expediting the delivery of services is nothing new. The Integrated Reorganization Plan of 1972, which was made as part of the law of the land by virtue of Presidential Decree No. 1, established eleven (11) regions, later increased to twelve (12), with definite regional centers and required departments and agencies of the Executive Branch of the National Government to set up field offices therein. The functions of the regional offices to be established pursuant to the Reorganization Plan are: (1) to implement laws, policies, plans, programs, rules and regulations of the department or agency in the regional areas; (2) to provide economical, efficient and effective service to the people in the area; (3) to coordinate with regional offices of other departments, bureaus and agencies in the area; (4) to coordinate with local government units in the area; and (5) to perform such other functions as may be provided by law. [See Part II, chap. III, art. 1, of the Reorganization Plan].We can readily see that the CAR is in the same genre as the administrative regions created under the Reorganization Plan, albeit under E.O. No. 220 the operation of the CAR requires the participation not only of the line departments and agencies of the National Government but also the local governments, ethno-linguistic groups and non-governmental organizations in bringing about the desired objectives and the appropriation of funds solely for that purpose.2. Then, considering the control and supervision exercised by the President over the CAR and the offices created under E.O. No. 220, and considering further the indispensable participation of the line departments of the National Government, the CAR may be considered more than anything else as a regional coordinating agency of the National Government, similar to the regional development councils which the President may create under the Constitution [Art. X, sec. 14]. These councils are "composed of local government officials, regional heads of departments and other government offices, and representatives from non-governmental organizations within the region for purposes of administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and social growth and development of the units in the region." [Ibid.] In this wise, the CAR may be considered as a more sophisticated version of the regional development council.IIIFinally, petitioners incidentally argue that the creation of the CAR contravened the constitutional guarantee of the local autonomy for the provinces (Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province) and city (Baguio City) which compose the CAR.We find first a need to clear up petitioners' apparent misconception of the concept of local autonomy.It must be clarified that the constitutional guarantee of local autonomy in the Constitution [Art. X, sec. 2] refers to theadministrativeautonomy of local government units or, cast in more technical language, the decentralization of government authority [Villegas v. Subido, G.R. No. L-31004, January 8, 1971, 37 SCRA 1]. Local autonomy is not unique to the 1987 Constitution, it being guaranteed also under the 1973 Constitution [Art. II, sec. 10]. And while there was no express guarantee under the 1935 Constitution, the Congress enacted the Local Autonomy Act (R.A. No. 2264) and the Decentralization Act (R.A. No. 5185), which ushered the irreversible march towards further enlargement of local autonomy in the country [Villegas v. Subido,supra.]On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987 Constitution contemplates the grant ofpoliticalautonomy and not just administrative autonomy these regions. Thus, the provision in the Constitution for an autonomous regional government with a basic structure consisting of an executive department and a legislative assembly and special courts with personal, family and property law jurisdiction in each of the autonomous regions [Art. X, sec. 18].As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for political autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent territorial and political subdivisions already enjoying local or administrative autonomy into an autonomous region vested with political autonomy.Anent petitioners' objection, we note the obvious failure to show how the creation of the CAR has actually diminished the local autonomy of the covered provinces and city. It cannot be over-emphasized that pure speculation and a resort to probabilities are insufficient to cause the invalidation of E.O. No. 220.WHEREFORE, the petitions are DISMISSED for lack of merit.SO ORDERED.Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Grio-Aquino, Medialdea and Regalado, JJ., concur.Separate OpinionsGUTIERREZ, JR.,J.,concurring:I concur in the result because with the enactments of Republic Acts No. 6658 and No. 6766, the questioned Executive Order No. 220 has been superseded. The basic issues have become moot and academic. The Cordillera Regional Consultative Commission and the Cordillera Autonomous Region have taken over the functions of the Cordillera Administrative Region. The latter office has becomefunctus oficio. Moreover, there can be no question about the validity of its acts because if it is notde jure, at the very least it is ade factooffice.I make these observations because I have grave doubts about the authority of the President to create such an office as the Cordillera Administrative Region (CAR) by mere executivefiat. The office has to be created by statute. To me, the functions of CAR go beyond ordinary planning and preparation for the real office. In fact, Congress had to pass Republic Act 6658 for this purpose. CAR was an agency which accelerated economic and social growth in the Cordilleras, coordinated the implementation of programs, accepted projects and activities in the Cordilleras, and discharged basic administrative functions. It was ade factoagency whose acts are valid but not ade jureor fully valid creation.Separate OpinionsGUTIERREZ, JR.,J.,concurring:I concur in the result because with the enactments of Republic Acts No. 6658 and No. 6766, the questioned Executive Order No. 220 has been superseded. The basic issues have become moot and academic. The Cordillera Regional Consultative Commission and the Cordillera Autonomous Region have taken over the functions of the Cordillera Administrative Region. The latter office has becomefunctus oficio. Moreover, there can be no question about the validity of its acts because if it is notde jure, at the very least it is ade factooffice.I make these observations because I have grave doubts about the authority of the President to create such an office as the Cordillera Administrative Region (CAR) by mere executivefiat. The office has to be created by statute. To me, the functions of CAR go beyond ordinary planning and preparation for the real office. In fact, Congress had to pass Republic Act 6658 for this purpose. CAR was an agency which accelerated economic and social growth in the Cordilleras, coordinated the implementation of programs, accepted projects and activities in the Cordilleras, and discharged basic administrative functions. It was ade factoagency whose acts are valid but not ade jureor fully valid creation.

As long as you enjoyed the experience, then it is definitely worth a while, and even if you didnt it would at least make a good story.Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 138334 August 25, 2003ESTELA L. CRISOSTOMO,Petitioner,vs.The Court of Appeals and CARAVAN TRAVEL & TOURS INTERNATIONAL, INC.,Respondents.D E C I S I O NYNARES-SANTIAGO,J.:In May 1991, petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed "Jewels of Europe". The package tour included the countries of England, Holland, Germany, Austria, Liechstenstein, Switzerland and France at a total cost of P74,322.70. Petitioner was given a 5% discount on the amount, which included airfare, and the booking fee was also waived because petitioners niece, Meriam Menor, was respondent companys ticketing manager.Pursuant to said contract, Menor went to her aunts residence on June 12, 1991 a Wednesday to deliver petitioners travel documents and plane tickets. Petitioner, in turn, gave Menor the full payment for the package tour. Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on Saturday, two hours before her flight on board British Airways.Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the first leg of her journey from Manila to Hongkong. To petitioners dismay, she discovered that the flight she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight scheduled on June 14, 1991. She thus called up Menor to complain.Subsequently, Menor prevailed upon petitioner to take another tour the "British Pageant" which included England, Scotland and Wales in its itinerary. For this tour package, petitioner was asked anew to pay US$785.00 or P20,881.00 (at the then prevailing exchange rate of P26.60). She gave respondent US$300 or P7,980.00 as partial payment and commenced the trip in July 1991.Upon petitioners return from Europe, she demanded from respondent the reimbursement of P61,421.70, representing the difference between the sum she paid for "Jewels of Europe" and the amount she owed respondent for the "British Pageant" tour. Despite several demands, respondent company refused to reimburse the amount, contending that the same was non-refundable.1Petitioner was thus constrained to file a complaint against respondent for breach of contract of carriage and damages, which was docketed as Civil Case No. 92-133 and raffled to Branch 59 of the Regional Trial Court of Makati City.In her complaint,2petitioner alleged that her failure to join "Jewels of Europe" was due to respondents fault since it did not clearly indicate the departure date on the plane ticket. Respondent was also negligent in informing her of the wrong flight schedule through its employee Menor. She insisted that the "British Pageant" was merely a substitute for the "Jewels of Europe" tour, such that the cost of the former should be properly set-off against the sum paid for the latter.For its part, respondent company, through its Operations Manager, Concepcion Chipeco, denied responsibility for petitioners failure to join the first tour. Chipeco insisted that petitioner was informed of the correct departure date, which was clearly and legibly printed on the plane ticket. The travel documents were given to petitioner two days ahead of the scheduled trip. Petitioner had only herself to blame for missing the flight, as she did not bother to read or confirm her flight schedule as printed on the ticket.Respondent explained that it can no longer reimburse the amount paid for "Jewels of Europe", considering that the same had already been remitted to its principal in Singapore, Lotus Travel Ltd., which had already billed the same even if petitioner did not join the tour. Lotus European tour organizer, Insight International Tours Ltd., determines the cost of a package tour based on a minimum number of projected participants. For this reason, it is accepted industry practice to disallow refund for individuals who failed to take a booked tour.3Lastly, respondent maintained that the "British Pageant" was not a substitute for the package tour that petitioner missed. This tour was independently procured by petitioner after realizing that she made a mistake in missing her flight for "Jewels of Europe". Petitioner was allowed to make a partial payment of only US$300.00 for the second tour because her niece was then an employee of the travel agency. Consequently, respondent prayed that petitioner be ordered to pay the balance of P12,901.00 for the "British Pageant" package tour.After due proceedings, the trial court rendered a decision,4the dispositive part of which reads:WHEREFORE, premises considered, judgment is hereby rendered as follows:1. Ordering the defendant to return and/or refund to the plaintiff the amount of Fifty Three Thousand Nine Hundred Eighty Nine Pesos and Forty Three Centavos (P53,989.43) with legal interest thereon at the rate of twelve percent (12%) per annum starting January 16, 1992, the date when the complaint was filed;2. Ordering the defendant to pay the plaintiff the amount of Five Thousand (P5,000.00) Pesos as and for reasonable attorneys fees;3. Dismissing the defendants counterclaim, for lack of merit; and4. With costs against the defendant.SO ORDERED.5The trial court held that respondent was negligent in erroneously advising petitioner of her departure date through its employee, Menor, who was not presented as witness to rebut petitioners testimony. However, petitioner should have verified the exact date and time of departure by looking at her ticket and should have simply not relied on Menors verbal representation. The trial court thus declared that petitioner was guilty of contributory negligence and accordingly, deducted 10% from the amount being claimed as refund.Respondent appealed to the Court of Appeals, which likewise found both parties to be at fault. However, the appellate court held that petitioner is more negligent than respondent because as a lawyer and well-traveled person, she should have known better than to simply rely on what was told to her. This being so, she is not entitled to any form of damages. Petitioner also forfeited her right to the "Jewels of Europe" tour and must therefore pay respondent the balance of the price for the "British Pageant" tour. The dispositive portion of the judgment appealed from reads as follows:WHEREFORE, premises considered, the decision of the Regional Trial Court dated October 26, 1995 is hereby REVERSED and SET ASIDE. A new judgment is hereby ENTERED requiring the plaintiff-appellee to pay to the defendant-appellant the amount of P12,901.00, representing the balance of the price of the British Pageant Package Tour, the same to earn legal interest at the rate of SIX PERCENT (6%) per annum, to be computed from the time the counterclaim was filed until the finality of this decision. After this decision becomes final and executory, the rate of TWELVE PERCENT (12%) interest per annum shall be additionally imposed on the total obligation until payment thereof is satisfied. The award of attorneys fees is DELETED. Costs against the plaintiff-appellee.SO ORDERED.6Upon denial of her motion for reconsideration,7petitioner filed the instant petition under Rule 45 on the following grounds:IIt is respectfully submitted that the Honorable Court of Appeals committed a reversible error in reversing and setting aside the decision of the trial court by ruling that the petitioner is not entitled to a refund of the cost of unavailed "Jewels of Europe" tour she being equally, if not more, negligent than the private respondent, for in the contract of carriage the common carrier is obliged to observe utmost care and extra-ordinary diligence which is higher in degree than the ordinary diligence required of the passenger. Thus, even if the petitioner and private respondent were both negligent, the petitioner cannot be considered to be equally, or worse, more guilty than the private respondent. At best, petitioners negligence is only contributory while the private respondent [is guilty] of gross negligence making the principle of pari delicto inapplicable in the case;IIThe Honorable Court of Appeals also erred in not ruling that the "Jewels of Europe" tour was not indivisible and the amount paid therefor refundable;IIIThe Honorable Court erred in not granting to the petitioner the consequential damages due her as a result of breach of contract of carriage.8Petitioner contends that respondent did not observe the standard of care required of a common carrier when it informed her wrongly of the flight schedule. She could not be deemed more negligent than respondent since the latter is required by law to exercise extraordinary diligence in the fulfillment of its obligation. If she were negligent at all, the same is merely contributory and not the proximate cause of the damage she suffered. Her loss could only be attributed to respondent as it was the direct consequence of its employees gross negligence.Petitioners contention has no merit.By definition, a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price.9Such person or association of persons are regarded as carriers and are classified as private or special carriers and common or public carriers.10A common carrier is defined under Article 1732 of the Civil Code as persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, offering their services to the public.It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours.While petitioner concededly bought her plane ticket through the efforts of respondent company, this does not mean that the latter ipso facto is a common carrier. At most, respondent acted merely as an agent of the airline, with whom petitioner ultimately contracted for her carriage to Europe. Respondents obligation to petitioner in this regard was simply to see to it that petitioner was properly booked with the airline for the appointed date and time. Her transport to the place of destination, meanwhile, pertained directly to the airline.The object of petitioners contractual relation with respondent is the latters service of arranging and facilitating petitioners booking, ticketing and accommodation in the package tour. In contrast, the object of a contract of carriage is the transportation of passengers or goods. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. Petitioners submission is premised on a wrong assumption.The nature of the contractual relation between petitioner and respondent is determinative of the degree of care required in the performance of the latters obligation under the contract. For reasons of public policy, a common carrier in a contract of carriage is bound by law to carry passengers as far as human care and foresight can provide using the utmost diligence of very cautious persons and with due regard for all the circumstances.11As earlier stated, however, respondent is not a common carrier but a travel agency. It is thus not bound under the law to observe extraordinary diligence in the performance of its obligation, as petitioner claims.Since the contract between the parties is an ordinary one for services, the standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code.12This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. The test to determine whether negligence attended the performance of an obligation is: did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence.13In the case at bar, the lower court found Menor negligent when she allegedly informed petitioner of the wrong day of departure. Petitioners testimony was accepted as indubitable evidence of Menors alleged negligent act since respondent did not call Menor to the witness stand to refute the allegation. The lower court applied the presumption under Rule 131, Section 3 (e)14of the Rules of Court that evidence willfully suppressed would be adverse if produced and thus considered petitioners uncontradicted testimony to be sufficient proof of her claim.On the other hand, respondent has consistently denied that Menor was negligent and maintains that petitioners assertion is belied by the evidence on record. The date and time of departure was legibly written on the plane ticket and the travel papers were delivered two days in advance precisely so that petitioner could prepare for the trip. It performed all its obligations to enable petitioner to join the tour and exercised due diligence in its dealings with the latter.We agree with respondent.Respondents failure to present Menor as witness to rebut petitioners testimony could not give rise to an inference unfavorable to the former. Menor was already working in France at the time of the filing of the complaint,15thereby making it physically impossible for respondent to present her as a witness. Then too, even if it were possible for respondent to secure Menors testimony, the presumption under Rule 131, Section 3(e) would still not apply. The opportunity and possibility for obtaining Menors testimony belonged to both parties, considering that Menor was not just respondents employee, but also petitioners niece. It was thus error for the lower court to invoke the presumption that respondent willfully suppressed evidence under Rule 131, Section 3(e). Said presumption would logically be inoperative if the evidence is not intentionally omitted but is simply unavailable, or when the same could have been obtained by both parties.16In sum, we do not agree with the finding of the lower court that Menors negligence concurred with the negligence of petitioner and resultantly caused damage to the latter. Menors negligence was not sufficiently proved, considering that the only evidence presented on this score was petitioners uncorroborated narration of the events. It is well-settled that the party alleging a fact has the burden of proving it and a mere allegation cannot take the place of evidence.17If the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts upon which he bases his claim, the defendant is under no obligation to prove his exception or defense.18Contrary to petitioners claim, the evidence on record shows that respondent exercised due diligence in performing its obligations under the contract and followed standard procedure in rendering its services to petitioner. As correctly observed by the lower court, the plane ticket19issued to petitioner clearly reflected the departure date and time, contrary to petitioners contention. The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the trip. Respondent also properly booked petitioner for the tour, prepared the necessary documents and procured the plane tickets. It arranged petitioners hotel accommodation as well as food, land transfers and sightseeing excursions, in accordance with its avowed undertaking.Therefore, it is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner for the tour. Had petitioner exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the flight. Needless to say, after the travel papers were delivered to petitioner, it became incumbent upon her to take ordinary care of her concerns. This undoubtedly would require that she at least read the documents in order to assure herself of the important details regarding the trip.The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of the obligation so demands.20There is no fixed standard of diligence applicable to each and every contractual obligation and each case must be determined upon its particular facts. The degree of diligence required depends on the circumstances of the specific obligation and whether one has been negligent is a question of fact that is to be determined after taking into account the particulars of each case.211wphi1The lower court declared that respondents employee was negligent. This factual finding, however, is not supported by the evidence on record. While factual findings below are generally conclusive upon this court, the rule is subject to certain exceptions, as when the trial court overlooked, misunderstood, or misapplied some facts or circumstances of weight and substance which will affect the result of the case.22In the case at bar, the evidence on record shows that respondent company performed its duty diligently and did not commit any contractual breach. Hence, petitioner cannot recover and must bear her own damage.WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. CV No. 51932 is AFFIRMED. Accordingly, petitioner is ordered to pay respondent the amount of P12,901.00 representing the balance of the price of the British Pageant Package Tour, with legal interest thereon at the rate of 6% per annum, to be computed from the time the counterclaim was filed until the finality of this Decision. After this Decision becomes final and executory, the rate of 12% per annum shall be imposed until the obligation is fully settled, this interim period being deemed to be by then an equivalent to a forbearance of credit.23SO ORDERED.Republic of the PhilippinesSUPREME COURTTHIRD DIVISIONG.R. No. 140665 November 13, 2000VICTOR TING "SENG DEE" and EMILY CHAN-AZAJAR,petitioners,vs.COURT OF APPEALS and PEOPLE OF THE PHILIPPINES,respondents.MELO,J.:Before us is a petition for certiorari under Rule 45 seeking the reversal of the February 12, 1999 decision of the Court of Appeals which affirmed that of the Regional Trial Court of the National Capital Judicial Region (Manila, Branch 45) finding petitioners guilty of seven (7) counts of violation of Batas Pambansa Blg. 22.Petitioners' version of the background events is as follows:From 1991 to 1992, Juliet Ting "Chan Sioc Hiu" obtained loans, in the aggregate amount of P2,750,000.00, from private complainant Josefina K. Tagle for use in Juliet's furniture business. As payment thereof, Juliet issued eleven (11) post-dated checks which, upon maturity, were dishonored for reasons of "Closed Account" or "Drawn Against Insufficient Funds." Juliet was subsequently prosecuted for violation of Batas Pambansa Blg. 22.Due to her financial difficulties, Juliet requested her husband Victor Ting "Seng Dee" and her sister Emily Chan-Azajar (petitioners herein) to take over her furniture business, including the obligations appurtenant thereto. Agreeing to Juliet's request, petitioners issued nineteen (19) checks in replacement of the eleven (11) checks earlier issued by Juliet. The planned take-over, however, never materialized since the Naga Hope Christian School, petitioner Emily Chan-Azajar's employer in Naga, refused to let her resign to attend to her sister's business. Since the planned take-over did not take place, petitioners requested Juliet to reassume her obligation to private complainant Tagle by replacing the checks they had previously issued to the latter. Thus, Juliet replaced the nineteen (19) checks issued by petitioners with twenty-three (23) Far East Bank checks in favor of Tagle. Petitioners then requested private complainant Tagle to return the nineteen (19) checks they had issued to her. Instead of returning the checks, Tagle deposited seven of the checks with MetroBank where they were dishonored for being "Drawn Against Insufficient Funds."On the other hand, private complainant Tagle alleged that sometime in April 1993, petitioners obtained a loan of P950,000.00 from her, issuing several post-dated checks in payment thereof. When the checks were deposited by Tagle with MetroBank, they were dishonored for having been drawn against insufficient funds. Tagle alleged that despite verbal and written demands, petitioners failed to pay her the value of the dishonored checks.Consequently, seven informations for violation of Batas Pambansa Blg. 22 were filed against petitioners. Said informations are similarly worded except with respect to the check number, the amount involved, and the date the check was issued. The information in Criminal Case No. 94-131945 (the other cases are Criminal Case No. 94-131946, Criminal Case No. 94-131947, Criminal Case No. 94-131948, Criminal Case No. 94-131949, Criminal Case No. 94-131950, and Criminal Case No. 94-131951) charged:That sometime prior to May 27, 1993, in the City of Manila, Philippines, the said accused, conspiring and confederating together and mutually helping each other, did then and there wilfully, unlawfully and feloniously make or draw and issue to JOSEPHINE K. TAGLE, to apply on account or for value Producers Bank of the Philippines, Check No. 946072 dated May 27, 1993 payable to CASH in the amount of P250,000.00 said accused well knowing that at the time of issue they did not have sufficient funds in or credit with the drawee bank for payment of such check in full upon its presentment, which check when presented for payment within ninety (90) days from the date thereof, was subsequently dishonored by the drawee bank for Drawn Against Insufficient Funds and despite receipt of notice of such dishonor, said accused failed to pay said JOSEFINA K. TAGLE the amount of the check or to make arrangements for full payment of the same within five (5) banking days after receiving said notice.(p. 2, Original Records.)Criminal Cases No. 94-131945 to 94-131951 were consolidated and jointly tried. When arraigned, petitioners, assisted by counsel, pleaded not guilty. During trial, the prosecution presented only one witness, the private complainant, the testimony of Producer's Bank representative Ferdinand Lazo being dispensed with after counsel for petitioners admitted the dishonor of the checks subject matter of the action.On March 16, 1995, the trial court found petitioners guilty of violating Batas Pambansa Blg. 22 in each of the seven cases, disposing as follows:WHEREFORE, in view of the foregoing, accused VICTOR TING and EMILY CHAN AZAJAR are hereby found "GUILTY" beyond reasonable doubt of all the charges contained in Criminal Case Nos. 94-131945; 94-131946; 94-131947; 94-131948; 94-131949; 94-131950 and 94-131951 and for each count, they are hereby sentenced to suffer the penalty of one (1) year imprisonment; to pay Josefina K. Tagle the total amount of P950,000.00; and to pay the cost.(p. 294, Rollo.)Aggrieved, petitioners filed an appeal with the Court of Appeals which was docketed therein as C.A.-G.R. No. 18054. However, the appellate court, on February 12, 1999, affirmed. Petitioners' motion for reconsideration was, likewise, denied for lack of merit. Hence, the instant petition.Petitioners claim that the Court of Appeals erred in affirming the decision of the trial court, given the absence of proof beyond reasonable doubt or in the presence of facts creating reasonable doubt.The petition has merit.Section 1 of Batas Pambansa Blg. 22, otherwise known as the Bouncing Checks Law, provides:Section 1.Checks without sufficient funds. Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more double the amount of the check which fine shall in no case exceed Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.For a violation of Batas Pambansa Blg. 22 to be committed, the following elements must be present:(1) the making, drawing, and issuance of any check to apply for account or for value;(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no sufficient funds in or credit with the drawee bank for the payment of such check in full upon is presentment; and(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment(Sycip, Jr. vs. CA, G.R. No. 125059, March 17, 2000).An analysis of the evidence presented, however, shows that not all the aforementioned elements have been established by the prosecution beyond reasonable doubt.That the seven checks in question were issued by petitioners is beyond dispute. Not only were the dishonored checks presented in court, but petitioners even admitted signing the checks and issuing them to private complainant. From the evidence on record, it is clear that petitioners signed and issued the seven checks in question.That the checks were dishonored is also clearly established. Section 3 of Batas Pambansa Blg. 22 provides that "the introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall beprima facieevidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped, or attached by the drawee on such dishonored check." In the instant case, the fact of the checks' dishonor is sufficiently shown by the return slips issued by MetroBank, the depository bank, stating that the checks had been returned for the reason "DAIF Drawn Against Insufficient Funds." Not only are these check return slipsprima facieevidence that the drawee bank dishonored the checks, but the defense did not present any evidence to rebut these documents. In fact, counsel for petitioners even admitted the fact of the checks' dishonor, agreeing to dispense with the presentation of the bank representative who was supposed to prove the fact of dishonor of said checks (p. 162, Rollo.).However, for liability to attach under Batas Pambansa Blg. 22, it is not enough that the prosecution establishes that a check was issued and that the same was subsequently dishonored. The prosecution must also prove the second element, that is, it must further show that the issuer, at the time of the check's issuance, had knowledge that he did not have enough funds or credit in the bank for payment thereof upon its presentment. Since the second element involves a state of mind which is difficult to verify, Section 2 of Batas Pambansa Blg. 22 creates a presumptionjuris tantumthat the second elementprima facieexists when the first and third elements of the offense are present (Magno v. People, 210 SCRA 471 [1992]). Section 2 provides:Section 2.Evidence of knowledge of insufficient funds. The making, drawing, and issuance of a check payment of which is refused by the drawee because of insufficient funds or credit with such bank, when presented within ninety days from the date of the check, shall beprima facieevidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee."In truth, this Court declared inKing v. People(G.R. No. 131540, December 2, 1999) that "the prima facie presumption arises when the check is issued. But the law also provides that the presumption does not arise when the issuer pays the amount of the check or makes arrangement for its payment 'within five banking days after receiving notice that such check has not been paid by the drawee.' Verily, BP 22 gives the accused an opportunity to satisfy the amount indicated in the check and thus avert prosecution This opportunity, however, can be used only upon receipt by the accused of a notice of dishonor." Thus, the presumption that the issuer had knowledge of the insufficiency of funds is brought into existenceonly after it is proved that the issuer had received a notice of dishonorand that, within five days from receipt thereof, he failed to pay the amount of the check or to make arrangement for its payment.King v. People,decided bythis Division, involves a set of facts similar to the case at bar. In said case, the accused therein was proven to have issued eleven checks, all of which were duly filled up and signed by her. It was also clearly established that these eleven checks were dishonored, as shown by the checks themselves which were stamped "ACCOUNT CLOSED" and further supported by the return tickets issued by PCI Bank stating that the checks had been dishonored. Yet, even if the prosecution had already established the issuance of the checksand their subsequent dishonor, this Court still required the prosecution to show that the issuer knew of the insufficiency of funds by proving that he or she received a notice of dishonor and, within five banking days thereafter, failed to satisfy the amount of the check or make arrangement for its payment.Moreover, inLina Lim Lao v. CA(274 SCRA 572 [1997]), we emphasized that "the full payment of the amount appearing in the check within five banking days from notice of dishonor is a 'complete defense.' The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner. Petitioner has a right to demand and the basic postulate of fairness require that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under BP 22."To prove that petitioners received a notice of dishonor, the prosecution presented a copy of the demand letter allegedly sent to petitioners through registered mail and its corresponding registry receipt. Private complainant Josefina Tagle, the sole witness for the prosecution, testified thus:Q: Now, when these seven (7) checks bounced for insufficiency of funds, what step did you take?A: I demanded the return of my money from them.Q: Now, what was the reply of the two accused?A: They kept on promising that they will pay but up to now they have not paid any single centavo.Q: What other step did you take?A: I requested my lawyer to write a demand letter.Q: And that demand letter was sent to the accused?A: Yes, Sir.Q: In what manner?A: By registered mail.Q: Now, was that demand letter received by the two accused?A: Yes, Sir.Q: What is your evidence?A: The return card.Q: If you are shown anew the copy of the demand letter which is already marked as Exhibit B, would you be able to recognize the same?A: Yes, Sir.Q: Is that the one that you are referring to?A: Yes, Sir.Q: How about the return card, is that correct?A: Yes, Sir, this is the one.Q: Now, upon receipt of this letter by the two accused, did the two accused pay the amount of the said check?A: No, Sir.Q: So what did you do next?A: I told my lawyer to file charges against them.Q: You mean the present charge?A: Yes, Sir.Atty. Acuesta:That is all, Your Honor.(TSN, Aug. 24, 1994, p. 8-9.)Aside from the above testimony, no other reference was made to the demand letter by the prosecution. As can be noticed from the above exchange, the prosecution alleged that the demand letter had been sent by mail. To prove mailing, it presented a copy of the demand letter as well as the registry return receipt. However, no attempt was made to show that the demand letter was indeed sent through registered mail nor was the signature on the registry return receipt authenticated or identified. It cannot even be gleaned from the testimony of private complainant as to who sent the demand letter and when the same was sent. In fact, the prosecution seems to have presumed that the registry return receipt was proof enough that the demand letter was sent through registered mail and that the same was actually received by petitioners or their agents.As adverted to earlier, it is necessary in cases for violation of Batas Pambansa Blg. 22, that the prosecution prove that the issuer had received a notice of dishonor. It is a general rule that when service of notice is an issue, the person alleging that the notice was served must prove the fact of service (58 Am Jur 2d, Notice, 45). The burden of proving notice rests upon the party asserting its existence. Now, ordinarily, preponderance of evidence is sufficient to prove notice. In criminal cases, however, the quantum of proof required is proof beyond reasonable doubt. Hence, for Batas Pambansa Blg. 22 cases, there should be clear proof of notice. Moreover, it is a general rule that, when service of a notice is sought to be made by mail, it should appear that the conditions on which the validity of such service depends had existence, otherwise the evidence is insufficient to establish the fact of service (C.J.S., Notice, 18). In the instant case, the prosecution did not present proof that the demand letter was sent through registered mail, relying as it did only on the registry return receipt. In civil cases, service made through registered mail is proved by the registry receipt issued by the mailing officeandan affidavit of the person mailing of facts showing compliance with Section 7 of Rule 13 (See Section 13, Rule 13, 1997 Rules of Civil Procedure). If, in addition to the registry receipt, it is required in civil cases that an affidavit of mailing as proof of service be presented, then with more reason should we hold in criminal cases that a registry receipt alone is insufficient as proof of mailing. In the instant case, the prosecution failed to present the testimony, or at least the affidavit, of the person mailing that, indeed, the demand letter was sent.Moreover, petitioners, during the pre-trial, denied having received the demand letter (p. 135, Rollo.). Given petitioners' denial of receipt of the demand letter, it behooved the prosecution to present proof that the demand letter was indeed sent through registered mail and that the same was received by petitioners. This, the prosecution miserably failed to do. Instead, it merely presented the demand letter and registry return receipt as if mere presentation of the same was equivalent to proof that some sort of mail matter was received by petitioners. Receipts for registered letters and return receipts do not prove themselves; they must be properly authenticated in order to serve as proof of receipt of the letters (Central Trust Co. v. City of Des Moines, 218 NW 580).Likewise, for notice by mail, it must appear that the same was served on the addressee or a duly authorized agent of the addressee. In fact, the registry return receipt itself provides that "[a] registered article must not be delivered to anyone but the addressee, or upon the addressee's written order, in which case the authorized agent must write the addressee's name on the proper space and then affix legibly his own signature below it." In the case at bar, no effort was made to show that the demand letter was received by petitioners or their agent. All that we have on record is an illegible signature on the registry receipt as evidence that someone received the letter. As to whether this signature is that of one of the petitioners or of their authorized agent remains a mystery. From the registry receipt alone, it is possible that petitioners or their authorized agent did receive the demand letter. Possibilities, however, cannot replace proof beyond reasonable doubt. There being insufficient proof that petitioners received notice that their checks had been dishonored, the presumption that they knew of the insufficiency of the funds therefor cannot arise.As we stated in Savage v. Taypin (G.R. No. 134217, May 11, 2000), "penal statutes must be strictly construed against the State and liberally in favor of the accused." Likewise, the prosecution may not rely on the weakness of the evidence for the defense to make up for its own blunders in prosecuting an offense. Having failed to prove all the elements of the offense, petitioners may not thus be convicted for violation of Batas Pambansa Blg. 22.That petitioners are civilly liable to private complainant is also doubtful. Private complainant claims that petitioners borrowed Nine Hundred Fifty Thousand (P950,000.00) Pesos from her on or about the end of April 1993, in payment of which petitioners issued several post-dated checks in her favor. The seven checks issued by petitioners as payment for the amount borrowed add up to P950,000.00. If private complainant is the businesswoman that she claims to be, she should be collecting interest on the loan she granted to petitioners. In other words, the amount to be repaid by petitioners should be more than P950,000.00, to account for interest on the loan. The checks issued by petitioners, however, do not provide for interest. It is thus more credible that the seven checks involved in this case form part of nineteen checks issued to replace the checks issued by Juliet Ting to private complainant. This conclusion is bolstered by private complainant's admission in her reply-affidavit that more than seven checks were issued by petitioners (p. 11,Original Records). In said reply-affidavit, private complainant states that "respondents issued and delivered to me in Manila several checks, which partially include their seven (7) bouncing checks herein. I say 'partially' because I will have to file additional bouncing check cases against them, as these other checks likewise bounced." Furthermore, in the same reply-affidavit, private complainant claims that the checks in question were not replaced, allegedly because the replacement checks must first be cleared, which did not happen in this case. By implication, had the 23 Far East Bank checks issued by Juliet Ting to replace the nineteen checks issued by petitioners been cleared, then private complainant would have considered the checks in question as having been replaced. This only supports our conclusion that it was Juliet Ting who owed money to private complainant, not petitioners.Moreover, the original debtor Juliet Ting was convicted by the Regional Trial Court of Manila in Criminal Cases 93-126581-91 for eleven counts of violation of Batas Pambansa Blg. 22. These eleven bouncing check cases involved the same obligation being sued upon by private complainant Tagle herein. The trial court expressly acknowledged in said cases that nineteen (19) checks were issued by petitioners as payment for Juliet Ting's obligation. In its August 7, 1997 decision convicting Juliet Ting for violation of Batas Pambansa Blg. 22, the trial court declared that "to cover the additional loans, accused (Juliet Ting) delivered 19 post-dated checks issued by Victor Ting and Emily Azajar (p. 55, Rollo.)." The trial court's decision further provides:Since she could not fund the other checks (Exhs. B to K), she replaced the same with 19 post-dated checks of her husband Victor Ting and her sister Emily Azajar totaling P2,450,000.00. They issued the checks as they would take over her furniture business. The intended partnership of Victor and Emily was aborted as the latter was not allowed to resign from her teaching post in Naga City. She then replaced the checks issued by Victor and Emily with her own checks 23 FEB post-dated checks per list (Exh. 9) prepared by Suzanne Azajar.Despite receipt of the replacement checks, complainant refused to return the checks of Victor and Emily and even filed cases against them.(p. 56, Rollo.)Not having borrowed the amount of Nine Hundred Fifty Thousand (P950,000.00) from private complainant, petitioners may not thus be held liable therefor.WHEREFORE, premises considered, the instant petition is GRANTED and the assailed decision of the Court of Appeals dated February 12, 1999 REVERSED and SET ASIDE. Petitioners Victor Ting "Seng Dee" and Emily Chan-Azajar are hereby ACQUITTED of the charges against them for violation of Batas Pambansa Blg. 22, for lack of sufficient evidence to prove the offenses charged beyond reasonable doubt. No special pronouncement is made as to costs.Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. 135992 July 23, 2004EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and TELECOMMUNICATIONS TECHNOLOGIES, INC.,petitioners,vs.INTERNATIONAL COMMUNICATION CORPORATION,respondent.

D E C I S I O N

AUSTRIA-MARTINEZ,J.:The role of the telecommunications industry in Philippine progress and development cannot be understated. Time was when the industry was dominated by a few -- an oligarchy of sorts where the elite made the decisions and serfdom had no choice but acquiesce. Sensing the need to abrogate their dominion, the government formulated policies in order to create an environment conducive to the entry of new players. Thus, in October 1990, the National Telecommunications Development Plan 1991-2010 (NTDP) was formulated and came into being. Designed by the Department of Transportation and Communications (DOTC), the NTDP provides for the framework of government policies, objectives and strategies that will guide the industry's development for the next 20 years. As expected, with it came the increase in the demand for telecommunications services, especially in the area of local exchange carrier service (LECS).1Concomitantly, the DOTC issued guidelines for the rationalization of local exchange telecommunications service. In particular, the DOTC issued on September 30, 1991, Department Circular No. 91-260, with the purpose of minimizing or eliminating situations wherein multiple operators provide local exchange service in a given area. Pursuant thereto, the National Telecommunications Commission (NTC) was tasked to define the boundaries of local exchange areas and authorize only one franchised local exchange carrier to provide local exchange service within such areas.Thereafter, on July 12, 1993, then President Fidel V. Ramos issued Executive Order No. 109 entitled Local Exchange Carrier Service. Section 2 thereof provides that all existing International Gateway Facility (IGF) operators2are required to provide local exchange carrier services in unserved and underserved areas, including Metro Manila, thereby promoting universal access to basic telecommunications service.The NTC promulgated Memorandum Circular No. 11-9-93 on September 17, 1993 implementing the objectives of E.O. No. 109.3Section 3 of the Circular mandates existing IGF operators to file a petition for the issuance of Certificate of Public Convenience and Necessity (CPCN) to install, operate and maintain local exchange carrier services within two years from effectivity thereof. Section 4 further requires IGF operators to provide a minimum of 300 local exchange lines per one international switch termination and a minimum of 300,000 local exchange lines within three years from grant of authority.To cap the government's efforts, Republic Act No. 7925, otherwise known as the Public Telecommunications Policy Act of the Philippines, was enacted on March 23, 1995. With regard to local exchange service, Section 10 thereof mandates an international carrier to comply with its obligation to provide local exchange service in unserved or underserved areas within three years from the grant of authority as required by existing regulations. On September 25, 1995, the NTC issued the Implementing Rules and Regulations for R.A. No. 7925 per its NTC MC No. 8-9-95.Taking advantage of the opportunities brought about by the passage of these laws, several IGF operators applied for CPCN to install, operate and maintain local exchange carrier services in certain areas. Respondent International Communication Corporation, now known as Bayan Telecommunications Corporation or Bayantel,4applied for and was given by the NTC a Provisional Authority (PA)5on March 3, 1995, to install, operate and provide local exchange service in Quezon City, Malabon and Valenzuela, Metro Manila, and the entire Bicol region. Meanwhile, petitioner Telecommunications Technologies Philippines, Inc. (TTPI), as an affiliate of petitioner Eastern Telecommunications Philippines, Inc. (ETPI), was granted by the NTC a PA on September 25, 1996, to install, operate and maintain a local exchange service in the Provinces of Batanes, Cagayan Valley, Isabela, Kalinga-Apayao, Nueva Vizcaya, Ifugao, Quirino, the cities of Manila and Caloocan, and the Municipality of Navotas, Metro Manila.It appears, however, that before TTPI was able to fully accomplish its rollout obligation, ICC applied for and was given a PA by the NTC on November 10, 1997, to install, operate and maintain a local exchange service in Manila and Navotas,6two areas which were already covered by TTPI under its PA dated September 25, 1996.Aggrieved, petitioners filed a petition for review with the Court of Appeals with application for a temporary restraining order and a writ of preliminary injunction, docketed as CA-G.R. SP No. 46047, arguing that the NTC committed grave abuse of discretion in granting a provisional authority to respondent ICC to operate in areas already assigned to TTPI.On April 30, 1998, the Court of Appeals dismissed7the petition for review on the ground that the NTC did not commit any grave abuse of discretion in granting the PA to TTPI. It sustained the NTC's finding that ICC is "legally and financially competent and its network plan technically feasible." The Court of Appeals also ruled that there was no violation of the equal protection clause because the PA granted to ICC and TTPI were given under different situations and there is no point of comparison between the two.8Hence, the present petition for review oncertiorari, raising the following issues:IWhether or not the Honorable Court of Appeals committed a serious error of law in upholding the Order of the NTC granting a PA to Respondent to operate LEC services in Manila and Navotas which are areas already assigned to petitioner TTPI under a prior and subsisting PA.IIWhether or not Petitioner is entitled to a Writ of Preliminary Injunction to restrain Respondent from installing LEC services in the areas granted to it by the Order under review.9In support thereof, petitioners posit the following arguments:(1) The assignment to ICC of areas already allocated to TTPI violates the Service Area Scheme (SAS), which is the guidepost of the laws and issuances governing local exchange service;(2) ICC did not make any showing that an existing operator, TTPI in this case, failed to comply with the service performance and technical standards prescribed by the NTC, and that the area is underserved, as required under Section 23 of MC No. 11-9-93;(3) The facts and figures cited by the NTC,i.e., ICC's alleged remarkable performance in fulfilling its rollout obligation and the growth rate in the installation of telephone lines in Manila and Navotas, do not justify the grant of the PA in favor of ICC, nor are they supported by the evidence on record as these were not presented during the proceedings before the NTC;(4) ICC did not comply with the requirement of "prior consultation" with the NTC before it filed its application, in violation of Sections 3 and 3.1 of MC 11-9-93;(5) ICC did not comply with Section 27 of MC 11-9-93 requiring that an escrow deposit be made equivalent to 20% and a performance bond equivalent to 10% of the investment required for the first two years of the project;(6) ICC is not financially and technically capable of undertaking the project;(7) The grant of a PA in favor of ICC to operate in areas covered by TTPI will render it difficult for the latter to cross-subsidize its operations in less profitable areas covered by it and will threaten its viability to continue as a local exchange operator.10After a review of the records of this case, the Court finds no grave abuse of discretion committed by the Court of Appeals in sustaining the NTC's grant of provisional authority to ICC.The power of the NTC to grant a provisional authority has long been settled. As the regulatory agency of the national government with jurisdiction over all telecommunications entities, it is clothed with authority and given ample discretion to grant a provisional permit or authority.11It also has the authority to issue Certificates of Public Convenience and Necessity (CPCN) for the installation, operation, and maintenance of communications facilities and services, radio communications systems, telephone and telegraph systems, including the authority to determine the areas of operations of applicants for telecommunications services.12In this regard, the NTC is clothed with sufficient discretion to act on matters solely within its competence.13In granting ICC the PA to operate a local exchange carrier service in the Manila and Navotas areas, the NTC took into consideration ICC's financial and technical resources and found them to be adequate. The NTC also noted ICC's performance in complying with its rollout obligations under the previous PA granted to it, thus:With the proven track record of herein applicant as one of the pacesetters in carrying out its landlines commitment in its assigned areas, applicant can best respond to public demand for faster installation of telephone lines in Manila and Navotas.The grant of this application is, therefore, a fitting recognition that should be accorded to any deserving applicant, such as herein applicant ICC whose remarkable performance in terms of public service as mandated by Executive Order 109 and Republic Act No. 7925 has persuaded this Commission to affix the stamp of its approval.14The Court will not interfere with these findings of the NTC, as these are matters that are addressed to its sound discretion, being the government agency entrusted with the regulation of activities coming under its special and technical forte.15Moreover, the exercise of administrative discretion is a policy decision and a matter that can best be discharged by the government agency concerned, and not by the courts.16Petitioner insists compliance with the service area scheme (SAS) mandated by DOTC Dept. Circular No. 91-260, to wit:1. The National Telecommunications Commission (NTC) shall define the boundaries of local exchange areas, and shall henceforth authorize only one franchised Local Exchange Carrier (LEC) to provide LEC service within such areas.The Court is not persuaded. Said department circular was issued by the DOTC in 1991, before the advent of E.O. No. 109 and R.A. No. 7925. When E.O. No. 109 was promulgated in 1993, and R.A. No. 7925 enacted in 1995, the service area scheme was noticeably omitted therefrom. Instead, E.O. No. 109 and R.A. No. 7925 adopted a policy of healthy competition among the local exchange carrier service providers.The need to formulate new policies is dictated by evolving goals and demands in telecommunications services. Thus, E.O. No. 109 acknowledges that there is a "need to promulgate new policy directives to meet the targets of Government through the National Telecommunications Development Plan (NTDP) of the Department of Transportation and Communications (DOTC), specifically: (1) to ensure the orderly development of the telecommunications sector through the provision of service to all areas of the country; (2) to satisfy the unserviced demand for telephones; and (3) to provide healthy competition among authorized service providers." Likewise, one of the national policies and objectives of R.A. No. 7925 is to foster the improvement and expansion of telecommunications services in the country through a healthy competitive environment, in which telecommunications carriers are free to make business decisions and to interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.17Recently, inPilipino Telephone Corporation vs. NTC,18the Court had occasion to rule on a case akin to the present dispute, involving the same respondent ICC, and the Pilipino Telephone Corporation (Piltel). In thePiltelcase, ICC applied for a provisional authority to operate a local exchange service in areas already covered by Piltel, which includes Misamis Occidental, Zamboanga del Sur, Davao del Sur, South Cotabato and Saranggani. Piltel opposed ICC's application but the NTC denied it, and granted ICC's application. The Court of Appeals dismissed Piltel's petition for review, and oncertioraribefore this Court, we affirmed the dismissal. The Court found that the NTC did not commit any grave abuse of discretion when it granted the ICC a provisional authority to operate in areas covered by Piltel. We held:We will not disturb the factual findings of the NTC on the technical and financial capability of the ICC to undertake the proposed project. We generally accord great weight and even finality to factual findings of administrative bodies such as the NTC, if substantial evidence supports the findings as in this case. The exception to this rule is when the administrative agency arbitrarily disregarded evidence before it or misapprehended evidence to such an extent as to compel a contrary conclusion had it properly appreciated the evidence. PILTEL gravely failed to show that this exception applies to the instant case. Moreover, the exercise of administrative discretion, such as the issuance of a PA, is a policy decision and a matter that the NTC can best discharge, not the courts.PILTEL contends that the NTC violated Section 23 of NTC Memorandum Circular No. 11-9-93, otherwise known as the "Implementing Guidelines on the Provisions of EO 109" which states:Section 23. No other company or entity shall be authorized to provide local exchange service in areas where theLECscomply with the relevant provisions of MTC MC No. 10-17-90 and NTC MC No. 10-16-90 and that the local exchange service area is not underserved. (Emphasis supplied)Section 23 of EO 109 does not categorically state that the issuance of a PA is exclusive to any telecommunications company. Neither Congress nor the NTC can grant an exclusive "franchise, certificate, or any other form of authorization" to operate a public utility. InRepublic v. Express Telecommunications Co., the Court held that "the Constitution is quite emphatic that the operation of a public utility shall not be exclusive." Section 11, Article XII of the Constitution provides: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 sixtyper centumof whose capital is owned by such citizens,nor shall such franchise, certificate or authorization be exclusive in characteror 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. xxx (Emphasis supplied)Thus, inRadio Communications of the Philippines, Inc. v. National Telecommunications Commission, the Court ruled that the "Constitution mandates that a franchise cannot be exclusive in nature.". . .Among the declared national policies in Republic Act No. 7925, otherwise known as the "Public Telecommunications Policy Act of the Philippines," is the healthy competition among telecommunications carriers, to wit:Obviously, "the need for a healthy competitive environment in telecommunications is sufficient impetus for the NTC to consider all those applicants, who are willing to offer competition, develop the market and provide the environment necessary for greater public service."Furthermore, "free competition in the industry may also provide the answer to a much-desired improvement in the quality and delivery of this type of public utility, to improved technology, fast and handy mobil[e] service, and reduced user dissatisfaction."PILTEL's contention that the NTC Order amounts to a confiscation of property without due process of law is untenable. "Confiscation" means the seizure of private property by the government without compensation to the owner. A franchise to operate a public utility is not an exclusive private property of the franchisee. Under the Constitution, no franchisee can demand or acquire exclusivity in the operation of a public utility. Thus, a franchisee of a public utility cannot complain of seizure or taking of property because of the issuance of another franchise to a competitor. Every franchise, certificate or authority to operate a public utility is, by constitutional mandate, non-exclusive. PILTEL cannot complain of a taking of an exclusive right that it does not own and which no franchisee can ever own.Likewise, PILTEL's argument that the NTC Order violates PILTEL's rights as a prior operator has no merit. The Court resolved a similar question inRepublic v. Republic Telephone Company, Inc.In striking down Retelco's claim that it had a right to be protected in its investment as a franchise-holder and prior operator of a telephone service in Malolos, Bulacan, the Court held:RETELCO's foremost argument is that "such operations and maintenance of the telephone system and solicitation of subscribers by [petitioners] constituted an unfair and ruinous competition to the detriment of [RETELCO which] is a grantee of both municipal and legislative franchises for the purpose." In effect, RETELCO pleads for protection from the courts on the assumption that its franchises vested in it an exclusive right as prior operator. There is no clear showing by RETELCO, however, that its franchises are of an exclusive character. xxx At any rate, it may very well be pointed out as well that neither did the franchise of PLDT at the time of the controversy confer exclusive rights upon PLDT in the operation of a telephone system. In fact, we have made it a matter of judicial notice that all legislative franchises for the operation of a telephone system contain the following provision:"It is expressly provided that in the even_t the Philippine Government should desire to maintain and operate for itself the system and enterprise herein authorized, the grantee shall surrender his franchise and will turn over to the Government said system and all serviceable equipment therein, at cost, less reasonable depreciation."19Similarly in this case, the grant of a PA to ICC to operate in areas covered by TTPI is not tainted with any grave abuse of discretion as it was issued by the NTC after taking into account ICC's technical and financial capabilities, and in keeping with the policy of healthy competition fostered by E.O. No. 109 and R.A. No. 7925.In addition, Section 6 of R.A. No. 7925 specifically limits the DOTC from exercising any power that will tend to influence or effect a review or a modification of the NTC's quasi-judicial functions, to wit:Section 6.Responsibilities of and Limitations to Department Powers.-- The Department of Transportation and Communications (Department) shall not exercise any power which will tend to influence or effect a review or a modification of the Commission's quasi-judicial function.The power of the NTC in granting or denying a provisional authority to operate a local exchange carrier service is a quasi-judicial function,20a sphere in which the DOTC cannot intrude upon. If at all, the service area scheme provided in DOTC Dept. Circular No. 91-260 is only one of the factors, but should not in any way, tie down the NTC in its determination of the propriety of a grant of a provisional authority to a qualified applicant for local exchange service.True, NTC MC No. 11-9-93 requires prior consultation with the NTC of the proposed service areas. As petitioners themselves argue, prior consultation allows the NTC to assess the impact of the proposed application on the viability of the local exchange operator in the area desired by the would-be applicant and on the viability of the entire telecommunications industry as well as rationalize the plans to minimize any adverse impact.21In this case, prior consultation was substantially complied with and its purpose accomplished, when ICC filed its application and the NTC was given the opportunity to assess ICC's viability to render local exchange service in the Manila and Navotas areas, and its impact on the telecommunications industry.It is also true that NTC MC No. 8-9-95 allows a duly enfranchised entity to maintain a local exchange network if it is shown that an existing authorized local exchange operator fails to satisfy the demand for local exchange service.22In this case, the NTC noted the increasing rate in the demand for local lines within the Manila and Navotas areas, and in order for these areas to catch up with its neighboring cities, installation of lines must be sped up.23This, in fact, is tantamount to a finding that the existing local exchange operator failed to meet the growing demand for local lines.ICC's technical and financial capabilities, as well as the growth rate in the number of lines in particular areas, are matters within NTC's competence and should be accorded respect. The NTC is given wide latitude in the evaluation of evidence and in the exercise of its adjudicative functions, and this includes the authority to take judicial notice of facts within its special competence.24TTPI anticipates that allowing ICC to enter its service areas will make it difficult for it to cross-subsidize its operations in the less profitable areas. Such argument, however, is futile. The cross-subsidy approach is apparently the government's response to the foreseen situation wherein given its policy of universal access, a local exchange provider will find itself operating in areas where the demand and the public's capacity to subscribe will be lesser than in other areas, making these areas more of a liability than an asset. Thus, Section 4 of E.O. No. 109 provides:SEC. 4.Cross-Subsidy. Until universal access to basic telecommunications is achieved, and such service is priced to reflect actual costs, local exchange service shall continue to be cross-subsidized by other telecommunications services within the same company.Meanwhile, NTC MC No. 8-9-95 provides:ACCESS CHARGESGENERAL(a) Until the local exchange service is priced reflecting actual costs, the local exchange service shall be cross-subsidized by other telecommu