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G.R. No. 111953 December 12, 1997

HON. RENATO C. CORONA, in his capacity as Assistant Secretary for Legal Affairs, HON. JESUS B. GARCIA, in his capacity as Acting Secretary, Department of Transportation and Communications, and ROGELIO A. DAYAN, in his capacity as General Manager of Philippine Ports Authority, petitioners, vs.UNITED HARBOR PILOTS ASSOCIATION OF THE PHILIPPINES and MANILA PILOTS ASSOCIATION,respondents.

 

ROMERO, J.:

In issuing Administrative Order No. 04-92 (PPA-AO No. 04-92), limiting the term of appointment of harbor pilots to one year subject to yearly renewal or cancellation, did the Philippine Ports Authority (PPA) violate respondents' right to exercise their profession and their right to due process of law?

The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On December 23, 1975, Presidential Decree No. 857 was issued revising the PPA's charter. Pursuant to its power of control, regulation, and supervision of pilots and the pilotage profession, 1 the PPA promulgated PPA-AO-03-85 2 on March 21, 1985, which embodied the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." These rules mandate, inter alia, that aspiring pilots must be holders of pilot licenses 3 and must train as probationary pilots in outports for three months and in the Port of Manila for four months. It is only after they have achieved satisfactory performance 4 that they are given permanent and regular appointments by the PPA itself 5 to exercise harbor pilotage until they reach the age of 70, unless sooner removed by reason of mental or physical unfitness by the PPA General Manager. 6 Harbor pilots in every harbor district are further required to organize themselves into pilot associations which would make available such equipment as may be required by the PPA for effective pilotage services. In view of this mandate, pilot associations invested in floating, communications, and office equipment. In fact, every new pilot appointed by the PPA automatically becomes a member of a pilot association and is required to pay a proportionate equivalent equity or capital before being allowed to assume his duties, as reimbursement to the association concerned of the amount it paid to his predecessor.

Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92 7 on July 15, 1992, whose avowed policy was to "instill effective discipline and thereby afford better protection to the port users through the improvement of pilotage services." This was implemented by providing therein that "all existing regular appointments which have been previously issued either by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only" and that "all appointments to harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one

(1) year from date of effectivity subject to yearly renewal or cancellation by the Authority after conduct of a rigid evaluation of performance."

On August 12, 1992, respondents United Harbor Pilots Association and the Manila Pilots Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92 before the Department of Transportation and Communication, but they were informed by then DOTC Secretary Jesus B. Garcia that "the matter of reviewing, recalling or annulling PPA's administrative issuances lies exclusively with its Board of Directors as its governing body."

Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08-92  8 which laid down the criteria or factors to be considered in the reappointment of harbor pilot, viz.: (1) Qualifying Factors: 9 safety record and physical/mental medical exam report and (2) Criteria for Evaluation: 10 promptness in servicing vessels, compliance with PPA Pilotage Guidelines, number of years as a harbor pilot, average GRT of vessels serviced as pilot, awards/commendations as harbor pilot, and age.

Respondents reiterated their request for the suspension of the implementation of PPA-AO No. 04-92, but Secretary Garcia insisted on his position that the matter was within the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling to the Office of the President (OP), reiterating his arguments before the DOTC.

On December 23, 1992, the OP issued an order directing the PPA to hold in abeyance the implementation of PPA-AO No. 04-92. In its answer, the PPA countered that said administrative order was issued in the exercise of its administrative control and supervision over harbor pilots under Section 6-a (viii), Article IV of P.D. No. 857, as amended, and it, along with its implementing guidelines, was intended to restore order in the ports and to improve the quality of port services.

On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal Affairs Renato C. Corona, dismissed the appeal/petition and lifted the restraining order issued earlier. 11 He concluded that PPA-AO No. 04-92 applied to all harbor pilots and, for all intents and purposes, was not the act of Dayan, but of the PPA, which was merely implementing Section 6 of P.D. No. 857, mandating it "to control, regulate and supervise pilotage and conduct of pilots in any port district."

On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its implementing memoranda and circulars, Secretary Corona opined that:

The exercise of one's profession falls within the constitutional guarantee against wrongful deprivation of, or interference with, property rights without due process. In the limited context of this case. PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful deprivation of, the property rights of those affected thereby . As may be noted, the issuance aims no more than to improve pilotage services by limiting the appointment to harbor pilot positions to one year, subject to renewal or cancellation after a rigid evaluation of the appointee's performance.

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PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their profession in PPA's jurisdictional area. (Emphasis supplied)

Finally, as regards the alleged "absence of ample prior consultation" before the issuance of the administrative order, Secretary Corona cited Section 26 of P.D. No. 857, which merely requires the PPA to consult with "relevant Government agencies." Since the PPA Board of Directors is composed of the Secretaries of the DOTC, the Department of Public Works and Highways, the Department of Finance, and the Department of Environment and Natural Resources, as well as the Director-General of the National Economic Development Agency, the Administrator of the Maritime Industry Authority (MARINA), and the private sector representative who, due to his knowledge and expertise, was appointed by the President to the Board, he concluded that the law has been sufficiently complied with by the PPA in issuing the assailed administrative order.

Consequently, respondents filed a petition for certiorari, prohibition and injunction with prayer for the issuance of a temporary restraining order and damages, before Branch 6 of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93-65673. On September 6, 1993, the trial court rendered the following judgment: 12

WHEREFORE, for all the foregoing, this Court hereby rules that:

1. Respondents (herein petitioners) have acted excess jurisdiction and with grave abuse of discretion and in a capricious, whimsical and arbitrary manner in promulgating PPA Administrative Order 04-92 including all its implementing Memoranda, Circulars and Orders;

2. PPA Administrative Order 04-92 and its implementing Circulars and Orders are declared null and void;

3. The respondents are permanently enjoined from implementing PPA Administrative Order 04-92 and its implementing Memoranda, Circulars and Orders.

No costs.

SO ORDERED.

The court a quo pointed out that the Bureau of Customs, the precursor of the PPA, recognized pilotage as a profession and, therefore, a property right under Callanta v. Carnation Philippines, Inc. 13 Thus, abbreviating the term within which that privilege may be exercised would be an interference with the property rights of the harbor pilots. Consequently, any "withdrawal or alteration" of such property right must be strictly made in accordance with the constitutional mandate of due process of law. This was apparently not followed by the PPA when it did not conduct public hearings prior to the issuance of PPA-AO No. 04-92; respondents allegedly learned about it only after its publication in the newspapers. From this decision, petitioners elevated their case to this Court on certiorari.

After carefully examining the records and deliberating on the arguments of the parties, the Court is convinced that PPA-AO No. 04-92 was issued in stark disregard of respondents' right against deprivation of property without due process of law. Consequently, the instant petition must be denied.

Section 1 of the Bill of Rights lays down what is known as the "due process clause" of the Constitution, viz.:

Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, . . .

In order to fall within the aegis of this provision, two conditions must concur, namely, that there is a deprivation and that such deprivation is done without proper observance of due process. When one speaks of due process of law, however, a distinction must be made between matters of procedure and matters of substance. In essence, procedural due process "refers to the method or manner by which the law is enforced," while substantive due process "requires that the law itself, not merely the procedures by which the law would be enforced, is fair, reasonable, and just." 14 PPA-AO No. 04-92 must be examined in light of this distinction.

Respondents argue that due process was not observed in the adoption of PPA-AO No. 04-92 allegedly because no hearing was conducted whereby "relevant government agencies" and the pilots themselves could ventilate their views. They are obviously referring to the procedural aspect of the enactment. Fortunately, the Court has maintained a clear position in this regard, a stance it has stressed in the recent case of Lumiqued v. Hon. Exevea,15 where it declared that "(a)s long as a party was given the opportunity to defend his interests in due course, he cannot be said to have been denied due process of law, for this opportunity to be heard is the very essence of due process. Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of the action or ruling complained of."

In the case at bar, respondents questioned PPA-AO No. 04-92 no less than four times 16 before the matter was finally elevated to this Tribunal. Their arguments on this score, however, fail to persuade. While respondents emphasize that the Philippine Coast Guard, "which issues the licenses of pilots after administering the pilots' examinations," was not consulted, 17 the facts show that the MARINA, which took over the licensing function of the Philippine Coast Guard, was duly represented in the Board of Directors of the PPA. Thus, petitioners correctly argued that, there being no matters of naval defense involved in the issuance of the administrative order, the Philippine Coast Guard need not be consulted. 18

Neither does the fact that the pilots themselves were not consulted in any way taint the validity of the administrative order. As a general rule, notice and hearing, as the fundamental requirements of procedural due process, are essential only when an administrative body exercises its quasi-judicial function. In the performance of its executive or legislative functions, such as issuing rules and regulations, an administrative body need not comply with the requirements of notice and hearing. 19

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Upon the other hand, it is also contended that the sole and exclusive right to the exercise of harbor pilotage by pilots is a settled issue. Respondents aver that said right has become vested and can only be "withdrawn or shortened" by observing the constitutional mandate of due process of law. Their argument has thus shifted from the procedural to one of substance. It is here where PPA-AO No. 04-92 fails to meet the condition set by the organic law.

There is no dispute that pilotage as a profession has taken on the nature of a property right. Even petitioner Corona recognized this when he stated in his March 17, 1993, decision that "(t)he exercise of one's profession falls within the constitutional guarantee against wrongful deprivation of, or interference with, property rights without due process." 20 He merely expressed the opinion the "(i)n the limited context of this case, PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful deprivation of, the property rights of those affected thereby, and that "PPA-AO 04-95 does not forbid, but merely regulates, the exercise by harbor pilots of their profession." As will be presently demonstrated, such supposition is gravely erroneous and tends to perpetuate an administrative order which is not only unreasonable but also superfluous.

Pilotage, just like other professions, may be practiced only by duly licensed individuals. Licensure is "the granting of license especially to practice a profession." It is also "the system of granting licenses (as for professional practice) in accordance with establishment standards." 21 A license is a right or permission granted by some competent authority to carry on a business or do an act which, without such license, would be illegal. 22

Before harbor pilots can earn a license to practice their profession, they literally have to pass through the proverbial eye of a needle by taking, not one but five examinations, each followed by actual training and practice. Thus, the court a quo observed:

Petitioners (herein respondents) contend, and the respondents (herein petitioners) do not deny, the here (sic) in this jurisdiction, before a person can be a harbor pilot, he must pass five (5) government professional examinations, namely, (1) For Third Mate and after which he must work, train and practice on board a vessel for at least a year; (2) For Second Mate and after which he must work, train and practice for at least a year; (3) For Chief Mate and after which he must work, train and practice for at least a year; (4) For a Master Mariner and after which he must work as Captain of vessel for at least two (2) years to qualify for an examination to be a pilot; and finally, of course, that given for pilots.

Their license is granted in the form of an appointment which allows them to engage in pilotage until they retire at the age 70 years. This is a vested right. Under the terms of PPA-AO No. 04-92, "(a)ll existing regular appointments which have been previously issued by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only," and "(a)ll appointments to harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to renewal or cancellation by the Authority after conduct of a rigid evaluation of performance."

It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor pilots to enjoy their profession before their compulsory retirement. In the past, they enjoyed a measure of security knowing that after passing five examinations and undergoing years of on-the-job training, they would have a license which they could use until their retirement, unless sooner revoked by the PPA for mental or physical unfitness. Under the new issuance, they have to contend with an annual cancellation of their license which can be temporary or permanent depending on the outcome of their performance evaluation. Veteran pilots and neophytes alike are suddenly confronted with one-year terms which ipso facto expire at the end of that period. Renewal of their license is now dependent on a "rigid evaluation of performance" which is conducted only after the license has already been cancelled. Hence, the use of the term "renewal." It is this pre-evaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally infirm. In a real sense, it is a deprivation of property without due process of law.

The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered by PPA-AO No. 03-85, which is still operational. Respondents are correct in pointing out that PPA-AO No. 04-92 is a "surplusage" 23 and, therefore, an unnecessary enactment. PPA-AO 03-85 is a comprehensive order setting forth the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." It provides, inter alia, for the qualification, appointment, performance evaluation, disciplining and removal of harbor pilots — matters which are duplicated in PPA-AO No. 04-92 and its implementing memorandum order. Since it adds nothing new or substantial, PPA-AO No. 04-92 must be struck down.

Finally, respondents' insinuation that then PPA General Manager Dayan was responsible for the issuance of the questioned administrative order may have some factual basis; after all, power and authority were vested in his office to propose rules and regulations. The trial court's finding of animosity between him and private respondents might likewise have a grain of truth. Yet the number of cases filed in court between private respondents and Dayan, including cases which have reached this Court, cannot certainly be considered the primordial reason for the issuance of PPA-AO No. 04-92. In the absence of proof to the contrary, Dayan should be presumed to have acted in accordance with law and the best of professional motives. In any event, his actions are certainly always subject to scrutiny by higher administrative authorities.

WHEREFORE, the instant petition is hereby DISMISSED and the assailed decision of the court a quo dated September 6, 1993, in Civil Case No. 93-65673 is AFFIRMED. No pronouncement as to costs.

SO ORDERED.

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G.R. No. 108358 January 20, 1995

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs.THE HON. COURT OF APPEALS, R.O.H. AUTO PRODUCTS PHILIPPINES, INC. and THE HON. COURT OF TAX APPEALS, respondents.

 

VITUG, J.:

On 22 August 1986, during the period when the President of the Republic still wielded legislative powers, Executive Order No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes, later amended to include estate and donor's taxes and taxes on business, for the taxable years 1981 to 1985.

Availing itself of the amnesty, respondent R.O.H. Auto Products Philippines, Inc., filed, in October 1986 and November 1986, its Tax Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty Return No. 34-F-00146-64-B, respectively, and paid the corresponding amnesty taxes due.

Prior to this availment, petitioner Commissioner of Internal Revenue, in a communication received by private respondent on 13 August 1986, assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1,410,157.71. The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty, the deficiency tax notice should forthwith be cancelled and withdrawn. The request was denied by the Commissioner, in his letter of 22 November 1988, on the ground that Revenue Memorandum Order No. 4-87, dated 09 February 1987, implementing Executive Order No. 41, had construed the amnesty coverage to include only assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made. The invoked provisions of the memorandum order read:

TO: All Internal Revenue Officers and Others Concerned:

1.0. To give effect and substance to the immunity provisions of the tax amnesty under Executive Order No. 41, as expanded by Executive Order No. 64, the following instructions are hereby issued:

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1.02. A certification by the Tax Amnesty Implementation Officer of the fact of availment of the said tax amnesty shall be a sufficient basis for:

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1.02.3. In appropriate cases, the cancellation/withdrawal of assessment notices and letters of demand issued after August 21, 1986 for the collection of income, business, estate or donor's taxes due during the same taxable years. 1 (Emphasis supplied)

Private respondent appealed the Commissioner's denial to the Court of Tax Appeals. Ruling for the taxpayer, the tax court said:

Respondent (herein petitioner Commissioner) failed to present any case or law which proves that an assessment can withstand or negate the force and effects of a tax amnesty. This burden of proof on the petitioner (herein respondent taxpayer) was created by the clear and express terms of the executive order's intention — qualified availers of the amnesty may pay an amnesty tax in lieu of said unpaid taxes which are forgiven (Section 2, Section 5, Executive Order No. 41, as amended). More specifically, the plain provisions in the statute granting tax amnesty for unpaid taxes for the period January 1, 1981 to December 31, 1985 shifted the burden of proof on respondent to show how the issuance of an assessment before the date of the promulgation of the executive order could have a reasonable relation with the objective periods of the amnesty, so as to make petitioner still answerable for a tax liability which, through the statute, should have been erased with the proper availment of the amnesty.

Additionally, the exceptions enumerated in Section 4 of Executive Order No. 41, as amended, do not indicate any reference to an assessment or pending investigation aside from one arising from information furnished by an informer. . . . Thus, we deem that the rule in Revenue Memorandum Order No. 4-87 promulgating that only assessments issued after August 21, 1986 shall be abated by the amnesty is beyond the contemplation of Executive Order No. 41, as amended. 2

On appeal by the Commissioner to the Court of Appeals, the decision of the tax court was affirmed. The appellate court further observed:

In the instant case, examining carefully the words used in Executive Order No. 41, as amended, we find nothing which justifies petitioner Commissioner's ground for denying respondent taxpayer's claim to the benefits of the amnesty law. Section 4 of the subject law enumerates, in no uncertain terms, taxpayers who may not avail of the amnesty granted,. . . .

Admittedly, respondent taxpayer does not fall under any of the . . . exceptions. The added exception urged by petitioner Commissioner based on Revenue Memorandum Order No. 4-87, further restricting the scope of the amnesty clearly amounts to an act of administrative legislation quite contrary to the mandate of the law which the regulation ought to implement.

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Lastly, by its very nature, a tax amnesty, being a general pardon or intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law, partakes of an absolute forgiveness or waiver by the Government of its right to collect what otherwise would be due it, and in this sense, prejudicial thereto, particularly to give tax evaders, who wish to relent and are willing to reform a chance to do so and thereby become a part of the new society with a clean slate. (Republic vs. Intermediate Appellate Court. 196 SCRA 335, 340 [1991] citing Commissioner of Internal Revenue vs. Botelho Shipping Corp., 20 SCRA 487) To follow [the restrictive application of Revenue Memorandum Order No. 4-87 pressed by petitioner Commissioner would be to work against the raison d'etre of E.O. 41, as amended, i.e., to raise government revenues by encouraging taxpayers to declare their untaxed income and pay the tax due thereon. (E.O. 41, first paragraph)] 3

In this petition for review, the Commissioner raises these related issues:

1. WHETHER OR NOT REVENUE MEMORANDUM ORDER NO. 4-87, PROMULGATED TO IMPLEMENT E.O. NO. 41, IS VALID;

2. WHETHER OR NOT SAID DEFICIENCY ASSESSMENTS IN QUESTION WERE EXTINGUISHED BY REASON OR PRIVATE RESPONDENT'S AVAILMENT OF EXECUTIVE ORDER NO. 41 AS AMENDED BY EXECUTIVE ORDER NO. 64;

3. WHETHER OR NOT PRIVATE RESPONDENT HAS OVERCOME THE PRESUMPTION OF VALIDITY OF ASSESSMENTS. 4

The authority of the Minister of Finance (now the Secretary of Finance), in conjunction with the Commissioner of Internal Revenue, to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be controverted. Neither can it be disputed that such rules and regulations, as well as administrative opinions and rulings, ordinarily should deserve weight and respect by the courts. Much more fundamental than either of the above, however, is that all such issuances must not override, but must remain consistent and in harmony with, the law they seek to apply and implement. Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law.

The real and only issue is whether or not the position taken by the Commissioner coincides with the meaning and intent of executive Order No. 41.

We agree with both the court of Appeals and court of Tax Appeals that Executive Order No. 41 is quite explicit and requires hardly anything beyond a simple application of its provisions. It reads:

Sec. 1. Scope of Amnesty. — A one-time tax amnesty covering unpaid income taxes for the years 1981 to 1985 is hereby declared.

Sec. 2. Conditions of the Amnesty. — A taxpayer who wishes to avail himself of the tax amnesty shall, on or before October 31, 1986;

a) file a sworn statement declaring his net worth as of December 31, 1985;

b) file a certified true copy of his statement declaring his net worth as of December 31, 1980 on record with the Bureau of Internal Revenue, or if no such record exists, file a statement of said net worth therewith, subject to verification by the Bureau of Internal Revenue;

c) file a return and pay a tax equivalent to ten per cent (10%) of the increase in net worth from December 31, 1980 to December 31, 1985: Provided, That in no case shall the tax be less than P5,000.00 for individuals and P10,000.00 for judicial persons.

Sec. 3. Computation of Net Worth. — In computing the net worths referred to in Section 2 hereof, the following rules shall govern:

a) Non-cash assets shall be valued at acquisition cost.

b) Foreign currencies shall be valued at the rates of exchange prevailing as of the date of the net worth statement.

Sec. 4. Exceptions. — The following taxpayers may not avail themselves of the amnesty herein granted:

a) Those falling under the provisions of Executive Order Nos. 1, 2 and 14;

b) Those with income tax cases already filed in Court as of the effectivity hereof;

c) Those with criminal cases involving violations of the income tax already filed in court as of the effectivity filed in court as of the effectivity hereof;

d) Those that have withholding tax liabilities under the National Internal Revenue Code, as amended, insofar as the said liabilities are concerned;

e) Those with tax cases pending investigation by the Bureau of Internal Revenue as of the effectivity hereof as a result of information furnished under Section 316 of the National Internal Revenue Code, as amended;

f) Those with pending cases involving unexplained or unlawfully acquired wealth before the Sandiganbayan;

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g) Those liable under Title Seven, Chapter Three (Frauds, Illegal Exactions and Transactions) and Chapter Four (Malversation of Public Funds and Property) of the Revised Penal Code, as amended.

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Sec. 9. The Minister of finance, upon the recommendation of the Commissioner of Internal Revenue, shall promulgate the necessary rules and regulations to implement this Executive Order.

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Sec. 11. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 22nd day of August in the year of Our Lord, nineteen hundred and eighty-six.

The period of the amnesty was later extended to 05 December 1986 from 31 October 1986 by Executive Order No. 54, dated 04 November 1986, and, its coverage expanded, under Executive Order No. 64, dated 17 November 1986, to include estate and honors taxes and taxes on business.

If, as the Commissioner argues, Executive Order No. 41 had not been intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August 1986, the law could have simply so provided in its exclusionary clauses. It did not. The conclusion is unavoidable, and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it.

It might not be amiss to recall that the taxable periods covered by the amnesty include the years immediately preceding the 1986 revolution during which time there had been persistent calls, all too vivid to be easily forgotten, for civil disobedience, most particularly in the payment of taxes, to the martial law regime. It should be understandable then that those who ultimately took over the reigns of government following the successful revolution would promptly provide for abroad, and not a confined, tax amnesty.

Relative to the two other issued raised by the Commissioner, we need only quote from Executive Order No. 41 itself; thus:

Sec. 6. Immunities and Privileges. — Upon full compliance with the conditions of the tax amnesty and the rules and regulations issued pursuant to this Executive order, the taxpayer shall enjoy the following immunities and privileges:

a) The taxpayer shall be relieved of any income tax liability on any untaxed income from January 1, 1981 to December 31, 1985, including increments thereto and penalties on

account of the non-payment of the said tax. Civil, criminal or administrative liability arising from the non-payment of the said tax, which are actionable under the National Internal Revenue Code, as amended, are likewise deemed extinguished.

b) The taxpayer's tax amnesty declaration shall not be admissible in evidence in all proceedings before judicial, quasi-judicial or administrative bodies, in which he is a defendant or respondent, and the same shall not be examined, inquired or looked into by any person, government official, bureau or office.

c) The books of account and other records of the taxpayer for the period from January 1, 1981 to December 31, 1985 shall not be examined for income tax purposes:Provided, That the Commissioner of Internal Revenue may authorize in writing the examination of the said books of accounts and other records to verify the validity or correctness of a claim for grant of any tax refund, tax credit (other than refund on credit of withheld taxes on wages), tax incentives, and/or exemptions under existing laws.

There is no pretension that the tax amnesty returns and due payments made by the taxpayer did not conform with the conditions expressed in the amnesty order.

WHEREFORE, the decision of the court of Appeals, sustaining that of the court of Tax Appeals, is hereby AFFIRMED in toto. No costs.

SO ORDERED.

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G.R. No. L-63915 April 24, 1985

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners, vs.HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacañang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of Printing, respondents.

 

ESCOLIN, J.:

Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of implementation and administrative orders.

Specifically, the publication of the following presidential issuances is sought:

a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847.

b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-1178,1180-1278.

c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-

1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-2044, 2046-2145, 2147-2161, 2163-2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507, 509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.

f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123.

g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.

The respondents, through the Solicitor General, would have this case dismissed outright on the ground that petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged non-publication of the presidential issuances in question 2 said petitioners are without the requisite legal personality to institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:

SEC. 3. Petition for Mandamus.—When any tribunal, corporation, board or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use a rd enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act required to be done to Protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant.

Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its object is to compel the performance of a public duty, they need not show any specific interest for their petition to be given due course.

The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor General, 3 this Court held that while the general rule is that "a writ of mandamus would be granted to a private individual only in those cases where he has some private or particular interest to be subserved, or some particular right to be protected, independent of that which he holds with the public at large," and "it is for the public officers exclusively to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and the object of the mandamus is to procure the enforcement of a public

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duty, the people are regarded as the real party in interest and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431].

Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the mandamus proceedings brought to compel the Governor General to call a special election for the position of municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:

We are therefore of the opinion that the weight of authority supports the proposition that the relator is a proper party to proceedings of this character when a public right is sought to be enforced. If the general rule in America were otherwise, we think that it would not be applicable to the case at bar for the reason 'that it is always dangerous to apply a general rule to a particular case without keeping in mind the reason for the rule, because, if under the particular circumstances the reason for the rule does not exist, the rule itself is not applicable and reliance upon the rule may well lead to error'

No reason exists in the case at bar for applying the general rule insisted upon by counsel for the respondent. The circumstances which surround this case are different from those in the United States, inasmuch as if the relator is not a proper party to these proceedings no other person could be, as we have seen that it is not the duty of the law officer of the Government to appear and represent the people in cases of this character.

The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public right recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute this proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering that the Solicitor General, the government officer generally empowered to represent the people, has entered his appearance for respondents in this case.

Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since the presidential issuances in question contain special provisions as to the date they are to take effect, publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on Article 2 of the Civil Code:

Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, ...

The interpretation given by respondent is in accord with this Court's construction of said article. In a long line of decisions, 4 this Court has ruled that publication in the Official Gazette is necessary in those cases where the legislation itself does not provide for its effectivity date-for then the date of publication is material for determining its date of

effectivity, which is the fifteenth day following its publication-but not when the law itself provides for the date when it goes into effect.

Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the fact of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is easily reached that said Article 2 does not preclude the requirement of publication in the Official Gazette, even if the law itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows:

Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and resolutions of a public nature of the, Congress of the Philippines; [2] all executive and administrative orders and proclamations, except such as have no general applicability; [3] decisions or abstracts of decisions of the Supreme Court and the Court of Appeals as may be deemed by said courts of sufficient importance to be so published; [4] such documents or classes of documents as may be required so to be published by law; and [5] such documents or classes of documents as the President of the Philippines shall determine from time to time to have general applicability and legal effect, or which he may authorize so to be published. ...

The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance that at this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of the debates and deliberations in the Batasan Pambansa—and for the diligent ones, ready access to the legislative records—no such publicity accompanies the law-making process of the President. Thus, without publication, the people have no means of knowing what presidential decrees have actually been promulgated, much less a definite way of informing themselves of the specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno en uso de su potestad. 5

The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be given substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such listing, to our mind, leaves respondents with no discretion whatsoever as to what must be included or excluded from such publication.

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The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise impose a burden or. the people, such as tax and revenue measures, fall within this category. Other presidential issuances which apply only to particular persons or class of persons such as administrative and executive orders need not be published on the assumption that they have been circularized to all concerned. 6

It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC 7:

In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the land, the requirement of due process and the Rule of Law demand that the Official Gazette as the official government repository promulgate and publish the texts of all such decrees, orders and instructions so that the people may know where to obtain their official and specific contents.

The Court therefore declares that presidential issuances of general application, which have not been published, shall have no force and effect. Some members of the Court, quite apprehensive about the possible unsettling effect this decision might have on acts done in reliance of the validity of those presidential decrees which were published only during the pendency of this petition, have put the question as to whether the Court's declaration of invalidity apply to P.D.s which had been enforced or implemented prior to their publication. The answer is all too familiar. In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank 8 to wit:

The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects-with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.

Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party under the Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official Gazette is "an operative fact which may have consequences which cannot be justly ignored. The past cannot always be erased by a new judicial declaration ... that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."

From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the subject matters nor the texts of these PDs can be ascertained since no copies thereof are available. But whatever their subject matter may be, it is undisputed that none of these unpublished PDs has ever been implemented or enforced by the government. In Pesigan vs. Angeles, 11 the Court, through Justice Ramon Aquino, ruled that "publication is necessary to apprise the public of the contents of [penal] regulations and make the said penalties binding on the persons affected thereby. " The cogency of this holding is apparently recognized by respondent officials considering the manifestation in their comment that "the government, as a matter of policy, refrains from prosecuting violations of criminal laws until the same shall have been published in the Official Gazette or in some other publication, even though some criminal laws provide that they shall take effect immediately.

WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect.

SO ORDERED.

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A.M. No. RTJ-92-876 September 19, 1994

STATE PROSECUTORS, complainants, vs.JUDGE MANUEL T. MURO, Regional Trial Court, Branch 54, Manila, respondent.

 

PER CURIAM:

In assaying the requisite norms for qualifications and eminence of a magistrate, legal authorities place a premium on how he has complied with his continuing duty to know the law. A quality thus considered essential to the judicial character is that of "a man of learning who spends tirelessly the weary hours after midnight acquainting himself with the great body of traditions and the learning of the law; is profoundly learned in all the learning of the law; and knows how to use that learning." 1

Obviously, it is the primary duty of a judge, which he owes to the public and to the legal profession, to know the very law he is supposed to apply to a given controversy. He is called upon to exhibit more than just a cursory acquaintance with the statutes and procedural rules. Party litigants will have great faith in the administration of justice if judges cannot justly be accused of apparent deficiency in their grasp of the legal principles. For, service in the judiciary means a continuous study and research on the law from beginning to end. 2

In a letter-complaint 3 dated August 19, 1992, respondent Judge Manuel T. Muro of the Regional Trial Court (RTC) of Manila, Branch 54, was charged by State Prosecutors Nilo C. Mariano, George C. Dee and Paterno V. Tac-an with ignorance of the law, grave misconduct and violations of Rules 2.01, 3.01 and 3.02 of the Code of Judicial Conduct, committed as follows:

1. That on August 13, 1992, respondent judge issued an Order dismissing eleven (11) cases (docketed as Crim. Cases Nos. 92-101959 to 92- 101969, inclusive) filed by the undersigned complainant prosecutors (members of the DOJ Panel of Prosecutors) against the accused Mrs. Imelda Romualdez Marcos, for Violation of Central Bank Foreign Exchange Restrictions, as consolidated in CB Circular No. 960, in relation to the penal provisions of Sec. 34 of R.A. 265, as amended, . . .;

2. That respondent Judge issued his Order solely on the basis of newspaper reports (August 11, 1992 issues of the Philippine Daily Inquirer and the Daily Globe) concerning the announcement on August 10, 1992 by the President of the Philippines of the lifting by the government of all foreign exchange restrictions and the arrival at such decision by the Monetary Board as per statement of Central Bank Governor Jose Cuisia;

3. That claiming that the reported announcement of the Executive Department on the lifting of foreign exchange restrictions by two newspapers which are reputable and of

national circulation had the effect of repealing Central Bank Circular No. 960, as allegedly supported by Supreme Court decisions . . ., the Court contended that it was deprived of jurisdiction, and, therefore, motu, prop(r)io had to dismiss all the eleven cases aforementioned "for not to do so opens this Court to charges of trying cases over which it has no more jurisdiction;"

4. That in dismissing aforecited cases on August 13, 1992 on the basis of a Central Bank Circular or Monetary Board Resolution which as of date hereof, has not even been officially issued, and basing his Order/decision on a mere newspaper account of the advance announcement made by the President of the said fact of lifting or liberalizing foreign exchange controls, respondent judge acted prematurely and in indecent haste, as he had no way of determining the full intent of the new CB Circular or Monetary Board resolution, and whether the same provided for exception, as in the case of persons who had pending criminal cases before the courts for violations of Central Bank Circulars and/or regulations previously issued on the matter;

5. That respondent Judge's arrogant and cavalier posture in taking judicial notice purportedly as a matter of public knowledge a mere newspaper account that the President had announced the lifting of foreign exchange restrictions as basis for his assailed order of dismissal is highly irregular, erroneous and misplaced. For the respondent judge to take judicial notice thereof even before it is officially released by the Central Bank and its full text published as required by law to be effective shows his precipitate action in utter disregard of the fundamental precept of due process which the People is also entitled to and exposes his gross ignorance of the law, thereby tarnishing public confidence in the integrity of the judiciary. How can the Honorable Judge take judicial notice of something which has not yet come into force and the contents, shape and tenor of which have not yet been published and ascertained to be the basis of judicial action? The Honorable Judge had miserably failed to "endeavor diligently to ascertain the facts" in the case at bar contrary to Rule 3.02 of the Code of Judicial Conduct constituting Grave Misconduct;

6. That respondent Judge did not even ha(ve) the prudence of requiring first the comment of the prosecution on the effect of aforesaid Central Bank Circular/Monetary Board resolution on the pending cases before dismissing the same, thereby denying the Government of its right to due process;

7. That the lightning speed with which respondent Judge acted to dismiss the cases may be gleaned from the fact that such precipitate action was undertaken despite already scheduled continuation of trial dates set in the order of the court (the prosecution having started presenting its evidence . . .) dated August 11, 1992 to wit: August 31, September 3, 10, 21, & 23 and October 1, 1992, all at 9:30 o'clock in the morning, in brazen disregard of all notions of fair play, thereby depriving the Government of its right to be heard, and clearly exposing his bias and partiality; and

8. That, in fact, the motive of respondent Judge in dismissing the case without even waiting for a motion to quash filed by the counsel for accused has even placed his dismissal Order suspect.

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Pursuant to a resolution of this Court dated September 8, 1992, respondent judge filed his comment, 4 contending,inter alia, that there was no need to await publication of the Central Bank (CB) circular repealing the existing law on foreign exchange controls for the simple reason that the public announcement made by the President in several newspapers of general circulation lifting foreign exchange controls was total, absolute, without qualification, and was immediately effective; that having acted only on the basis of such announcement, he cannot be blamed for relying on the erroneous statement of the President that the new foreign exchange rules rendered moot and academic the cases filed against Mrs. Marcos, and which was corrected only on August 17, 1992 but published in the newspapers on August 18, 1992, and only after respondent judge had issued his order of dismissal dated August 13, 1992; that the President was ill-advised by his advisers and, instead of rescuing the Chief Executive from embarrassment by assuming responsibility for errors in the latter's announcement, they chose to toss the blame for the consequence of their failures to respondent judge who merely acted on the basis of the announcements of the President which had become of public knowledge; that the "saving clause" under CB Circular No. 1353 specifically refers only to pending actions or investigations involving violations of CB Circular No. 1318, whereas the eleven cases dismissed involved charges for violations of CB Circular No. 960, hence the accused cannot be tried and convicted under a law different from that under which she was charged; that assuming that respondent judge erred in issuing the order of dismissal, the proper remedy should have been an appeal therefrom but definitely not an administrative complaint for his dismissal; that a mistake committed by a judge should not necessarily be imputed as ignorance of the law; and that a "court can reverse or modify a doctrine but it does not show ignorance of the justices or judges whose decisions were reversed or modified" because "even doctrines initiated by the Supreme Court are later reversed, so how much more for the lower courts?"

He further argued that no hearing was necessary since the prosecution had nothing to explain because, as he theorized, "What explanation could have been given? That the President was talking 'through his hat' (to use a colloquialism) and should not be believed? That I should wait for the publication (as now alleged by complainants), of a still then non-existent CB circular? . . . As it turned out, CB Circular No. 3153 (sic) does not affect my dismissal order because the said circular's so-called saving clause does not refer to CB Circular 960 under which the charges in the dismissed cases were based;" that it was discretionary on him to take judicial notice of the facts which are of public knowledge, pursuant to Section 2 of Rule 129; that the contention of complainants that he acted prematurely and in indecent haste for basing his order of dismissal on a mere newspaper account is contrary to the wordings of the newspaper report wherein the President announced the lifting of controls as an accomplished fact, not as an intention to be effected in the future, because of the use of the present perfect tense or past tense "has lifted," not that he "intends to lift," foreign exchange controls.

Finally, respondent judge asseverates that complainants who are officers of the Department of Justice, violated Section 6, Rule 140 of the Rules of Court which provides that "proceedings against judges of first instance shall be private and confidential" when they caused to be published in the newspapers the filing of the present administrative case against him; and he emphasizes the fact that he had to immediately resolve a

simple and pure legal matter in consonance with the admonition of the Supreme Court for speedy disposition of cases.

In their reply 5 and supplemental reply, 6 complainants aver that although the saving clause under Section 16 of CB Circular No. 1353 made specific reference to CB Circular No. 1318, it will be noted that Section 111 of Circular No. 1318, which contains a saving clause substantially similar to that of the new circular, in turn refers to and includes Circular No. 960. Hence, whether under Circular No. 1318 or Circular No. 1353, pending cases involving violations of Circular No. 960 are excepted from the coverage thereof. Further, it is alleged that the precipitate dismissal of the eleven cases, without according the prosecution the opportunity to file a motion to quash or a comment, or even to show cause why the cases against accused Imelda R. Marcos should not be dismissed, is clearly reflective of respondent's partiality and bad faith. In effect, respondent judge acted as if he were the advocate of the accused.

On December 9, 1993, this Court issued a resolution referring the complaint to the Office of the Court Administrator for evaluation, report and recommendation, pursuant to Section 7, Rule 140 of the Rules of Court, as revised, there being no factual issues involved. The corresponding report and recommendation, 7 dated February 14, 1994, was submitted by Deputy Court Administrator Juanito A. Bernad, with the approval of Court Administrator Ernani Cruz-Paño.

The questioned order 8 of respondent judge reads as follows:

These eleven (11) cases are for Violation of Central Bank Foreign Exchange Restrictions as consolidated in CB Circular No. 960 in relation to the penal provision of Sec. 34 of R.A. 265, as amended.

The accused Mrs. Imelda R. Marcos pleaded not guilty to all these cases; apparently the other accused in some of these cases, Roberto S. Benedicto, was not arrested and therefore the Court did not acquire jurisdiction over his person; trial was commenced as against Mrs. Marcos.

His Excellency, the President of the Philippines, announced on August 10, 1992 that the government has lifted all foreign exchange restrictions and it is also reported that Central Bank Governor Jose Cuisia said that the Monetary Board arrived at such decision (issue of the Philippine Daily Inquirer, August 11, 1992 and issue of the Daily Globe of the same date). The Court has to give full confidence and credit to the reported announcement of the Executive Department, specially from the highest official of that department; the Courts are charged with judicial notice of matters which are of public knowledge, without introduction of proof, the announcement published in at least the two newspapers cited above which are reputable and of national circulation.

Per several cases decided by the Supreme Court (People vs. Alcaras, 56 Phil. 520, People vs. Francisco, 56 Phil. 572, People vs. Pastor, 77 Phil. 1000, People vs. Crisanto Tamayo, 61 Phil. 225), among others, it was held that the repeal of a penal law without re-enactment extinguishes the right to prosecute or punish the offense committed under

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the old law and if the law repealing the prior penal law fails to penalize the acts which constituted the offense defined and penalized in the repealed law, the repealed law carries with it the deprivation of the courts of jurisdiction to try, convict and sentence persons charged with violations of the old law prior to its repeal. Under the aforecited decisions this doctrine applies to special laws and not only to the crimes punishable in the Revised Penal Code, such as the Import Control Law. The Central Bank Circular No. 960 under which the accused Mrs. Marcos is charged is considered as a penal law because violation thereof is penalized with specific reference to the provision of Section 34 of Republic Act 265, which penalizes violations of Central Bank Circular No. 960, produces the effect cited in the Supreme Court decisions and since according to the decisions that repeal deprives the Court of jurisdiction, this Court motu propriodismisses all the eleven (11) cases as a forestated in the caption, for not to do so opens this Court to charges of trying cases over which it has no more jurisdiction.

This order was subsequently assailed in a petition for certiorari filed with the Court of Appeals, entitled "People of the Philippines vs. Hon. Manuel T. Muro, Judge, RTC of Manila, Br. 54 and Imelda R. Marcos," docketed as CA-G.R. SP No. 29349. When required to file her comment, private respondent Marcos failed to file any. Likewise, after the appellate court gave due course to the petition, private respondent was ordered, but again failed despite notice, to file an answer to the petition and to show cause why no writ of preliminary injunction should issue. Eventually, on April 29, 1993, the Court of Appeals rendered a decision 9 setting aside the order of August 13, 1992, and reinstating Criminal Cases Nos. 92-101959 to 92-101969.

In finding that respondent judge acted in excess of jurisdiction and with grave abuse of discretion in issuing the order of dismissal, the appellate court held that:

The order was issued motu proprio, i.e., without any motion to dismiss filed by counsel for the accused, without giving an opportunity for the prosecution to be heard, and solely on the basis of newspaper reports announcing that the President has lifted all foreign exchange restrictions.

The newspaper report is not the publication required by law in order that the enactment can become effective and binding. Laws take effect after fifteen days following the completion of their publication in the Official Gazette or in a newspaper of general circulation unless it is otherwise provided (Section 1, Executive Order No. 200). The full text of CB Circular 1353, series of 1992, entitled "Further Liberalizing Foreign Exchange Regulation" was published in the August 27, 1992 issue of the Manila Chronicle, the Philippine Star and the Manila Bulletin. Per certification of the CB Corporate Affairs Office, CB Circular No. 1353 took effect on September 2 . . . .

Considering that respondent judge admittedly had not seen the official text of CB Circular No. 1353, he was in no position to rule judiciously on whether CB Circular No. 960, under which the accused Mrs. Marcos is charged, was already repealed by CB Circular No. 1353. . . .

xxx xxx xxx

A cursory reading of the . . . provision would have readily shown that the repeal of the regulations on non-trade foreign exchange transactions is not absolute, as there is a provision that with respect to violations of former regulations that are the subject of pending actions or investigations, they shall be governed by the regulations existing at the time the cause of action (arose). Thus his conclusion that he has lost jurisdiction over the criminal cases is precipitate and hasty. Had he awaited the filing of a motion to dismiss by the accused, and given opportunity for the prosecution to comment/oppose the same, his resolution would have been the result of deliberation, not speculation.

I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to take judicial notice is to be exercised by courts with caution; care must be taken that the requisite notoriety exists; and every reasonable doubt on the subject should be promptly resolved in the negative. 10

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. 11 The provincial guide in determining what facts may be assumed to be judicially known is that of notoriety. 12 Hence, it can be said that judicial notice is limited to facts evidenced by public records and facts of general notoriety. 13

To say that a court will take judicial notice of a fact is merely another way of saying that the usual form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. 14 This is because the court assumes that the matter is so notorious that it will not be disputed. 15 But judicial notice is not judicial knowledge. The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is not authorized to make his individual knowledge of a fact, not generally or professionally known, the basis of his action. Judicial cognizance is taken only of those matters which are "commonly" known. 16

Things of "common knowledge," of which courts take judicial notice, may be matters coming to the knowledge of men generally in the course of the ordinary experiences of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned demonstration. 17 Thus, facts which are universally known, and which may be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided they are of such universal notoriety and so generally understood that they may be regarded as forming part of the common knowledge of every person. 18

Respondent judge, in the guise of exercising discretion and on the basis of a mere newspaper account which is sometimes even referred to as hearsay evidence twice removed, took judicial notice of the supposed lifting of foreign exchange controls, a matter which was not and cannot be considered of common knowledge or of general notoriety. Worse, he took cognizance of an administrative regulation which was not yet in force when the order of dismissal was issued. Jurisprudence dictates that judicial notice cannot be taken of a statute before it becomes effective. 19 The reason is simple. A law

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which is not yet in force and hence, still inexistent, cannot be of common knowledge capable of ready and unquestionable demonstration, which is one of the requirements before a court can take judicial notice of a fact.

Evidently, it was impossible for respondent judge, and it was definitely not proper for him, to have taken cognizance of CB Circular No. 1353, when the same was not yet in force at the time the improvident order of dismissal was issued.

II. Central Bank Circular No. 1353, which took effect on September 1, 1992, further liberalized the foreign exchange regulations on receipts and disbursements of residents arising from non-trade and trade transactions. Section 16 thereof provides for a saving clause, thus:

Sec. 16. Final Provisions of CB Circular No. 1318. - All the provisions in Chapter X of CB Circular No. 1318 insofar as they are not inconsistent with, or contrary to the provisions of this Circular, shall remain in full force and effect: Provided, however, that any regulation on non-trade foreign exchange transactions which has been repealed, amended or modified by this Circular, violations of which are the subject of pending actions or investigations, shall not be considered repealed insofar as such pending actions or investigations are concerned, it being understood that as to such pending actions or investigations, the regulations existing at the time the cause of action accrued shall govern.

Respondent judge contends that the saving clause refers only to the provisions of Circular No. 1318, whereas the eleven criminal cases he dismissed involve a violation of CB Circular No. 960. Hence, he insists, Circular No. 960 is deemed repealed by the new circular and since the former is not covered by the saving clause in the latter, there is no more basis for the charges involved in the criminal cases which therefore warrant a dismissal of the same. The contention is patently unmeritorious.

Firstly, the second part of the saving clause in Circular No. 1353 explicitly provides that "any regulation on non-trade foreign transactions which has been repealed, amended or modified by this Circular, violations of which are the subject of pending actions or investigations, shall not be considered repealed insofar as such pending actions or investigations are concerned, it being understood that as to such pending actions or investigations, theregulations existing at the time the cause of action accrued shall govern." The terms of the circular are clear and unambiguous and leave no room for interpretation. In the case at bar, the accused in the eleven cases had already been arraigned, had pleaded not guilty to the charges of violations of Circular No. 960, and said cases had already been set for trial when Circular No. 1353 took effect. Consequently, the trial court was and is supposed to proceed with the hearing of the cases in spite of the existence of Circular No. 1353.

Secondly, had respondent judge only bothered to read a little more carefully the texts of the circulars involved, he would have readily perceived and known that Circular No. 1318 also contains a substantially similar saving clause as that found in Circular No. 1353, since Section 111 of the former provides:

Sec. 111. Repealing clause. - All existing provisions of Circulars 365, 960 and 1028, including amendments thereto, with the exception of the second paragraph of Section 68 of Circular 1028, as well as all other existing Central Bank rules and regulations or parts thereof, which are inconsistent with or contrary to the provisions of this Circular, are hereby repealed or modified accordingly: Provided, however, that regulations, violations of which are the subject of pending actions or investigations, shall be considered repealed insofar as such pending actions or investigations are concerned, it being understood that as to such pending actions or investigations, the regulations existing at the time the cause of action accrued shall govern.

It unequivocally appears from the section above quoted that although Circular No. 1318 repealed Circular No. 960, the former specifically excepted from its purview all cases covered by the old regulations which were then pending at the time of the passage of the new regulations. Thus, any reference made to Circular No. 1318 necessarily involves and affects Circular No. 960.

III. It has been said that next in importance to the duty of rendering a righteous judgment is that of doing it in such a manner as will beget no suspicion of the fairness and integrity of the judge. 20 This means that a judge should not only render a just, correct and impartial decision but should do so in such a manner as to be free from any suspicion as to its fairness and impartiality and as to his integrity. While a judge should possess proficiency in law in order that he can competently construe and enforce the law, it is more important that he should act and behave in such a manner that the parties before him should have confidence in his impartiality. Thus, it is not enough that he decides cases without bias and favoritism. Nor is it sufficient that he in fact rids himself of prepossessions. His actuations should moreover inspire that belief. Like Caesar's wife, a judge must not only be pure but beyond suspicion. 21

Moreover, it has always heretofore been the rule that in disposing of controverted cases, judges should show their full understanding of the case, avoid the suspicion of arbitrary conclusion, promote confidence in their intellectual integrity and contribute useful precedents to the growth of the law. 22 A judge should be mindful that his duty is the application of general law to particular instances, that ours is a government of laws and not of men, and that he violates his duty as a minister of justice under such a system if he seeks to do what he may personally consider substantial justice in a particular case and disregards the general law as he knows it to be binding on him. Such action may have detrimental consequences beyond the immediate controversy. He should administer his office with due regard to the integrity of the system of the law itself, remembering that he is not a depository of arbitrary power, but a judge under the sanction of the law. 23 These are immutable principles that go into the very essence of the task of dispensing justice and we see no reason why they should not be duly considered in the present case.

The assertion of respondent judge that there was no need to await publication of Circular No. 1353 for the reason that the public announcement made by the President in several newspapers of general circulation lifting foreign exchange controls is total, absolute, without qualification, and immediately effective, is beyond comprehension. As a judge of the Regional Trial Court of Manila, respondent is supposed to be well-versed in the

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elementary legal mandates on the publication of laws before they take effect. It is inconceivable that respondent should insist on an altogether different and illogical interpretation of an established and well-entrenched rule if only to suit his own personal opinion and, as it were, to defend his indefensible action. It was not for him to indulge or even to give the appearance of catering to the at-times human failing of yielding to first impressions. 24 He having done so, in the face of the foregoing premises, this Court is hard put to believe that he indeed acted in good faith.

IV. This is not a simple case of a misapplication or erroneous interpretation of the law. The very act of respondent judge in altogether dismissing sua sponte the eleven criminal cases without even a motion to quash having been filed by the accused, and without at least giving the prosecution the basic opportunity to be heard on the matter by way of a written comment or on oral argument, is not only a blatant denial of elementary due process to the Government but is palpably indicative of bad faith and partiality.

The avowed desire of respondent judge to speedily dispose of the cases as early as possible is no license for abuse of judicial power and discretion, 25 nor does such professed objective, even if true, justify a deprivation of the prosecution's right to be heard and a violation of its right to due process oflaw. 26

The lightning speed, to borrow the words of complainants, with which respondent judge resolved to dismiss the cases without the benefit of a hearing and without reasonable notice to the prosecution inevitably opened him to suspicion of having acted out of partiality for the accused. Regardless of how carefully he may have evaluated changes in the factual situation and legal standing of the cases, as a result of the newspaper report, the fact remains that he gave the prosecution no chance whatsoever to show or prove that it had strong evidence of the guilt of the accused. To repeat, he thereby effectively deprived the prosecution of its right to due process. 27 More importantly, notwithstanding the fact that respondent was not sure of the effects and implications of the President's announcement, as by his own admission he was in doubt whether or not he should dismiss the cases, 28 he nonetheless deliberately refrained from requiring the prosecution to comment thereon. In a puerile defense of his action, respondent judge can but rhetorically ask: "What explanation could have been given? That the President was talking 'through his hat' and should not be believed? That I should wait for the publication of a still then non- existent CB Circular?" The pretended cogency of this ratiocination cannot stand even the minutest legal scrutiny.

In order that bias may not be imputed to a judge, he should have the patience and circumspection to give the opposing party a chance to present his evidence even if he thinks that the oppositor's proofs might not be adequate to overthrow the case for the other party. A display of petulance and impatience in the conduct of the trial is a norm of conduct which is inconsistent with the "cold neutrality of an impartial judge." 29 At the very least, respondent judge acted injudiciously and with unjustified haste in the outright dismissal of the eleven cases, and thereby rendered his actuation highly dubious.

V. It bears stressing that the questioned order of respondent judge could have seriously and substantially affected the rights of the prosecution had the accused invoked the defense of double jeopardy, considering that the dismissal was ordered after arraignment and without the consent of said accused. This could have spawned legal complications and inevitable delay in the criminal proceedings, were it not for the holding of the Court of Appeals that respondent judge acted with grave abuse of discretion amounting to lack of jurisdiction. This saved the day for the People since in the absence of jurisdiction, double jeopardy will not set in. To stress this point, and as acaveat to trial courts against falling into the same judicial error, we reiterate what we have heretofore declared:

It is settled doctrine that double jeopardy cannot be invoked against this Court's setting aside of the trial court's judgment of dismissal or acquittal where the prosecution which represents the sovereign people in criminal cases is denied due process. . . . .

Where the prosecution is deprived of a fair opportunity to prosecute and prove its case, its right to due process is thereby violated.

The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted of their jurisdiction. Thus, the violation of the State's right to due process raises a serious jurisdictional issue . . . which cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process is apparent, a decision rendered in disregard of that right is void for lack of jurisdiction . . . . 30

It is also significant that accused Marcos, despite due notice, never submitted either her comment on or an answer to the petition for certiorari as required by the Court of Appeals, nor was double jeopardy invoked in her defense. This serves to further underscore the fact that the order of dismissal was clearly unjustified and erroneous. Furthermore, considering that the accused is a prominent public figure with a record of influence and power, it is not easy to allay public skepticism and suspicions on how said dismissal order came to be, to the consequent although undeserved discredit of the entire judiciary.

VI. To hold a judge liable for rendering a manifestly unjust order through inexcusable negligence or ignorance, it must be clearly shown that although he has acted without malice, he failed to observe in the performance of his duty that diligence, prudence and care which the law is entitled to exact in the rendering of any public service. Negligence and ignorance are inexcusable if they imply a manifest injustice which cannot be explained by a reasonable interpretation, and even though there is a misunderstanding or error of the law applied, it nevertheless results logically and reasonably, and in a very clear and indisputable manner, in the notorious violation of the legal precept. 31

In the present case, a cursory perusal of the comment filed by respondent judge reveals that no substantial argument has been advanced in plausible justification of his act. He utterly failed to show any legal, factual, or even equitable justification for the dismissal of the eleven criminal cases. The explanation given is no explanation at all. The strained and fallacious submissions therein do not speak well of respondent and cannot but

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further depreciate his probity as a judge. On this point, it is best that pertinent unedited excerpts from his comment 32 be quoted by way of graphic illustration and emphasis:

On the alleged ignorance of the law imputed to me, it is said that I issued the Order dismissing the eleven (11) cases against Mrs. Imelda R. Marcos on the basis of newspaper reports referred to in paragraph 2 of the letter complaint without awaiting the official publication of the Central Bank Circular. Ordinarily a Central Bank Circular/Resolution must be published in the Official Gazette or in a newspaper of general circulation, but the lifting of "all foreign exchange controls" was announced by the President of the Philippines WITHOUT QUALIFICATIONS; as published in the Daily Globe, August 11, 1992" the government has lifted ALL foreign exchange controls," and in the words of the Philippine Daily Inquirer report of the same date "The government yesterday LIFTED the LAST remaining restrictions on foreign exchange transactions, . . ." (emphasis in both quotations supplied) not only the President made the announcement but also the Central Bank Governor Jose Cuisia joined in the announcement by saying that "the Monetary Board arrived at the decision after noting how the "partial liberalization" initiated early this year worked."

Therefore, because of the ABSOLUTE lifting of ALL restrictions on foreign exchange transactions, there was no need to await the publication of the repealing circular of the Central Bank. The purpose of requiring publication of laws and administrative rules affecting the public is to inform the latter as to how they will conduct their affairs and how they will conform to the laws or the rules. In this particular case, with the total lifting of the controls, there is no need to await publication. It would have been different if the circular that in effect repealed Central Bank Circular No. 960, under which the accused was charged in the cases dismissed by me, had provided for penalties and/or modified the provisions of said Circular No. 960.

The Complainants state that the lifting of controls was not yet in force when I dismissed the cases but it should be noted that in the report of the two (2) newspapers aforequoted, the President's announcement of the lifting of controls was stated in the present perfect tense (Globe) or past tense (Inquirer). In other words, it has already been lifted; the announcement did not say that the government INTENDS to lift all foreign exchange restrictions but instead says that the government "has LIFTED all foreign exchange controls," and in the other newspaper cited above, that "The government yesterday lifted the last remaining restrictions on foreign exchange transactions". The lifting of the last remaining exchange regulations effectively cancelled or repealed Circular No. 960.

The President, who is the Chief Executive, publicly announced the lifting of all foreign exchange regulations. The President has within his control directly or indirectly the Central Bank of the Philippines, the Secretary of Finance being the Chairman of the Monetary Board which decides the policies of the Central Bank.

No official bothered to correct or qualify the President's announcement of August 10, published the following day, nor made an announcement that the lifting of the controls do not apply to cases already pending, not until August 17 (the fourth day after my Order, and the third day after report of said order was published) and after the President said on

August 17, reported in the INQUIRER's issue of August 18, 1992, that the "new foreign exchange rules have nullified government cases against Imelda R. Marcos, telling reporters that the charges against the widow of former President Marcos "have become moot and academic" because of new ruling(s) which allow free flow of currency in and out of the country" (Note, parenthetically, the reference to "new rules" not to "rules still to be drafted"). The INQUIRER report continues: "A few hours later, presidential spokeswoman Annabelle Abaya said, RAMOS (sic) had "corrected himself'." "He had been belatedly advised by the Central Bank Governor Jose Cuisia and Justice Secretary Franklin Drilon that the Monetary Board Regulation excluded from its coverage all criminal cases pending in court and such a position shall stand legal scrutiny', Mrs. Abaya, said."

I will elaborate on two points:

1. If the President was wrong in making the August 10 announcement (published in August 11, 1992, newspapers) and in the August 17 announcement, SUPRA, and thus I should have relied on the Presidential announcements, and there is basis to conclude that the President was at the very least ILL-SERVED by his financial and legal advisers, because no one bothered to advise the President to correct his announcements, not until August 17, 1992, a few hours after the President had made another announcement as to the charges against Imelda Marcos having been rendered moot and academic. The President has a lot of work to do, and is not, to my knowledge, a financier, economist, banker or lawyer. It therefore behooved his subalterns to give him timely (not "belated") advice, and brief him on matters of immediate and far-reaching concerns (such as the lifting of foreign exchange controls, designed, among others to encourage the entry of foreign investments). Instead of rescuing the Chief Executive from embarrassment by assuming responsibility for errors in the latter's announcement, these advisers have chosen to toss the blame for the consequence of their failing to me, who only acted on the basis of announcements of their Chief, which had become of public knowledge.

xxx xxx xxx

The Court strongly feels that it has every right to assume and expect that respondent judge is possessed with more than ordinary credentials and qualifications to merit his appointment as a presiding judge in the Regional Trial Court of the National Capital Judicial Region, stationed in the City of Manila itself. It is, accordingly, disheartening and regrettable to note the nature of the arguments and the kind of logic that respondent judge would want to impose on this Court notwithstanding the manifest lack of cogency thereof. This calls to mind similar scenarios and how this Court reacted thereto.

In one case, an RTC Judge was administratively charged for acquitting the accused of a violation of CB Circular No. 960 despite the fact that the accused was apprehended with US$355,349.00 while boarding a plane for Hongkong, erroneously ruling that the State must first prove criminal intent to violate the law and benefit from the illegal act, and further ordering the return of US$3,000.00 out of the total amount seized, on the mistaken interpretation that the CB circular exempts such amount from seizure.

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Respondent judge therein was ordered dismissed from the government service for gross incompetence and ignorance of the law. 33

Subsequently, the Court dismissed another RTC judge, with forfeiture of retirement benefits, for gross ignorance of the law and for knowingly rendering an unjust order or judgment when he granted bail to an accused charged with raping an 11-year old girl, despite the contrary recommendation of the investigating judge, and thereafter granted the motion to dismiss the case allegedly executed by the complainant. 34

Similarly, an RTC judge who was described by this Court as one "who is ignorant of fairly elementary and quite familiar legal principles and administrative regulations, has a marked penchant for applying unorthodox, even strange theories and concepts in the adjudication of controversies, exhibits indifference to and even disdain for due process and the rule of law, applies the law whimsically, capriciously and oppressively, and displays bias and impartiality," was dismissed from the service with forfeiture of all retirement benefits and with prejudice to reinstatement in any branch of the government or any of its agencies or instrumentalities. 35

Still in another administrative case, an RTJ judge was also dismissed by this Court for gross ignorance of the law after she ordered, in a probate proceeding, the cancellation of the certificates of title issued in the name of the complainant, without affording due process to the latter and other interested parties. 36

Only recently, an RTC judge who had been reinstated in the service was dismissed after he acquitted all the accused in four criminal cases for illegal possession of firearms, on the ground that there was no proof of malice or deliberate intent on the part of the accused to violate the law. The Court found him guilty of gross ignorance of the law, his error of judgment being almost deliberate and tantamount to knowingly rendering an incorrect and unjust judgment. 37

ACCORDINGLY, on the foregoing premises and considerations, the Court finds respondent Judge Manuel T. Muro guilty of gross ignorance of the law. He is hereby DISMISSED from the service, such dismissal to carry with it cancellation of eligibility, forfeiture of leave credits and retirement benefits, and disqualification from reemployment in the government service. 38

Respondent is hereby ordered to CEASE and DESIST immediately from rendering any judgment or order, or continuing any judicial action or proceeding whatsoever, effective upon receipt of this decision.

SO ORDERED.

 

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G.R. No. L-47821 September 15, 1988

BENITO ROSALES, EMILIA R. ROSALES and ROMMEL ROSALES represented by Guardian-Ad-Litem, ROMMEL ROSALES, petitioners, vs.COURT OF APPEALS and DON BOSCO TECHNICAL INSTITUTE, FR. AGUSTIN LOPEZ; MRS. S.A. MENDOZA, assisted by her husband GODOFREDO MENDOZA and MISS FELICIDAD GORDON.respondents.

Antonio R. Rabago for petitioners.

Myrna Cruz-Feliciano for respondents.

 

BIDIN, J.:

This is a petition for review on certiorari seeking to annul and set aside the decision of the Court of Appeals * dated July 26, 1977 in CA-G.R. No. 54674-R entitled "BENITO ROSALES, et al, v. DON BOSCO TECHNICAL INSTITUTE" which affirmed the decision of the courta quo ** dated September 14, 1973, dismissing petitioners' complaint for damages. The decision of the Court of Appeals reads:

... (It) is clearly evident that plaintiffs were not candid when they maintained that they knew nothing about the school's petition for reconsideration, and that after all there was nothing 'mysterious' about the School's actuations. Further, it is likewise clear from the evidence that plaintiffs did seek the review by the Secretary of Education of the Director's ruling, and that at the time the School filed its motion to dismiss, the matter was still pending resolution with the Secretary of Education. Hence, the court a quo incurred in no error when it found that the decision of the Director of Private Schools dated May 5, 1972 was far from being final and that the administrative remedies availed of by plaintiffs had not yet been exhausted.

As to the claim that plaintiffs have been denied due process, suffice it to say that the dismissal of the complaint was based on the ground that it was premature, administrative remedies not having been exhausted.

PREMISES CONSIDERED, decision appealed from is hereby affirmed in toto. No costs. (pp. 26-27, Rollo)

The facts of the case as found by the Court of Appeals, are as follows:

On April 11, 1972, the Don Bosco Technical Institute (School, for short) posted the list of honor students for the graduation of its elementary department which was to take place on April 22,1972. Rommel Rosales a student of Grade VI, candidate for graduation and

likewise candidate for Valedictorian, reported to his parents that he was not listed as Valedictorian of the class but that it was another boy by the name of Conrado Valerie. The parents of Rommel demanded for a re-computation of the grades of their son who, they averred, should be class valedictorian and filed a formal complaint with the Director of Bureau of Private Schools against the school claiming anomalous ranking of honor pupils for the grade school with a request for a review of the computations made by the school.

On April 20, 1972, the Chief of the Legal Division of the Bureau of Private Schools sent a copy of the complaint by first indorsement to the Rector of herein respondent school. Said comment was made on April 21, 1972, stating, among others, that the complaint had lost its validity because the same was filed on the eve of the commencement exercises of the school, in violation of the provision of paragraph 176, Section XI of the Manual of Regulation for Private Schools requiring complaints of the kind to be filed not later than ten (10) days before commencement exercises. However, defendant Rector indicated that he would welcome an investigation in order to erase any doubt as to the selection of the honor students of the grade school concerned.

On May 5, 1972, the Director of Private Schools rendered a decision holding that Rommel Rosales was the rightful valedictorian.

On November 29, 1972, Rosales filed a complaint for damages itemized as follows: P25,000.00 for moral damages; P15,000.00 for correctional damages and P5,000.00 for attorney's fees, in view of the failure of the school to graduate Rommel Rosales as valedictorian of his class.

In its answer, respondent school prayed that the complaint be dismissed on the ground that the Director of Private Schools acting on its motion dated May 11, 1972 reconsidered and set aside his decision of May 5, 1972 and instead "approved and/or confirmed the selection and award of honors to the students concerned for the school year 1971-1972 as effected by the school." (p. 14, Rollo [R.A., p. 31])

Petitioners, in their reply, averred that said motion for reconsideration was mysteriously filed, there being no original copies of the same in the Office of the Director of Private Schools which would show the date of filing thereof and their corresponding receipt of a copy thereof by the petitioners.

Respondent school however, insisted that their motion for reconsideration was regularly filed and the assailed decision was in fact reconsidered as above stated on December 18,1972. The records show that petitioners filed a motion for reconsideration on January 11, 1973 of said decision of December 18, 1972 but was denied on January 19, 1973. Thus, on February 7, 1973, petitioners appealed both decisions of December 18, 1972 and January 19, 1973 to the Secretary of Education which appeal was still pending at the time of the filing of their complaint in court.

At the pre-trial, plaintiffs (petitioners herein) confirmed their filing of said appeal with the Secretary of Education. For this reason, respondent school moved to dismiss the

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complaint for lack of cause of action on the ground of plaintiff's (petitioner's) failure to exhaust administrative remedies.

On September 14, 1973, the trial court issued an order which reads:

Acting on the motion to dismiss dated August 20, 1 973 and the opposition thereto filed by the plaintiffs and after hearing the oral argument of the plaintiffs during the hearing of the motion, the Court finds that plaintiffs have not exhausted all administrative remedies against the defendants and that it does not fall within any of the recognized exceptions to the requirement. Since the complaint does not allege exhaustion of said remedies principally on appeal to the Secretary of Education which was available to him, the Court finds that the complaint does not allege facts sufficient to constitute cause of action.

WHEREFORE, the Motion to Dismiss is granted and the complaint is DISMISSED, without costs. (Rollo, pp. 23-24)

On appeal, the Court of Appeals found that the court a quo incurred no error when it found that the decision of the Director of Private Schools dated May 5, 1972 was far from being final and that the administrative remedies availed of by plaintiffs had not yet been exhausted and affirmed the decision appealed from in toto.

Hence, this petition. Petitioners raised the following assignment of errors:

I

THE LOWER COURT ERRED IN NOT FINDING THAT THE DECISION OF THE BUREAU OF PRIVATE SCHOOLS DATED MAY 5, 1972 HAS ALREADY BECOME FINAL AND CONCLUSIVE.

II

THE LOWER COURT ERRED IN NOT FINDING THAT THE EXHAUSTION OF ADMIMSTRATIVE REMEDIES IS NOT APPLICABLE IN THIS INSTANT CASE.

III

THE LOWER COURT ERRED IN ACTING AND DISREGARDING THE APPLICATION OF DUE PROCESS OF LAW TO THE PLAINTIFFS-APPELLANTS.

IV

THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT OF THE PLAINTIFFS- APPELLANT. (pp. 10-11, Rollo).

The main issues in this case are:

1. Whether or not the decision of the Director of the Bureau of Private Schools dated May 5, 1972 has already become final and conclusive; and

2. Whether or not the principle of exhaustion of administrative remedies is applicable in this case.

The first issue involves findings of fact of the Court of Appeals and of the trial court which as a general rule are final and may not be reviewed on appeal to this Court, subject to certain exceptions which have been recognized and accepted by this court at one time or another (Manlapaz v. Court of Appeals, 147 SCRA 238 [1987]).

Petitioners' position is to the effect that there was no motion for reconsideration of the May 5, 1972 decision of the Director of Private Schools, so that the same has become final and executory.

The Court of Appeals found that although the Record on Appeal does not contain a copy of the alleged motion for reconsideration of the subject decision of May 5, 1972, it was however, mentioned in the letter of the Director of Private Schools dated January 19, 1973 addressed to counsel of plaintiffs (petitioners herein) which reads:

This has reference to your request in behalf of Mrs. Emilia R. Rosales, for reconsideration of the action taken by this Office as per letter dated December 18, 1972, reconsidering its original stand on the matter of the ranking of honor students at the Don Bosco Technical Institute, Mandaluyong, Rizal, for the school year 1971-72, as contained in a letter dated May 5, 1972.

After a careful review of the records of the present case, in the light of existing rules and regulations on the matter, this Office finds no valid cause or reason to modify or disturb its action as embodied in a letter dated December 18, 1972.

Accordingly, please be informed that your request for reconsideration, as per letter dated January 11, 1973, is denied. (p. 14, Rollo [R.A. pp. 28-29].

Thus, as correctly concluded by the Court of Appeals, the contents of aforesaid letter indubitably establish that there was in fact the questioned motion for reconsideration which was acted upon by the Director of Private Schools on December 18, 1972, reconsidering his stand on May 5,1972; that petitioners knew about this reconsidered stand otherwise they would not have written said request for reconsideration of the decision of said Director of December 18, 1972, and that the request for reconsideration written by Atty. Rabago in behalf of his clients, the herein petitioners was dated January 11, 1973 which was denied on January 19, 1973.

Subject complaint, Civil Case No. 16998, was filed with the trial court on November 29,1972, showing beyond dispute that the request for reconsideration judicially admitted

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to have been filed by the petitioners on February 7, 1973 with the Secretary of Education and Culture had not yet been resolved at the time of the filing of Civil Case No. 16998.

Hence, the said civil case which is an action for damages is premature. The finality of the administrative case which gives life to petitioners' cause of action has not yet been reached. This was still pending as evidenced in the certificate issued by the agency trying the same (Record on Appeal, pp. 53-54; Rollo, p. 14). The court a quo was thus correct in acting upon the motion to dismiss filed by the respondents on the ground that plaintiffs failed to exhaust administrative remedies.

Under the doctrine of exhaustion of administrative remedies, recourse through court action, as a general rule, cannot prosper until all the remedies have been exhausted at the administrative level, (Pacana vs. Consunji, 108 SCRA 631[1981]; Pestañas et al. v. Dyogi, et al., 81 SCRA 574 [1978]; Antonio v. Tanco, 65 SCRA 448 [1975]).

Thus, in Abe-Abe et al. v. Manta (90 SCRA 524, 531 [1979]) we emphatically declared:

When an adequate remedy may be had within the Executive Department of the government, but nevertheless, a litigant fails or refuses to avail himself of the same, the judiciary shall decline to interfere. This traditional attitude of the courts is based not only on convenience but likewise on respect; convenience of the party litigants and respect for a co-equal office in the government. If a remedy is available within the administrative machinery, this should be resorted to before resort can be made to (the) court. (citing Cruz vs. Del Rosario, 119 Phil. 63, 66).

Petitioners however, claim that they were denied due process, obviously to show that their case falls within one of the exceptions to the doctrine of exhaustion of administrative remedies.

Such contention is however untenable, because in the first place, they were made to avail in the same administrative agency, the opportunity or right to oppose, which in fact they did, when they filed a motion for reconsideration and later when the motion was denied, they appealed to the Secretary of Education and Culture.

Precisely, a motion for reconsideration or appeal is curative in character on the issue of alleged denial of due process (Sampang vs. Inciong, 137 SCRA 56 [19851; REMERCO Garments v. MOLE, 135 SCRA 167 [1985])

WHEREFORE, the instant petition is Dismissed for lack of merit and the decision of the Court of Appeals is Affirmed. No costs.

SO ORDERED.

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G.R. No. 91551 August 16, 1991

U.P. BOARD OF REGENTS, DR. JOSE V. ABUEVA, in his capacity as U.P. President, DR. ERNESTO O. DOMINGO, in his capacity as Chancellor of U.P. Manila, and the Nomination Committee for the Director of the U.P.-P.G.H. Medical Center, petitioners, vs.HON. JAINAL D. RASUL, in his capacity as Presiding Judge, Branch 69 of the Regional Trial Court, Pasig, Metro Manila, and DR. FELIPE A. ESTRELLA, JR., respondents.

Ledesma, Saludo & Associates for private respondent.

 

GANCAYCO, J.:p

The principal issue in this case is whether or not respondent Dr. Felipe A. Estrella who holds the position of Director of the Philippine General Hospital (PGH) can invoke security of tenure during his term of office notwithstanding the abolition of the said position by the University of the Philippines Board of Regents.

Petitioners seek to annul and set aside the decision dated August 28, 1989 and the order dated October 23, 1989 issued and rendered by respondent Judge, Honorable Jainal D. Rasul of the Regional Trial Court, Branch 69, Pasig, Metro Manila. The dispositive portion of the decision in question reads as follows:

WHEREFORE, in view of the foregoing and by virtue of preponderance of evidence, this Court hereby renders judgment in favor of the plaintiff and against the defendants.

1. Permanently enjoining the Defendants Dr. Jose V. Abueva, in his capacity as UP President; Dr. Ernesto Domingo, in his capacity as Chancellor of UP-Manila; the Nomination Committee for the Director of the UP-PGH Medical Center and the UP Board of Regents, from proceeding with the nomination of a Medical Director, until the expiration of the term of office of the plaintiff, Dr. Felipe A. Estrella, Jr., in his capacity as Director of the PGH or unless sooner removed, for cause provided by law;

2. Permanently enjoining the UP Board of Regents from implementing the so-called Reorganization Plan of UP-PGH, unless there is a prior legislative enactment of enabling law authorizing it and finally,

3. Ordering the defendants to pay attorney's fees and litigation expenses for P50,000.00 and the costs of this suit.

SO ORDERED. 1

In an order dated October 23, 1989, the respondent Judge denied petitioners' motion for reconsideration of the decision above-mentioned.

Assailing the above-mentioned rulings, petitioners allege as errors the following:

REASONS FOR THE ALLOWANCE OF THE WRIT

I

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT RESPONDENT ESTRELLA IS ENTITLED TO THE PROTECTIVE MANTLE OF THE CONSTITUTIONAL GUARANTEE OF SECURITY OF TENURE

II

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE REORGANIZATION OF U.P. MANILA INCLUDING THE PGH, WAS DONE IN BAD FAITH

III

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT RESPONDENT ESTRELLA NEED NOT EXHAUST ADMINISTRATIVE REMEDIES BEFORE HE CAN BRING SUIT AGAINST THE U.P. BOARD OF REGENTS, ET AL.

IV

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE REORGANIZATION PLAN FOR THE U.P. PGH MEDICAL CENTER CANNOT YET BE IMPLEMENTED

V

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE U.P. BOARD OF REGENTS HAS NO AUTHORITY TO REORGANIZE

VI

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT HE CAN SUBSTITUTE HIS OWN JUDGMENT FOR THAT OF THE U.P. BOARD REGENTS.

ADMIN LAW DEC 5 2015 21

VII

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT NON-IMPLEMENTATION OF THE REORGANIZATION PLAN WILL NOT CAUSE CONSIDERABLE DAMAGE TO U.P. IN GENERAL AND TO PGH IN PARTICULAR. 2

The petition is devoid of merit.

The facts and background of the case as narrated by the trial court are as follows—

That on June 26, 1986, plaintiff Dr. Felipe A. Estrella, Jr., was appointed by the defendant Board of Regents BOR as Director of the Philippine General Hospital, to take effect "1 September 1986 until 30 April 1992"(Exh. "A-14");that the defendant U.P. Board of Regents speaking thru its then University Secretary Professor Martin Gregorio intended to have the plaintiff serve his full term, as Director, since any other arrangement would impede the hospital's development, not to mention the continuity of its service operations (Exh. "A"); that the duties and responsibilities, under Chapter 29, of the Revised Administrative Code, as PGH Director, inter alia, to direct and manage various activities within the hospital; formulate and implement regulations; develop institutional plans and policies; approve/recommend budget proposals of the hospital; execute contracts; represent the hospital in proper functions; approve and sign warrants, checks, vouchers and recommend or endorse appointments of personnel to higher authorities (Exh. "M").

On September 16, 1987, barely two (2) weeks after assuming the presidency of the University of the Philippines defendant Jose V. Abueva submitted a memorandum to the Board of Regents to reorganize the U.P. Manila including the Philippine General Hospital with a draft resolution for approval of the Board of Regents, recommending that certain key positions of UP Manila including that of plaintiff be declared vacant (Exhs. "C" to "C-3"): that on March 20, 1988, the defendant Board of Regent upon recommendation of defendants Abueva and Domingo approved the so-called reorganization plan for the Philippine General Hospital.

On April 29, 1988, defendant Dr. Ernesto Domingo acting on instruction of defendant Dr. Jose v. Abueva, U.P. President, issued a memorandum creating the Nomination Committee for the UP-PGH Medical Center Director; that on May 10, 1988, defendant-members of the Nomination Committee thus created, are scheduled to nominate plaintiff s replacement as Director; that consequently on May 2, 1988, plaintiff filed with this Court, his complaint for Injunction with Preliminary Injunction of temporary restraining Order, seeking to enjoin defendants Abueva, Domingo, the Nomination Committee and the ITP Board of Regents from proceeding with the nomination of UP-PGH medical Center Director, in order to forestall the consequent removal/dismissal of the plaintiff Dr. Felipe A. Estrella, Jr., incumbent PGH Director, even before the expiration of his term of office on April 30, 1992 without any cause provided by law.

On May 2, this Court issued the Restraining Order and on May 30, After due hearing this Court, thru its then Presiding Judge Hon. Julio Logarta issued the Writ of Preliminary Injunction, enjoining defendants from implementing the reorganization plan for the UP-PGH medical Center (Exh. "A" Affidavit of plaintiff Dr. Felipe A. Estrella, Jr.; Exh. "10" Affidavit of defendant Dr. Ernesto O. Domingo; TSN pp. 1-23, June 1, 1989, TSN pp. 1-106, June 1, 1989; TSN pp.1-52, June 1, 1989). 3

Respondent Judge, based on the evidence presented, concluded that the reorganization of PGH was done in bad faith. Accordingly, the lower court ruled that respondent Dr. Estrella cannot be removed from office as a result of such defective abolition of the position to which he was appointed. Significant in this regard is the following pronouncement of the lower court:

Going over the organizational structure of present set-up of the PGH and proposed reorganizational structure, it appears that there are other minor differences aside from changes of designations and enlargement of functions and powers, namely: (1) The positions of Assistant Director for Administration and Assistant Director for Fiscal matters in the present set-up are combined into only one position of Assistant Director for Administrative and Fiscal Matters in the reorganization plan; (2) The position of Assistant Director for Health Operation in the present set-up was changed to position of Director of Health Services, directly under the UP-PGH Medical Center Director with one Assistant Director for Allied Medical Services, under it, in the reorganization plan and (3) The five (5) Departments of Oncology, Out-Patient Department, Emergency Room, Charity Ward and Pay Ward under the present set-up were converted into Institute of Oncology, Out-Patient Hospital, Emergency Hospital, Charity Hospital and Non-Charity Hospital under the reorganization plan.

In other words, these five (5) units were merely enlarged, expanded and called hospitals headed each by a Director. The Director of the PGH under the present set-up became Director of UP-PGH Medical Center. Aside from the three changes above and change of designations and transfers of duties, the structure remains substantially the same. The leadership element which the defendant Abueva wants to impress upon this Court, encourages reorganization and justifies abolition of positions. But the whole reorganization set-up under our law cannot or should not have the effect of abolishing the position of the plaintiff unless legal requirements are complied with .(Brallo vs. Enage, 94 Phil. 732) If the reorganization plan results in abolishing the position of the plaintiff and in putting in his place another one, with substantially the same duties, not to say qualifications, in the name ofleadership, it will surely be considered a device to unseat the incumbent and to circumvent the constitutional and statutory prohibition of removal from office of a civil service officer even without cause provided by law. Plaintiffs position should not therefore be deemed abolished by mere implication. (Cuneta vs. CA, 1 SCRA 663, 111 Phil. 249) If the abolition of office is made to circumvent the constitutional security of tenure of civil service employees, our Supreme Court, has ruled that such abolition is null and void. (Gutierrez vs. CA, 1-25972, 2 /26 / 68, 26 SCRA 32) 4

Respondent Dr. Estrella was appointed Director of PGH on June 26, 1986 by the LTP Board of Regents. His appointment was to be effective September 1, 1986 until April 30, 1992 or unless sooner terminated. Appointees of the LTP Board of Regents enjoy

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security of tenure during their term of office. In Tapales v. President of the University of the Philippines, 5 We held that Director Tapales who was appointed by the UP Board of Regents as Director of the Conservatory of Music for a term of five (5) years is entitled to security of tenure during his term of office. Likewise, inSta. Maria v. President Salvador P. Lopez, et. al., 6 We rejected the removal of Professor Sta. Maria as dean of the College of Education. In that case, Professor Sta. Maria was appointed by the UP Board of Regents as dean of the College of Education effective May 16,1967 until May 17,1972 or unless sooner terminated. Before the expiration of his term of office, President Salvador P. Lopez removed him as dean of the College of Education and tranferred him to the office of the UP President. Upholding the right of Professor Sta. Maria to security of tenure, We explained out that "... a college dean holding an appointment with a fixed term ... cannot, without his consent, be terminated before the end of his term. He cannot be asked to give up his post. Nor may he be appointed as dean of another college. Much less can he be transferred to another position even if it be dignified with a dean's rank."

Petitioners argue, however, that the abolition of the position of respondent Dr. Estrella Jr. negates his claim to security of tenure. The argument is devoid of merit.

It is clear from the record that the PGH itself was not abolished in the reorganization plan approved by the UP Board of Regents. The PGH was merely renamed "UP-PGH Medical Center" and some of it functions and objectives were expanded or consolidated. There is no substantial distinction, in terms of functions, between PGH and the proposed UP-PGH Medical Center.

While PGH itself was not abolished, the position of PGH Director was abolished and in its place, the position of UP-PGH Medical Center Director was created. After abolishing said position, it was proposed to be reclassified as Director, Charity hospital, one of the five (5) hospital director positions proposed to be created in the reorganized PGH.

The UP Board of Regents acted within the scope and limitations of its charter, Act No. 1870, as amended when it approved the reorganization plan renaming the PGH and expanding and consolidating some of its functions and objectives. The UP Board of Regents did not and could not have abolished PGH. And rightly so. The PGH and one of its component units, the Cancer Institute, are creations of special laws, the old Administrative, Code (Chapter 29, Secs. 706-707) and Commonwealth Act No. 398, respectively. The authority of the UP under Act No. 1870 as amended, to combine two or more colleges in the interest of economy and efficiency does not empower UP to abolish offices created by special laws. Section 6(b) of Act No. 1870, al amended, reads as follows:

(b) To provide for the establishment of one or more Colleges of Liberal Arts; a College of Law; a College of Social and Political Science; a College of Medicine and Surgery; a College of Pharmacy; a College of Dentistry; a College of Veterinary Science; a College of Engineering; a College of Mines; a College of Agriculture; a College of Education; a School of Fine Arts; a School of Forestry; a Conservatory of Music, and such other colleges and schools as the Board of Regents may deem necessary: Provided, That the Board of Regents may establish these colleges, or any of them, in Manila or in any other

place in the Archipelago, as soon as in its judgment conditions shall favor their opening and finds shall be available for their maintenance: And provided further, That the Board of Regents shall have the power to combine two or more of the colleges authorized by this Act, in the interests of economy and efficiency And provided finally, That the Philippine Medical School as established by Act Numbered Fourteen Hundred and Fifteen as amended, shall become the College of Medicine and Surgery of the Philippine University as soon as two or more colleges of the University of the Philippines shall have been established and in actual operation.

It is therefore clear that the authority of the UP is limited to what is expressly provided in Act No. 1870 as amended, that is, to combine or merge colleges. that is all the law speaks of in such instance.

On the other hand, the power to create and abolish offices carries with it the power to fix the number of positions, salaries, emoluments, and to provide funds for the operation of the office created. 7 This power is inherently legislative in character. The UP Board of Regents does not have such power. Hence, the abolition of the position of respondent Dr. Estrella is not valid.

It is true that a valid and bona fide abolition of an office denies to the incumbent the right to security of tenure. 8However, in this case, the renaming and restructuring of the PGH and its component units cannot give rise to a valid and bona fide abolition of the position of PGH Director. This is because where the abolished office and the offices created in its place have similar functions, the abolition lacks good faith. 9 We hereby apply the principle enunciated in Cesar Z. Dalio vs. Hon. Salvador M. Mison 10 that abolition which merely changes the nomenclature of positions is invalid and does not result in the removal of the incumbent.

The above notwithstanding, and assuming that the abolition of the position of the PGH Director and the creation of a UP-PGH Medical Center Director are valid the removal of the incumbent is still not justified for the reason that the duties and functions of the two positions are basically the same. The UP-PGH Medical Center is essentially the same PGH hence, the Medical Center Director will be performing duties very similar to the present PGH Director. It cannot be invoked to sustain the argument that respondent is not entitled to security of tenure. InPalma-Fernandez v. de la Paz, 11 the abolition of the position of "Chief of Clinic" and the creation of the position of "Assistant Director, Professional Services" were set aside for the reason that the two positions are basically one and the same except for the change of nomenclature.

The proposal to establish five hospitals within the UP-PGH Medical Center, and with it, the proposal to create five hospital director positions militate against the propriety of giving due course to this petition. As presently organized, there is only one hospital director position in the plantilla of positions of the PGH, the PGH Director. In the proposed reorganization, such number will be increased to six, one UP-PGH Medical Center Director and five directors for each of the five hospitals proposed to be established namely, the Out-Patient Hospital, Emergency Hospital, Charity Hospital, Non-Charity Hospital and Institute of Oncology. In Guerrero vs. Arizabal, 12 We held that

ADMIN LAW DEC 5 2015 23

the creation of additional management positions in a proposed reorganization is evidence of bad faith and is in violation of Republic Act No. 6656. We hold that the same applies to the PGH reorganization.

Finally, the admission by petitioner Dr. Jose V. Abueva that the staffing pattern for the reorganized PGH has not been prepared is fatal to petitioners' cause. In Dario v. Mison, 13 We made the observation that no reorganization of the Bureau of Customs actually took place since a staffing pattern which could have been the basis for hiring and g was lacking. In this case, petitioners were poised to nominate and appoint a UP-PGH Medical Center Director inspite of the absence of a staffing pattern. The absence of such an important element in the reorganization plan contradicts the petitioners' claim of good faith and only proves that petitioners were unreasonably in a hurry to remove respondent Estrella from his office.

Anent the issue regarding respondent Estrella's failure to exhaust all administrative remedies, We hold that this case has special circumstances that made it fall under the jurisprudentially accepted exceptions to the rule. As the facts show, respondent Dr. Estrella was about to be replaced by the Nomination Committee. He must have believed that airing his protest with the Board of Regents would only be fruitless and that unless he goes to the courts, irreparable damage or injury on his part will be caused by the implementation of the proposed reorganization.

Respondent Judge did not commit any reversible error much less grave abuse of discretion. The facts as supported by evidence established may no longer be disturbed.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated August 28, 1989 and Order dated October 23, 1989 of the respondent Judge are hereby AFFIRMED in toto. No costs.

SO ORDERED.

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G.R. No. 103953 March 25, 1999

SAMAHANG MAGBUBUKID NG KAPDULA, INC., petitioner-appellant, vs.THE HONORABLE COURT OF APPEALS, PONCIANO DUCUSIN, AQUILINO DUCUSIN, EUFEMIO CABINGAN, LEONARDO DIAZ, REYNALDO PEREZ, SERAPIO FIRME, RICARDO BRAZA, ANTONIO BAUTISTA, ROMULO BUCLATIN, EULOGIO PARANAQUE, JR., AGAPITO DUCUSIN, DELFIN DUCUSIN, REYNALDO GARCIA, MARTIN SALAZAR, MELECIO LAYON, CIRIACO ABEJERO, BASILIO BUCLATIN, FERLITA BUCLATIN, RUFINA BUCLATIN, BONIFACIO BUCLATIN, LUNINING BUCLATIN, LEONARDO BEJESON, REGENTOR CONTANER, DANILO GONZALES, EMILIO DUCUSIN, GERMAN DUCUSIN, MARCIANO BACAY, IRENEO DUCUSIN, LEONARDO DUCUSIN, ALEJANDRO DUCUSIN, WILLIE CADESALE, MARTIN DE LA CUESTA, DOMINGO ORENSE, CRESENCIA LOPEZ, PONCIANO BELTRAN, JUN DOYOLA, DONATO CRUZ, MIGUEL BUGAGAO, LUCIO ILAO, ALFREDO COSTACIO, HILARION CARAIG, LARRY DE LA VEGA, RAYMUNDO SOBEJANO, AVELINO DUCUSIN, ROSENDO DUCUSIN, VICENTE RIVERA, BONGBONG BACAY, DONATO CASCANO, EDGARDO DUCUSIN, OLIVER DUCUSIN, ARMANDO BEJESON, ROMEO OBIAS, JOMARIE LALAGON, ROGELIO SEVILLA, MICHAEL DUCUSIN, MAURA BUCLATIN, ERNESTO MOGAR, FILEMON ANARNA, RUPERTO ILAO, RUPERTO MENDOZA, CARLOS MENDOZA, ALFREDO DRIZ, MARIO CABINGAN, JUAN SOMBILLO, EUGENIO MERCADO, CECILLIO BENIG, JR., ROMIE LUYAS, ALFONSO BULAHAN, ADAM CARBADILLA, PEPITO CADESALE, LIWAYWAY CAPARAS, EVARISTO CREUS, RAUL GONZAGA, ANTONIO GONZAGA, SANO ADION, REYNALDO ZORINO, WILFREDO ALILING, and BERNARDO ASUNCION, respondent-appellees.

 

PURISIMA, J.:

At bar is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the Decision 1 of the Court of Appeals in CA-G.R. SP No. 26173.

The facts that matter are as follows:

Macario Aro was the former owner of two (2) parcels of agricultural land with an aggregate area of 168.7 hectares, more or less in Barangay Malinta. Dasmariñas Cavite. The members of petitioner Samahang Magbubukid Ng Kapdula, Inc. were the tenants on the two (2) parcels of land.

Sometimes in 1979 or 1980, Mr. Aro sold the said parcels of land to Arrow Head Golf Club, Inc., which was founded by Ricardo Silverio who envisioned to establish a car assembly plant within the area. In the process, the member of petitioner were evicted. But the establishment of a car assembly plant in the place never materialized.

The parcels of land in question were later leased to the spouse, Ruben Rodriguez and Gloria Bugagao, for a term of seven (7) years from July 8, 1983 to July 8, 1990 2, and where then developed into a sugarcane plantation, with the herein private respondents as the regular farmworkers.

On July 13, 1984, the same property was acquired by the Philippine National Bank (PNB) at a Sheriff auction sale.3

In 1986, the members of petitioner sought the assistance of the former Ministry of Agrarian Reform (MART), now Department of Agrarian Reform ("DAR"), thought then Minister Heherson Alvarez, for their reinstatement as farmworkers thereon, but nothing came out of such efforts.

The ownership of subject parcels of land was later transferred to the Asset Privatization Trust ("APT") which conveyed the same on March 19, 1991 to the Republic of the Philippines, represented by the DAR. 4

On March 26, 1991, in furtherance of its objective of instituting agrarian reform in the country, the DAR issued Certificate of Land Ownership ("CLOA") Nos. 1116 5 and 1117 6 for the said parcels of the land in favor of the petitioner.

On September 27, 1991, the private respondents filed a Petition for Certiorari with Court of Appeals, assailing the issuance of said CLOAs to the petitioner.

On January 30, 1992, the Court of Appeals granted the petition, disposing thus:

WHEREFORE, the petition is hereby GRANTED in that the respondent. Department of Agrarian Reform be directed to conduct a hearing and/or investigation, with due notice to the herein petitioners, to determine the rightful beneficiaries of the subject parcels of land in accordance with the R.A. No. 6657 or the CARP; and to cause the cancellation of the Transfer Certificates of Title Nos. CLOA-1116 and 1117 in the name of private respondent be found not intitled to the subject parcels of land. 7

Dissatisfied therewith, the petitioner has come to this Court to assail the Decision of the Court of Appeals, contending that:

I

THE RESPONDENT COURT ERRED IN NOT DISMISSING THE PETITION FOR CERTIORARI FOR NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES.

I-A

THE RESPONDENT COURT ERRED IN ITS FINDING THAT HEREIN PRIVATE RESPONDENTS WERE NOT GIVEN OPPORTUNITY TO BE HEARD IN THE

ADMIN LAW DEC 5 2015 25

ADMINISTRATIVE PROCEEDINGS CONDUCTED PRECEDING THE ISSUANCE OF THE AWARDS.

I-B

THE RESPONDENT COURT ERRED IN ITS FINDING THAT DETERMINATION OF QUALIFIED BENEFICIARIES IS A DECISION OF THE SECRETARY AND THAT RESORTING TO THE DAR ADJUDICATION BOARD OF QUESTION SUCH DECISION IS UNAVAILING.

II

THE RESPONDENT COURT ERRED IN ITS FINDING THAT THERE WAS FAILURE TO OBSERVE DUE PROCESS IN THE ISSUANCE OF THE TCT NOS. CLOA-1116 AND CLOA-1117 IN THE NAME OF HEREIN PETITIONER.

II-A

THE RESPONDENT COURT ERRED IN NOT UPHOLDING THE PRESUMPTION THAT OFFICIAL DUTY HAS BEEN REGULARLY PERFORMED ABSENT EVIDENCE TO THE CONTRARY.

III

THE RESPONDENT COURT ERRED IN DIRECTING THE DAR TO CONDUCT A HEARING AND/OR INVESTIGATION, WITH DUE NOTICE TO HEREIN PRIVATE RESPONDENTS, TO DETERMINE THE RIGHTFUL BENEFICIARIES OF THE SUBJECT PARCELS OF LAND IN ACCORDANCE WITH R.A. NO. 6657, AND TO CAUSE THE CANCELLATION OF TCT NOS. CLOA-1116 AND CLOA-1117 IN THE NAME OF HEREIN PETITIONER SHOULD IT BE FOUND NOT ENTITLED THERETO.

III-A

THE RESPONDENT COURT ERRED IN NOT GIVING RESPECT AND REGARDING WITH FINALITY THE FINDINGS OF FACT OF DAR.

IV

THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ITS FINDING OF FACTS WHICH IS NOT SUPPORTED BY EVIDENCE.

Petitioner-appellant's submission boil down to two pivotal issues:

1. Whether or not there was observance of due process by the Department of Agrarian Reform prior to the issuance of CLOA Nos. 1116 and 1117 in favor of petitioner; and

2. Whether there was a need for the private respondents to exhaust administrative remedies before filing their petition for certiorari with the Court of Appeals.

Petitioner contends that before taking recourse to the Court of Appeals, the private respondents should have first exhausted all administrative remedies available to them. On the ground of non-exhaustion of administrative remedies, the respondent court should have dismissed the petition of private respondents. To buttress its stance, petitioner cited Section 50 8 of Republic Act No. 6657 (RA 6657) and Section 1 Rule II of the Revised Rules of the DAR Adjudication Board 9 vesting the DAR and DAR Adjudication Board (DARAB) with jurisdiction to resolve agrarian reform disputes, including the issuance of CLOAs.

The Court Appeals, on the other hand, opined that determination by secretary of the Department of Agrarian Reform as the rightful beneficiaries has the effect of a final ruling or award by the DAR itself and therefore, resort to DARAB to question the ruling of the Secretary would be improper. There is thus no need to exhaust administrative remedies, under the premises.

From the DARAB Revised Rules of Procedure, it can be gleaned that decisions of the DAR Secretary cannot be questioned before DARAB. Pertinent rules, provide:

Sec. 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act. 6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act. No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations.

Specifically, such jurisdiction shall extend over but not be limited to the following:

xxx xxx xxx

(c) Cases involving the annulment or cancellation of orders or decisions or DAR officials other than the secretary, lease contracts or deeds of sale or their amendments under the administration and disposition of the DAR and LBP," (Rule II DARAB Revised Rules of Procedure) (emphasis ours).

From the foregoing, it is decisively clear that DARAB may only entertain appeals from decisions or orders of DAR officials other than the Secretary. It is also irrefutable that the issuance of subject CLOAs constituted a decision of the Secretary, who issued and signed the same. 10

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Consequently, the propriety of the recourse by private respondents to the respondent court on petition forcertiorari, to assail the issuance by the DAR of the CLOAs in question, is beyond cavil. Under Section 54 of RA 6657, decisions and awards of the DAR may be brought to the Court of Appeals by certiorari. 11

Time and again, this court has ruled that in cases of denial of due process, exhaustion of available administrative remedies is unnecessary. 12 The aggrieved party may seek judicial relief outright.

But was there a denial of due process under the attendant facts and circumstances? Respondent court found that the herein private respondents were denied the opportunity to ventilate their stance before the DAR. But according to the petitioner, during the investigation and conferences conducted on the question of inclusion of subject properties in the Comprehensive Agrarian Reform Program of the government, Mr. Ruben Rodriguez was notified of the same, as evidenced by Annexes "E" 13, "F" 14, "F-1" 15, and "F-2". 16

Records show, however, that the letter (Annex "E"), which was supposed to be the notice to the private respondents regarding the inclusion of subject properties in the CARP, was ineffective. First of all, the letter of Provincial Agrarian Reform Officer Serapio T. Magpayo to Mr. Ruben Rodriguez indicates no receipt of the same by Mr. Rodriguez nor was it signed by Mr. Magpayo. Secondly, if it was ever sent, it was sent too late, the same being dated June 5, 1991, when the said parcels of land had already been awarded to the members petitioner. (The CLOAs under controversy were issued on March 26, 1991.) Thirdly, the letter was addressed to Mr. Ruben Rodriguez, who no longer possessed the said properties as his lease thereover ended on July 8, 1990.

There is thus a need for further hearings to determine the beneficiaries of subject parcels of land. In such hearings, the private respondents, who were deprived of an opportunity to be heard before the DAR, should participate. This is in pursuance of the provisions of Section 40(4) 17, in relation to Section 22 18 of RA 6657, providing for the order of priority of the qualified beneficiaries of CARP.

WHEREFORE, the petition is hereby DENIED and the Decision of the Court of Appeals in CA-G.R. SP No. 26173 AFFIRMED. No pronouncement as to costs.

SO ORDERED.

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G.R. No. 123997 January 20, 1999

REPUBLIC OF THE PHILIPPINES, petitioner, vs.SANDIGANBAYAN and BRIG. GEN. PEDRO R. BALBANERO, respondents.

 

BELLOSILLO, J.:

This case emphasizes with great force the awesome responsibility of counsel to represent a client's cause with due diligence and zeal which necessarily excludes improvident and unreasonable requests for postponement of hearings that only serve to impede the speedy and inexpensive administration of justice.

The Republic of the Philippines, in this special civil action for certiorari, mandamus and prohibition, assails the Order of the Sandiganbayan, First Division, dated 19 October 1995, in "Republic of the Philippines v. Brig. Gen Balbanero," Civil Case No. 0053, denying petitioner's oral motion for postponement of the 19 and 20 October 1995 hearings and requiring it instead to submit a written offer of evidence, as well as the Resolution of 3 January 1996 denying reconsideration thereof. Petitioner therefore prays that it be allowed to present documentary and testimonial evidence in a formal trial and that public respondent be prevented from conducting further proceedings pursuant to its questioned Orders.

Civil Case No. 0053 is an action for forfeiture under RA No. 1379 1 instituted on 14 October 1988 by the Republic of the Philippines against retired Brig. Gen. Pedro R. Balbanero alleging that the latter acquired funds, real properties and other assets amounting to P10.5 million manifestly out of proportion to his total salary and emoluments as an Army Officer and as income from business and other legitimately acquired properties.

On 22 March 1989 private respondent filed his answer with counterclaim to which the Republic filed a reply with motion to dismiss counterclaim. After the submission by private respondent of documentary evidence and in view of the manifestation of Solicitor Felipe Magat, Colonel Ernesto Punzalan and Captain Samuel Padilla of the AFP Anti-Graft Board representing the Government that P8.4 million of the alleged over P10 million unexplained wealth had been clarified, the Sandiganbayan in its Order dated 19 February 1990 required private respondent to prove the legal source of the remaining "P1.3 million." The parties were required to meet to resolve the matter before trial. On the basis of a "Complete Report" dated 2 August 1990 submitted by Capt. Padilla, the amount of respondent's wealth deemed to be still unexplained dwindled to P165,043.00. Thus the OSG in behalf of petitioner asked that a decision be rendered forfeiting the amount in its favor.

To prove the legal source of the remaining P165,043.00, private respondent submitted a document titled "Real Estate Mortgage Loan" purporting to show that the amount was the purchase price he received for real estate sold to Ms. Iluminada S. Salvador et al. when he failed to pay his mortgage indebtedness. In his Manifestation and Motion dated 7 December 1990 private respondent moved that the complaint against him be dismissed on the ground that he had explained to the government's satisfaction the legal source of all his alleged unexplained wealth.

In its answer to the foregoing Manifestation and Motion the Presidential Commission on Good Government (PCGG) denied that private respondent had satisfactorily explained the legitimate source of his wealth and added that the "Complete Report" submitted by the AFP Anti-Graft Board was without its approval, hence, did not bind the Republic.

On 28 June 1991, without resolving private respondent's Manifestation and Motion of 7 December 1990, public respondent Sandiganbayan allowed the Republic to present oral and documentary evidence to support its complaint for forfeiture.

On 7 June 1994 private respondent moved that petitioner be bound by the Solicitor General's previous admission that only P165,043.00 had not been satisfactorily explained, hence, the remaining issue to be resolved by the Sandiganbayan should be limited to the amount. But Sandiganbayan denied the motion. Hence, on 3 May 1995 private respondent elevated the matter to this Court by way of a petition for certiorari, prohibition and mandamusin "Pedro R. Balbanero v. the Hon. Sandiganbayan and the Republic of the Philippines," docketed as G.R. No. 119633.

In view of the pendency of his petition, private respondent moved that the hearings on 18, 19 and 20 October 1995 be canceled and that no further schedule be set. Public respondent denied the cancellation unless a restraining order was issued by this Court in G.R. No. 119633, citing petitioner's readiness to present on the scheduled hearings Major Samuel Padilla (earlier referred to as Captain Padilla) who purportedly conducted the audit examination of the accounts of private respondent.

Upon urgent motion dated 5 October 1995 the Sandiganbayan granted private respondent's request for cancellation of the 18 October 1995 hearing on the allegation that his counsel was scheduled to attend an election case before the RTC of Gapan, Nueva Ecija, but stressing that the cancellation was without prejudice to the settings on 19 and 20 October 1995. 2

On 19 October 1995 Associate Solicitor Rodolfo Tagapan, Jr., and Assistant Solicitor General Cesario del Rosario manifested during the hearing that they had been relieved from the case and that ASG Romeo C. de la Cruz and Solicitor Karl B. Miranda had been designated in their stead. However, since the latter two were in the United Arab Emirates attending to the case of convicted Filipina overseas contract worker Sarah Balabagan, Associate Solicitor Tagapan asked that the hearing be reset, to which the Sandiganbayan reacted adversely with its now assailed Order of 19 October 1995 which we quote hereunder for a better appreciation of the factual milieu —

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When this case was called for hearing . . . respondent appeared . . . while the petitioner Republic appeared through Associate Solicitor Rodolfo Tagapan together with Atty. Cresencio Jaso of the PCGG. Associate Solicitor Tagapan informed the Court that he had been relieved . . . from this case and in his stead Solicitor Karl B. Miranda had been designated . . . but that Solicitor Miranda was . . . in Abu Dhabi on official mission, while Atty. Jaso . . . informed this Court that this was his first appearance . . . and was, therefore, not ready to be of assistance. Additionally, no witness had appeared allegedly upon advice of Associate Solicitor Tagapan precisely, because of this (sic) re-assignments relying on the postponement to be granted by this Court.

. . . Solicitor Rodolfo Reodica had been appearing until suddenly at the hearing on May 10, 1995 Associate Solicitor Tagapan appeared and had expressed his unreadiness to proceed at that time. The petition for postponement was granted . . . over the objection of the respondent, notwithstanding the pendency of a petition for certiorari, prohibition and mandamus already filed by the respondent to dispute a prior denial of his motion to dismiss by reason of . . . the petitioner's earlier repeated failure to proceed . . . said petition . . . now docketed as G.R. No. 119633. On September 22, 1995 . . . Associate Solicitor. Tagapan informed the Court that he would be ready to present Major Samuel Padilla on October 18, 19 and 20, 1995. Today, the Court is faced with the situation as above stated.

This case had been pending not only for a very long time but despite many false starts from the petitioner. While indeed the Court has reacted negatively to the difficult situations created by the assignment of young Solicitors such as Solicitor Reodica now Solicitor Tagapan on short notice, the Court can not accept a rotation of young and inexperienced Solicitors who are uninformed of the details of this case by reason of their assignment on short notice as reasons for postponing this case on top of their informal complaints of lack of cooperation from or coordination with the PCGG much less can the Court accept the last minute substitutions of Solicitors with others who are not in this country.

In view hereof, the petitioner is given ten (10) days from today within which to formally offer whatever evidence exist (sic) on record with the respondent being given a like period to comment thereon and to state his disposition on this matter with respect to the presentation of his own evidence.

The setting for tomorrow is necessarily cancelled under the circumstances.

Petitioner moved that this Order be reconsidered and that it be allowed to present evidence in a formal trial. The motion was denied by public respondent in its assailed Resolution of 3 January 1996 thus —

The "MOTION FOR RECONSIDERATION" dated 7 December 1995 of the Plaintiff is Denied.

It is true that this Court expressed its impatience and disapproval over the practice of the Office of the Solicitor General of passing on, actually "dumping" of certain cases such as

these to a succession of young inexperienced lawyers on short notice. This, however, is not cured by transferring a long standing case to probably experienced lawyers who are not available and on short notice.

The point of this Court's impatience on the transferring of cases to inexperienced lawyers on short notice is that cases are unduly delayed and, perhaps, prejudiced by the inexperienced; in fact, more than anything, the practice has demonstrated an apparent low regard of Solicitors and Assistant Solicitors General for many "PCGG cases."

Assigning this case, which has suffered long and innumerable postponements attributable to plaintiff, to lawyers of the Office of the Solicitor General who are not even in the country at the time of the setting neither responds to the problem nor demonstrates appropriate concern for the case.

The petitioner is given fifteen (15) days to submit its written offer of evidence after which the case of the plaintiff will be deemed submitted, with or without the offer.

Hence, this special civil action for certiorari, prohibition and mandamus.

The QSG contends that the Sandiganbayan gravely abused its discretion when it deprived the Republic of its right to present evidence in a full-blown hearing amounting to a violation of its right to due process. Counsel contends that the reasons given for the requested resettings of the 19 and 20 October 1995 hearings were meritorious grounds which were not intended to delay the case nor violate private respondent's right to a speedy trial. The OSG further contends that public respondent should not have taken against the Republic the fact that Major Samuel Padilla was indisposed on the day of the hearing as it was a circumstance beyond its control while the re-assignment of the case to Solicitor Miranda and Atty. Jaso was effected only in response to public respondent's plaintive about the assignment of the case to young and untrained solicitors.

On 17 April 1996 we required respondents to file their respective comments on the petition without granting the TRO sought by petitioner. Private respondent's Comment and petitioner's Reply thereto were noted on 8 July 1996 and 4 February 1998, respectively. On 6 July 1998 we considered this case submitted for decision without public respondent's comment when it failed to file the required pleading for more than two (2) years from the time it was first required to do so and despite our Resolution of 4 February 1998 reiterating our Resolution of 17 April 1996.

Plainly stated, the issue before us is whether public respondent Sandiganbayan committed grave abuse of discretion in denying the Republic's oral motion for postponement of the 19 and 20 October 1995 hearings and in requiring it to just formally offer its evidence within fifteen (15) days from notice.

It is well-settled that motions for continuance or deferment of hearings are granted only upon meritorious grounds3 and that the grant or denial thereof is addressed to the sound

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discretion of the court 4 the exercise of which will not be disturbed except on a showing of a patent and grave abuse of discretion.

Petitioner failed to show such patent and grave abuse of discretion on the part of public respondent in denying its oral motion for postponement. Records show that the 18, 19 and 20 October hearings were scheduled some five (5) months earlier, or on 10 May 1995, for several reasons among which was to give Associate Solicitor Tagapan of the OSG, who appeared for the first time vice Solicitor Reodica, an opportunity to study the case. 5 In addition, on 13 October 1995 when public respondent Sandiganbayan canceled the 18 October hearing, it cautioned the parties that such cancellation was without prejudice to the settings on 19 and 20 October 1995. 6

However, on 19 October 1995, Solicitor Tagapan appeared only to manifest that he had just been relieved from the case and that other solicitors were assigned to take over but unfortunately they were not then available. The OSG explains that the re-assignment was effected in response to public respondent's complaint about the assignment of many PCGG cases to young and inexperienced solicitors. But a careful reading of the questioned Order of 19 October 1995 shows that public respondent objected not so much on the assignment of the case to young and inexperienced solicitors but that such re-assignment was done on short notice and very close to the date of scheduled hearings. The excuse given by the OSG completely failed to justify why the re-assignment had to be done so near to the scheduled hearing of 19 October 1995 and, worse, to solicitors who were not even present.

Furthermore, it has not been shown that some other urgent circumstance prompted the re-assignment to justify the OSG's non-compliance with the requisites of motions in general set out in Rule 15 7 of the Rules of Court 8 Sec. 2 of which provides that "[a]ll motions shall be in writing except motions for continuance made in the presence of the adverse party, or those made in the course of a hearing or trial." A motion for postponement should not be filed at the last hour 9 and that judges are cautioned against granting improvident postponements. 10 Thus when the reason adduced in support of a motion for postponement was not unavoidable or could have been foreseen but was presented only on the day of the trial although there was no apparent reason why it could not have been presented earlier, thus avoiding inconvenience to the adverse party, it is proper for the court to deny postponement. 11

What exacerbates the case for the OSG is the fact that it appeared in the 19 October 1995 hearing without its promised witness, apparently expecting that public respondent would just benevolently grant its precipitate oral motion for postponement. While the OSG now claims that Major Padilla was "indisposed" for which reason he was not presented, public respondent's factual conclusion to which this Court is bound in a certiorari proceeding is that no witness appeared allegedly upon advice of Associate Solicitor Tagapan relying on the postponement to be granted by public respondent precisely because of the reassignment of solicitors. 12

The rule that a party asking for postponement has absolutely no right to assume that its motion would be granted, especially on less than three (3) days' notice, and must be in

court prepared on the day of the hearing 13 applies with greater force in this case where the OSG had in fact more reason not to presume a grant of its motion for postponement considering that Major (formerly Captain) Samuel Padilla had already been previously warned by public respondentthus —

Capt. Samuel Padilla is given five (5) days from receipt hereof to show why he should not be held disciplinarily accountable for his failure to appear . . . when he knew as a matter of fact that this case wherein he appears to be the principal government witness has been pending since 1988 and that his testimony was suspended as far back as February 15, 1990, precisely by reason of the unorganized state of evidence of the petitioner at the time so that all of the proceedings thereafter had been precisely to clarify and organize whatever evidence the parties might have thereon. It is a cause of great wonder to the Court what urgent meeting could have befallen Capt. Padilla resulting to his failure to appear in Courttoday. 14

Under the circumstances, it cannot rightly be said that the OSG was not guilty of inexcusable carelessness, presumptiousness, indifference to and neglect of duty in assuming that public respondent would grant its oral motion for postponement, coming to court unprepared and without a witness. Hence public respondent was well within its authority to deny the Republic's oral motion for postponement of the hearings set on 19 and 20 October 1995 and require it, instead, to just formally offer its evidence within fifteen (15) days from notice. Petitioner is not guilty of abuse of discretion, much less grave, nor can it be charged by petitioner with denial of due process. 15

WHEREFORE, the instant petition for certiorari, prohibition and mandamus is DENIED. The questioned Order of public respondent Sandiganbayan dated 19 October 1995 denying the oral motion of petitioner Republic of the Philippines for the postponement of the 19 and 20 October 1995 hearings as well as the Resolution dated 3 January 1996 denying petitioner's motion for reconsideration, is AFFIRMED.

SO ORDERED.

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G.R. No. L-39655 March 21, 1975

ARROW TRANSPORTATION CORPORATION, petitioner, vs.BOARD OF TRANSPORTATION and SULTAN RENT-A-CAR, INC., respondents.

Manuel Imbong for petitioner.

Office of the Solicitor General Estelito P. Mendoza and Assistant Solicitor General Reynato S. Puno for respondent Board.

Pastor C. Bacani and Ernesto Ganiban for private respondent.

 

FERNANDO, J.:ñé+.£ªwph!1

It must have been the realization that a challenge to a provisional permit issued by respondent Board of Transportation 1 based on the absence of a hearing is not likely to be attended with success that prompted petitioner to rely on another aspect of procedural due process, the infirmity alleged being traceable to what it considered lack of jurisdiction. 2 There is the invocation of Philippine Long Distance Telephone Company v. Medina 3 with its mention of both competitors and the public being notified. It does not suffice. Something more, which more, is necessary. The reliance is misplaced. Its applicability is by no means obvious. As was pointed out in the answer of respondent Board of Transportation, such a claim is hardly persuasive with the procedure set forth in Presidential Decree No. 101 being followed and the provisional authority to operate being based on an urgent public need. Such a contention merits the approval of the Court. The petition cannot prosper.

Both petitioner and private respondent Sultan Rent-a-Car are domestic corporations. 4 The former has in his favor a certificate of public convenience to operate a public utility bus air-conditioned-auto-truck service from Cebu City to Mactan International Airport and vice-versa with the use of twenty (20) units. 5 Private respondent on September 12, 1974 filed a petition with the respondent Board for the issuance of a certificate of public convenience to operate a similar service on the same line. 6 Eight days later, without the required publication, the Board issued an order granting it provisional permit to operate such auto-truck service on the line applied for. 7 There was a motion for reconsideration and for the cancellation of such provisional permit filed on October 21, 1974, 8 but without awaiting final action thereon, this petition was filed. 9 This is the explanation: "That petitioner has not waited for the resolution of his Motion for Reconsideration before going to this Court considering that the question involved herein is purely a legal one, aside from the fact that the issuance of the Order without the Board having acquired jurisdiction of the case yet, is patently illegal or was performed without jurisdiction." 10

So it was set forth in the petition filed on November 16, 1974. As a preliminary injunction was likewise sought, a hearing was scheduled for November 29, 1974. It was cancelled, this Court issuing a resolution instead, requiring respondents to file an answer not later than December 6, 1974 and setting the hearing on the merits of the case on Wednesday, December 11, 1974. In the answer submitted the facts alleged were substantially admitted. 11 It denied the allegation that there must be a publication before a provisional permit can be issued, reference being made, as noted, to Presidential Decree No. 101, which authorized respondent Board to grant provisional permits when warranted by compelling circumstances and to proceed promptly along the method of legislative inquiry. 12 The case was then argued on December 11, 1974, Attorney Manuel Imbong appearing for petitioner and Assistant Solicitor General Reynato S. Puno appearing for respondent Board of Transportation. 13 Thereafter, the parties were given twenty days to file their respective memoranda and an additional ten-day period to submit replies thereto if so minded. In time all the pleadings were submitted, and the case was ready for decision.

The petition, to repeat, cannot prosper.

1. It is to be, admitted that the claim for relief on the asserted constitutional deficiency based on procedural due process, not from the standpoint of the absence of a hearing but from the lack of jurisdiction without the required publication having been made, was argued vigorously and developed exhaustively in the memoranda of petitioner. The arguments set forth, while impressed with plausibility, do not suffice to justify the grant of certiorari. Moreover, the doctrine announced in the Philippine Long Distance Telephone Company decision, heavily leaned on by petitioner is, at the most, a frail and insubstantial support and gives way to decisions of this Court that have an even more specific bearing on this litigation.

2. A barrier to petitioner's pretension, not only formidable but also insurmountable, is the well-settled doctrine that for a provisional permit, an ex parte hearing suffices. 14 The decisive consideration is the existence of the public need.15 That was shown in this case, respondent Board, on the basis of demonstrable data, being satisfied of the pressing necessity for the grant of the provisional permit sought. There is no warrant for the nullification of what was ordered by it. It must have been, as already noted, this state of the law that did lead petitioner to harp on its interpretation of what for it is the teaching of the Philippine Long Distance Telephone Company decision. 16 There was therein stated that one of the compelling reasons that led this Court to hold that the defunct Public Service Commission did not acquire jurisdiction was that no provision was made for bringing in as parties thereto the competitors of the Philippine Long Distance Telephone Company. 17 That is the basis for the objection on procedural due process ground. While no doubt such a holding was necessary for the decision of that case which dealt with a petition for the reexamination of a decision that was held to be final and executory, it finds no application to this controversy dealing with a provisional permit. This is made clear by this portion of the opinion of Justice Sanchez: "Araneta seeks reexamination of the rates approved by the Commission. Araneta avers that PLDT can carry out its improvement and expansion program at less onerous terms to the subscribers. But Araneta [University] was not a party to the rate-fixing case or to any of the other proceedings below. These rate-fixing and allied cases terminated with the final

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judgment of January 9, 1964. Not being a party, it could not have moved to reconsider said decision. Nor could it have appealed from that decision — it had no standing in that case. Even if we treat Araneta's reexamination petition as one for reconsideration, the time therefor has long passed. 18 It was then stated: The reexamination herein sought by Araneta, perforce seeks the fixing of new and different rates. 19 Further: Araneta in effect, institutes a freshpetition — for new rates different from those already established. Such petition is a proceeding separate and distinct from those concluded by the final judgment of PSC of January 9, 1964. 20 The conclusion, therefore, necessarily follows:" We hold that the Public Service Commission may not reduce or increase rates established in a judgment that has become final, without proper notice; and that a Commission order reducing or increasing said rates without such notice is void." 21 Under the facts of that case, the procedural due process infirmity amounting to lack of jurisdiction is quite apparent. The opposite is true with this present petition which deals with a grant of provisional permit. It would be to lift out of context the reference made in the aforesaid opinion with reference to notification to the competitors to give a color of applicability to the situation before us. Clearly then, the allegation of a failure to follow the command of the due process guarantee is bereft of any legal foundation.

3. The question of whether the controversy is ripe for judicial determination was likewise argued by the parties. For it is undeniable that at the time the petition was filed. there was pending with the respondent Board a motion for reconsideration. Ordinarily, its resolution should be awaited. Prior thereto, an objection grounded on prematurity can be raised. Nonetheless, counsel for petitioner would stress that certiorari lies as the failure to observe procedural due process ousted respondent Board of whatever jurisdiction it could have had in the premises. This Court was impelled to go into the merits of the controversy at this stage, not only because of the importance of the issue raised but also because of the strong public interest in having the matter settled. As was set forth in Executive Order No. 101 which prescribes the procedure to be followed by respondent Board, it is the policy of the State, as swiftly as possible, to improve the deplorable condition of vehicular traffic, obtain maximum utilization of existing public motor vehicles and eradicate the harmful and unlawful trade of clandestine operators, as well as update the standard of those carrying such business, making it "imperative to provide, among other urgently needed measures, more expeditious methods in prescribing, redefining, or modifying the lines and mode of operation of public utility motor vehicles that now or thereafter, may operate in this country. 22 It is essential then both from the standpoint of the firms engaged as well as of the riding public to ascertain whether or not the procedure followed in this case and very likely in others of a similar nature satisfies the procedural due process requirement. Thus its ripeness for adjudication becomes apparent.

To paraphrase what was said in Edu v. Ericta 23 where the validity of a legislation was passed upon in a certiorari proceeding to annul and set aside a writ of preliminary injunction, to so act would be to conserve both time and effort. Those desiring to engage in public utility business as well as the public are both vitally concerned with the final determination of the standards to be followed in the procedure that must be observed. There is, to repeat, a great public interest in a definitive outcome of the crucial issue involved. One of the most noted authorities on Administrative Law, professor Kenneth

Culp Davis, discussing the ripeness concept, is of the view that the resolution of what could be a debilitating uncertainty with the conceded ability of the judiciary to work out a solution of the problem posed is a potent argument for minimizing the emphasis laid on its technical aspect. 24

WHEREFORE, the petition for certiorari is dismissed. No costs.

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G.R. No. 85439 January 13, 1992

KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM), TERESITA A. FAJARDO, NADYESDA B. PONSONES, MA. FE V. BOMBASE, LOIDA D. LUCES, MARIO S. FRANCISCO, AMADO V. MANUEL and ROLANDO G. GARCIA, incumbent members of the Board, AMADO G. PEREZ and MA. FE V. BOMBASE, incumbent General Manager and Secretary-Treasurer, respectively, petitioners, vs.HON. CARLOS G. DOMINGUEZ, Secretary of Agriculture, Regional Director of Region IV of the Department of Agriculture ROGELIO P. MADRIAGA, RECTO CORONADO and Municipal Mayor IGNACIO R. BUNYE, both in his capacity as Municipal Mayor of Muntinlupa, Metro Manila and as Presiding Officer of Sangguniang Bayan ng Muntinglupa, and JOHN DOES, respondents.

G.R. No. 91927 January 13, 1992

IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E. AGUINALDO, ALEJANDRO I. MARTINEZ, EPIFANIO A. ESPELETA, REY E. BULAY, LUCIO B. CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO, ROGER SMITH, RUFINO B. JOAQUIN, NOLASCO I. DIAZ, RUFINO IBE and NESTOR SANTOS, petitioners, vs.THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C. BERBANO, Special Prosecutor III, respondents.

Jose O. Villanueva and Roberto B. Romanillos for petitioners in G.R. No. 85439.

Alampay & Manhit Law Offices for petitioners in G.R. No. 91927.

 

DAVIDE, JR., J.:

These cases have been consolidated because they are closely linked with each other as to factual antecedents and issues.

The first case, G.R. No. 85439 (hereinafter referred to as the Kilusang Bayan case), questions the validity of the order of 28 October 1988 of then Secretary of Agriculture Hon. Carlos G. Dominguez which ordered: (1) the take-over by the Department of Agriculture of the management of the petitioner Kilusang Bayan sa Paglilingkod Ng Mga Magtitinda ng Bagong Pamilihang Bayan ng Muntilupa, Inc. (KBMBPM) pursuant to the Department's regulatory and supervisory powers under Section 8 of P.D. No. 175, as amended, and Section 4 of Executive Order No. 13, (2) the creation of a Management Committee which shall assume the management of KBMBPM upon receipt of the order,

(3) the disbandment of the Board of Directors, and (4) the turn over of all assets, properties and records of the KBMBPM the Management Committee.

The second case. G.R. No. 91927 (hereinafter referred to as the Bunye case), seeks the nullification of the Resolution of 4 January 1990 of the Sandiganbayan admitting the Amended Information against petitioners in Criminal Case No. 13966 and denying their motion to order or direct preliminary investigation, and its Resolution of 1 February 1990 denying the motion to reconsider the former.

The procedural and factual antecedents are not disputed.

On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter, Municipality), Metro Manila, thru its then Mayor Santiago Carlos, Jr., entered into a contract with the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM) represented by its General Manager, Amado Perez, for the latter's management and operation of the new Muntinlupa public market. The contract provides for a twenty-five (25) year term commencing on 2 September 1985, renewable for a like period, unless sooner terminated and/or rescinded by mutual agreement of the parties, at a monthly consideration of Thirty-Five Thousand Pesos (P35,000) to be paid by the KBMBPM within the first five (5) days of each month which shall, however, be increased by ten percent (10%) each year during the first five (5) years only. 1

The KBMBPM is a service cooperative organized by and composed of vendors occupying the New Muntinlupa Public Market in Alabang, Muntinlupa, Metro Manila pursuant to Presidential Decree No. 175 and Letter of Implementation No. 23; its articles of incorporation and by-laws were registered with the then Office of the Bureau of Cooperatives Development (thereafter the Bureau of Agricultural Cooperatives Development or BACOD and now the Cooperative Development Authority). 2

Following his assumption into office as the new mayor succeeding Santiago Carlos, Jr., petitioner Ignacio Bunye, claiming to be particularly scandalized by the "virtual 50-year term of the agreement, contrary to the provision of Section 143, paragraph 3 of Batas Pambansa Blg. 337," and the "patently inequitable rental," directed a review of the aforesaid contract. 3 He sought opinions from both the Commission on Audit and the Metro Manila Commission (MMC) on the validity of the instrument. In separate letters, these agencies urged that appropriate legal steps be taken towards its rescission. The letter of Hon. Elfren Cruz of the MMC even granted the Municipality authority "to take the necessary legal steps for the cancellation/recission of the above cited contract and make representations with KBMBPM for the immediate transfer/takeover of the possession, management and operation of the New Muntinlupa Market to the Municipal Government of Muntinlupa." 4

Consequently, upon representations made by Bunye with the Municipal Council, the latter approved on 1 August 1988 Resolution No. 45 abrogating the contract. To implement this resolution, Bunye, together with his co-petitioners and elements of the Capital Command of the Philippine Constabulary, proceeded, on 19 August 1986, to the

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public market and announced to the general public and the stallholders thereat that the Municipality was taking over the management and operation of the facility, and that the stallholders should henceforth pay their market fees to the Municipality, thru the Market Commission, and no longer to the KBMBPM. 5

On 22 August 1988, the KBMBPM filed with Branch 13 of the Regional Trial Court of Makati a complaint for breach of contract, specific performance and damages with prayer for a writ of preliminary injunction against the Municipality and its officers, which was docketed as Civil Case No. 88-1702. 6 The complaint was premised on the alleged illegal take-over of the public market effected "in excess of his (Bunye's) alleged authority" and thus "constitutes breach of contract and duty as a public official."

The writ applied for having been denied, 7 the KBMBPM officers resisted the attempts of Bunye and company to complete the take-over; they continued holding office in the KBS building, under their respective official capacities. The matter having been elevated to this Court by way of certiorari, 8 We remanded the same to the Court of Appeals which docketed it as C.A.-G.R. No. L-16930. 9

On 26 August 1988, Amado Perez filed with the Office of the Ombudsman a letter-complaint charging Bunye and his co-petitioners with oppression, harassment, abuse of authority and violation of the Anti-Graft and Corrupt Practices Act 10 for taking over the management and operation of the public market from KBMBPM. 11

In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos of the Office of the Special Prosecutor directed Bunye and his co-petitioners to submit within ten (10) days from receipt thereof counter-affidavits, affidavits of their witnesses and other supporting documents. 12 The subpoena and letter-complaint were received on 12 October 1988.

On 20 October 1988, two (2) days before the expiration of the period granted to file said documents, Bunye, et al. filed by mail an urgent motion for extension of "at least fifteen (15) days from October 22, 1988" within which to comply 13 with the subpoena.

Thereafter, the following transpired which subsequently gave rise to these petitions:

G.R. No. 85439

In the early morning of 29 October 1988, a Saturday, respondent Madriaga and Coronado, allegedly accompanied by Mayor Bunye and the latters' heavily armed men, both in uniform and in civilian clothes, together with other civilians, namely: Romulo Bunye II, Alfredo Bunye, Tomas Osias, Reynaldo Camilon, Benjamin Taguibao, Benjamin Bulos and other unidentified persons, allegedly through force, violence and intimidation, forcibly broke open the doors of the offices of petitioners located at the second floor of the KBS Building, new Muntinlupa Public Market, purportedly to serve upon petitioners the Order of respondent Secretary of Agriculture dated 28 October 1988, and to implement the same, by taking over and assuming the management of KBMBPM, disbanding the then incumbent Board of Directors for that purpose and

excluding and prohibiting the General Manager and the other officers from exercising their lawful functions as such. 14 The Order of the Secretary reads as follows: 15

O R D E R

WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC., (KBMBPM), Alabang, Muntinlupa, Metro Manila is a Cooperative registered under the provisions of Presidential Decree No. 175, as amended;

WHEREAS, the Department of Agriculture is empowered to regulate and supervise cooperatives registered under the provisions of Presidential Decree No. 175, as amended;

WHEREAS, the general membership of the KBMBPM has petitioned the Department of Agriculture for assistance in the removal of the members of the Board of Directors who were not elected by the general membership of said cooperative;

WHEREAS, the on-going financial and management audit of the Department of Agriculture auditors show (sic) that the management of the KBMBPM is not operating that cooperative in accordance with PD. 175, LOI No. 23, the Circulars issued by DA/BACOD and the provisions of the by-laws of KBMBPM;

WHEREAS, the interest of the public so demanding it is evident and urgently necessary that the KBMBPM MUST BE PLACED UNDER MANAGEMENT TAKE-OVER of the Department of Agriculture in order to preserve the financial interest of the members of the cooperative and to enhance the cooperative development program of the government;

WHEREAS, it is ordered that the Department of Agriculture in the exercise of its regulatory and supervisory powers under Section 8 of PD 175, as amended, and Section 4 of Executive Order No. 113, take over the management of KBMBPM under the following directives:

1. THAT a Management Committee is hereby created composed of the following:

a) Reg. Dir. or OIC RD — DA Region IV

b) Atty. Rogelio P. Madriaga — BACOD

c) Mr. Recto Coronado — KBMBPM

d) Mrs. Nadjasda Ponsones — KBMBPM

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e) One (1) from the Municipal Government of Muntinlupa to be designated by the Sangguniang Pambayan ng Muntinlupa;

2. THAT the Management Committee shall, upon receipt of this Order, assume the management of KBMBPM;

3. THAT the present Board of Directors is hereby disbanded and the officers and Manager of the KBMBPM are hereby directed to turnover all assets, properties and records of the KBMBPM to the Management Committee herein created;

4. THAT the Management Committee is hereby empowered to promulgate rules of procedure to govern its workings as a body;

5. THAT the Management Committee shall submit to the undersigned thru the Director of BACOD monthly reports on the operations of KBMBPM;

6. THAT the Management Committee shall call a General Assembly of all registered members of the KBMBPM within Ninety (90) days from date of this Order to decide such matters affecting the KBMBPM, including the election of a new set of Board of Director (sic).

This Order takes effect immediately and shall continue to be in force until the members of the Board of Directors shall have been duly elected and qualified.

Done this 28th day of October, 1988 at Quezon City.

As claimed by petitioners, the Order served on them was not written on the stationary of the Department, does not bear its seal and is a mere xerox copy.

The so-called petition upon which the Order is based appears to be an unverified petition dated 10 October 1988 signed, according to Mayor Bunye, 16 by 371 members of the KBMBPM.

On 2 November 1988, petitioners filed the petition in this case alleging, inter alia, that:

(a) Respondent Secretary acted without or in excess of jurisdiction in issuing the Order for he arrogated unto himself a judicial function by determining the alleged guilt of petitioners on the strength of a mere unverified petition; the disbandment of the Board of Directors was done without authority of law since under Letter of Implementation No. 23, removal of officers, directors or committee members could be done only by the majority of the members entitled to vote at an annual or special general assembly and only after an opportunity to be heard at said assembly.

(b) Respondent Secretary acted in a capricious, whimsical, arbitrary and despotic manner, so patent and gross that it amounted to a grave abuse of discretion.

(c) The Order is a clear violation of the By-Laws of KBMBPM and is likewise illegal and unlawful for it allows or tolerates the violation of the penal provisions under paragraph (c), Section 9 of P.D. No. 175.

(d) The Order is a clear violation of the constitutional right of the individual petitioners to be heard. 17

They pray that upon the filing of the petition, respondents, their agents, representatives or persons acting on their behalf be ordered to refrain, cease and desist from enforcing and implementing the questioned Order or from excluding the individual petitioners from the exercise of their rights as such officers and, in the event that said acts sought to be restrained were already partially or wholly done, to immediately restore the management and operation of the public market to petitioners, order respondents to vacate the premises and, thereafter, preserve the status quo; and that, finally, the challenged Order be declared null and void.

In the Resolution of 9 October 1988, 18 We required the respondents to Comment on the petition. Before any Comment could be filed, petitioners filed on 2 January 1989 an Urgent Ex-Parte Motion praying that respondent Atty. Rogelio Madriaga, who had assumed the position of Chairman of the Management Committee, be ordered to stop and/or cancel the scheduled elections of the officers of the KBMBPM on 6 January 1989 and, henceforth, desist from scheduling any election of officers or Members of the Board of Directors thereof until further orders on the Court. 19 The elections were, nevertheless, held and a new board of directors was elected. So, on 19 January 1989, petitioners filed a supplemental motion 20 praying that respondent Madriaga and the "newly elected Board of Directors be ordered to cease and desist from assuming, performing or exercising powers as such, and/or from removing or replacing the counsels of petitioners as counsels for KBMBPM and for Atty. Fernando Aquino, Jr., to cease and desist from unduly interfering with the affairs and business of the cooperative."

Respondent Bunye, by himself, filed his Comment on 23 January 1989. 21 He denies the factual allegations in the petition and claims that petitioners failed to exhaust administrative remedies. A reply thereto was filed by petitioners on 7 February 1989. 22

Respondent Recto Coronado filed two (2) Comments. The first was filed on 6 February 1989 23 by his counsel, Atty. Fernando Aquino, Jr., and the second, which is for both him and Atty. Madriaga, was filed by the latter on 10 February 1989. 24

On 20 February 1989, petitioners filed a Reply to the first Comment of Coronado 25 and an Ex-Parte Motion for the immediate issuance of a cease and desist order 26 praying that the so-called new directors and officers of KBMBPM, namely: Tomas M. Osias, Ildefonso B. Reyes, Paulino Moldez, Fortunato M. Medina, Aurora P. del Rosario, Moises Abrenica, and Lamberto Casalla, be ordered to immediately cease and desist from filing notices of withdrawals or motions to dismiss cases filed by the Cooperative now pending before the courts, administrative offices and the Ombudsman and Tanodbayan, and that if such motions or notices were already filed, to immediately withdraw and desist from further pursuing the same until further orders of this Court. The latter was precipitated by

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the Resolution No. 19 of the "new" board of directors withdrawing all cases filed by its predecessors against Bunye, et al., and more particularly the following cases: (a) G.R. No. 85439 (the instant petition), (b) Civil Case No. 88-1702, (c) OSP Case No. 88-2110 before the Ombudsman, (d) IBP Case No. 88-0119 before the Tanodbayan, and Civil Case No. 88-118 for Mandamus. 27

On 1 March 1989, We required the Solicitor General to file his Comment to the petition and the urgent motion for the immediate issuance of a cease and desist order. 28

A motion to dismiss the instant petition was filed on 30 March 1989. 29 On 19 April 1989, We resolved to dismiss the case and consider it closed and terminated. 30 Thereupon, after some petitioners filed a motion for clarification and reconsideration, We set aside the dismissal order and required the new directors to comment on the Opposition to Motion to Dismiss filed by the former. 31

The new board, on 14 June 1989, prayed that its Manifestation of 6 June 1989 and Opposition dated 9 June 1989, earlier submitted it response to petitioners' motion for reconsideration of the order dismissing the instant petition, be treated as its Comment. 32 Both parties then continued their legal fencing, serving several pleadings on each other.

In Our Resolution of 9 August 1989, 33 We gave the petition due course and required the parties to submit their respective Memoranda.

On 14 August 1989, petitioners filed an urgent ex-parte motion for the immediate issuance of a cease and desist order 34 in view of the new board's plan to enter into a new management contract; the motion was noted by this Court on 23 August 1989. A second ex-parte motion, noted on 18 October 1989, was filed on 19 September 1989 asking this court to consider the "Invitation to pre-qualify and bid" for a new contract published by respondent Bunye. 35

In a belated Comment 36 for the respondent Secretary of Agriculture filed on 22 September 1989, the Office of the Solicitor General asserts that individual petitioners, who were not allegedly elected by the members or duly designated by the BACOD Director, have no right or authority to file this case; the assailed Order of the Secretary was issued pursuant to P.D. No. 175, more particularly Section 8 thereof which authorizes him "(d) to suspend the operation or cancel the registration of any cooperative after hearing and when in its judgment and based on findings, such cooperative is operating in violation of this Decree, rules and regulations, existing laws as well as the by-laws of the cooperative itself;" the Order is reasonably necessary to correct serious flaws in the cooperative and provide interim measures until election of regular members to the board and officers thereof; the elections conducted on 6 January 1989 are valid; and that the motion to dismiss filed by the new board of directors binds the cooperative. It prays for the dismissal of the petition.

Respondent Secretary of Agriculture manifested on 22 September 1989 that he is adopting the Comment submitted by the Office of the Solicitor General as his

memorandum; 37 petitioners and respondents Coronado and Madriaga filed their separate Memoranda on 6 November 1989; 38 while the new board of directors submitted its Memorandum on 11 December 1989. 39

The new KBMBPM board submitted additional pleadings on 16 February 1990 which it deemed relevant to the issues involved herein. Reacting, petitioners filed a motion to strike out improper and inadmissible pleadings and annexes and sought to have the pleaders cited for contempt. Although We required respondents to comment, the latter did not comply.

Nevertheless, a manifestation was filed by the same board on 25 February 1991 40 informing this Court of the holding, on 9 January 1991, of its annual general assembly and election of its board of directors for 1991. It then reiterates the prayer that the instant petition be considered withdrawn and dismissed. Petitioners filed a counter manifestation alleging that the instant petition was already given due course on 9 August 1989. 41 In its traverse to the counter manifestation, the new board insists that it "did not derive authority from the October 28, 1988 Order, the acts of the Management Committee, nor (sic) from the elections held in (sic) January 6, 1989," but rather from the members of the cooperative who elected them into office during the elections.

Petitioners filed a rejoinder asserting that the election of new directors is not a supervening event independent of the main issue in the present petition and that to subscribe to the argument that the issues in the instant petition became moot with their assumption into office is to reward a wrong done.

G. R. NO. 91927

Petitioners claim that without ruling on their 20 October 1988 motion for an extension of at last 15 days from 22 October 1988 within which to file their counter-affidavits, which was received by the Office of the Special Prosecutor on 3 November 1988, Special Prosecutor Onos promulgated on 11 November 1988 a Resolution finding the evidence on hand sufficient to establish a prima facie case against respondents (herein petitioners) and recommending the filing of the corresponding information against them before the Sandiganbayan. 42Petitioners also claim that they submitted their counter-affidavits on 9 November 1988. 43

In their motion dated 2 December 1988, petitioners move for a reconsideration of the above Resolution, 44 which was denied by Onos 45 in his 18 January 1989 Order. The information against the petitioners was attached to this order.

Upon submission of the records for his approval, the Ombudsman issued a first indorsement on 4 April 1989 referring to "Judge Gualberto J. de la Llana, Acting Director , IEO/RSSO, this Office, the within records of OSP Case No. 88-02110 . . .  for further preliminary investigation . . ." 46

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Thereafter, on 28 April 1989, Bunye and company received a subpoena from de la Llana requiring them to appear before the latter on 25 April 1989, 47 submit a report and file comment. After being granted an extension, Bunye and company submitted their comment on 18 May 1989. 48

On 22 August 1989, de la Llana recommended the filing of an information for violation of section 3 (e) of the Anti-Graft and Corrupt Practices Act. 49 The case was referred to special prosecuting officer Jose Parentela, Jr. who, in his Memorandum 50 to the Ombudsman through the Acting Special Prosecutor, likewise urged that an information be filed against herein petitioners. On 3 October 1989, the Ombudsman signed his conformity to the Memorandum and approved the 18 January information prepared by Onos, which was then filed with the Sandiganbayan.

Consequently, Bunye, et al. were served arrest warrants issued by the Sandiganbayan. Detained at the NBI on 9 October 1989, they claim to have discovered only then the existence of documents recommending and approving the filing of the complaint and a memorandum by special prosecutor Bernardita G. Erum proposing the dismissal of the same. 51

Arraignment was set for 18 October 1989. 52

However, on 14 October 1989, petitioners filed with the Sandiganbayan an "Omnibus Motion to Remand to the Office of the Ombudsman; to Defer Arraignment and to Suspend Proceedings." 53

Subsequently, through new counsel, petitioners filed on 17 October 1989 a Consolidated Manifestation and Supplemental Motion 54 praying, inter alia, for the quashal of the information on the ground that they were deprived of their right to a preliminary investigation and that the information did not charge an offense.

The Sandiganbayan issued an order on 18 October 1989 deferring arraignment and directing the parties to submit their respective memoranda, 55 which petitioners complied with on 2 November 1989. 56 On 16 November 1989, special Prosecutor Berbano filed a motion to admit amendedinformation. 57

On 17 November 1989, the Sandiganbayan handed down a Resolution 58 denying for lack of merit the Omnibus Motion to Remand the Case To The Office of the Ombudsman, to Defer Arraignment and to Suspend Proceedings. Petitioners then filed a motion to order a preliminary investigation 59 on the basis of the introduction by the amended information of new, material and substantive allegations, which the special prosecutor opposed, 60 thereby precipitating a rejoinder filed by petitioners. 61

On 4 January 1990, the Sandiganbayan handed down a Resolution 62 admitting the Amended Information and denying the motion to direct preliminary investigation. Their

motion to reconsider this Resolution having been denied in the Resolution of 1 February 1990, 63 petitioners filed the instant petition on 12 February 1990.

Petitioners claim that respondent Sandiganbayan acted without or in excess of jurisdiction or with manifest grave abuse of discretion amounting to lack of jurisdiction in denying petitioners their right to preliminary investigation and in admitting the Amended Information.

They then pray that: (a) the 4 January and 1 February 1990 Resolutions of the Sandiganbayan, admitting the amended information and denying the motion for reconsideration, respectively, be annulled; (b) a writ be issued enjoining the Sandiganbayan from proceeding further in Criminal Case No. 13966; and (c) respondents be enjoined from pursuing further actions in the graft case.

We required the respondents to Comment on the petition.

On 21 February 1990, petitioners' counsel filed a motion to drop Epifanio Espeleta and Rey E. Dulay as petitioners, 64 and in the Comment they filed on 30 March 1990, in compliance with Our Resolution of 1 March 1990, they state that they do not interpose any objection to the motion.

On 20 March 1990, the Office of the Solicitor General moved that it be excused from filing comment for the respondents as it cannot subscribe to the position taken by the latter with respect to the questions of law involved.65 We granted this motion in the resolution of 8 May 1990.

Respondent Berbano filed his comment on 10 September 1991 and petitioners replied on 20 December 1990; Berbano subsequently filed a Rejoinder thereto on 11 January 1991. 66 The Sandiganbayan then filed a manifestation proposing that it be excused from filing comment as its position on the matters in issue is adequately stated in the resolutions sought to be annulled. 67 On 7 March 1991, We resolved to note the manifestation and order the instant petition consolidated with G.R. No. 85439.

The present dispute revolves around the validity of the antecedent proceedings which led to the filing of the original information on 18 January 1989 and the amended information afterwards.

THE ISSUES AND THEIR RESOLUTION

1. G. R. No. 85439.

As adverted to in the introductory portion of this Decision, the principal issue in G.R. No. 85439 is the validity of the 28 October 1988 Order of respondent Secretary of Agriculture. The exordium of said Order unerringly indicates that its basis is the alleged petition of the general membership of the KBMBPM requesting the Department for

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assistance "in the removal of the members of the Board of Directors who were not elected by the general membership" of the cooperative and that the "ongoing financial and management audit of the Department of Agriculture auditors show (sic) that the management of the KBMBPM is not operating that cooperative in accordance with P.D. 175, LOI 23, the Circulars issued by DA/BACOD and the provisions and by-laws of KBMBPM." It is also professed therein that the Order was issued by the Department "in the exercise of its regulatory and supervisory powers under Section 8 of P.D. 175, as amended, and Section 4 of Executive Order No. 113."

Respondents challenge the personality of the petitioners to bring this action, set up the defense of non-exhaustion of administrative remedies, and assert that the Order was lawfully and validly issued under the above decree and Executive Order.

We find merit in the petition and the defenses interposed do not persuade Us.

Petitioners have the personality to file the instant petition and ask, in effect, for their reinstatement as Section 3, Rule 65 of the Rules of Court, defining an action for mandamus, permits a person who has been excluded from the use and enjoyment of a right or office to which he is entitled, to file suit. 68 Petitioners, as ousted directors of the KBMBPM, are questioning precisely the act of respondent Secretary in disbanding the board of directors; they then pray that this Court restore them to their prior stations.

As to failure to exhaust administrative remedies, the rule is well-settled that this requirement does not apply where the respondent is a department secretary whose acts, as an alter ego of the President, bear the implied approval of the latter, unless actually disapproved by him. 69 This doctrine of qualified political agency ensures speedy access to the courts when most needed. There was no need then to appeal the decision to the office of the President; recourse to the courts could be had immediately. Moreover, the doctrine of exhaustion of administrative remedies also yields to other exceptions, such as when the question involved is purely legal, as in the instant case, 70 or where the questioned act is patently illegal, arbitrary or oppressive. 71 Such is the claim of petitioners which, as hereinafter shown, is correct.

And now on the validity of the assailed Order.

Regulation 34 of Letter of Implementation No. 23 (implementing P.D. No. 175) provides the procedure for the removal of directors or officers of cooperatives, thus:

An elected officer, director or committee member may be removed by a vote of majority of the members entitled to vote at an annual or special general assembly. The person involved shall have an opportunity to be heard.

A substantially identical provision, found in Section 17, Article III of the KBMBPM's by-laws, reads:

Sec. 17. Removal of Directors and Committee Members. — Any elected director or committee member may be removed from office for cause by a majority vote of the members in good standing present at the annual or special general assembly called for the purpose after having been given the opportunity to be heard at the assembly.

Under the same article are found the requirements for the holding of both the annual general assembly and a special general assembly.

Indubitably then, there is an established procedure for the removal of directors and officers of cooperatives. It is likewise manifest that the right to due process is respected by the express provision on the opportunity to be heard. But even without said provision, petitioners cannot be deprived of that right.

The procedure was not followed in this case. Respondent Secretary of Agriculture arrogated unto himself the power of the members of the KBMBPM who are authorized to vote to remove the petitioning directors and officers. He cannot take refuge under Section 8 of P.D. No. 175 which grants him authority to supervise and regulate all cooperatives. This section does not give him that right.

An administrative officer has only such powers as are expressly granted to him and those necessarily implied in the exercise thereof. 72 These powers should not be extended by implication beyond what may to necessary for their just and reasonable execution. 73

Supervision and control include only the authority to: (a) act directly whenever a specific function is entrusted by law or regulation to a subordinate; (b) direct the performance of duty; restrain the commission of acts; (c) review, approve, reverse or modify acts and decisions of subordinate officials or units; (d) determine priorities in the execution of plans and programs; and (e) prescribe standards, guidelines, plans and programs. Specifically, administrative supervision is limited to the authority of the department or its equivalent to: (1) generally oversee the operations of such agencies and insure that they are managed effectively, efficiently and economically but without interference with day-to-day activities; (2) require the submission of reports and cause the conduct of management audit, performance evaluation and inspection to determine compliance with policies, standards and guidelines of the department; (3) take such action as may be necessary for the proper performance of official functions, including rectification of violations, abuses and other forms of mal-administration; (4) review and pass upon budget proposals of such agencies but may not increase or add to them. 74

The power to summarily disband the board of directors may not be inferred from any of the foregoing as both P.D. No. 175 and the by-laws of the KBMBPM explicitly mandate the manner by which directors and officers are to be removed. The Secretary should have known better than to disregard these procedures and rely on a mere petition by the general membership of the KBMBPM and an on-going audit by Department of Agriculture auditors in exercising a power which he does not have, expressly or impliedly. We cannot concede to the proposition of the Office of the Solicitor General that the Secretary's power under paragraph (d), Section 8 of P.D. No. 175 above quoted to suspend the

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operation or cancel the registration of any cooperative includes the "milder authority of suspending officers and calling for the election of new officers." Firstly, neither suspension nor cancellation includes the take-over and ouster of incumbent directors and officers, otherwise the law itself would have expressly so stated. Secondly, even granting that the law intended such as postulated, there is the requirement of a hearing. None was conducted.

Likewise, even if We grant, for the sake of argument, that said power includes the power to disband the board of directors and remove the officers of the KBMBPM, and that a hearing was not expressly required in the law, still the Order can be validly issued only after giving due process to the affected parties, herein petitioners.

Due process is guaranteed by the Constitution 75 and extends to administrative proceedings. In the landmark case ofAng Tibay vs. Court of Industrial Relations, 76 this Court, through Justice Laurel, laid down the cardinal primary requirements of due process in administrative proceedings, foremost of which is the right to a hearing, which includes the right to present one's case and submit evidence in support thereof. The need for notice and the opportunity to be heard is the heart of procedural due process, be it in either judicial or administrative proceedings. 77 Nevertheless, a plea of a denial of procedural due process does not lie where a defect consisting in an absence of notice of hearing was thereafter cured by the aggrieved party himself as when he had the opportunity to be heard on a subsequent motion for reconsideration. This is consistent with the principle that what the law prohibits is not the absence of previous notice but the absolute absence thereof and lack of an opportunity to be heard. 78

In the instant case, there was no notice of a hearing on the alleged petition of the general membership of the KBMBPM; there was, as well, not even a semblance of a hearing. The Order was based solely on an alleged petition by the general membership of the KBMBPM. There was then a clear denial of due process. It is most unfortunate that it was done after democracy was restored through the peaceful people revolt at EDSA and the overwhelming ratification of a new Constitution thereafter, which preserves for the generations to come the gains of that historic struggle which earned for this Republic universal admiration.

If there were genuine grievances against petitioners, the affected members should have timely raise these issues in the annual general assembly or in a special general assembly. Or, if such a remedy would be futile for some reason or another, judicial recourse was available.

Be that as it may, petitioners cannot, however, be restored to their positions. Their terms expired in 1989, thereby rendering their prayer for reinstatement moot and academic. Pursuant to Section 13 of the by-laws, during the election at the first annual general assembly after registration, one-half plus one (4) of the directors obtaining the highest number of votes shall serve for two years, and the remaining directors (3) for one year; thereafter, all shall be elected for a term of two years. Hence, in 1988, when the board was disbanded, there was a number of directors whose terms would have expired the next year (1989) and a number whose terms would have expired two years after (1990).

Reversion to the status quo preceding 29 October 1988 would not be feasible in view of this turn of events. Besides, elections were held in 1990 and 1991. 79 The affairs of the cooperative are presently being managed by a new board of directors duly elected in accordance with the cooperative's by-laws.

2. G. R. No. 91927.

The right of an accused to a preliminary investigation is not among the rights guaranteed him in the Bill of Rights. As stated in Marcos, et al. vs. Cruz, 80 "the preliminary investigation in criminal cases is not a creation of the Constitution; its origin is statutory and it exists and the right thereto can be invoked when so established and granted by law. It is so specifically granted by procedural law. 81 If not waived, absence thereof may amount to a denial of due process. 82 However, lack of preliminary investigation is not a ground to quash or dismiss a complaint or information. Much less does it affect the court's jurisdiction. In People vs. Casiano, 83 this Court ruled:

Independently of the foregoing, the absence of such investigation [preliminary] did not impair the validity of the information or otherwise render it defective. Much less did it affect the jurisdiction of the court of first instance over the present case. Hence, had the defendant-appellee been entitled to another preliminary investigation, and had his plea of not guilty upon arraignment not implied a waiver of said right, the court of first instance should have, either conducted such preliminary investigation, or ordered the Provincial Fiscal to make it, in pursuance of section 1687 of the Revised Administrative Code (as amended by Republic Act No. 732), or remanded the record for said investigation to the justice of the peace court, instead of dismissing the case as it did in the order appealed from.

This doctrine was thereafter reiterated or affirmed in several case. 84

In the instant case, even if it is to be conceded for argument's sake that there was in fact no preliminary investigation, the Sandiganbayan, per Doromal vs. Sandiganbayan, 85 "should merely suspend or hold in abeyance proceedings upon the questioned Amended Information and remand the case to the Office of the Ombudsman for him to conduct a preliminary investigation."

It is Our view, however, that petitioners were not denied the right to preliminary investigation. They, nevertheless, insist that the preliminary investigation conducted by the Office of the Special Prosecutor existed more in form than in substance. This is anchored on the failure by prosecutor Onos to consider the counter-affidavits filed by petitioners. The same sin of omission is ascribed to Acting Director de la Llana who purportedly failed to consider the comments submitted by the petitioners pursuant to a subpoena dated 13 April 1989. The failure of special prosecutor Berbano to conduct a preliminary investigation before amending the information is also challenged.

It is finally urged that the Sandiganbayan completely disregarded the "glaring anomaly that on its face the Information filed by the Office of the Special Prosecutor" was

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prepared and subscribed on 18 January 1989, while the records indicate that the preliminary investigation was concluded on 3 October 1989.

In his Comment, respondent Berbano dispassionately traces the genesis of the criminal information filed before the Sandiganbayan. His assessment that a preliminary investigation sufficient in substance and manner was conducted prior to the filing of the information reflects the view of the Sandiganbayan, maintained in both the 17 November 1989 and 4 January 1990 resolutions, that there was compliance with the requirements of due process.

Petitioners were provided a reasonable period within which to submit their counter-affidavits; they did not avail of the original period; they moved for an extension of at least fifteen (15) days from 22 October 1988. Despite the urgency of its nature, the motion was sent by mail. The extension prayed for was good up to 6 November 1988. But, as admitted by them, they filed the Counter-Affidavits only on 9 November 1988. Yet, they blamed prosecutor Onos for promulgating the 11 November 1989 Resolution and for, allegedly, not acting on the motion. Petitioners then should not lay the blame on Onos; they should blame themselves for presuming that the motion would be granted.

This notwithstanding, petitioners were able to file a Motion for Reconsideration on 13 December 1988 requesting that the reviewing prosecutor consider the belatedly filed documents; 86 thus, there is the recommendation of prosecutor Bernardita Erum calling for the dismissal of the charges on 2 March 1989, which, however, was not sustained upon subsequent review. The Sandiganbayan, in its 17 November 1989 Resolution, succinctly summed up the matter when it asserted that "even granting, for the sake of argument, that prosecutor Onos . . . failed to consider accused-movants' counter-affidavits, such defect was cured when a "Motion for Reconsideration" was filed, and which . . . de la Llana took into account upon review."

It may not then be successfully asserted that the counter-affidavits were not considered by the Ombudsman in approving the information. Perusal of the factual antecedents reveals that a second investigation was conducted upon the "1st Indorsement" of the Ombudsman of 4 April 1989. As a result, subpoenas were issued and comments were asked to be submitted, which petitioners did, but only after a further extension of fifteen (15) days from the expiration of the original deadline. From this submission the matter underwent further review.

Moreover, in the 18 January 1989 Order of prosecutor Onos, there was an ample discussion of the defenses raised by the petitioners in their counter-affidavits, thus negating the charge that the issues raised by them were not considered at all. 87

It is indisputable that the respondents were not remiss in their duty to afford the petitioners the opportunity to contest the charges thrown their way. Due process does not require that the accused actually file his counter-affidavits before the preliminary investigation is deemed completed. All that is required is that he be given the opportunity to submit such if he is so minded. 88

In any event, petitioners did in fact, although belatedly, submit their counter-affidavits and as a result thereof, the prosecutors concerned considered them in subsequent reviews of the information, particularly in the re-investigation ordered by the Ombudsman.

And now, as to the protestation of lack of preliminary investigation prior to the filing of the Amended Information. The prosecution may amend the information without leave of court before arraignment, 89 and such does not prejudice the accused. 90 Reliance on the pronouncements in Doromal vs. Sandiganbayan 91 is misplaced as what obtained therein was the preparation of an entirely new information as contrasted with mere amendments introduced in the amended information, which also charges petitioners with violating Section 3 (e) of the Anti-Graft Law.

In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law requiring the Tanodbayan to conduct another preliminary investigation of a case under review by it. On the contrary, under P.D. No. 911, in relation to Rule 12, Administrative Order No. VII, the Tanodbayan may, upon review, reverse the findings of the investigator and thereafter "where he finds a prima facie case, to cause the filing of an information in court against the respondent, based on the same sworn statements or evidence submitted, without the necessity of conducting another preliminary investigation."

Respondent Sandiganbayan did not then commit any grave abuse of discretion in respect to its Resolutions of 4 January 1990 and 1 February 1990.

The petition then must fail.

CONCLUSION

WHEREFORE, judgment is hereby rendered:

1. GRANTING the petition in G.R. No. 85439; declaring null and void the challenged Order of 28 October 1988 of the respondent Secretary of Agriculture; but denying, for having become moot and academic, the prayer of petitioners that they be restored to their positions in the KBMBPM.

2. DISMISSING, for lack of merit, the petition in G.R. No. 91927.

No pronouncement as to costs.

IT IS SO ORDERED.

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G.R. No. L-16969             April 30, 1966

R. MARINO CORPUS, plaintiff-appellant, vs.MIGUEL CUADERNO, SR., defendant-appellee.

Rosauro L. Alvarez, for plaintiff-appellant.G. B. Guevara, R. P. Guevara and E. S. Tipon, for defendant-appellee.

MAKALINTAL, J.:

This is a suit for damage commenced in the Court of First Instance of Manila, where plaintiff asked for half a million pesos and defendant, on his counterclaim, for one and a half million. After trial the court dismissed the complaint and awarded P1,000.00 to defendant. Plaintiff appealed directly to Us in view of the amount claimed by him.

During the time pertinent to this case defendant was Governor of the Central Bank of the Philippines. On January 13, 1949 Corpus was appointed Economist in the Department of Economic Research of said bank. Thereafter he received promotions in position and salary. By 1954 he was Director of the Department of Loans and Credit and Rural Banks Administration. On December 15, 1954 a number of employee of the bank filed an administrative complaint against him. Upon their petition he was suspended from office on February 8, 1955. After investigation he was found guilty on five counts and upon recommendation of the Governor was penalized with suspension without pay from February 8, 1955 to August 30, 1955, the date the Monetary Board of the bank rendered its decision.

On August 31, 1955 Corpus received a letter from Cuaderno informing him that be had been "reinstated in the service of the bank" with the designation of "Technical Assistant to the Governor." On January 17, 1956 he was appointed Special Assistant to the Governor, in charge of the Export Department.

On March 7, 1958 several of his co-employees in the same department filed an administrative complaint against him, alleging a number of acts of misfeasance. The Monetary Board, upon recommendation of the Governor, suspended him on March 18.

On March 25, 1958 Corpus instituted the present action, alleging that his suspension was unwarranted and had been brought about by Cuaderno's malicious machinations. The latter's counterclaim, after the denials and special defenses in his answer, alleged that the complaint had been filed maliciously and that plaintiff had committed libel against him.

On May 5, 1959, while this case was still pending in the lower court, the three-man committee created to investigate the 1958 administrative charges against plaintiff reported to the Monetary Board that if found no basis to recommend disciplinary action

against him and therefore urged that he be reinstated. But on July 20, 1959 the Monetary Board resolved that:

After an exhaustive and mature deliberation of the report of the aforesaid fact-finding committee, and representations of both complainants and respondent, through their respective counsel; and, further, after a thorough review of the service record of the respondent, particularly the various cases presented against him, object of Monetary Board Resolution No. 1527 dated August 30, 1955, which all involve fitness, discipline, etc. of respondent; and moreover, upon formal statement of the Governor that he has lost confidence in the respondent as Special Assistant to the Governor and in charge of the Export Department (such position being primarily confidential and highly technical in nature), the Monetary Board finds that the continuance of the respondent in the service of the Central Bank would be prejudicial to the best interest of the Central Bank and, therefore, in accordance with the provisions of Section 14 of the Bank Charter, considers the respondent, Mr. R. Marino Corpus, resigned as of the date of his suspension.

On March 22, 1960 the lower court rendered the decision appealed from, absolving Cuaderno from liability but ordering Corpus to pay damages, as aforesaid, the allegation of libel having been duly proven.

Appellant now avers that the lower court erred in holding (1) that appellee is not liable for damages for illegally causing his suspension and eventual removal; and (2) that appellant had committed libel against appellee.

In connection with the first issue it is pertinent to state that the question of legality of appellant's removal by resolution of the Monetary Board of July 20, 1959 has been decided by Us in another case (G.R. No. L-23721, March 31, 1965). We found there that he had been removed not for any of the charges in the administrative complaint against him in 1958 — charges as to which no specific findings were made by the Monetary Board — but by reason of loss of confidence by the Governor of the Bank; and held that loss of confidence alone is not a sufficient and legitimate cause for removal even if the position involved, as in appellant's case, belongs to the category of policy-determining, primarily confidential or highly technical positions referred to in the Constitution. In that case, therefore, We ordered appellant's reinstatement in the service.

The question here now is whether appellant's removal was the result of malicious machinations on the part of appellee, as alleged in the complaint. Appellant starts by saying that Cuaderno harbored a feeling of professional jealousy against him because he was a much solicited guest speaker on economic matters — a subject appellee considered his forte; and that on one occasion, during a hearing in Congress, appellant gave testimony contrary to that which appellee had given, thus putting the latter in a bad light. Resentment according to appellant was followed by overt acts, thus: Appellee induced a number of bank employees to file the administrative complaints of 1955 and 1958. The 1955 complaint was dated January 20, but as early as January 11 appellee saw to it that an investigating committee was created by the Monetary Board. And before appellant was given a chance to explain his side he was suspended, upon appellee's recommendation, on February 8, 1955. Appellant was not given a chance to read the

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charges against him except during the trial of the instant case. After the investigation appellant received a letter from appellee, informing him of his reinstatement, but without mentioning the fact that he had been found guilty and given the penalty of suspension without pay. Appellee even congratulated him on his exoneration. To completely convince appellant of this, appellee ordered the preparation of the "back salary" check corresponding to appellant's period of suspension, only to have the check cancelled later on. After the second administrative complaint was filed in 1958 appellee hastily convened an extraordinary meeting of the Monetary Board in order to magnify the false charges against appellant although appellee knew that the meeting was violative of the Central Bank charter, because the object of the meeting, as aforesaid, was not stated in the call, and the object actually stated did not justify an extraordinary meeting at all. To lull appellant into a false sense of security, appellee simply notified him, by letters, to prepare comments on the administrative charges, leading him to believe that he had all the time to do so, but afterwards appellee suddenly changed his tactics and directed the secretary of the Monetary Board to demand that appellant answer the charges as soon as possible. And on March 18, 1958 appellee informed appellant that he had been suspended effective that day. The corresponding letters and notices were delivered to appellant at his house by the bank's security guards, who were in uniform and fully armed — a manner of delivery that proved humiliating to appellant.

We first take up the question of appellant's removal from office as a result of the administrative complaint filed against him in 1958. The removal was embodied in a resolution of the Monetary Board, upon appellee's recommendation as Governor of the Bank. The procedure adopted was in accordance with the provision of the bank charter that the Monetary Board shall "on the recommendation of the Governor, appoint, fix the remunerations, and remove all officers and employees of the Central Bank." (Section 14, R.A. 265.) Under this provision the Board has the power to adopt or reject the recommendation. The decisive action belonged to the Board, not to appellee.

In speaking of the action of the Board, this Court said in G.R. No. L-23721,  supra: "we do not believe that in opining that the position of Corpus was one dependent on confidence, the defendant Monetary Board necessarily acted with vindictiveness or wantonness, and not in the exercise of honest judgment."

The record does not show that it was appellee who instigated either or both of the administrative cases against appellant. The 1955 complaint was filed by ten bank employees, while the one in 1958 was filed by eighteen of appellant's subordinates in his department — persons who would naturally be expected to feel greater loyalty to appellant, their immediate superior, than to appellee. None of the complainants in the first group were in the second group. No acts are attributed to appellee from which it may be inferred that he convinced all or a large number of them to file the charges.

Appellant stresses the fact that in the first administrative case, even before the complainants filed their complaint of January 20, 1955 the Monetary Board had already created an investigating committee, based on "papers presented by the Governor." The resolution to that effect was passed January 11, 1955. The evidence shows, however, that the complainants charged appellant as early as December 15, 1954, reiterated their

complaint on the following December 26, and again on January 3, 1955. The complaint of January 20, 1955 was only a more formal and detailed narration of the charges.

In any event, some of the charges were substantiated. True, appellant was absolved of negligence in the performance of official duties and dishonesty, but he was found guilty on five other counts, namely: (1) physical maltreatment of a co-employee; (2) use of insulting language; (3) oppressive treatment of subordinates; (4) promulgation of unreasonable office regulations; and (5) defiance to the Monetary Board. Under the circumstances, malice can hardly be imputed to anybody in the formulation of those charges.

Appellant says it was only during the trial of the present case that he read a copy of the 1955 administrative complaint against him. We are hard put to believe this. One who is thus charged, and suspended by reason thereof, would lose no time finding out what the charges are. And after the administrative investigations had been terminated and appellant received a letter informing him of his restoration to office, he would want to know whether he had been exonerated or not. The fact is that he requested appellee to intercede for him in convincing the members of the Monetary Board to amend the resolution imposing upon him the penalty of suspension without pay — a fact which certainly does not jibe with his alleged ignorance of the charges of which he had been found guilty.

Contrary to appellant's claim, it was not appellee who was responsible for the cancellation of the check covering the period of his suspension. In fact appellee was the one who had the check prepared on September 6, 1955, just before he left on a trip to Istanbul; but as appellant himself stated in a letter-complaint he sent to the Presidential Complaints and Action Committee the check "was subsequently cancelled upon orders of Acting Deputy Governor Castillo on the strength of the Monetary Board resolution which was prepared after Governor Cuaderno's departure on September 6th." This is confirmed by appellant's witness, Jose Carmona, who was Chief Accountant of the Central Bank at the time.

Neither was appellee responsible for appellant's preventive suspension in connection with the two administrative cases against him. The pertinent resolution of the Monetary Board shows that it suspended appellant (in 1955) "after being appraised (sic) of the findings and observations of the Committee created on January 11, 1955 on the matter at its present stage." The Board was then acting on complainants' petition dated January 3, 1955, precisely urging appellant's suspension. Likewise it appears that in the 1958 administrative case the complainants filed, on March 12 of that year, a motion for the immediate suspension or relief from office of appellant; and (to quote from the corresponding resolution) "after a lengthy and mature deliberation on the matter and upon the recommendation of the Governor, the Board, by unanimous vote, decided to suspend from office effective today, March 18, 1958, Mr. R. Marino Corpus." Both acts of suspension were by the Monetary Board, not by appellee. If appellee recommended suspension, he did so in the performance of his duty as he saw it and not in pursuance of an insidious scheme against appellant.

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Concerning the alleged humiliating manner in which the communications from the Monetary Board were served upon appellant, we fail to see how appellee may be held responsible. The bank's security guards who delivered them may have been in uniform and armed at the time, but it does not appear that they did anything to call the public's attention to the import of the messages they were carrying. If they acted in an oppressive and high-handed manner, it is they and not appellee who should be made to answer.

Appellant says that after appellee had lulled him into a false sense of security in connection with the 1958 case, the latter suddenly pressed him to file his answer without first furnishing him a copy of the complaint. The record fails to substantiate this grievance. The complaint was filed on March 7, 1958. Appellant received a letter from Deputy Governor Castillo asking him to appear at the Central Bank at 9 in the evening of March 10, 1958, to furnish the Monetary Board with certain information. According to appellant, when he went to the meeting hall as directed he found nobody there except the Board Secretary, Attorney Filomeno Sta. Ana. In the afternoon of March 14, 1958 appellant received a letter from Sta. Ana asking him to answer the charges. Appellant apparently did not reply to the letter. Then on March 17, 1958 Sta. Ana, upon appellee's instructions, again sent appellant a memorandum asking him to submit his answer without delay. Instead of answering the charges, or asking for a copy thereof if he did not have a copy, as he now claims, appellant had his subordinate, Orlando Villanueva, write a letter on March 18, 1958, telling Sta. Ana that "Mr. Corpus has instructed me to inform you that his lawyer, Atty. Rosauro Alvarez (Roseller Lim and Rosauro Alvarez Law Offices) is now sick with flu and is asking for time." Considering that appellant had engaged a lawyer to defend him, his allegation of ignorance of the charges deserves scant credit.

All that may be said about appellee's actuations is that he lost confidence in appellant in view of the charges filed against him in 1958; and although they were not substantiated, appellee believed in good faith that such loss of confidence was sufficient reason to recommend appellant's removal.

We come now to the question of libel, which is the subject of appellee's counterclaim. The statements for which appellee seeks damages from appellant appeared in the March 21, 1958 issue of The Manila Chronicle, as follows:

CORPUS TALKS OF "INTRIGUER "

A suspended Central Bank official yesterday said that a high-ranking CB official, who was dismissed for malversation from the Philippine National Bank before the war, intrigued and instigated the filing of charges against him.

In an interview, R. Marino Corpus, who was suspended the other day as special assistant to the CB governor and head of the CB export department asserted that the "intriguer" was "dismissed from the PNB when my father, Judge Rafael Corpus, was president of the bank.

Corpus was suspended on the basis of an administrative complaint filed by 18 of the 78 employees of the CB export department.

In a previous interview, Corpus preferred not to comment on his suspension beyond saying that "time will tell who instigated the charges, and why."

Yesterday, Corpus called for the ouster of the CB official he was referring to, averring that this official was automatically disqualified by the CB charter from holding a position in the Bank which calls for "high moral integrity."

When this story hits the streets, the CB official who will be cussing me and will be pushing hard to have me disqualified from the CB will be the one who instigated the charges against me, Corpus added. "He will stop at nothing to run me down, because now that he is exposed, he is automatically disqualified by the charter of the bank from holding a position which calls for high moral integrity."

Recalling how this CB official was dismissed from the PNB before the war, Corpus said the man was discovered "milking" a sugar central.1äwphï1.ñët

The suspended CB official added that President Quezon ordered this official's dismissal because he felt that the moment he (Mr. Quezon) was convinced a government official holding a position of trust was unfit to remain in public service, out he would go.

ASK THEM

Pressed for the identification of the official he was referring to, Corpus said the following would be in a position to reveal who the person was: CB Governor Miguel Cuaderno, who was assistant general manager of the PNB then; CB legal counsel Natalio Balboa, who was in the PNB legal department; CB chief accountant Jose Carmona, who was also in the PNB accounting department, and others like Primitivo Lovina, president of the Chamber of Commerce of the Philippines; PNB President Arsenio Jison, Manuel Marquez, president of the Commercial Bank and Trust Company, and Alfonso Calalang, President of the Bankers Association of the Philippines.

In disclaiming liability, appellant points out that in the aforequoted news item it does not appear that he was speaking of appellee.

In order to maintain a libel suit it is essential that the victim be identifiable (People vs. Monton, L-16772, November 30, 1962), although it is not necessary that he be named (91 A.L.R. 1161). It is enough if by intrinsic reference the allusion is apparent or if the publication contains matters of description or reference to facts and circumstances from which others reading the article may know the plaintiff was intended, or if he is pointed out by extraneous circumstances so that persons knowing him could and did understand that he was the person referred to.

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While no name is mentioned in appellant's defamatory statements, the following circumstances mentioned therein make the object ascertainable: (1) the person in question was a high ranking Central Bank official; (2) he was formerly an official of the Philippine National Bank, and at the time had something to do with sugar centrals; (3) his identity is known by the persons named therein; and (4) he was the one who instigated the aforementioned charges against appellant.

All these circumstances point to appellee. It is established by the evidence that at least two other persons who read the article readily realized that it referred to appellee. Asked how he immediately arrived at such a conclusion, Manuel Marquez explained that "there is a paragraph in the article which says that this CB official was dismissed from the PNB before the war, Corpus said the man was discovered milking a sugar central;" and that "the only official who is at present in the Central Bank and who was with the Philippine National Bank prior to the establishment of the Central Bank, who, to my knowledge, was in some way or another connected with the Sugar Central was Governor Miguel Cuaderno." Aside from appellee, two Central Bank officials who were also with the Philippine National Bank were Natalio Balboa, who was in the legal department thereof, and Jose Carmona, who was in the auditing department. Balboa testified that he knew the article was about appellee for the following reasons:

Because, as I said, the first paragraph of the article it refers to "Intriguer" and I know no other, Mr. Corpus is referring to "intriguer" to Mr. Cuaderno because I know that he was trying to prevail on Mr. Cuaderno to stop the administrative investigation against Mr. Corpus, when he failed to prevail on Mr. Cuaderno because the other employees are pressing the complaint and the complaint was submitted to the Monetary Board, and he made the conclusion that it was Mr. Cuaderno as the intriguer, that is the first part of it. The second part of it is that he was dismissed from the Philippine National Bank by President Quezon. President Quezon will not dismiss any official of the Philippine National Bank other than the President, Vice-President, General Manager, and Assistant Manager. He would not dismiss the other executive officials or the legal counsel or others, it must be the Philippine National Bank Board of Directors. The third of it is that milking a sugar central, there is no other person connected with the sugar central but Mr. Cuaderno, with the Bataan Sugar Central. I was connected as Secretary of the Ma-ao Sugar Central and there was no complaint and we only met once a month, so, all those there and my opinion was not based on one single item of the article, it was all those three and the rest of the article may be.

Appellant pointed particularly to Marquez and Balboa as among the persons who could identify the Central Bank official he was speaking of, and both declared that the article referred to appellee. Furthermore, five days after he gave the press interview, appellant instituted the present action wherein he accused appellee of having instigated the administrative charges against him — a fact which obviously proves that he was speaking of appellee when he made the derogatory statement complained of.

In view of the evidence just considered, We cannot apply here the rule in Kunkle vs. Cablenews-American, 42 Phil. 757, relied upon by appellant, that the publication of a matter of a defamatory nature in a newspaper, without naming or accurately describing the person to whom the reprobated acts are attributed, will not give rise to a civil action

for damages at the instance of a person claiming to be the injured party, unless it appears that the description of the person referred to in the defamatory publication was sufficiently clear that at least one third person would have understood the description as relating to him. Here, more than one third person identified appellee as the object of the libel.

Appellee has not appealed from the decision of the lower court and therefore his prayer that the amount of damages awarded to him be increased must be denied..

The judgment appealed from is affirmed, with costs against plaintiff-appellant.