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G.R. No. 164789 August 27, 2009

CHRISTIAN GENERAL ASSEMBLY, INC.,Petitioner,vs.SPS. AELIN! C. IGNACI! "#$ PRISCILLA T. IGNACI!,Respondents.

D E C I S I O N

BRI!N, J.:

We resolve in this Rule 45 petition the legal issue of hether an a!tion to res!ind a !ontra!t to sell asu"division lot that the "u#er found to "e under litigation falls under the e$!lusive %urisdi!tion of the&ousing and 'and (se Regulator# )oard *&'(R)+.

In this petition,Christian -eneral sse/"l#, In!. *C-+ pra#s that e set aside the de!ision0issued "#the Court of ppeals *C+ in C1-.R. SP No. 2522 that dis/issed its !o/plaint for res!ission filed iththe Regional 3rial Court *R3C+ of )ula!an for la! of %urisdi!tion, as ell as the C resolutionthat deniedits /otion for re!onsideration.

6C3(' N3ECEDEN3S

3he present !ontrovers# tra!es its roots to the !ase filed "# C- against the Spouses velino andPris!illa Igna!io *respondents+ for res!ission of their Contra!t to Sell "efore the R3C, )ran!h 4, 7alolos,)ula!an. 3he fa!ts, dran fro/ the re!ords and outlined "elo, are not in dispute.

On pril 8, 99:, C- entered into a Contra!t to Sell a su"division lot4*su"%e!t propert#+ ith therespondents 1 the registered oners and developers of a housing su"division non as ;illa Pris!illaSu"division lo!ated in )aranga# Cut!ut, Pulilan, )ula!an. (nder the Contra!t to Sell, C- ouldpa# P0,2,888.88 for the su"%e!t propert# on install/ent "asis< the# ere to pa# a don pa#/entof P,:=,588, ith the "alan!e pa#a"le ithin three #ears on e>ual /onthl# a/orti?ation pa#/entsof P4=,59.:5, in!lusive of interest at 04@ per annu/, starting Aune 99:.

On ugust 5, 0888, the parties /utuall# agreed to a/end the Contra!t to Sell to e$tend the pa#/entperiod fro/ three to five #ears, !al!ulated fro/ the date of pur!hase and "ased on the in!reased total!onsideration ofP0,28=,=88, ith e>ual /onthl# install/ents of P2,=5.88, in!lusive of interest at 04@per annu/, starting Septe/"er 0888.

!!ording to C-, it religiousl# paid the /onthl# install/ents until its ad/inistrative pastor dis!overedthat the title !overing the su"%e!t propert# suffered fro/ fatal flas and defe!ts. C- learned that thesu"%e!t propert# as a!tuall# part of to !onsolidated lots *'ots 0B6 and 0B- )sdB84B888:09 O'3+ thatthe respondents had a!>uired fro/ Ni!anor driano *driano+ and Ceferino Sison *Sison+, respe!tivel#.driano and Sison ere for/er tenantB"enefi!iaries of Purifi!a!ion S. I/perial *I/perial+ hose propert#

in Cut!ut, Pulilan, )ula!an5had "een pla!ed under Presidential De!ree *PD+ No. 02s Operation 'and3ransfer.=!!ording to C-, I/perial applied for the retention of five he!tares of her land under Repu"li!!t No. ==52,2hi!h the Depart/ent of grarian Refor/ *DR+ granted in its O!to"er 0, 992 order*DR Order+. 3he DR Order authori?ed I/perial to retain the far/ lots previousl# aarded to the tenantB"enefi!iaries, in!luding 'ot 0B6 previousl# aarded to driano, and 'ot 0B- )sdB84B888:09 aarded toSison. On appeal, the Offi!e of the President:and the C9upheld the DR Order. 3hrough the CourtsResolution dated Aanuar# 9, 0885 in -.R. No. =5=58, e affir/ed the DR Order "# den#ing thepetition for revie of the appellate de!ision.
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(nderstanda"l# aggrieved after dis!overing these !ir!u/stan!es, C- filed a !o/plaint against therespondents "efore the R3C on pril 8, 0880.8C- !lai/ed that the respondents fraudulentl#!on!ealed the fa!t that the su"%e!t propert# as part of a propert# under litigation< thus, the Contra!t toSell as a res!issi"le !ontra!t under rti!le : of the Civil Code. C- ased the trial !ourt to res!indthe !ontra!t< order the respondents to return the a/ounts alread# paid< and aard a!tual, /oral ande$e/plar# da/ages, attorne#s fees and litigation e$penses.

Instead of filing an anser, the respondents filed a /otion to dis/iss asserting that the R3C had no%urisdi!tion over the !ase.Citing PD No. 9520and PD No. 44, the respondents !lai/ed that the !asefalls ithin the e$!lusive %urisdi!tion of the &'(R) sin!e it involved the sale of a su"division lot. C-opposed the /otion to dis/iss, !lai/ing that the a!tion is for res!ission of !ontra!t, not spe!ifi!perfor/an!e, and is not a/ong the a!tions ithin the e$!lusive %urisdi!tion of the &'(R), as spe!ified "#PD No. 952 and PD No. 44.

On O!to"er 5, 0880, the R3C issued an order den#ing the respondents /otion to dis/iss. 3he R3Cheld that the a!tion for res!ission of !ontra!t and da/ages due to the respondents fraudulent/isrepresentation that the# are the rightful oners of the su"%e!t propert#, free fro/ all liens anden!u/"ran!es, is outside the &'(R)s %urisdi!tion.1avvphi1

3he respondents !ountered "# filing a petition for !ertiorari ith the C. In its O!to"er 08, 088 de!ision,the C found /erit in the respondents position and set the R3C order aside< the C ruled that the&'(R) had e$!lusive %urisdi!tion over the su"%e!t /atter of the !o/plaint sin!e it involved a !ontra!t tosell a su"division lot "ased on the provisions of PD No. 952 and PD No. 44.

Contending that the C !o//itted reversi"le error, the C- no !o/es "efore the Court asing us tooverturn the C de!ision and resolution.

3&E PE3I3ION

In its petition, C- argues that the C erred B

*+ in appl#ing rti!le 9 of the Civil Code for "rea!h of re!ipro!al o"ligation, hile thepetitioners a!tion is for the res!ission of a res!issi"le !ontra!t under rti!le : of the sa/eCode, hi!h is !ogni?a"le "# the regular !ourt< and

*0+ in holding that the &'(R) has e$!lusive %urisdi!tion over the petitioners a!tion "# appl#ingntipolo Realt# Corp v. National &ousing Corporationand other !ited !ases.

In essen!e, the /ain issue e are ased to resolve is hi!h of the to 1 the regular !ourt or the &'(R)1 has e$!lusive %urisdi!tion over C-s a!tion for res!ission and da/ages.

!!ording to C-, the e$!lusive %urisdi!tion of the &'(R), as set forth in PD No. 44 and PD No. 952,

is li/ited to !ases involving spe!ifi! perfor/an!e and does not !over a!tions for res!ission.

3aing the opposing vie, respondents insist that sin!e C-s !ase involves the sale of a su"division lot,it falls under the &'(R)s e$!lusive %urisdi!tion.

3&E CO(R3S R('IN-

We find no /erit in the petition and !onse>uentl# affir/ the C de!ision.
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Develop/ent of the &'(R)s %urisdi!tion

3he nature of an a!tion and the %urisdi!tion of a tri"unal are deter/ined "# the /aterial allegations of the!o/plaint and the la governing at the ti/e the a!tion as !o//en!ed. 3he %urisdi!tion of the tri"unalover the su"%e!t /atter or nature of an a!tion is !onferred onl# "# la, not "# the parties !onsent or "#their aiver in favor of a !ourt that ould otherise have no %urisdi!tion over the su"%e!t /atter or the

nature of an a!tion.43hus, the deter/ination of hether the C-s !ause of a!tion falls under the%urisdi!tion of the &'(R) ne!essitates a !loser e$a/ination of the las defining the &'(R)s %urisdi!tionand authorit#.

PD No. 952, ena!ted on Aul# 0, 92=, as intended to !losel# supervise and regulate the real estatesu"division and !ondo/iniu/ "usinesses in order to !ur" the groing nu/"er of sindling and fraudulent/anipulations perpetrated "# uns!rupulous su"division and !ondo/iniu/ sellers and operators. s oneof its Fhereas !lausesF statesG

W&ERES, reports of alar/ing /agnitude also sho !ases of sindling and fraudulent /anipulationsperpetrated "# uns!rupulous su"division and !ondo/iniu/ sellers and operators, su!h as failure todeliver titles to the "u#ers or titles free fro/ liens and en!u/"ran!es, and to pa# real estate ta$es, and

fraudulent sales of the sa/e su"division lots to different inno!ent pur!hasers for valueuasiB%udi!ial poers
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3he surge in the real estate "usiness in the !ountr# "rought ith it an in!reasing nu/"er of !ases"eteen su"division onersHdevelopers and lot "u#ers on the issue of the e$tent of the &'(R)se$!lusive %urisdi!tion. In the !ases that rea!hed us, e have !onsistentl# ruled that the &'(R) hase$!lusive %urisdi!tion over !o/plaints arising fro/ !ontra!ts "eteen the su"division developer and the lot"u#er or those ai/ed at !o/pelling the su"division developer to !o/pl# ith its !ontra!tual and statutor#o"ligations to /ae the su"division a "etter pla!e to live in. 5

We e$plained the &'(R)s e$!lusive %urisdi!tion at length in Sps. Osea v. /"rosio,=here e saidG

-enerall#, the e$tent to hi!h an ad/inistrative agen!# /a# e$er!ise its poers depends largel#, if notholl#, on the provisions of the statute !reating or e/poering su!h agen!#. Presidential De!ree *P.D.+No. 44, FE/poering 3he National &ousing uthorit# 3o Issue Writ Of E$e!ution In 3he Enfor!e/entOf Its De!ision (nder Presidential De!ree No. 952,F !larifies and spells out the >uasiB%udi!ial di/ensionsof the grant of %urisdi!tion to the &'(R) in the folloing spe!ifi! ter/sG

SEC. . In the e$er!ise of its fun!tions to regulate the real estate trade and "usiness and in addition to itspoers provided for in Presidential De!ree No. 952, the National &ousing uthorit# shall have e$!lusive%urisdi!tion to hear and de!ide !ases of the folloing natureG

. (nsound real estate "usiness pra!ti!esuasiB%udi!ial authorit# /ust also "e deter/ined "#referring to the ter/s of P.D. No. 952, F3he Su"division nd Condo/iniu/ )u#ers Prote!tive De!ree.FSe!tion of this statute providesG

$ $ $ National &ousing uthorit# no &'(R). B 3he National &ousing uthorit# shall have e$!lusive%urisdi!tion to regulate the real estate trade and "usiness in a!!ordan!e ith the provisions of this De!ree.

3he need for the s!ope of the regulator# authorit# thus lodged in the &'(R) is indi!ated in the se!ond,third and fourth prea/"ular paragraphs of PD 952 hi!h provideG

W&ERES, nu/erous reports reveal that /an# real estate su"division oners, developers, operators,andHor sellers have reneged on their representations and o"ligations to provide and /aintain properl#su"division roads, drainage, seerage, ater s#ste/s, lighting s#ste/s, and other si/ilar "asi!re>uire/ents, thus endangering the health and safet# of ho/e and lot "u#ersualifies that the !ases !ogni?a"le "# the &'(R) arethose instituted "# su"division or !ondo/iu/ "u#ers or oners against the pro%e!t developer or oner.3his is also in eeping ith the poli!# of the la, hi!h is to !ur" uns!rupulous pra!ti!es in the real estatetrade and "usiness.0

3hus, in the !ases of Fajardo Jr. v. Freedom to Buid, Inc.,!""#and Cadi/as v. Carrion,0e upheld theR3Cs %urisdi!tion even if the su"%e!t /atter as a su"division lot sin!e it as the su"division developerho filed the a!tion against the "u#er for violation of the !ontra!t to sell.

3he onl# instan!e that &'(R) /a# tae !ogni?an!e of a !ase filed "# the developer is hen said !ase isinstituted as a !o/pulsor# !ounter!lai/ to a pending !ase filed against it "# the "u#er or oner of asu"division lot or !ondo/iniu/ unit. 3his as hat happened in 6ran!el Realt# Corporation v.S#!ip,04here the &'(R) too !ogni?an!e of the developers !lai/ against the "u#er in order to forestallsplitting of !auses of a!tion.

O"viousl#, here it is not !lear fro/ the allegations in the !o/plaint that the propert# involved is asu"division lot, as in Javeana v. Hon. Presidin$ Jud$e, R3C, )ran!h 8, 7anila,05the !ase falls underthe %urisdi!tion of the regular !ourts and not the &'(R). Si/ilarl#, in %pouses Dea Cru& v. Court o'

(ppeas,0=e held that the R3C had %urisdi!tion over a !ase here the !onfli!t involved a su"division lot"u#er and a part# ho oned a nu/"er of su"division lots "ut as not hi/self the su"division developer.

3he Present Case

In the present !ase, C- is un>uestiona"l# the "u#er of a su"division lot fro/ the respondents, ho soldthe propert# in their !apa!ities as oner and developer. s C- stated in its !o/plaintG

0.8. Defendants are the registered oners and developers of a housing su"division presentl#non as ;illa Pris!illa Su"division lo!ated at )rg#. Cut!ut, Pulilan, )ula!an


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0.80 On or a"out pril 8, 99:, the plaintiff thru its d/inistrative Pastor "ought fro/ defendantson install/ent "asis a par!el of land designated at 'ot , )lo! 4 of the said ;illa Pris!illaSu"division $$$

$$$

0.84 t the ti/e of the e$e!ution of the se!ond Contra!t to Sell *nne$ F)F+, 'ot , )lo! 4 of the;illa Pris!illa Su"division as alread# !overed "# 3ransfer Certifi!ate of 3itle No. 3B0222= of theRegistr# of Deeds of Kue?on Cit# in the na/e of Ilu/inada 3. Sone%a, /arried to sterio Sone%a*defendant Pris!illa 3. Igna!ios sister and "rotherBinBla+ and the defendants as !oBoners, "utthe latter represented the/selves to "e the real and a"solute oners thereof, as in fa!t it asannotated in the title that the# ere e/poered to sell the sa/e. Cop# of 3C3 No. 3B0222= ishereto atta!hed and /ade part hereof as nne$ FCF.

0.85 Plaintiff has "een religiousl# pa#ing the agreed /onthl# install/ents until its d/inistrativePastor dis!overed re!entl# that hile apparentl# !lean on its fa!e, the title !overing the su"%e!t lota!tuall# suffers fro/ fatal flas and defe!ts as it is part of the propert# involved in litigation even"efore the original Contra!t to Sell *nne$ FF+, hi!h defendants deli"eratel# and fraudulentl#

!on!ealed fro/ the plaintiffuired "#defendants fro/ Ni!anor driano and Ceferino Sison, for/er tenantsB"enefi!iaries of Purifi!a!ionS. I/perial, hose propert# at Cut!ut, Pulilan, )ula!an originall# !overed "# 3C3 No. 048:2:!ontaining an area of 9,4 s>uare /eters as pla!ed under Operation 'and 3ransfer underP.D. No. 02ue, 7etro 7anilauentl# petitioners !o/e "efore this Court, in this petition, hi!h the Court resolves to treat asa petition for certiorari, raising the folloing issuesG

I

P()'IC RESPONDEN3 CO77I33ED SERIO(S ERROR IN DEC'RIN- 3&33&E &O(SIN- ND 'ND (SE RE-('3ORL )ORD &S 0(%I2JDICI( 6(NC3IONS, NO3WI3&S3NDIN- )SENCE O6 EMPRESS -RN3

)L EMEC(3I;E ORDER NO. 98 O6 DECE7)ER 2, 9:= W&IC& CRE3ED I3.ND E;EN I6 3&E &'(R) &S K(SIBA(DICI' 6(NC3IONS, P()'ICRESPONDEN3 'IEWISE SERIO(S'L ERRED IN DEC'RIN- 3&3 3&E)ORD O6 CO77ISSIONERS IS ''OWED 3O SI3 IN DECISION 3O RENDERA(D-7EN3 ND 3O DE'E-3E I3S K(SIBA(DICI' (3&ORI3L 3O S()ORDIN3E O66ICE.

II

P()'IC RESPONDEN3 -R;E'L )(SED I3S DISCRE3ION IN DEC'RIN-3&3 3&E 'O3 S()AEC3 O6 3&E CON3RC3 SO(-&3 3O )E EN6ORCED ISPRP&ERN' DESPI3E D7ISSION O6 I3S CONA(-' N3(RE.

III

P()'IC RESPONDEN3 -R;E'L )(SED I3S DISCRE3ION IN DEC'RIN-3&3 ON'L NO3RI' NO3ICE O6 RESCISSION 7L ;'ID'L CNCE' RESER;3ION -REE7EN3 P(RS(N3 3O REP()'IC C3 NO. =550.

s the first and third issues raised "# the petitioners strie at the !ore of the !ase at "en!h, thisCourt dee/s it appropriate to initiall# dispose of the issue of private respondents !apa!it# to "ringher !o/plaint "efore the &'(R)BO'.

It is settled that rules of pro!edure are as a /atter of !ourse !onstrued li"erall# in pro!eedings"efore ad/inistrative "odies. 9In the instant !ase, the original suit for spe!ifi! perfor/an!e andda/ages as filed "# the private respondent ith the &'(R)BO', an ad/inistrative "od# notha/strung "# the stri!t pro!edural te!hni!alities of the Rules of Court. (nder the !ir!u/stan!es, it as!ertainl# appropriate for the &'(R)BO' to have a!ted on the su"stantive >uestions relating to thevalidit# of petitioners unilateral res!ission of the !ontra!t ithout undul# !on!erning itself ith a /erepro!edural slip, the nonB%oinder of private petitioners hus"and in the original !o/plaint "efore the&'(R). 7oreover, sin!e petitioners parti!ipated in the ad/inistrative pro!eedings ithout o"%e!ting to or


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raising the pro!edural infir/it#, the# ere !ertainl# estopped fro/ raising it on appeal "efore the Offi!e ofthe President and "efore this Court.

Pro!eeding to the prin!ipal issues raised "# the petitioner, hile E.O. :5 dated 0 De!e/"er 9:=a"olished the 7inistr# of &u/an Settle/ents *7&S+, it is patentl# !lear fro/ a reading of itsprovisions that the said e$e!utive order did not a"olish the &u/an Settle/ents Regulator#

Co//ission *&SRC+ hi!h !ontinued to e$er!ise its poers and fun!tions even after the 7inistr# of&u/an Settle/ents !eased to e$ist. In spite of the >uino -overn/ents stated intention oferadi!ating hat it !onsidered the vestiges of the previous regi/e, it as not its intention to !reate ava!uu/ "# a"olishing those %uridi!al entities, agen!ies, !orporations, et!., atta!hed to or supervised"# the 7&S, hi!h perfor/ed vital ad/inistrative fun!tions. Pertinentl#, Se!tion of E.O. :5/andates thatG

. . . 3he final disposition and final organi?ational align/ent or atta!h/ent of the%uridi!al entities, agen!ies, !orporations and !oun!ils atta!hed to, or under thead/inistrative supervision of the 7&S in!luding their respe!tive e$isting pro%e!ts,appropriations and other assets shall "e su"%e!t to su"se>uent ena!t/ents "# the

President.

Pursuant to this provision therefore, the President su"se>uentl# issued E$e!utive Order No. 98,series of 9:=, re!ogni?ing the &u/an Settle/ents Regulator# Co//ission *rena/ed the &'(R)+as one of the prin!ipal housing agen!ies of the govern/ent. Prior to this, E$e!utive Order No. =4: in9: transferred all the fun!tions of the National &ousing uthorit# *pursuant to Presidential De!reesNos. 952, 0= and 44+ to the &u/an Settle/ents Regulator# Co//ission *&SRC+ !onsolidatingall regulator# fun!tions relating to land use and housing develop/ent in a single entit#. 10)eing thesole re$uator*"od# for housing and land develop/ent, the rena/ed "od#, the &'(R), 11ould have"een redu!ed to a fun!tionall# sterile entit# if, as the petitioner !ontends, it la!ed the poers e$er!ised"# its prede!essor hi!h in!luded the poer to settle disputes !on!erning land use and housingdevelop/ent and a!>uisition. 7oreover, this Court has had the o!!asion to definitivel# rule on the

>uestion as to hether or not the &ousing and 'and (se Regulator# )oard !ould e$er!ise the sa/e>uantu/ of %udi!ial or >uasiB%udi!ial poers possessed "# the &SRC under the 7inistr# of &u/anSettle/ents in the e$er!ise of its regulator# fun!tions hen it held, in nited Housin$ Corporation vs.Hon. Da*rit12thatG

s e$pli!itl# provided "# la, %urisdi!tion over a!tions for spe!ifi! perfor/an!e of!ontra!tual and statutor# o"ligations filed "# "u#ers of su"division lot or!ondo/iniu/ unit against the oner or developer, is vested e$!lusivel# in the &SRC,Se!tion of PD 44, in no un!ertain ter/s, providesG

Se!. . In the e$er!ise of its fun!tions to regulate real estate trade and "usiness andin addition to its poers provided for in Presidential De!ree No. 952, the National

&ousing uthorit# shall have e$!lusive %urisdi!tion to hear and de!ide !ases of thefolloing natureG

. (nsound real estate "usiness pra!ti!esuantu/ of %udi!ial or >uasiB%udi!ial poers hi!han ad/inistrative agen!# /a# e$er!ise is defined in the agen!#s ena"ling a!t. In vie of the Courtspronoun!e/ent in nited Housin$ Corporation vs. Hon. Da*rit, supra, re!ogni?ing the &'(R) as thesu!!essor agen!# of the &SRCs poers and fun!tions, it therefore follos that the transfer of su!hfun!tions fro/ the N& to the &RSC effe!ted "# Se!tion : of E.O. =4:, series of 9:, there"#resulted in the a!>uisition "# the &'(R) of ad%udi!ator# poers hi!h in!luded the poer to F*h+ear

and de!ide !ases of unsound real estate "usiness pra!ti!es . . . and !ases of spe!ifi!perfor/an!e.F 14O"viousl#, in the e$er!ise of its poers and fun!tions, the &'(R) /ust interpret andappl# !ontra!ts, deter/ine the rights of the parties under these !ontra!ts, and aard da/ages heneverappropriate. 1+We fail to see ho the &SRC hi!h possessed %urisdi!tion over the a!tions for spe!ifi!perfor/an!e for !ontra!tual and statutor# o"ligations filed "# "u#ers of su"division lots againstdevelopers had suddenl# lots its ad%udi!ator# poers "# the /ere fiat of a !hange in na/e throughE.O. 98. One thrust of the /ultipli!ation of ad/inistrative agen!ies is that the interpretation of su!h!ontra!ts and agree/ents and the deter/ination of private rights under these agree/ents is no longer auni>uel# %udi!ial fun!tion. 163he a"sen!e of an# provision, e$press or i/plied, in E.O. 98, repealing those>uasiB%udi!ial poers inherited "# the &SRC fro/ the National &ousing uthorit#, further/ore /ilitatesagainst petitioners position on the >uestion.

-oing to petitioners !ontention that the de!ision of the O' should have "een rendered "# the)oard of Co//issioners sitting en banc, e find a/ple authorit# "oth in the statutes and in%urispruden!eB%ustif#ing the )oards a!t of dividing itself into divisions of three. (nder Se!tion 5 ofE.O. =4: hi!h defines the poers and duties of the Co//ission, the )oard is spe!ifi!all#/andated to F*a+dopt rules of pro!edure for the !ondu!t of its "usinessF and perfor/ su!h fun!tionsne!essar# for the effe!tive a!!o/plish/ent of *its+ a"ove /entioned fun!tions.F Sin!e nothing in theprovisions of either E.O. 98 or E.O. =4: denies or ithholds the poer or authorit# to delegatead%udi!ator# fun!tions to a division, e !annot see ho the )oard, for the purpose of effe!tivel#!arr#ing out its ad/inistrative responsi"ilities and >uasiB%udi!ial poers as a regulator# "od# should"e denied the poer, as a /atter of pra!ti!al ad/inistrative pro!edure, to !onstitute its ad%udi!ator#"oards into various divisions. fter all, the poer !onferred upon an ad/inistrative agen!# to issuerules and regulations ne!essar# to !arr# out its fun!tions has "een held Fto "e an ade>uate sour!eof authorit# to delegate a parti!ular fun!tion, unless "# e$press provision of the !t or "# i/pli!ationit has "een ithheld.F 173he pra!ti!al ne!essit# of esta"lishing a pro!edure here"# !ases are de!ided"# three *+ Co//issioners further/ore assu/es greater signifi!an!e hen one notes that the &'(R),as !onstituted, onl# has four *4+ full ti/e !o//issioners and five *5+ part ti/e !o//issioners to deal ithall the fun!tions, ad/inistrative, ad%udi!ator#, or otherise, entrusted toit. 18s the Offi!e of the President noted in its 6e"ruar# 0=, 99 Resolution den#ing petitioners 7otionfor Re!onsideration, Fit is i/possi"le and ver# i/pra!ti!al to gather the four *4+ full ti/e and five *5+ partti/e !o//issioners *together+ %ust to de!ide a !ase.F Considering that its part ti/e !o//issioners a!t/erel# in an e42o''icio!apa!it#, re>uiring a /a%orit# of the )oard to siten bancon ea!h and ever# !ase"rought "efore it ould result in an ad/inistrative night/are. 19

6inall#, petitioners assertion that R =550 is inappli!a"le in the instant !ase "e!ause the said ladoes not appl# to !ases of reservation agree/ents finds no /erit in the !ase at "en!h in vie ofSe!tion 04 of P.D. 952 hi!h providesG

Se!. 04. Faiure to Pa* Instaments 3he rights of the "u#er in the event of hisfailure to pa# the install/ents due for reasons other than the failure of the oner ordeveloper to develop the pro%e!t shall "e governed "# Repu"li! !t No. =550.


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s the Soli!itor -eneral !orre!tl# pointed out, R =550 /aes no distin!tion "eteen FoptionF andFsaleF 20hi!h, under P.D. 952 also in!ludes Fan e$!hange or atte/pt to sell, an option of sale orpur!hase, a soli!itation of a sale or an offer to sell dire!tl#.F 213his allBe/"ra!ing definition virtuall#in!ludes all transa!tions !on!erning land and housing a!>uisition, in!luding reservation agree/ents.Sin!e R.. =550 /andates !an!ellation "# notariala!t a/ong other re>uire/ents "efore an# !an!ellation of a !ontra!t /a# "e effe!ted, petitioners

pre!ipitate !an!ellation of its !ontra!t ith private respondent ithout o"serving the !onditions i/posed"# the said la as invalid and i/proper.

In fine, the &'(R)BO' a!ted ithin the s!ope of its authorit# in ordering petitioners to !o/pl#and !ontinue ith the sale of the house and lot su"%e!t of the !ontra!t "eteen the original parties. It!annot "e gainsaid that the >uasiB%udi!ial fun!tions e$er!ised "# the "od# are ne!essar# in!idents tothe proper e$er!ise of its poers and fun!tions under E.O. 98 and the las ena!ted delineating thes!ope of authorit# of its )oard of Co//issioners. Den#ing the "od# those fun!tions so ne!essar# in!arr#ing out its poer to regulate housing and land use results in its effe!tive e/as!ulation as ani/portant regulator# "od# in an area vital to the national e!ono/#.

3he a!ute housing shortage pro"le/ has pro/pted thousands of /iddle and loer !lass "u#ers ofhouses and lots and !ondo/iniu/ units to enter into all sorts of agree/ents ith private housingdevelopers involving all /anner of install/ent s!he/es under !ontra!ts dran e$!lusivel# "# thesedevelopers. 7an# of these virtual !ontra!ts of adhesion entrap inno!ent "u#ers "# re>uiring !ashdeposits under reservation agree/ents hi!h in!lude, so/eti/es in the fine print, default !lausesguaranteeing huge /onetar# indfalls for the developers in the event that their "u#ers *oftenti/esfor the fli/siest of reasons+ default "# failing to !o/e up ith !ertain re>uire/ents. While the Court!an tae %udi!ial noti!e of this perni!ious pra!ti!e, it !an onl# hope that future legislation ouldaddress the need to prote!t the inno!ent /iddle or loer !lass ho/e pur!haser. In the !ase of theindividual vi!ti/, this Court !an onl# go to the e$tent of aarding su!h da/ages as /a# "e properunder the pe!uliar !ir!u/stan!es of the !ases "rought "efore it.

W&ERE6ORE, pre/ises !onsidered, the petition is here"# DIS7ISSED for la! of /erit. Costsagainst petitioners.

SO ORDERED.


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G.R. No. L+0444 August '1, 1987

ANTIP!L! REALTY C!RP!RATI!N, petitioner,vs.THE NATI!NAL H!-SING A-TH!RITY, H!N. G.. T!BIAS, 3# 3s ""3t* "s G#5")

M"#"g5 o t N"t3o#") Hous3#g Auto53t*, THE H!N. (AC!B! C. CLAE, 3# 3s ""3t* "s

P5s3$#t3") E:ut3; Ass3st"#t "#$ IRGILI! A. Y-S!N, respondents.

&ELICIAN!, J.:

)# virtue of a Contra!t to Sell dated : ugust 928, Aose &ernando a!>uired prospe!tive and"enefi!ial onership over 'ot. No. 5, )lo! I; of the Ponderosa &eights Su"division in ntipolo,Ri?al, fro/ the petitioner ntipolo Realt# Corporation.

On 0: ugust 924, 7r. &ernando transferred his rights over 'ot No. 5 to private respondent

;irgilio Luson. 3he transfer as e/"odied in a Deed of ssign/ent and Su"stitution of O"ligor*Delega!ion+, e$e!uted ith the !onsent of ntipolo Realt#, in hi!h 7r. Luson assu/ed theperfor/an!e of the vendees o"ligations under the original !ontra!t, in!luding pa#/ent of hisprede!essors install/ents in arrears. &oever, for failure of ntipolo Realt# to develop thesu"division pro%e!t in a!!ordan!e ith its undertaing under Clause 2 of the Contra!t to Sell, 7r.Luson paid onl# the arrearages pertaining to the period up to, and in!luding, the /onth of ugust920 and stopped all /onthl# install/ent pa#/ents falling due thereafter Clause 2 readsG

Clause 2. S()DI;ISION )E(3I6IC3ION. 3o insure the "eaut# of thesu"division in line ith the /odern trend of ur"an develop/ent, the SE''ER here"#o"ligates itself to provide the su"division ithG

a+ Con!rete !ur"s and gutters

"+ (nderground drainage s#ste/

!+ sphalt paved roads

d+ Independent ater s#ste/

e+ Ele!tri!al installation ith !on!rete posts.

f+ 'ands!aping and !on!rete sideall

g+ Developed par or a/phiBtheatre

h+ 04Bhour se!urit# guard servi!e.

3hese i/prove/ents shall "e !o/plete ithin a period of to *0+ #ears fro/ date ofthis !ontra!t.Faiure b* the %EE6 sha permit the B8E6 to suspend his month*


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instaments -ithout an* penaties or interest char$es unti such time that such

improvements sha have been competed. 1

On 4 O!to"er 92=, the president of ntipolo Realt# sent a noti!e to private respondent Lusonadvising that the re>uired i/prove/ents in the su"division had alread# "een !o/pleted, andre>uesting resu/ption of pa#/ent of the /onthl# install/ents on 'ot No. 5. 6or his part, 7r. Lusonreplied that he ould !onfor/ ith the re>uest as soon as he as a"le to verif# the truth of therepresentation in the noti!e.

In a se!ond letter dated 02 Nove/"er 92=, ntipolo Realt# reiterated its re>uest that 7r. Lusonresu/e pa#/ent of his /onthl# install/ents, !iting the de!ision rendered "# the National &ousinguthorit# *N&+ on 05 O!to"er 92= in Case No. 050 *entitled FAose ). ;iado Ar., !o/plainant vs.Conrado S. Re#es, respondentF+ de!laring ntipolo Realt# to have Fsu"stantiall# !o/plied ith its!o//it/ent to the lot "u#ers pursuant to the Contra!t to Sell e$e!uted "# and "eteen the lot"u#ers and the respondent.F In addition, a for/al de/and as /ade for full and i//ediate pa#/entof the a/ount of P=,994.2, representing install/ents hi!h, ntipolo Realt# alleged, had a!!ruedduring the period hile the i/prove/ents ere "eing !o/pleted i.e., "eteen Septe/"er 920

and O!to"er 92=.

7r. Luson refused to pa# the Septe/"er 920BO!to"er 92= /onthl# install/ents "ut agreed to pa#the post O!to"er 92= install/ents. ntipolo Realt# responded "# res!inding the Contra!t to Sell,and !lai/ing the forfeiture of all install/ent pa#/ents previousl# /ade "# 7r. Luson.

ggrieved "# the res!ission of the Contra!t to Sell, 7r. Luson "rought his dispute ith ntipoloRealt# "efore pu"li! respondent N& through a letterB!o/plaint dated 8 7a# 922 hi!h !o/plaintas do!eted in N& as Case No. 00.

ntipolo Realt# filed a 7otion to Dis/iss hi!h as heard on 0 Septe/"er 922. ntipolo Realt#,ithout presenting an# eviden!e, /oved for the !onsolidation of Case No. 00 ith several other

!ases filed against it "# other su"division lot "u#ers, then pending "efore the N&. In an Orderissued on 2 6e"ruar# 92:, the N& denied the /otion to dis/iss and s!heduled Case No. 00 forhearing.

fter hearing, the N& rendered a de!ision on 9 7ar!h 92: ordering the reinstate/ent of theContra!t to Sell under the folloing !onditionsG

l+ ntipolo Realt# Corporation shall sent si! to ;irgilio Lu?on a state/ent of a!!ountfor the /onthl# a/orti?ations fro/ Nove/"er 92= to the presentuen!e thereof, retainall the prior install/ent pa#/ents /ade "# the latter. 4

3his Court denied !ertiorari in a /inute resolution issued on De!e/"er 92:, Fithout pre%udi!eto petitioners pursuing the ad/inistrative re/ed#.F + /otion for re!onsideration as denied on 09Aanuar# 929.

3hereafter, petitioner interposed an appeal fro/ the N& de!ision ith the Offi!e of the President

hi!h, on 9 7ar!h 929, dis/issed the sa/e through pu"li! respondent Presidential E$e!utivessistant Aa!o"o C. Clave. 6

In the present petition, ntipolo Realt# again asserts that, in hearing the !o/plaint of privaterespondent Luson and in ordering the reinstate/ent of the Contra!t to Sell "eteen the parties, theN& had not onl# a!ted on a /atter "e#ond its !o/peten!e, "ut had also, in effe!t, assu/ed theperfor/an!e of %udi!ial or >uasiB%udi!ial fun!tions hi!h the N& as not authori?ed to perfor/.

We find the petitioners argu/ents la!ing in /erit.

It is "# no !o//onpla!e learning that /an# ad/inistrative agen!ies e$er!ise and perfor/ad%udi!ator# poers and fun!tions, though to a li/ited e$tent onl#. 'i/ited delegation of %udi!ial or

>uasiB%udi!ial authorit# to ad/inistrative agen!ies *e.g., the Se!urities and E$!hange Co//issionand the National 'a"or Relations Co//ission+ is ell re!ogni?ed in our %urisdi!tion,7"asi!all#"e!ause the need for spe!ial !o/peten!e and e$perien!e has "een re!ogni?ed as essential in theresolution of >uestions of !o/ple$ or spe!iali?ed !hara!ter and "e!ause of a !o/panion re!ognition thatthe do!ets of our regular !ourts have re/ained !roded and !logged. In %pouses Jose (bejo and

(urora (bejo, et a. vs. Hon. 6a'ae dea Cru&, etc., et a., 8the Court, through 7r. Chief Austi!e3eehanee, saidG

In the fifties, the Court taing !ogni?an!e of the /ove to vest %urisdi!tion inad/inistrative !o//issions and "oards the poer to resolve spe!iali?ed disputes inthe field of la"or *as in !orporations, pu"li! transportation and pu"li! utilities+ ruledthat Congress in re>uiring the Industrial Courts intervention in the resolution of la"or

/anage/ent !ontroversies liel# to !ause stries or lo!outs /eant su!h %urisdi!tionto "e e$!lusive, although it did not so e$pressl# state in the la. 3he Court held thatunder the 9sense2ma3in$ and e4peditious doctrine o' primar* jurisdiction . . . thecourts cannot or -i not determine a controvers* invovin$ a 7uestion -hich is -ithin

the jurisdiction o' an administrative tribuna -here the 7uestion demands the

e4ercise o' sound administrative discretion re7uirin$ the specia 3no-ed$e,

e4perience, and services o' the administrative tribuna to determine technica and

intricate matters o' 'act, and a uni'ormit* o' ruin$ is essentia to comp* -ith the


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purposes o' the re$uator* statute administered9*Pa/"u%an Sur (nited 7ineWorers v. Sa/ar 7ining Co., In!., 94 Phil, 90, 94 954+.

In this era o' co$$ed court doc3ets, the need 'or speciai&ed administrative boards or

commissions -ith the specia 3no-ed$e, e4perience and capabiit* to hear and

determine prompt* disputes on technica matters or essentia* 'actua matters,

subject to judicia revie- in case o' $rave abuse o' discretion has become -e ni$h

indispensabe.3hus, in 9:4, the Court noted that "eteen the poer lodged in anad/inistrative "od# and a !ourt, the un/istaea"le trend has "een to refer it to thefor/er, FIn!reasingl#, this Court has "een !o//itted to the vie that unless the laspeas !learl# and une>uivo!a"l#, the !hoi!e should fall on fan ad/inistrativeagen!#F *N6' v. Eis/a, 02 SCR 49, 40:, !iting pre!edents+. 3he Court in theearlier !ase of E"on vs. De -u?/an * SCR 50, 5= 9:0+, noted that thela/aing authorit#, in restoring to the la"or ar"iters and the N'RC their %urisdi!tionto aard all inds of da/ages in la"or !ases, as against the previous P.D.a/end/ent splitting their %urisdi!tion ith the regular !ourts, Fevidentl#, . . . hadse!ond thoughts a"out depriving the 'a"or r"iters and the N'RC of the %urisdi!tion

to aard da/ages in la"or !ases "e!ause that setup ould /ean dupli!it# of suits,splitting the !ause of a!tion and possi"le !onfli!ting findings and !on!lusions "# totri"unals on one and the sa/e !lai/.F

In an even /ore re!ent !ase, Tropica Homes, Inc. vs. 5ationa Housin$ (uthorit*, et a., 97r. Austi!e-utierre?, speaing for the Court, o"served thatG

There is no 7uestion that a statute ma* vest e4cusive ori$ina jurisdiction in an

administrative a$enc* over certain disputes and controversies 'ain$ -ithin the

a$enc*:s specia e4pertise. The ver* de'inition o' an administrative a$enc* incudes

its bein$ vested -ith 7uasi2judicia po-ers.3he ever in!reasing variet# of poers andfun!tions given to ad/inistrative agen!ies re!ogni?es the need for the a!tive

intervention of ad/inistrative agen!ies in /atters !alling for te!hni!al noledge andspeed in !ountless !ontroversies hi!h !annot possi"l# "e handled "# regular!ourts.

In general the >uantu/ of %udi!ial or >uasiB%udi!ial poers hi!h an ad/inistrative agen!# /a#e$er!ise is defined in the ena"ling a!t of su!h agen!#. In other ords, the e$tent to hi!h anad/inistrative entit# /a# e$er!ise su!h poers depends largel#, if not holl#, on the provisions ofthe statute !reating or e/poering su!h agen!#.10In the e$er!ise of su!h poers, the agen!# !on!erned /ust!o//onl# interpret and appl# !ontra!ts and deter/ine the rights of private parties under su!h !ontra!ts. One thrust of the /ultipli!ation ofad/inistrative agen!ies is that the interpretation of !ontra!ts and the deter/ination of private rights thereunder is no longer a uni>uel#%udi!ial fun!tion, e$er!isa"le onl# "# our regular !ourts.

3hus, the e$tent to hi!h the N& has "een vested ith >uasiB%udi!ial authorit# /ust "e deter/ined"# referring to the ter/s of Presidential De!ree No. 952, non as F3he Su"division andCondo/iniu/ )u#ers De!ree.F 11Se!tion of this statute provides as follosG

National &ousing uthorit#. 3he National &ousing uthorit# shall have e$!lusive%urisdi!tion to regulate the real estate trade and "usiness in a!!ordan!e ith theprovisions of this de!ree *e/phasis supplied+


19/179

3he need for and therefore the s!ope of the regulator# authorit# thus lodged in the N& areindi!ated in the se!ond and third prea/"ular paragraphs of the statute hi!h provideG

W&ERES, nu/erous reports reveal that /an# real estate su"division oners,developers, operators, andHor sellers have rene$ed on their representations andobi$ations to provide and maintain proper* subdivision roads, draina$e, se-era$e,

-ater s*stems i$htin$ s*stems and other simiar basic re7uirements,thusendangering the health and safet# of ho/e and lot "u#ersuasiB%udi!ial di/ensions of the grant of regulator# authorit# to theN& in the folloing >uite spe!ifi! ter/sG

SEC3ION . In the e$er!ise of its fun!tions to regulate the real estate trade and"usiness and in addition to its poers provided for in Presidential De!ree No. 952,the National &ousing uthorit# shall have e$!lusive %urisdi!tion to hear and de!ide!ases of the folloing natureG

. (nsound real estate "usiness pra!ti!esG

). Clai/s involving refund and an* other caims 'ied b* sub2 division ot orcondominium unit bu*er a$ainst the project o-ner, deveoper, deaer, bro3er or

saesman< and

C. Cases invovin$ speci'ic per'ormance o' contractua and statutor* obi$ations 'iedb* bu*ers o' subdivision ots or condominium units a$ainst the o-ner, deveoper,

deaer, bro3er or saesman.*e/phasis supplied.+

3he su"stantive provisions "eing applied and enfor!ed "# the N& in the instant !ase are found inSe!tion 0 of Presidential De!ree No. 952 hi!h readsG

Se!. 0. NonB6orfeiture of Pa#/ents. 5o instament pa*ment made b* a bu*er ina subdivision or condominium project 'or the ot or unit he contracted to bu* sha be

'or'eited in 'avor o' the o-ner or deveoper -hen the bu*er, a'ter due notice to the

o-ner or deveoper, desists 'rom 'urther pa*ment due to the 'aiure o' the o-ner or

deveoper to deveop the subdivision or condominium project accordin$ to the

approved pans and -ithin the time imit 'or comp*in$ -ith the same. Su!h "u#er/a#, at his option, "e rei/"ursed the total a/ount paid in!luding a/orti?ation andinterests "ut e$!luding delin>uen!# interests, ith interest thereon at the legal rate.*e/phasis supplied.+

&aving failed to !o/pl# ith its !ontra!tual o"ligation to !o/plete !ertain spe!ified i/prove/ents inthe su"division ithin the spe!ified period of to #ears fro/ the date of the e$e!ution of the Contra!t


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to Sell, petitioner as not entitled to e$er!ise its options under Clause 2 of the Contra!t. &en!e,petitioner !ould neither res!ind the Contra!t to Sell nor treat the install/ent pa#/ents /ade "# theprivate respondent as forfeited in its favor. Indeed, under the general Civil 'a,1'in vie of petitioners"rea!h of its !ontra!t ith private respondent, it is the latter ho is vested ith the option either to res!ind the !ontra!t and re!eiverei/"urse/ent of an install/ent pa#/ents *ith legal interest+ /ade for the pur!hase of the su"division lot in >uestion, or to suspendpa#/ent of further pur!hase install/ents until su!h ti/e as the petitioner had fulfil led its o"ligations to the "u#er. 3he N& as therefore!orre!t in holding that private respondents prior install/ent pa#/ents !ould not "e forfeited in favor of petitioner.

Neither did the N& !o//it an# a"use, let alone a grave a"use of dis!retion or a!t in e$!ess of its%urisdi!tion hen it ordered the reinstate/ent of the Contra!t to Sell "eteen the parties. Su!hreinstate/ent is no /ore than a logi!al !onse>uen!e of the N&s !orre!t ruling, %ust noted, that thepetitioner as not entitled to res!ind the Contra!t to Sell. 3here is, in an# !ase, no >uestion thatunder Presidential De!ree No. 952, the N& as legall# e/poered to deter/ine and prote!t therights of !ontra!ting parties under the la ad/inistered "# it and under the respe!tive agree/ents,as ell as to ensure that their o"ligations thereunder are faithfull# perfor/ed.

We turn to petitioners assertion that it had "een denied the right to due pro!ess. 3his assertion la!ssu"stan!e. 3he re!ord shos that a !op# of the order den#ing the 7otion to Dis/iss and s!hedulingthe hearing of the !o/plaint for the /orning of = 7ar!h 92:, as dul# served on !ounsel forpetitioner, as eviden!ed "# the annotation appearing at the "otto/ of said !op# indi!ating that su!hservi!e had "een effe!ted. 14 )ut even if it "e assu/ed, arguendo, that su!h noti!e had not "een served on the petit ioner,nevertheless the latter as not deprived of due pro!ess, for hat the funda/ental la a"hors is not the a"sen!e of previous noti!e "ut ratherthe a"solute la! of opportunit# to "e heard. 1+ In the instant !ase, petitioner as given a/ple opportunit# to present its side and to "e heardon a /otion for re!onsideration as ell, and not %ust on a /otion to dis/iss< the !lai/ of denial of due pro!ess /ust hen!e sound even /orehollo. 16

We turn finall# to the >uestion of the a/ount of P=,994.2 hi!h petitioner insists had a!!ruedduring the period fro/ Septe/"er 920 to O!to"er 92=, hen private respondent had suspendedpa#/ent of his /onthl# install/ents on his !hosen su"division lot. 3he N& in its 9 7ar!h 92:resolution ruled that the regular /onthl# install/ents under the Contra!t to Sell did not a!!rue duringthe Septe/"er 920 O!to"er 92= periodG

Respondent alloed the !o/plainant to suspend pa#/ent of his /onthl#install/ents until the i/prove/ents in the su"division shall have "een !o/pleted.Respondent infor/ed !o/plainant on Nove/"er 92= that the i/prove/ents have"een !o/pleted. )onth* instaments durin$ the period o' suspension o' pa*mentdid not become due and demandabe 5either did the* accrue %uch must be the

case, other-ise, there is no sense in suspendin$ pa*ments. I' the suspension is

i'ted the debtor sha resume pa*ments but never did he incur an* arrears.

Su!h "eing the !ase, the demand o' respondent 'or compainant to pa* the arrearsdue durin$ the period o' suspension o' pa*ment is nu and void.Conse>uentl#, thenoti!e of !an!ellation "ased on the refusal to pa# the s that ere not due and

de/anda"le is also null and void. 17

3he N& resolution is pro"a"l# too terse and in need of !ertifi!ation and a/plifi!ation. 3he N&!orre!tl# held that no install/ent pa#/ents should "e !onsidered as having a!!rued during theperiod of suspension of pa#/ents. Clearl#, the !riti!al issue is hat happens to the install/entpa#/ents hi!h ould have a!!rued and fallen due during the period of suspension had no defaulton the part of the petitioner intervened. 3o our /ind, the N& resolution is /ost appropriatel# readas dire!ting that the ori$ina period o' pa*ment in the Contract to %e must be deemed e4tended b*


21/179

a period o' time e7ua to the period o' suspension =i.e., b* 'our =>? *ears and t-o ="? months? durin$

-hich e4tended time =tac3ed on to the ori$ina contract period? private respondent bu*er must

continue to pa* the month* instament pa*ments unti the entire ori$ina contract price sha have

been paid.We thin that su!h is the intent of the N& resolution hi!h dire!ted that Fif thesuspension is lifted, the de"tor shall resu/e pa#/entsF and that su!h is the /ost e>uita"le and %ustreading that /a# "e given to the N& resolution. 3o per/it ntipolo Realt# to !olle!t the disputed

a/ount in a lu/p su/ after it had defaulted on its o"ligations to its lot "u#ers, ould tend to defeatthe purpose of the authori?ation *under Se!. 0 of Presidential De!ree No. 952,supra+ to lot "u#ersto suspend install/ent pa#/ents. s the N& resolution pointed out, su!h /ust "e the !ase,otherise, there is no sense in suspending pa#/ents.F (pon the other hand, to !ondone the entirea/ount that ould have "e!o/e due ould "e an e$pressivel# harsh penalt# upon the petitionerand ould result in the un%ust enri!h/ent of the private respondent at the e$pense of the petitioner.It should "e re!alled that the latter had alread# fulfilled, al"eit tardil#, its o"ligations to its lot "u#ersunder their Contra!ts to Sell. t the sa/e ti/e, the lot "u#er should not "e regarded as delin>uentand as su!h !harged penalt# interest. 3he suspension of install/ent pa#/ents as attri"uta"le tothe petitioner, not the private respondent. 3he ta!ing on of the period of suspension to the end ofthe original period pre!isel# prevents default on the part of the lot "u#er. In the ords of the N&

resolution, Fnever ould the "u#er in!ur an# arrears.F

W&ERE6ORE, the Petition for !ertiorari is DIS7ISSED. 3he N& de!ision appealed fro/ is here"#66IR7ED and !larified as providing for the lengthening of the original !ontra!t period for pa#/entof install/ents under the Contra!t to Sell "# four *4+ #ears and to *0+ /onths, during hi!he$tended ti/e private respondent shall !ontinue to pa# the regular /onthl# install/ent pa#/entsuntil the entire original !ontra!t pri!e shall have "een paid. No pronoun!e/ent as to !osts.

SO ORDERED.


22/179

-.R. No. 85

3&E (NI3ED S33ES, !o/plainantBappellee,

vs.

6RED '. DORR, E3 '., defendantsBappellants.

6. -. Waite for appellants.

Soli!itorB-eneral raneta for appellee.

'DD, A.G

3he defendants have "een !onvi!ted upon a !o/plaint !harging the/ ith the offense of riting,pu"lishing, and !ir!ulating a s!urrilous li"el against the -overn/ent of the (nited States and the Insular-overn/ent of the Philippine Islands. 3he !o/plaint is "ased upon se!tion : of !t No. 090 of the

Co//ission, hi!h is as follosG

Ever# person ho shall utter seditious ords or spee!hes, rite, pu"lish, or !ir!ulate s!urrilous li"elsagainst the -overn/ent of the (nited States or the Insular -overn/ent of the Philippine Islands, or hi!htend to distur" or o"stru!t an# laful offi!er in e$e!uting his offi!e, or hi!h tend to instigate others to!a"al or /eet together for unlaful purposes, or hi!h suggest or in!ite re"ellious !onspira!ies or riots, orhi!h tend to stir up the people against the laful authorities, or to distur" the pea!e of the !o//unit#,the safet# and order of the -overn/ent, or ho shall noingl# !on!eal su!h evil pra!ti!es, shall "epunished "# a fine not e$!eeding to thousand dollars or "# i/prison/ent not e$!eeding to #ears, or"oth, in the dis!retion of the !ourt.

3he alleged li"el as pu"lished as an editorial in the issue of the F7anila 6reedo/F of pril =, 980, underthe !aption of F fe hard fa!ts.F

3he ttorne#B-eneral in his "rief indi!ates the folloing passages of the arti!le as those upon hi!h herelies to sustain the !onvi!tionG

Sidne# da/son, in a late letter in F'eslies Weel#,F has the folloing to sa# of the a!tion of the CivilCo//ission in appointing ras!all# natives to i/portant -overn/ent positionsG

FIt is a strong thing to sa#, "ut nevertheless true, that the Civil Co//ission, through its e$Binsurgent offi!eholders, and "# its !ontinual disregard for the re!ords of natives o"tained during the /ilitar# rule of theIslands, has, in its distri"ution of offi!es, !onstituted a prote!torate over a set of /en ho should "e in %ailor deported. . . . Referen!e is then /ade to the appoint/ent of one 3e!son as %usti!e of the pea!e. 3hisis the ind of foolish or that the Co//ission is doing all over the Islands, reinstating insurgents androgues and turning don the /en ho have during the struggle, at the ris of their lives, aided the/eri!ans.F


23/179

$$$ $$$ $$$

3here is no dou"t "ut that the 6ilipino offi!e holders of the Islands are in a good /an# instan!es ras!als.

$$$ $$$ $$$

3he !o//ission has e$alted to the highest positions in the Islands 6ilipinos ho are alleged to "enotoriousl# !orrupt and ras!all#, and /en of no personal !hara!ter.

$$$ $$$ $$$

Editor ;alde?, of F7iau,F /ade serious !harges against to of the native Co//issioners !hargesagainst 3rinidad &. Pardo de 3avera, hi!h, if true, ould "rand the /an as a !oard and a ras!al, and

ith hat result . . . Referen!e is then /ade to the prose!ution and !onvi!tion of ;alde? for li"el Fundera la hi!h spe!ifies that the greater the truth the greater the li"el.F Is it the desire of the people of the(nited States that the natives against ho/ these !harges have "een /ade *hi!h, if true, a"solutel#vilif# their personal !hara!ters+ "e per/itted to retain their seats on the Civil Co//ission, the e$e!utive"od# of the Philippine -overn/ent, ithout an investigation

$$$ $$$ $$$

It is a notorious fa!t that /an# "ran!hes of the -overn/ent organi?ed "# the Civil Co//ission are rottenand !orrupt. 3he fis!al s#ste/, upon hi!h life, l i"ert#, and %usti!e depends, is ad/itted "# the ttorne#B

-eneral hi/self to "e /ost unsatisfa!tor#. It is a fa!t that the Philippine %udi!iar# is far fro/ "eing hat itshould. Neither fis!als nor %udges !an "e persuaded to !onvi!t insurgents hen the# ish to prote!t the/.

$$$ $$$ $$$

No e hear all sorts of reports as to rottenness e$isting in the provin!e of 3a#a"as, and espe!iall# thenorthern end of it< it is said that it is i/possi"le to se!ure the !onvi!tion of la"reaers and outlas "# thenative %usti!es, or a prose!ution "# the native fis!als.

$$$ $$$ $$$

3he long and short of it is that /eri!ans ill not stand for an ar"itrar# govern/ent, espe!iall# heneviden!es of !arpet"agging and ru/ors of graft are too thi! to "e pleasant.


24/179

We do not understand that it is !lai/ed that the defendants su!!eeded in esta"lishing at the trial the truthof an# of the foregoing state/ents. 3he onl# >uestion hi!h e have !onsidered is hether theirpu"li!ation !onstitutes an offense under se!tion : of !t No. 090, a"ove !ited.

Several allied offenses or /odes of !o//itting the sa/e offense are defined in that se!tion, vi?G *+ 3he

uttering of seditious ords or spee!hes< *0+ the riting, pu"lishing, or !ir!ulating of s!urrilous li"elsagainst the -overn/ent of the (nited States or the Insular -overn/ent of the Philippine Islands< *+ theriting, pu"lishing, or !ir!ulating of li"els hi!h tend to distur" or o"stru!t an# laful offi!er in e$e!utinghis offi!e< *4+ or hi!h tend to instigate others to !a"al or /eet together for unlaful purposes< *5+ orhi!h suggest or in!ite re"ellious !onspira!ies or riots< *=+ or hi!h tend to stir up the people against thelaful authorities or to distur" the pea!e of the !o//unit#, the safet# and order of the -overn/ent< *2+noingl# !on!ealing su!h evil pra!ti!es.

3he !o/plaint appears to "e fra/ed upon the theor# that a riting, in order to "e punisha"le as a li"elunder this se!tion, /ust "e of a s!urrilous nature and dire!ted against the -overn/ent of the (nitedStates or the Insular -overn/ent of the Philippine Islands, and /ust, in addition, tend to so/e one of theresults enu/erated in the se!tion. 3he arti!le in >uestion is des!ri"ed in the !o/plaint as Fa s!urrilous

li"el against the -overn/ent of the (nited States and the Insular -overn/ent of the Philippine Islands,hi!h tends to o"stru!t the laful offi!ers of the (nited States and the Insular -overn/ent of thePhilippine Islands in the e$e!ution of their offi!es, and hi!h tends to instigate others to !a"al and /eettogether for unlaful purposes, and hi!h suggests and in!ites re"ellious !onspira!ies, and hi!h tendsto stir up the people against the laful authorities, and hi!h distur"s the safet# and order of the-overn/ent of the (nited States and the Insular -overn/ent of the Philippine Islands.F )ut it is Fa ellBsettled rule in !onsidering indi!t/ents that here an offense /a# "e !o//itted in an# of several different/odes, and the offense, in an# parti!ular instan!e, is alleged to have "een !o//itted in to or /ore/odes spe!ified, it is suffi!ient to prove the offense !o//itted in an# one of the/, provided that it "esu!h as to !onstitute the su"stantive offenseF *Co/. vs. neeland, 08 Pi!., 7ass., 08=, 05+, and thedefendants /a#, therefore, "e !onvi!ted if an# one of the su"stantive !harges into hi!h the !o/plaint/a# "e separated has "een /ade out.

We are all, hoever, agreed upon the proposition that the arti!le in >uestion has no appre!ia"le tenden!#to Fdistur" or o"stru!t an# laful offi!er in e$e!uting his offi!e,F or to FinstigateF an# person or !lass ofpersons Fto !a"al or /eet together for unlaful purposes,F or to Fsuggest or in!ite re"ellious !onspira!iesor riots,F or to Fstir up the people against the laful authorities or to distur" the pea!e of the !o//unit#,the safet# and order of the -overn/ent.F ll these various tenden!ies, hi!h are des!ri"ed in se!tion : of!t No. 090, ea!h one of hi!h is /ade an ele/ent of a !ertain for/ of li"el, /a# "e !hara!teri?ed ingeneral ter/s as seditious tenden!ies. 3his is re!ogni?ed in the des!ription of the offenses punished "#this se!tion, hi!h is found in the title of the a!t, here the# are defined as the !ri/es of the Fseditiousutteran!es, hether ritten or spoen.F

E$!luding fro/ !onsideration the offense of pu"lishing Fs!urrilous li"els against the -overn/ent of the

(nited States or the Insular -overn/ent of the Philippine Islands,F hi!h /a# !on!eiva"l# stand on aso/ehat different footing, the offenses punished "# this se!tion all !onsist in in!iting, orall# or in riting,to a!ts of dislo#alt# or diso"edien!e to the lafull# !onstituted authorities in these Islands. nd hile thearti!le in >uestion, hi!h is, in the /ain, a virulent atta! against the poli!# of the Civil Co//ission inappointing natives to offi!e, /a# have had the effe!t of e$!iting a/ong !ertain !lasses dissatisfa!tion iththe Co//ission and its /easures, e are una"le to dis!over an#thing in it hi!h !an "e regarded ashaving a tenden!# to produ!e an#thing lie hat /a# "e !alled disaffe!tion, or, in other ords, a state offeeling in!o/pati"le ith a disposition to re/ain lo#al to the -overn/ent and o"edient to the las. 3here!an "e no !onvi!tion, therefore, for an# of the offenses des!ri"ed in the se!tion on hi!h the !o/plaint is


25/179

"ased, unless it is for the offense of pu"lishing a s!urrilous li"el against the -overn/ent of the of the(nited States or the Insular -overn/ent of the Philippine Islands.

Can the arti!le "e regarded as e/"ra!ed ithin the des!ription of Fs!urrilous li"els against the-overn/ent of the (nited States or the Insular -overn/ent of the Philippine IslandsF In the

deter/ination of this >uestion e have en!ountered great diffi!ult#, "# reason of the al/ost entire la! of/eri!an pre!edents hi!h /ight serve as a guide in the !onstru!tion of the la. 3here are, indeed,nu/erous English de!isions, /ost of the/ of the eighteenth !entur#, on the su"%e!t of li"elous atta!supon the F-overn/ent, the !onstitution, or the la generall#,F atta!s upon the &ouses of Parlia/ent, theCa"inet, the Esta"lished Chur!h, and other govern/ental organis/s, "ut these de!isions are not noa!!essi"le to us, and, if the# ere, the# ere /ade under su!h different !onditions fro/ those hi!hprevail at the present da#, and are founded upon theories of govern/ent so foreign to those hi!h haveinspired the legislation of hi!h the ena!t/ent in >uestion for/s a part, that the# ould pro"a"l# afford"ut little light in the present in>uir#. In England, in the latter part of the eighteenth !entur#, an# Fritten!ensure upon pu"li! /en for their !ondu!t as su!h,F as ell as an# ritten !ensure Fupon the las orupon the institutions of the !ountr#,F ould pro"a"l# have "een regarded as a li"el upon the -overn/ent.*0 Stephen, &istor# of the Cri/inal 'a of England, 4:.+ 3his has !eased to "e the la in England, and itis dou"tful hether it as ever the !o//on la of an# /eri!an State. FIt is true that there are an!ient

di!ta to the effe!t that an# pu"li!ation tending to Fpossess the people ith an ill opinion of the-overn/entF is a seditious li"el * per &olt, C. A., in R. vs. 3u!hin, 284, 5 St. 3r., 50, and Ellen"orough,C. A., in R. vs. Co""ett, :84, 09 &o. St. 3r., 49+, "ut no one ould a!!ept that do!trine no. (nless theords used dire!tl# tend to fo/ent riot or re"ellion or otherise to distur" the pea!e and tran>uilit# of theingdo/, the ut/ost latitude is alloed in the dis!ussion of all pu"li! affairs.F * En!. of the 'as ofEngland, 458.+ Audge Coole# sa#s *Const. 'i/., 50:+G F3he English !o//on la rule hi!h /ade li"elson the !onstitution or the govern/ent indi!ta"le, as it as ad/inistered "# the !ourts, see/s to usunsuited to the !ondition and !ir!u/stan!es of the people of /eri!a, and therefore never to have "eenadopted in the several States.F

We find no de!isions !onstruing the 3ennessee statute *Code, se!. ===+, hi!h is apparentl# the onl#e$isting /eri!an statute of a si/ilar !hara!ter to that in >uestion, and fro/ hi!h /u!h of the

phraseolog# of then latter appears to have "een taen, though ith so/e essential /odifi!ations.

3he i/portant >uestion is to deter/ine hat is /eant in se!tion : of !t No. 090 "# the e$pression FtheInsular -overn/ent of the Philippine Islands.F Does it /ean in a general and a"stra!t sense the e$istinglas and institutions of the Islands, or does it /ean the aggregate of the individuals "# ho/ thegovern/ent of the Islands is, for the ti/e "eing, ad/inistered Either sense ould dou"tless "ead/issi"le.

We understand, in /odern politi!al s!ien!e, . . . "# the ter/ govern/ent, that institution or aggregate ofinstitutions "# hi!h an independent so!iet# /aes and !arries out those rules of a!tion hi!h areunne!essar# to ena"le /en to live in a so!ial state, or hi!h are i/posed upon the people for/ing that

so!iet# "# those ho possess the poer or authorit# of pres!ri"ing the/. -overn/ent is the aggregate ofauthorities hi!h rule a so!iet#. )# Fd/inistration, again, e understand in /odern ti/es, and espe!iall#in /ore or less free !ountries, the aggregate of those persons in hose hands the reins of govern/entare for the ti/e "eing *the !hief /inisters or heads of depart/ents+.F *)ouvier, 'a Di!tionar#, :9.+ )utthe riter adds that the ter/s Fgovern/entF and Fad/inistrationF are not ala#s used in their stri!tness,and that Fgovern/entF is often used for Fad/inistration.F


26/179

In the a!t of Congress of Aul# 4, 29:, !o//onl# non as the FSedition !t,F it is /ade an offense toFrite, print, utter, or pu"lished,F or to Fnoingl# and illingl# assist or aid in riting, printing, uttering, orpu"lishing an# false, s!andalous, and /ali!ious riting or ritings against the -overn/ent of the (nitedStates, or either &ouse of the Congress of the (nited States, or the President of the (nited States, ithintent to defa/e the said -overn/ent, or either &ouse of the said Congress, or the said President, or to"ring the/, or either of the/, into !onte/pt or disrepute, or to e$!ite against the/ or either or an# of the/the hatred of the good people of the (nited States,F et!. 3he ter/ Fgovern/entF ould appear to "e usedhere in the a"stra!t sense of the e$isting politi!al s#ste/, as distinguished fro/ the !on!rete organis/s ofthe -overn/ent the &ouses of Congress and the E$e!utive hi!h are also spe!iall# /entioned.

(pon the hole, e are of the opinion that this is the sense in hi!h the ter/ is used in the ena!t/entunder !onsideration.

It /a# "e said that there !an "e no su!h thing as a s!urrilous li"el, or an# sort of a li"el, upon ana"stra!tion lie the -overn/ent in the sense of the las and institutions of a !ountr#, "ut e thin ananser to this suggestion is that the e$pression Fs!urrilous li"elF is not used in se!tion : of !t No. 090 inthe sense in hi!h it is used in the general li"el la *!t No. 022+ that is, in the sense of ritten

defa/ation of individuals "ut in the ider sense, in hi!h it is applied in the !o//on la to"lasphe/ous, o"s!ene, or seditious pu"li!ations in hi!h there /a# "e no ele/ent of defa/ationhatever. F3he ord li"el as popularl# used, see/s to /ean onl# defa/ator# ords< "ut ords ritten, ifo"s!ene, "lasphe/ous, or seditious, are te!hni!all# !alled li"els, and the pu"li!ation of the/ is, "# thela of England, an indi!ta"le offense.F *)radlaugh vs. 3he Kueen, K. ). D., =82, =02, per )ra/ell '.A. See Co/. vs. neeland, 08 Pi!., 08=, 0.+

While li"els upon for/s of govern/ent, un!onne!ted ith defa/ation of individuals, /ust in the nature ofthings "e of un!o//on o!!urren!e, the offense is "# no /eans an i/aginar# one. n instan!e of aprose!ution for an offense essentiall# of this nature is Repu"li!a vs. Dennie, 4 Leates *Pa.+, 0=2, herethe defendant as indi!ted Fas a fa!tious and seditious person of a i!ed /ind and un>uiet andtur"ulent disposition and !onversation, seditiousl#, /ali!iousl#, and illfull# intending, as /u!h as in hi/

la#, to "ring into !onte/pt and hatred the independen!e of the (nited States, the !onstitution of thisCo//onealth and of the (nited States, to e$!ite popular dis!ontent and dissatisfa!tion against thes!he/e of polit# instituted, and upon trial in the said (nited States and in the said Co//onealth, to/olest, distur", and destro# the pea!e and tran>uilit# of the said (nited States and of the saidCo//onealth, to !onde/n the prin!iples of the Revolution, and revile, depre!iate, and s!andali?e the!hara!ters of the Revolutionar# patriots and states/en, to endanger, su"vert, and totall# destro# therepu"li!an !onstitutions and free govern/ents of the said (nited States and this Co//onealth, toinvolve the said (nited States and this Co//onealth in !ivil ar, desolation, and anar!h#, and topro!ure "# art and for!e a radi!al !hange and alteration in the prin!iples and for/s of the said!onstitutions and govern/ents, ithout the free ill, ish, and !on!urren!e of the people of the said(nited States and this Co//onealth, respe!tivel#,F the !harge "eing that Fto fulfill, perfe!t, and "ring toeffe!t his i!ed, seditious, and detesta"le intentions aforesaid he . . . falsel#, /ali!iousl#, fa!tiousl#, andseditiousl# did /ae, !o/pose, rite, and pu"lish the folloing li"el, to it< de/o!ra!# is s!ar!el#

tolera"le at an# period of national histor#. Its o/ens are ala#s sinister and its poers are unpropitious.With all the lights or e$perien!e "la?ing "efore our e#es, it is i/possi"le not to dis!over the futilit# of thisfor/ of govern/ent. It as ea and i!ed at thens, it as "ad in Sparta, and orse in Ro/e. It has"een tried in 6ran!e and ter/inated in despotis/. it as tried in England and re%e!ted ith the ut/ostloathing and a"horren!e. It is on its trial here and its issue ill "e !ivil ar, desolation, and anar!h#. Noise /an "ut dis!erns its i/perfe!tions< no good /an "ut shudders at its /iseries< no honest /an "utpro!lai/s its fraud, and no "rave /an "ut dras his sord against its for!e. 3he institution of a s!he/e ofpolit# so radi!all# !onte/pti"le and vi!ious is a /e/ora"le e$a/ple of hat the villain# of so/e /en !andevise, the foll# of others re!eive, and "oth esta"lish, in despite of reason, refle!tion, and sensation.F


27/179


28/179

-.R. No. 'B0:59 Nove/"er :, 959

CE)( (NI3ED EN3ERPRISES, plaintiffBappellee,

vs.

AOSE -''O6IN, Colle!tor of Custo/s, Ce"u Port, defendantBappellant.

7anuel . Qo?a for appellee.

6irst ssistant Soli!itor -eneral -uiller/o E. 3orres and Soli!itors 6rine C. Qa"allero and Pedro O!a/pofor appellant.

RELES, A.).'., A.G

3his suit for /andator# in%un!tion as instituted in the Court of 6irst Instan!e of Ce"u (nited Enterprise to!o/pel Aose -allofin, as !olle!tor of Custo/s, Ce"u Port, to release and deliver to the plaintiff toi/ported ship/ents of 2,:4 "ales of over issue nespapers pur!hased "# the latter fro/ the (nitedStates. s an!illar# relief during the penden!# of the a!tion, the plaintiff pra#ed for the issuan!e of a ritof preli/inar# /andator# in%un!tion, hi!h as granted "# the !ourt after the plaintiff posted a "ond in thea/ount of P=8,888.88 in favor of the defendant. 3hereafter, the goods ere released to the plaintiff, itappearing further that the advan!e sales ta$ due on the sa/e had "een dul# paid upon arrival of the/er!handise at port.

3he i/portation of the aforesaid ship/ents as /ade under and "# virtue of an I/port ControlCo//ission 'i!ense No. 005, issued "# the defun!t I/port Control Co//ission. (nder the ter/s of theli!ense, the plaintiff !ould i/port, on a noBdollar re/ittan!e "asis, over issue nespapers up to the

a/ount or value of :,888.88.

3he refusal of the defendant to deliver the i/ported ite/s is pre/ised on his !ontention that hile the five"ills of lading !overing the to ship/ents of the over issue nespapers ere all dated at 'os ngeles,(.S.. De!e/"er 2, 95, or one da# "efore the e$piration of the i/port li!ense in >uestion, the vessels7HS ;EN3(R and 7HS )3N, !arr#ing on "oard the said /er!handise, a!tuall# left the ports ofe/"aration, 'os ngeles, and San 6ran!is!o, on Aanuar# 0 and Aanuar# =, 954 respe!tivel#. &en!e,a!!ording to the defendant, the i/portation /ust "e !onsidered as having "een /ade ithout a validi/port li!ense, "e!ause under the regulations issued "# the Central )an and the 7onetar# )oard, Fallship/ents that left the port of origin after Aune 8, 95, and are !overed "# ICC li!enses, /a# "ereleased "# the )ureau of Custo/s ithout the need of a Central )an release !ertifi!ate< provided the#left the port of origin ithin the period of validit# of the li!ensesF. No Central )an !ertifi!ate for the

release of the goods having "een shon or presented to the defendant, the latter refused to /ae thedeliver#.

3he loer !ourt as thus !onfor/ed ith the issue of deter/ining hether the valid period of the li!ensein >uestion should "e !ounted up to the ti/e hen the vessels !arr#ing the i/ported ite/s left the ports oforigin on Aanuar# 0 and Aanuar# =, 954, or hen the !orresponding "ills of lading ere dated, orDe!e/"er 2, 95. 3he !ourt !hose the latter date, and heldG


29/179

In vie therefore, this Court pronoun!es %udg/ent /aing rit of preli/inar# /andator# in%un!tion issuedagainst defendant per/anent, ith orders for the !an!ellation of plaintiffs "ond, this after hateveradvan!e sales ta$ or an# ta$es, sur!harges and so forth /ight "e due on the goods shall have "een paid,ithout !osts.

3he defendant appealed to the Court of ppeals. 3he >uestion raised, hoever, "eing purel# one of la,the appeal as !ertified to us pursuant to a resolution of said !ourt dated Aul# 9, 952. 3he appeal hasno /erit.

3he authorit# of the appellee to i/port as !ontained in the I/port Control Co//ission 'i!ense No.2005, validated on Aune :, 95, and under Resolution 28 of the Co//ission *adopted 7ar!h 02,950+, the sa/e had a si$B/onth period of validit# !ounted fro/ the said date Aune :, 95. 3his li!ensestates, a/ong other !onditions, that

Co//odities !overed "# this li!ense /ust "e shipped fro/ the !ountr# of origin "efore the e$pir# date ofthe li!ense, and are su"%e!t to se!. of Repu"li! !t. No. =58.

lthough Repu"li! !t No. =58, !reating the I/port Control Co//ission, e$pired on Aul# , 95, it is to"e !on!eded that its dul# e$e!uted a!ts !an have valid effe!ts even "e#ond the life span of saidgovern/ental agen!#.

What is i/portant to !onsider onl# is the legal !onnotation of the ord FshippedF as the ter/ as used inthe li!ense. Defendant /aintains that it is hen the vessel leaves the port of e/"aration, hile plaintiffholds that it is the dates of the "ills of lading, hi!h are usuall# issued after the !argo is pla!ed on "oard

the vessel. 3he date of the ship/ent is the date hen the goods for dispat!h are loaded on "oard thevessel, and not ne!essaril# hen the ship puts to sea, is !learl# i/plied fro/ our ruling in the !ase of (.S3o"a!!o Corporation vs. Rufino 'una, et al., *:2 Phil., 4+, herein e saidG

)# se!tion = of !t No. 40=, all goods in!luding leaf to"a!!o have "een pla!ed under !ontrol. Petitioners/er!handise left the port of departure "efore the passage of that !t "ut arrived in 7anila after itsapproval. 6or the purpose of enfor!ing or appl#ing said se!tion =, there !an onl# "e one date ofi/portation. Whi!h as the date 3he date the goods ere ordered, the date the# ere put on "oardvessel, or the date the# rea!hed the port of destination We are of the opinion that the date of i/portationis the date of ship/ent and not the date of rrival in 7anila. *E/phasis supplied+

3he issuan!e of the "ill of lading, further/ore, presupposes or !arries the presu/ption that the goodsere delivered to the !arrier for i//ediate ship/ent * C.A.S. se!. 0 *0+, p. 05, and !ases !itedtherein+. It does not appear here that the "ill of lading spe!ified an# designated da# on hi!h the vesselere to lift an!hor, nor as it shon that plaintiff had an# noledge that the vessel 7HS ;EN3(R and7HS )3N ere not to depart soon after he pla!ed his !argo on "oard and the !orresponding "ills oflading issued to hi/. 6ro/ this latter ti/e, the goods in !onte/plation of la, are dee/ed alread# intransit *Ne Civil Code, rts. 5 and 2=+.


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It should also "e !onsidered that it is entirel# outside the shippers hands to fi$ the dates of departure,route or arrival of a vessel *unless he !harters the hole ship see rt. =5=, Code of Co//er!e+.

Defendants relian!e upon Central )an regulations that the ship/ent li!ensed /ust have Fleft the port oforigin ithin the period of validit# of the Fli!enseF is not /aintaina"le in the present !ase, "e!ause the

regulations !a/e onto effe!t onl# on Aul# , 95 alread# after issuan!e of the appellee li!ense and!annot "e read into the sa/e.

3he Soli!itor -enerals !ontention that, assu/ing the si$ /onths are !ounted up to the date the i/portsgoods ere pla!ed on "oard the vessels for ship/ent the period of validit# had lieise alread# elapsed"e!ause, legall# si$ /onths /ean :8 da#s, hi!h in this !ase e$pired on De!e/"er 5, !annot no "eentertained "e!ause the defendantBappellant, under paragraph of his anser to the Co/plaint,e$pressl# ad/itted that the date appearing on the "ills of lading *De!e/"er 2, 95+ as the date ofloading on "oard the vessels Fis one da# "efore the e$piration of the validit# of the i/port li!enseF. Whathe onl# >uestioned in the !ourt "elo is the legal !onnotation of the ord FshippedF under the i/portli!ense.

In the light of the resolution e have taen on the /ain issue, it "e!o/es unne!essar# for us to dellfurther upon the other >uestions raised "# the parties.

Wherefore, the appeal should "e dis/issed and the %udg/ent of the loer !ourt affir/ed. So rendered.

Paras, C.A., )eng?on, Padilla, 7onte/a#or, )autista ngelo, 'a"rador, Enden!ia, )arrera, and -utierre?David, AA., !on!ur.


31/179

-.R. No. 8=09=. Aul# 5, 99=

IS)E'O 3. CRISOS3O7O, petitioner, vs. 3&E CO(R3 O6 PPE'S and the PEOP'E O6 3&EP&I'IPPINES, respondents.

D E C I S I O N7ENDOQ, A.G

3his is a petition to revie the de!ision of the Court of ppeals dated Aul# 5, 990, the dispositive portionof hi!h readsG

W&ERE6ORE, the present petition is partiall# granted. 3he >uestioned Orders and rits dire!ting *+Treinstate/entU of respondent Isa"elo 3. Crisosto/o to the position of TPresident of the Pol#te!hni!(niversit# of the Philippines,U and *0+ pa#/ent of Tsalaries and "enefitsU hi!h said respondent failed tore!eive during his suspension insofar as su!h pa#/ent in!ludes those a!!ruing after the a"olition of the

PCC and its transfer to the P(P, are here"# set aside. !!ordingl#, further pro!eedings !onsistent iththis de!ision /a# "e taen "# the !ourt a >uo to deter/ine the !orre!t a/ounts due and pa#a"le to saidrespondent "# the said universit#.

3he "a!ground of this !ase is as follosG

Petitioner Isa"elo Crisosto/o as President of the Philippine College of Co//er!e *PCC+, having "eenappointed to that position "# the President of the Philippines on Aul# 2, 924.

During his in!u/"en!# as president of the PCC, to ad/inistrative !ases ere filed against petitioner forillegal use of govern/ent vehi!les, /isappropriation of !onstru!tion /aterials "elonging to the !ollege,oppression and harass/ent, grave /is!ondu!t, nepotis/ and dishonest#. 3he ad/inistrative !ases,hi!h ere filed ith the Offi!e of the President, ere su"se>uentl# referred to the Offi!e of the Soli!itor-eneral for investigation.

Charges of violations of R.. No. 89, V *e+ and R.. No. 990, V 08B0 and R.. No. 2, V 4 erelieise filed against hi/ ith the Offi!e of 3anod"a#an.

On Aune 4, 92=, three *+ infor/ations for violation of Se!. *e+ of the ntiB-raft and Corrupt Pra!ti!es!t *R.. No. 89, as a/ended+ ere filed against hi/. 3he infor/ations alleged that he appropriated

for hi/self a "aha# u"o, hi!h as intended for the College, and !onstru!tion /aterials orthP058,888.88, /ore or less. Petitioner as also a!!used of using a driver of the College as his personaland fa/il# driver.

On O!to"er 00, 92=, petitioner as preventivel# suspended fro/ offi!e pursuant to R.. No. 89, V ,as a/ended. In his pla!e Dr. Pa"lo 3. 7ateo, Ar. as designated as offi!erBinB!harge on Nove/"er 8,92=, and then as !ting President on 7a# , 922.


32/179

On pril , 92:, P.D. No. 4 as issued "# then President 6erdinand E. 7ar!os, CON;ER3IN- 3&EP&I'IPPINE CO''E-E O6 CO77ERCE IN3O PO'L3EC&NIC (NI;ERSI3L, DE6ININ- I3SO)AEC3I;ES, OR-NIQ3ION' S3R(C3(RE ND 6(NC3IONS, ND EMPNDIN- I3SC(RRIC('R O66ERIN-S.

7ateo !ontinued as the head of the ne (niversit#. On pril , 929, he as appointed !ting Presidentand on 7ar!h 0:, 9:8, as President for a ter/ of si$ *=+ #ears.

On Aul# , 9:8, the Cir!uit Cri/inal Court of 7anila rendered %udg/ent a!>uitting petitioner of the!harges against hi/. 3he dispositive portion of the de!ision readsG

W&ERE6ORE, the Court finds the a!!used, Isa"elo 3. Crisosto/o, not guilt# of the violations !harged inall these three !ases and here"# a!>uits hi/ therefro/, ith !osts de ofi!io. 3he "ail "onds filed "# saida!!used for his provisional li"ert# are here"# !an!elled and released.

Pursuant to the provisions of Se!tion , R.. No. 89, as a/ended, otherise non as 3he ntiB-raftand Corrupt Pra!ti!es !t, and under hi!h the a!!used has "een suspended "# this Court in an Orderdated O!to"er 00, 92=, said a!!used is here"# ordered reinstated to the position of President of thePhilippine College of Co//er!e, no non as the Pol#te!hni! (niversit# of the Philippines, fro/ hi!hhe has "een suspended. )# virtue of said reinstate/ent, he is entitled to re!eive the salaries and other"enefits hi!h he failed to re!eive during suspension, unless in the /eanti/e ad/inistrative pro!eedingshave "een filed against hi/.

3he "ail "onds filed "# the a!!used for his provisional li"ert# in these !ases are here"# !an!elled and

released.

SO ORDERED.

3he !ases filed "efore the 3anod"a#an *no the O/"uds/an+ ere lieise dis/issed on ugust :,99 on the ground that the# had "e!o/e /oot and a!ade/i!. On the other hand, the ad/inistrative!ases ere dis/issed for failure of the !o/plainants to prose!ute the/.

On 6e"ruar# 0, 990, petitioner filed ith the Regional 3rial Court a /otion for e$e!ution of the%udg/ent, parti!ularl# the part ordering his reinstate/ent to the position of president of the P(P and thepa#/ent of his salaries and other "enefits during the period of suspension.

3he /otion as granted and a partial rit of e$e!ution as issued "# the trial !ourt on 7ar!h =, 990.On 7ar!h 0=, 990, hoever, President Cora?on C. >uino appointed Dr. Aai/e -ellor as a!tingpresident of the P(P, folloing the e$piration of the ter/ of offi!e of Dr. Ne/esio Prudente, ho hadsu!!eeded Dr. 7ateo. Petitioner as one of the five no/inees !onsidered "# the President of thePhilippines for the position.


33/179

On pril 04, 990, the Regional 3rial Court, through respondent Audge 3eresita D#B'ia!o 6lores, issuedanother order, reiterating her earlier order for the reinstate/ent of petitioner to the position of P(Ppresident. rit of e$e!ution, ordering the sheriff to i/ple/ent the order of reinstate/ent, as issued.

In his return dated pril 0:, 990, the sheriff stated that he had e$e!uted the rit "# installing petitioner asPresident of the P(P, although Dr. -ellor did not va!ate the offi!e as he anted to !onsult ith thePresident of the Philippines first. 3his led to a !onte/pt !itation against Dr. -ellor. hearing as set on7a# 2, 990. On 7a# 5, 990, petitioner also /oved to !ite Depart/ent of Edu!ation, Culture and SportsSe!retar# Isidro Cario in !onte/pt of !ourt. Petitioner assu/ed the offi!e of president of the P(P.

On 7a# :, 990, therefore, the People of the Philippines filed a petition for !ertiorari and prohi"ition *C-.R. No. 029+, assailing the to orders and the rits of e$e!ution issued "# the trial !ourt. It alsoased for a te/porar# restraining order.

On Aune 05, 990, the Court of ppeals issued a te/porar# restraining order, en%oining petitioner to!ease and desist fro/ a!ting as president of the P(P pursuant to the reinstate/ent orders of the trial!ourt, and en%oining further pro!eedings in Cri/inal Cases Nos. ;IB009B0.

On Aul# 5, 990, the Seventh Division of the Court of ppeals rendered a de!ision,0 the dispositiveportion of hi!h is set forth at the "eginning of this opinion. Said de!ision set aside the orders and rit ofreinstate/ent issued "# the trial !ourt. 3he pa#/ent of salaries and "enefits to petitioner a!!ruing afterthe !onversion of the PCC to the P(P as disalloed. Re!over# of salaries and "enefits as li/ited tothose a!!ruing fro/ the ti/e of petitioners suspension until the !onversion of the PCC to the P(P. 3he!ase as re/anded to the trial !ourt for a deter/ination of the a/ounts due and pa#a"le to petitioner.

&en!e this petition. Petitioner argues that P.D. No. 4, hi!h !onverted the PCC into the P(P, did nota"olish the PCC. &e !ontends that if the la had intended the PCC to lose its e$isten!e, it ould havespe!ified that the PCC as "eing Ta"olishedU rather than T!onvertedU and that if the P(P as intended to"e a ne institution, the la ould have said it as "eing T!reated.U Petitioner !lai/s that the P(P is/erel# a !ontinuation of the e$isten!e of the PCC, and, hen!e, he !ould "e reinstated to his for/erposition as president.

In part the !ontention is ell taen, "ut, as ill presentl# "e e$plained, reinstate/ent is no longer possi"le"e!ause of the pro/ulgation of P.D. No. 42 "# the President of the Philippines on Aune 8, 92:.

P.D. No. 4 did not a"olish, "ut onl# !hanged, the for/er Philippine College of Co//er!e into hat isno the Pol#te!hni! (niversit# of the Philippines, in the sa/e a# that earlier in 950, R.. No. 22: had!onverted hat as then the Philippine S!hool of Co//er!e into the Philippine College of Co//er!e.What too pla!e as a !hange in a!ade/i! status of the edu!ational institution, not in its !orporate life.&en!e the !hange in its na/e, the e$pansion of its !urri!ular offerings, and the !hanges in its stru!tureand organi?ation.


34/179

s petitioner !orre!tl# points out, hen the purpose is to a"olish a depart/ent or an offi!e or anorgani?ation and to repla!e it ith another one, the la/aing authorit# sa#s so. &e !ites the folloinge$a/plesG

E.O. No. 289G

V . 3here is here"# !reated a 7inistr# of 3rade and Industr#, hereinafter referred to as the 7inistr#. 3hee$isting 7inistr# of 3rade esta"lished pursuant to Presidential De!ree No. 20 as a/ended, and thee$isting 7inistr# esta"lished pursuant to Presidential De!ree No. 4:: as a/ended, are a"olished togetherith their servi!es, "ureaus and si/ilar agen!ies, regional offi!es, and all other entities under theirsupervision and !ontrol. . . .

E.O. No. 28G

V . 3here is here"# !reated a 7inistr# of Pu"li! Wors and &igha#s, hereinafter referred to as the7inistr#. 3he e$isting 7inistr# of Pu"li! Wors esta"lished pursuant to E$e!utive Order No. 54= asa/ended, and the e$isting 7inistr# of Pu"li! &igha#s esta"lished pursuant to Presidential De!ree No.45: as a/ended, are a"olished together ith their servi!es, "ureaus and si/ilar agen!ies, regionaloffi!es, and all other entities ithin their supervision and !ontrol. . . .

R.. No. =925G

V . Creation and Co/position. B National Poli!e Co//ission, hereinafter referred to as theCo//ission, is here"# !reated for the purpose of effe!tivel# dis!harging the fun!tions pres!ri"ed in theConstitution and provided in this !t. 3he Co//ission shall "e a !ollegial "od# ithin the Depart/ent. It

shall "e !o/posed of a Chair/an and four *4+ regular !o//issioners, one *+ of ho/ shall "edesignated as ;i!eBChair/an "# the President. 3he Se!retar# of the Depart/ent shall "e the e$Boffi!ioChair/an of the Co//ission, hile the ;i!eBChair/an shall a!t as the e$e!utive offi!er of theCo//ission.

$$$ $$$ $$$

V 98. Status of Present NPO'CO7, PCBINP. B (pon the effe!tivit# of this !t, the present NationalPoli!e Co//ission, and the Philippine Consta"ular#BIntegrated National Poli!e shall !ease to e$ist. 3hePhilippine Consta"ular#, hi!h is the nu!leus of the integrated Philippine Consta"ular#BIntegrated

National Poli!e, shall !ease to "e a /a%or servi!e of the r/ed 6or!es of the Philippines. 3he IntegratedNational Poli!e, hi!h is the !ivilian !o/ponent of the Philippine Consta"ular#BIntegrated National Poli!e,shall !ease to "e the national poli!e for!e and in lieu thereof, a ne poli!e for!e shall "e esta"lished and!onstituted pursuant to this !t.

In !ontrast, P.D. No. 4, providesG


35/179

V . 3he present Philippine College of Co//er!e is here"# !onverted into a universit# to "e non asthe TPol#te!hni! (niversit# of the Philippines,U hereinafter referred to in this De!ree as the (niversit#.

s alread# noted, R.. No. 22: earlier providedG

V . 3he present Philippine S!hool of Co//er!e, lo!ated in the Cit# of 7anila, Philippines, is here"#granted full !ollege status and !onverted into the Philippine College of Co//er!e, hi!h ill offer notonl# its present oneB#ear and toB#ear vo!ational !o//er!ial !urri!ula, the latter leading to the titles ofsso!iate in )usiness Edu!ation andHor sso!iate in Co//er!e, "ut also fourB#ear !ourses leading to thedegrees of )a!helor of S!ien!e in )usiness in Edu!ation and )a!helor of S!ien!e in Co//er!e, and fiveB#ear !ourses leading to the degrees of 7aster of rts in )usiness Edu!ation and 7aster of rts inCo//er!e, respe!tivel#.

3he appellate !ourt ruled, hoever, that the P(P and the PCC are not Tone and the sa/e institutionU "utTto different entitiesU and that sin!e petitioner Crisosto/os ter/ as !oter/inous ith the legale$isten!e of the PCC, petitioners ter/ e$pired upon the a"olition of the PCC. In rea!hing this!on!lusion, the Court of ppeals too into a!!ount the folloingG

a+ fter respondent Crisosto/os suspension, P.D. No. 4 *entitled TCON;ER3IN- 3&E P&I'IPPINECO''E-E O6 CO77ERCE IN3O PO'L3EC&NIC (NI;ERSI3L, DE6ININ- I3S O)AEC3I;ES,OR-NIQ3ION' S3R(C3(RE ND 6(NC3IONS, ND EMPNDIN- I3S C(RRIC('RO66ERIN-SU+ as issued on pril , 92:. 3his de!ree e$pli!itl# provides that P(Ps o"%e!tives andpurposes !over not onl# PCCs offering of progra/s Tin the field of !o//er!e and "usinessad/inistrationU "ut also Tprogra/s in other pol#te!hni! areasU and Tin other fields su!h as agri!ulture, artsand trades and fisheries . . .U *se!tion 0+. )eing a universit#, P(P as !on!eived as a "igger institutiona"sor"ing, /erging and integrating the entire PCC and other Tnational s!hoolsU as /a# "e TtransferredU tothis ne state universit#.

"+ 3he /anner of sele!tion and appoint/ent of the universit# head is su"stantiall# different fro/ thatprovided "# the PCC Charter. 3he P(P President Tshall "e appointed "# the President of the Philippinesupon re!o//endation of the Se!retar# of Edu!ation and Culture after !onsultation ith the (niversit#)oard of RegentsU *se!tion 4, P.D. 4+. 3he President of PCC, on the other hand, as appointed T"#the President of the Philippines upon re!o//endation of the )oard of 3rusteesU *Se!tion 4, R.. 22:+.

!+ 3he !o/position of the ne universit#s )oard of Regents is lieise different fro/ that of the PCC)oard of 3rustees *hi!h in!luded the !hair/an of the Senate Co//ittee on Edu!ation and the !hair/anof the &ouse Co//ittee on Edu!ation, the President of the PCC lu/ni sso!iation as ell as thePresident of the Cha/"er of Co//er!e of the Philippines+. Whereas, a/ong others, the NED Dire!torB

-eneral, the Se!retar# of Industr# and the Se!retar# of 'a"or are /e/"ers of the P(P )oard of Regents.*Se!tion =, P.D. 4+.

d+ 3he de!ree /oreover transferred to the ne universit# all the properties in!luding Te>uip/ent andfa!ilitiesUG


36/179

T. . . oned "# the Philippine College of Co//er!e and su!h other National S!hools as /a# "e integrated. . . in!luding their o"ligations and appropriations . . .U *Se!. 0< Itali!

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