ADMINISTRATIVE LAW

1. LEVERIZA V IAC
G.R. No. L-66614 January 25, 1988
PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICS
ADMINISTRATION,respondents.

BIDIN, J.:
This is a Petition for Review on certiorari seeking the reversal of the decision of the Intermediate
Appellate Court, Third Division * dated February 29, 1984 in AC-G.R. No. CV No. 61705
entitled Mobil Oil Philippines, Inc., plaintiff-appellee vs. Primitivo Leveriza Parungao, Antonio C.
Vasco and Civil Aeronautics Administration, defendants-appellants; Primitive Leveriza, Fe Leveriza
Parungao and Antonio C. Leveriza, cross-defendant, affirming in toto the decision of the trial court
dated April 6, 1976.
As found by the trial court and adopted by the Intermediate Appellate Court, the facts of this case
are as follows:
Around three contracts of lease resolve the basic issues in the instant case. These three
contracts are as follows:
First Contract. For purposes of easy reference and brevity, this contract shall be
referred to hereinafter as Contract A. This is a "CONTRACT OF LEASE", executed
between the REPUBLIC OF THE PHILIPPINES, represented by Defendant CIVIL
AERONAUTICS ADMINISTRATION, as lessor, and ROSARIO C. LEVERIZA, as lessee, on
April 2, 1965, over a certain parcel of land at the MIA area, consisting of approximately
4,502 square meters, at a monthly rental of P450.20, for a period of 25 years, (Exhibit
"A", Exhibit "I-Leverizas", Exhibit "I-CAA").
Second Contracts. For purposes of easy references and brevity, this contract shall be
referred to hereinafter as Contract B. This is a "LEASE AGREEMENT", executed between
ROSARIO C. LEVERIZA, as lessor, and Plaintiff MOBIL OIL PHILIPPINES, INC., as lessee on
May 21, 1965, over 3,000 square meters of that SAME Parcel of land subject of
Contract A above mentioned, at a monthly rental of P1,500.00, for a period of 25 years
(Exhibit 'B', Exhibit 4-Leverizas' ).
Third Contract. For purposes of easy reference and brevity, this contract shall be
referred to hereinafter as Contract C. This is a "LEASE AGREEMENT", executed between

Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, and plaintiff MOBIL OIL

PHILIPPINES, INC., as lessee, on June 1, 1968 over that SAME parcel of land (Lot A, on
plan being a portion of Parcel, Psu 2031), containing an area of 3,000 square meters
more or less, at a monthly rental of P.25 per square meter for the second 200 square
meters, and P.20 per square meter for the rest, for a period of 29 (sic) years. (Exhibit
"C").
There is no dispute among the parties that the subject matter of the three contracts of
lease above mentioned, Contract A, Contract B, and Contract C, is the same parcel of
land, with the noted difference that while in Contract A, the area leased is 4,502
square meters, in Contract B and Contract C, the area has been reduced to 3,000
square meters. To summarize:
Contract A a lease contract of April 2, 1965 between the Republic of the
Philippines, represented by Defendant Civil Aeronautics Administration
and Rosario C. Leveriza over a parcel of land containing an area of 4,502
square meters, for 25 years.
Contract B a lease contract (in effect a sublease) of May 21, 1965
between defendant Rosario C. Leveriza and plaintiff Mobil Oil Philippines,
Inc. over the same parcel of land, but reduced to 3,000 square meters for
25 years; and
Contract C a lease contract of June 1, 1968 between defendant Civil
Aeronautics Administration and plaintiff Mobil Oil Philippines, Inc., over
the same parcel of land, but reduced to 3,000 square meters, for 25 years.
It is important to note, for a clear understanding of the issues involved, that it appears
that defendant Civil Aeronautics Administration as LESSOR, leased the same parcel of
land, for durations of time that overlapped to two lessees, to wit: (1) Defendant
Rosario C. Leveriza, and that plaintiff Mobil Oil Philippines, Inc., as LESSEE, leased the
same parcel of land from two lessors, to wit: (1) defendant Rosario C. Leveriza and (2)
defendant Civil Aeronautics Administration, Inc., for durations of time that also
overlapped.
For purposes of brevity defendant Civil Aeronautics Administration shall be referred to
hereinafter as defendant CAA.
Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is now
deceased. This is the reason why her successor-in-interest, her heirs, are sued, namely:
Defendants Primitive Leveriza, her second husband, (now also deceased), Fe Leveriza
Parungao, her daughter by her second husband, and Antonio C. Vasco, her son by her
first husband. For purposes of brevity, these defendants shall be referred to
hereinafter as Defendants Leveriza.

Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as the
Plaintiff. (pp. 95-99, Record on Appeal).
Plaintiff in this case seeks the rescission or cancellation of Contract A and Contract B on
the ground that Contract A from which Contract B is derived and depends has already
been cancelled by the defendant Civil Aeronautics Administration and maintains that
Contract C with the defendant CAA is the only valid and subsisting contract insofar as
the parcel of land, subject to the present litigation is concerned. On the other hand,
defendants Leverizas' claim that Contract A which is their contract with CAA has never
been legally cancelled and still valid and subsisting; that it is Contract C between
plaintiff and defendant CAA which should be declared void.
Defendant CAA asserts that Exhibit "A" is still valid and subsisting because its
cancellation by Guillermo Jurado was ineffective and asks the court to annul Contract A
because of the violation committed by defendant Leveriza in leasing the parcel of land
to plaintiff by virtue of Contract B without the consent of defendant CAA. Defendant
CAA further asserts that Contract C not having been approved by the Director of Public
Works and Communications is not valid. ...
xxx xxx xxx
After trial, the lower court render judgment on April 6, 1976 the dispositive part of which reads:
WHEREFORE, after having thus considered the evidence of all the parties, testimonial
and documentary, and their memoranda and reply-memoranda, this Court hereby
renders judgment:
1. Declaring Contract A as having been validly cancelled on June 28, 1966,
and has therefore ceased to have any effect as of that date;
2. Declaring that Contract B has likewise ceased to have any effect as of
June 28, 1966 because of the cancellation of Contract A;
3. Declaring that Contract C was validly entered into on June 1, 1968, and
that it is still valid and subsisting;
4. Ordering defendant CAA to refund to defendants Leverizas the amount
of P32,189.30 with 6% per annum until fully paid;
5. Ordering defendants Leverizas to refund to plaintiff the amount of
P48,000.00 with 6% interest per annum until fully paid;
6. Dismissing defendants Leverizas' four counterclaims against plaintiff;
7. Dismissing defendants Leverizas' cross-claim against defendant CAA;

8. Dismissing defendant CAA's counterclaim against plaintiff;

9. Dismissing defendant CAA's counterclaim against defendant Leverizas.
No pronouncements as to costs.
On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly discovered
evidence, lack of jurisdiction of the court over the case and lack of evidentiary support of the
decision which was denied in the order of November 12,1976 (Rollo, p. 17).
On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot lease
was properly registered in the name of the Republic of the Philippines, it was only the President of
the Philippines or an officer duly designated by him who could execute the lease contract pursuant
to Sec. 567 of the Revised Administrative Code; that the Airport General Manager has no authority
to cancel Contract A, the contract entered into between the CAA and Leveriza, and that Contract C
between the CAA and Mobil was void for not having been approved by the Secretary of Public
Works and Communications. Said motion was however denied on November 12, 1976 (Rollo, p. 18).
On appeal, the Intermediate Appellate Court, being in full accord with the trial court, rendered a
decision on February 29, 1984, the dispositive part of which reads:
WHEREFORE, finding no reversible error in the decision of the lower court dated April
6, 1976, the same is hereby affirmed in toto.
Hence, this petition.
The petitioners raised the following assignment of errors:
I
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE ADMINISTRATOR
OF THE CIVIL AERONAUTICS ADMINISTRATION (CAA) HAD THE STATUTORY AUTHORITY
TO LEASE, EVEN WITHOUT APPROVAL OF THE THEN SECRETARY OF PUBLIC WORKS
AND COMMUNICATIONS, REAL PROPERTY BELONGING TO THE REPUBLIC OF THE
PHILIPPINES.
II
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE ADMINISTRATOR
OF THE CIVIL AERONAUTICS ADMINISTRATION HAD STATUTORY AUTHORITY, WITHOUT
THE APPROVAL OF THE THEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS,
TO CANCEL A LEASE CONTRACT OVER REAL PROPERTY OWNED BY THE REPUBLIC OF
THE PHILIPPINES, WHICH CONTRACT WAS APPROVED, AS REQUIRED BY LAW, BY THE
SECRETARY.
III

THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE CONTRACT
OF SUBLEASE (CONTRACT B) ENTERED INTO BETWEEN PETITIONERS' PREDECESSOR-ININTEREST AND RESPONDENT MOBIL OIL PHILIPPINES, INC. WAS WITHOUT THE
CONSENT OF THE ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION.
The petition is devoid of merit.
There is no dispute that Contract "A" at the time of its execution was a valid contract. The issue
therefore is whether or not said contract is still subsisting after its cancellation by CAA on the
ground of a sublease executed by petitioners with Mobil Oil Philippines without the consent of CAA
and the execution of another contract of lease between CAA and Mobil Oil Philippines (Contract
"C").
Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid sublease and
does not constitute a ground for the cancellation of Contract "A", while Contract "C", a subsequent
lease agreement between CAA and Mobil Oil Philippines is null and void, for lack of approval by the
Department Secretary. Petitioners anchor their position on Sections 567 and 568 of the Revised
Administrative Code which require among others, that subject contracts should be executed by the
President of the Philippines or by an officer duly designated by him, unless authority to execute the
same is by law vested in some other officer (Petition, Rollo, pp. 15-16).
At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validly
cancelled on June 28, 1966 and so was Contract "B" which was derived therefrom. Accordingly, it
maintains that Contract "C" is the only valid contract insofar as the parcel of land in question is
concerned and that approval of the Department Head is not necessary under Section 32 (par. 24) of
the Republic Act 776 which expressly vested authority to enter into such contracts in the
Administrator of CAA (Comment; Rollo, p. 83).
On its part, respondent Civil Aeronautics Administration took the middle ground with its view that
Contract "A" is still subsisting as its cancellation is ineffective without the approval of the
Department Head but said contract is not enforceable because of petitioners' violation of its terms
and conditions by entering into Contract "B" of sublease without the consent of CAA. The CAA
further asserts that Contract "C" not having been approved by the Secretary of Public Works and
Communications, is not valid (Rollo, p. 43). However, in its comment filed with the Supreme Court,
the CAA made a complete turnabout adopting the interpretation and ruling made by the trial court
which was affirmed by the Intermediate Appellate Court (Court of Appeals), that the CAA
Administrator has the power to execute the deed or contract of lease involving real properties
under its administration belonging to the Republic of the Philippines without the approval of the
Department Head as clearly provided in Section 32, paragraph (24) of Republic Act 776.
The issue narrows down to whether or not there is a valid ground for the cancellation of Contract
"A."

Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee specifically "for
the purpose of operating and managing a gasoline station by the latter, to serve vehicles going in
and out of the airport."
As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision
of paragraph 7 of said Contract reads in full:
7. The Party of the Second part may transfer her rights to the leased premises but in
such eventuality, the consent of the Party of the First Part shall first be secured. In any
event, such transfer of rights shall have to respect the terms and conditions of this
agreement.
Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of
the contract. Said paragraph reads:
8. Failure on the part of the Party of the Second Part to comply with the terms and
conditions herein agreed upon shall be sufficient for revocation of this contract by the
Party of the First Part without need of judicial demand.
It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract "B") with
Mobil Oil Philippines without the consent of CAA (lessor). The cancellation of the contract was
made in a letter dated June 28, 1966 of Guillermo P. Jurado, Airport General Manager of CAA
addressed to Rosario Leveriza, as follows:
(Letterhead)
June 28, 1966
Mrs.
Manila International Airport

Rosario

Leveriza

Madam:
It has been found out by the undersigned that you have sublet the
property of the CAA leased to you and by virtue of this, your lease
contract is hereby cancelled because of the violation of the stipulations of
the contract. I would like to inform you that even without having sublet
the said property the said contract would have been cancelled as per
attached communication.
Very truly yours,
For the Director:
(Sgd.)
(Typed)

Illegible

GUILLERMO
P.
Airport General Manager

JURADO

Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the
Airport General Manager had no legal authority to make the cancellation. They maintain that it is
only the Secretary of Public Works and Communications, acting for the President, or by delegation
of power, the Director of Civil Aeronautics Administration who could validly cancel the contract.
They do admit, however, and it is evident from the records that the Airport General Manager
signed "For the Director." Under the circumstances, there is no question that such act enjoys the
presumption of regularity, not to mention the unassailable fact that such act was subsequently
affirmed or ratified by the Director of the CAA himself (Record on Appeal, pp. 108-110).
Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in effect,
repealing an act of the Secretary which is beyond the authority of the Administrator.
Such argument is untenable. The terms and conditions under which such revocation or cancellation
may be made, have already been specifically provided for in Contract "A" which has already been
approved by the Department Head, It is evident that in the implementation of aforesaid contract,
the approval of said Department Head is no longer necessary if not redundant.
It is further contended that even granting that such cancellation was effective, a subsequent billing
by the Accounting Department of the CAA has in effect waived or nullified the rescission of Contract
"A."
It will be recalled that the questioned cancellation of Contract "A" was among others, mainly based
on the violation of its terms and conditions, specifically, the sublease of the property by the lessee
without the consent of the lessor.
The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after
the cancellation of Contract "A" is obviously an error. However, this Court has already ruled that
the mistakes of government personnel should not affect public interest. In San Mauricio Mining
Company v. Ancheta (105 SCRA 391, 422), it has been held that as a matter of law rooted in the
protection of public interest, and also as a general policy to protect the government and the
people, errors of government personnel in the performance of their duties should never deprive
the people of the right to rectify such error and recover what might be lost or be bartered away in
any actuation, deal or transaction concerned. In the case at bar, the lower court in its decision
which has been affirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the
amount of rentals which was not due from them with 6% interest per annum until fully paid.
Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a mere
sublease to respondent Mobil Oil Philippines, Inc. and requires no prior consent of CAA to perfect
the same. Citing Article 1650 of the Civil Code, they assert that the prohibition to sublease must be
expressed and cannot be merely implied or inferred (Rollo, p. 151).

As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a prior
consent interprets the first sentence of paragraph 7 of Contract "A" to refer to an assignment of
lease under Article 1649 of the Civil Code and not to a mere sublease. A careful scrutiny of said
paragraph of Contract "A" clearly shows that it speaks of transfer of rights of Rosario Leveriza to the
leased premises and not to assignment of the lease (Rollo, pp. 48-49).
Petitioners likewise argued that it was contemplated by the parties to Contract "A" that Mobil Oil
Philippines would be the owner of the gasoline station it would construct on the leased premises
during the period of the lease, hence, it is understood that it must be given a right to use and
occupy the lot in question in the form of a sub-lease (Rollo, p. 152).
In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage and
operate the gasoline station. The fact that Mobil Oil was mentioned in that contract was clearly not
intended to give approval to a sublease between petitioners and said company but rather to insure
that in the arrangements to be made between them, it must be understood that after the
expiration of the lease contract, whatever improvements have been constructed in the leased
premises shall be relinquished to CAA. Thus, this Court held that "the primary and elementary rule
of construction of documents is that when the words or language thereof is clear and plain or
readily understandable by any ordinary reader thereof, there is absolutely no room for
interpretation or construction anymore." (San Mauricio Mining Company v. Ancheta, supra).
Finally, petitioners contend that the administrator of CAA cannot execute without approval of the
Department Secretary, a valid contract of lease over real property owned by the Republic of the
Philippines, citing Sections 567 and 568 of the Revised Administrative Code, which provide as
follows:
SEC. 567. Authority of the President of the Philippines to execute contracts relative to
real property. When the Republic of the Philippines is party to a deed conveying the
title to real property or is party to any lease or other contract relating to real property
belonging to said government, said deed or contract shall be executed on behalf of said
government by the President of the Philippines or by an officer duly designated by him,
unless authority to execute the same is by law expressly vested in some other officer.
(Emphasis supplied)
SEC. 568. Authority of national officials to make contract. Written contracts not
within the purview of the preceding section shall, in the absence of special provision,
be executed, with the approval of the proper Department Head, by the Chief of the
Bureau or Office having control of the appropriation against which the contract would
create a charge; or if there is no such chief, by the proper Department Head himself or
the President of the Philippines as the case may require.
On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease
real property belonging to the Republic of the Philippines under its administration even without the

approval of the Secretary of Public Works and Communications, which authority is expressly vested
in it by law, more particularly Section 32 (24) of Republic Act 776, which reads:
Sec. 32. Powers and Duties of the Administrator. Subject to the general control and
supervision of the Department Head, the Administrator shall have, among others, the
following powers and duties:
xxx xxx xxx
(24) To administer, operate, manage, control, maintain and develop the Manila
International Airport and all government aerodromes except those controlled or
operated by the Armed Forces of the Philippines including such power and duties as: ...
(b) to enter into, make and execute contracts of any kind with any person, firm, or
public or private corporation or entity; (c) to acquire, hold, purchase, or lease any
personal or real property; right of ways, and easements which may be proper or
necessary: Provided, that no real property thus acquired and any other real property of
the Civil Aeronautics Administration shall be sold without the approval of the President
of the Philippines. ...
There is no dispute that the Revised Administrative Code is a general law while
Republic Act 776 is a special law nor in the fact that the real property subject of the
lease in Contract "C" is real property belonging to the Republic of the Philippines.
Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by the
President of the Philippines, or (2) by an officer duly designated by him or (3) by an officer expressly
vested by law. It is readily apparent that in the case at bar, the Civil Aeronautics Administration has
the authority to enter into Contracts of Lease for the government under the third category. Thus, as
correctly ruled by the Court of Appeals, the Civil Aeronautics Administration has the power to
execute the deed or contract involving leases of real properties belonging to the Republic of the
Philippines, not because it is an entity duly designated by the President but because the said
authority to execute the same is, by law expressly vested in it.
Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the
Civil Aeronautics Administration by reason of its creation and existence, administers properties
belonging to the Republic of the Philippines and it is on these properties that the Administrator
must exercise his vast power and discharge his duty to enter into, make and execute contract of any
kind with any person, firm, or public or private corporation or entity and to acquire, hold, purchase,
or lease any personal or real property, right of ways and easements which may be proper or
necessary. The exception, however, is the sale of properties acquired by CAA or any other real
properties of the same which must have the approval of the President of the Philippines. The Court
of appeals took cognizance of the striking absence of such proviso in the other transactions
contemplated in paragraph (24) and is convinced as we are, that the Director of the Civil
Aeronautics Administration does not need the prior approval of the President or the Secretary of
Public Works and Communications in the execution of Contract "C."

In this regard, this Court, ruled that another basic principle of statutory construction mandates that
general legislation must give way to special legislation on the same subject, and generally be so
interpreted as to embrace only cases in which the special provisions are not applicable (Sto.
Domingo v. De los Angeles, 96 SCRA 139),. that specific statute prevails over a general statute (De
Jesus v. People, 120 SCRA 760) and that where two statutes are of equal theoretical application to a
particular case, the one designed therefor specially should prevail (Wil Wilhensen, Inc. v. Baluyot,
83 SCRA 38)
WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of Appeals
appealed from is AFFIRMED in toto.
SO ORDERED.
Gutierrez, Jr., Feliciano and Cortes, JJ., concur.
Fernan, J took no part.

2. MECANO V COA
G.R. No. 103982 December 11, 1992
ANTONIO
vs.
COMMISSION ON AUDIT, respondent.

A.

MECANO, petitioner,

CAMPOS, JR., J.:

Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commission
on Audit (COA, for brevity) embodied in its 7th Indorsement, dated January 16, 1992, denying his
claim for reimbursement under Section 699 of the Revised Administrative Code (RAC), as amended,
in the total amount of P40,831.00.
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized for
cholecystitis from March 26, 1990 to April 7, 1990, on account of which he incurred medical and
hospitalization expenses, the total amount of which he is claiming from the COA.
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity),
he requested reimbursement for his expenses on the ground that he is entitled to the benefits
under Section 699 1 of the RAC, the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of
duty. When a person in the service of the national government of a province, city,
municipality or municipal district is so injured in the performance of duty as thereby to
receive some actual physical hurt or wound, the proper Head of Department may
direct that absence during any period of disability thereby occasioned shall be on full
pay, though not more than six months, and in such case he may in his discretion also
authorize the payment of the medical attendance, necessary transportation,
subsistence and hospital fees of the injured person. Absence in the case contemplated
shall be charged first against vacation leave, if any there be.
xxx xxx xxx
In case of sickness caused by or connected directly with the performance of some act
in the line of duty, the Department head may in his discretion authorize the payment
of the necessary hospital fees.
Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to the
Secretary of Justice, along with the comment, bearing the same date, of Gerarda Galang, Chief, LED
of the NBI, "recommending favorable action thereof". Finding petitioner's illness to be service-

connected, the Committee on Physical Examination of the Department of Justice favorably

recommended the payment of petitioner's claim.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated
November 21, 1990, returned petitioner's claim to Director Lim, having considered the statements
of the Chairman of the COA in its 5th Indorsement dated 19 September 1990, to the effect that the
RAC being relied upon was repealed by the Administrative Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S.
1991 2 dated April 26, 1991 of then Secretary of Justice Franklin M. Drilon (Secretary Drilon, for
brevity) stating that "the issuance of the Administrative Code did not operate to repeal or abregate
in its entirety the Revised Administrative Code, including the particular Section 699 of the latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim to then
Undersecretary Bello for favorable consideration. Under a 6th Indorsement, dated July 2, 1991,
Secretary Drilon forwarded petitioner's claim to the COA Chairman, recommending payment of the
same. COA Chairman Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992, however,
denied petitioner's claim on the ground that Section 699 of the RAC had been repealed by the
Administrative Code of 1987, solely for the reason that the same section was not restated nor reenacted in the Administrative Code of 1987. He commented, however, that the claim may be filed
with the Employees' Compensation Commission, considering that the illness of Director Mecano
occurred after the effectivity of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo Montenegro to
Director Lim under a 9th Indorsement dated February 7, 1992, with the advice that petitioner
"elevate the matter to the Supreme Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section
699 of the RAC, this petition was brought for the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementioned
Opinion No. 73, S. 1991 of Secretary Drilon. He further maintains that in the event that a claim is
filed with the Employees' Compensation Commission, as suggested by respondent, he would still
not be barred from filing a claim under the subject section. Thus, the resolution of whether or not
there was a repeal of the Revised Administrative Code of 1917 would decide the fate of petitioner's
claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of
1987 (Exec. Order No. 292) operated to revoke or supplant in its entirety the Revised Administrative
Code of 1917. The COA claims that from the "whereas" clauses of the new Administrative Code, it
can be gleaned that it was the intent of the legislature to repeal the old Code. Moreover, the COA
questions the applicability of the aforesaid opinion of the Secretary of Justice in deciding the
matter. Lastly, the COA contends that employment-related sickness, injury or death is adequately
covered by the Employees' Compensation Program under P.D. 626, such that to allow simultaneous

recovery of benefits under both laws on account of the same contingency would be unfair and
unjust to the Government.
The question of whether a particular law has been repealed or not by a subsequent law is a matter
of legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing
provision which expressly and specifically cites the particular law or laws, and portions thereof, that
are intended to be repealed. 3 A declaration in a statute, usually in its repealing clause, that a
particular and specific law, identified by its number or title, is repealed is an express repeal; all
others are implied repeals. 4
In the case of the two Administrative Codes in question, the ascertainment of whether or not it was
the intent of the legislature to supplant the old Code with the new Code partly depends on the
scrutiny of the repealing clause of the new Code. This provision is found in Section 27, Book VII
(Final Provisions) of the Administrative Code of 1987 which reads:
Sec. 27. Repealing Clause. All laws, decrees, orders, rules and regulations, or
portions thereof, inconsistent with this Code are hereby repealed or modified
accordingly.
The question that should be asked is: What is the nature of this repealing clause? It is certainly not
an express repealing clause because it fails to identify or designate the act or acts that are intended
to be repealed. 5 Rather, it is an example of a general repealing provision, as stated in Opinion No.
73, S. 1991. It is a clause which predicates the intended repeal under the condition that substantial
conflict must be found in existing and prior acts. The failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless an irreconcilable inconcistency
and repugnancy exist in the terms of the new and old laws. 6 This latter situation falls under the
category of an implied repeal.
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals an
intention on the part of the legislature to abrogate a prior act on the subject, that intention must be
given effect. 7 Hence, before there can be a repeal, there must be a clear showing on the part of the
lawmaker that the intent in enacting the new law was to abrogate the old one. The intention to
repeal must be clear and manifest; 8 otherwise, at least, as a general rule, the later act is to be
construed as a continuation of, and not a substitute for, the first act and will continue so far as the
two acts are the same from the time of the first enactment. 9
There are two categories of repeal by implication. The first is where provisions in the two acts on
the same subject matter are in an irreconcilable conflict, the later act to the extent of the conflict
constitutes an implied repeal of the earlier one. The second is if the later act covers the whole
subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the earlier
law. 10
Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same
subject matter; they are so clearly inconsistent and incompatible with each other that they cannot

be reconciled or harmonized; and both cannot be given effect, that is, that one law cannot be
enforced without nullifying the other. 11
Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover
the entire subject matter of the old Code. There are several matters treated in the old Code which
are not found in the new Code, such as the provisions on notaries public, the leave law, the public
bonding law, military reservations, claims for sickness benefits under Section 699, and still others.
Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the
subject claim are in an irreconcilable conflict. In fact, there can be no such conflict because the
provision on sickness benefits of the nature being claimed by petitioner has not been restated in
the Administrative Code of 1987. However, the COA would have Us consider that the fact that
Section 699 was not restated in the Administrative Code of 1987 meant that the same section had
been repealed. It further maintained that to allow the particular provisions not restated in the new
Code to continue in force argues against the Code itself. The COA anchored this argument on the
whereas clause of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be enhanced by a new
Administrative Code which incorporate in a unified document the major structural,
functional and procedural principles and rules of governance; and
xxx xxx xxx
It argues, in effect, that what is contemplated is only one Code the Administrative Code of 1987.
This contention is untenable.
The fact that a later enactment may relate to the same subject matter as that of an earlier statute is
not of itself sufficient to cause an implied repeal of the prior act, since the new statute may merely
be cumulative or a continuation of the old one. 12 What is necessary is a manifest indication of
legislative purpose to repeal. 13
We come now to the second category of repeal the enactment of a statute revising or codifying
the former laws on the whole subject matter. This is only possible if the revised statute or code was
intended to cover the whole subject to be a complete and perfect system in itself. It is the rule that
a subsequent statute is deemed to repeal a prior law if the former revises the whole subject matter
of the former statute. 14 When both intent and scope clearly evidence the idea of a repeal, then all
parts and provisions of the prior act that are omitted from the revised act are deemed
repealed. 15 Furthermore, before there can be an implied repeal under this category, it must be the
clear intent of the legislature that the later act be the substitute to the prior act. 16
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to
cover only those aspects of government that pertain to administration, organization and procedure,
understandably because of the many changes that transpired in the government structure since the
enactment of the RAC decades of years ago. The COA challenges the weight that this opinion carries
in the determination of this controversy inasmuch as the body which had been entrusted with the

implementation of this particular provision has already rendered its decision. The COA relied on the
rule in administrative law enunciated in the case of Sison vs.Pangramuyen 17 that in the absence of
palpable error or grave abuse of discretion, the Court would be loathe to substitute its own
judgment for that of the administrative agency entrusted with the enforcement and
implementation of the law. This will not hold water. This principle is subject to limitations.
Administrative decisions may be reviewed by the courts upon a showing that the decision is vitiated
by fraud, imposition or mistake. 18 It has been held that Opinions of the Secretary and
Undersecretary of Justice are material in the construction of statutes in pari materia. 19
Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are
not favored. 20The presumption is against inconsistency and repugnancy for the legislature is
presumed to know the existing laws on the subject and not to have enacted inconsistent or
conflicting statutes. 21
This Court, in a case, explains the principle in detail as follows: "Repeals by implication are not
favored, and will not be decreed unless it is manifest that the legislature so intended. As laws are
presumed to be passed with deliberation with full knowledge of all existing ones on the subject, it is
but reasonable to conclude that in passing a statute it was not intended to interfere with or
abrogate any former law relating to some matter, unless the repugnancy between the two is not
only irreconcilable, but also clear and convincing, and flowing necessarily from the language used,
unless the later act fully embraces the subject matter of the earlier, or unless the reason for the
earlier act is beyond peradventure renewed. Hence, every effort must be used to make all acts
stand and if, by any reasonable construction, they can be reconciled, the later act will not operate
as a repeal of the earlier. 22
Regarding respondent's contention that recovery under this subject section shall bar the recovery
of benefits under the Employees' Compensation Program, the same cannot be upheld. The second
sentence of Article 173, Chapter II, Title II (dealing on Employees' Compensation and State
Insurance Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly provides that "the
payment of compensation under this Title shall not bar the recovery of benefits as provided for in
Section 699 of the Revised Administrative Code . . . whose benefits are administered by the system
(meaning SSS or GSIS) or by other agencies of the government."
WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is hereby
ordered to give due course to petitioner's claim for benefits. No costs.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon,
Bellosillo and Melo, JJ., concur.
Gutierrez, Jr., J., concur in the result.

3. IRON AND STEEL AUTHORITY V CA

G.R. No. 102976 October 25, 1995
IRON
AND
STEEL
AUTHORITY, petitioner,
vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION, respondents.

FELICIANO, J.:
Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272 dated 9
August 1973 in order, generally, to develop and promote the iron and steel industry in the
Philippines. The objectives of the ISA are spelled out in the following terms:
Sec. 2. Objectives The Authority shall have the following objectives:
(a) to strengthen the iron and steel industry of the Philippines and to expand the
domestic and export markets for the products of the industry;
(b) to promote the consolidation, integration and rationalization of the industry in
order to increase industry capability and viability to service the domestic market and to
compete in international markets;
(c) to rationalize the marketing and distribution of steel products in order to achieve a
balance between demand and supply of iron and steel products for the country and to
ensure that industry prices and profits are at levels that provide a fair balance between
the interests of investors, consumers suppliers, and the public at large;
(d) to promote full utilization of the existing capacity of the industry, to discourage
investment in excess capacity, and in coordination, with appropriate government
agencies to encourage capital investment in priority areas of the industry;
(e) to assist the industry in securing adequate and low-cost supplies of raw materials
and to reduce the excessive dependence of the country on imports of iron and steel.
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. The authority shall have the following powers and
functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such use of

the State's power is necessary to implement the construction of capacity which is

needed for the attainment of the objectives of the Authority;
xxx xxx xxx
(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August
1973. 1 When ISA's original term expired on 10 October 1978, its term was extended for another ten
(10) years by Executive Order No. 555 dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National
Development Corporation which is itself an entity wholly owned by the National Government,
embarked on an expansion program embracing, among other things, the construction of an
integrated steel mill in Iligan City. The construction of such a steel mill was considered a priority and
major industrial project of the Government. Pursuant to the expansion program of the NSC,
Proclamation No. 2239 was issued by the President of the Philippines on 16 November 1982
withdrawing from sale or settlement a large tract of public land (totalling about 30.25 hectares in
area) located in Iligan City, and reserving that land for the use and immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No. 2239 were occupied by a
non-operational chemical fertilizer plant and related facilities owned by private respondent Maria
Cristina Fertilizer Corporation ("MCFC"), Letter of Instruction (LOI), No. 1277, also dated 16
November 1982, was issued directing the NSC to "negotiate with the owners of MCFC, for and on
behalf of the Government, for the compensation of MCFC's present occupancy rights on the subject
land." LOI No. 1277 also directed that should NSC and private respondent MCFC fail to reach an
agreement within a period of sixty (60) days from the date of LOI No. 1277, petitioner ISA was to
exercise its power of eminent domain under P.D. No. 272 and to initiate expropriation proceedings
in respect of occupancy rights of private respondent MCFC relating to the subject public land as
well as the plant itself and related facilities and to cede the same to the NSC. 2
Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August 1983,
petitioner ISA commenced eminent domain proceedings against private respondent MCFC in the
Regional Trial Court, Branch 1, of Iligan City, praying that it (ISA) be places in possession of the
property involved upon depositing in court the amount of P1,760,789.69 representing ten percent
(10%) of the declared market values of that property. The Philippine National Bank, as mortgagee of
the plant facilities and improvements involved in the expropriation proceedings, was also
impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA in turn
placed NSC in possession and control of the land occupied by MCFC's fertilizer plant installation.
The case proceeded to trial. While the trial was ongoing, however, the statutory existence of
petitioner ISA expired on 11 August 1988. MCFC then filed a motion to dismiss, contending that no

valid judgment could be rendered against ISA which had ceased to be a juridical person. Petitioner
ISA filed its opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did
dismiss the case. The dismissal was anchored on the provision of the Rules of Court stating that
"only natural or juridical persons or entities authorized by law may be parties in a civil case." 3 The
trial court also referred to non-compliance by petitioner ISA with the requirements of Section 16,
Rule 3 of the Rules of Court. 4
Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the
expiration of its term, its juridical existence continued until the winding up of its affairs could be
completed. In the alternative, petitioner ISA urged that the Republic of the Philippines, being the
real party-in-interest, should be allowed to be substituted for petitioner ISA. In this connection, ISA
referred to a letter from the Office of the President dated 28 September 1988 which especially
directed the Solicitor General to continue the expropriation case.
The trial court denied the motion for reconsideration, stating, among other things that:
The property to be expropriated is not for public use or benefit [__] but for the use and
benefit [__] of NSC, a government controlled private corporation engaged in private
business and for profit, specially now that the government, according to newspaper
reports, is offering for sale to the public its [shares of stock] in the National Steel
Corporation in line with the pronounced policy of the present administration to
disengage the government from its private business ventures. 5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of
Appeals affirmed the order of dismissal of the trial court. The Court of Appeals held that petitioner
ISA, "a government regulatory agency exercising sovereign functions," did not have the same rights
as an ordinary corporation and that the ISA, unlike corporations organized under the Corporation
Code, was not entitled to a period for winding up its affairs after expiration of its legally mandated
term, with the result that upon expiration of its term on 11 August 1987, ISA was "abolished and
[had] no more legal authority to perform governmental functions." The Court of Appeals went on to
say that the action for expropriation could not prosper because the basis for the proceedings, the
ISA's exercise of its delegated authority to expropriate, had become ineffective as a result of the
delegate's dissolution, and could not be continued in the name of Republic of the Philippines,
represented by the Solicitor General:
It is our considered opinion that under the law, the complaint cannot prosper, and
therefore, has to be dismissed without prejudice to the refiling of a new complaint for
expropriation if the Congress sees it fit." (Emphases supplied)
At the same time, however, the Court of Appeals held that it was premature for the trial
court to have ruled that the expropriation suit was not for a public purpose, considering that
the parties had not yet rested their respective cases.

In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the
action for expropriation in its capacity as agent of the Republic of the Philippines, the Republic, as
principal of ISA, is entitled to be substituted and to be made a party-plaintiff after the agent ISA's
term had expired.
Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law
further extending the term of ISA after 11 August 1988 evinced a "clear legislative intent to
terminate the juridical existence of ISA," and that the authorization issued by the Office of the
President to the Solicitor General for continued prosecution of the expropriation suit could not
prevail over such negative intent. It is also contended that the exercise of the eminent domain by
ISA or the Republic is improper, since that power would be exercised "not on behalf of the National
Government but for the benefit of NSC."
The principal issue which we must address in this case is whether or not the Republic of the
Philippines is entitled to be substituted for ISA in view of the expiration of ISA's term. As will be
made clear below, this is really the only issue which we must resolve at this time.
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:
Sec. 1. Who May Be Parties. Only natural or juridical persons or entities authorized
by law may be parties in a civil action.
Under the above quoted provision, it will be seen that those who can be parties to a civil
action may be broadly categorized into two (2) groups:
(a) those who are recognized as persons under the law whether natural, i.e., biological
persons, on the one hand, or juridical person such as corporations, on the other hand;
and
(b) entities authorized by law to institute actions.
Examination of the statute which created petitioner ISA shows that ISA falls under category (b)
above. P.D. No. 272, as already noted, contains express authorization to ISA to commence
expropriation proceedings like those here involved:
Sec. 4. Powers and Functions. The Authority shall have the following powers and
functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such use
of the State's power is necessary to implement the construction of capacity which is
needed for the attainment of the objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)
It should also be noted that the enabling statute of ISA expressly authorized it to enter into
certain kinds of contracts "for and in behalf of the Government" in the following terms:
xxx xxx xxx
(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the
government, for the bulk purchase of materials, supplies or services for any sectors in
the industry, and to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce operating costs of such
sector;
xxx xxx xxx
(Emphasis supplied)
Clearly, ISA was vested with some of the powers or attributes normally associated with juridical
personality. There is, however, no provision in P.D. No. 272 recognizing ISA as possessing general or
comprehensive juridical personality separate and distinct from that of the Government. The ISA in
fact appears to the Court to be a non-incorporated agency or instrumentality of the Republic of the
Philippines, or more precisely of the Government of the Republic of the Philippines. It is common
knowledge that other agencies or instrumentalities of the Government of the Republic are cast
in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes with
and at other times without capital stock, and accordingly vested with a juridical personality distinct
from the personality of the Republic. Among such incorporated agencies or instrumentalities are:
National Power Corporation; 6 Philippine Ports Authority; 7 National Housing Authority; 8 Philippine
National Oil Company; 9 Philippine National Railways; 10 Public Estates Authority; 11 Philippine
Virginia Tobacco Administration, 12 and so forth. It is worth noting that the term "Authority" has
been used to designate both incorporated and non-incorporated agencies or instrumentalities of
the Government.
We consider that the ISA is properly regarded as an agent or delegate of the Republic of the
Philippines. The Republic itself is a body corporate and juridical person vested with the full panoply
of powers and attributes which are compendiously described as "legal personality." The relevant
definitions are found in the Administrative Code of 1987:
Sec. 2. General Terms Defined. Unless the specific words of the text, or the context
as a whole, or a particular statute, require a different meaning:
(1) Government of the Republic of the Philippines refers to the corporate governmental
entity through which the functions of government are exercised throughout the
Philippines, including, save as the contrary appears from the context, the various arms

through which political authority is made effective in the Philippines, whether

pertaining to the autonomous regions, the provincial, city, municipal or barangay
subdivisions or other forms of local government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or
controlled corporation, or a local government or a distinct unit therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled
corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the powers, duties and functions as
well as the assets and liabilities of that agency revert back to, and are re-assumed by, the Republic
of the Philippines, in the absence of special provisions of law specifying some other disposition
thereof such as, e.g., devolution or transmission of such powers, duties, functions, etc. to some
other identified successor agency or instrumentality of the Republic of the Philippines. When the
expiring agency is an incorporated one, the consequences of such expiry must be looked for, in the
first instance, in the charter of that agency and, by way of supplementation, in the provisions of the
Corporation Code. Since, in the instant case, ISA is a non-incorporated agency or instrumentality of
the Republic, its powers, duties, functions, assets and liabilities are properly regarded as folded
back into the Government of the Republic of the Philippines and hence assumed once again by the
Republic, no special statutory provision having been shown to have mandated succession thereto
by some other entity or agency of the Republic.
The procedural implications of the relationship between an agent or delegate of the Republic of the
Philippines and the Republic itself are, at least in part, spelled out in the Rules of Court. The general
rule is, of course, that an action must be prosecuted and defended in the name of the real party in
interest. (Rule 3, Section 2) Petitioner ISA was, at the commencement of the expropriation
proceedings, a real party in interest, having been explicitly authorized by its enabling statute to
institute expropriation proceedings. The Rules of Court at the same time expressly recognize the
role of representative parties:

Sec. 3. Representative Parties. A trustee of an expressed trust, a guardian, an

executor or administrator, or a party authorized by statute may sue or be sued without
joining the party for whose benefit the action is presented or defended; but the court
may, at any stage of the proceedings, order such beneficiary to be made a party. . . . .
(Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or
delegate or representative of the Republic of the Philippines pursuant to its authority under P.D.
No. 272. The present expropriation suit was brought on behalf of and for the benefit of the
Republic as the principal of ISA. Paragraph 7 of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs the subject parcels of land for
the construction and installation of iron and steel manufacturing facilities that are
indispensable to the integration of the iron and steel making industry which is vital to
the promotion of public interest and welfare. (Emphasis supplied)
The principal or the real party in interest is thus the Republic of the Philippines and not the
National Steel Corporation, even though the latter may be an ultimate user of the properties
involved should the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the Philippines is entitled to be
substituted in the expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term of
ISA having expired. Put a little differently, the expiration of ISA's statutory term did not by itself
require or justify the dismissal of the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration
of ISA's statutory term, was not a ground for dismissal of such proceedings since a party may be
dropped or added by order of the court, on motion of any party or on the court's own initiative at
any stage of the action and on such terms as are just. 13 In the instant case, the Republic has
precisely moved to take over the proceedings as party-plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the Court recognized
that the Republic may initiate or participate in actions involving its agents. There the Republic of
the Philippines was held to be a proper party to sue for recovery of possession of property although
the "real" or registered owner of the property was the Philippine Ports Authority, a government
agency vested with a separate juridical personality. The Court said:
It can be said that in suing for the recovery of the rentals, the Republic of the
Philippines acted as principal of the Philippine Ports Authority, directly exercising the
commission it had earlier conferred on the latter as its agent. . . . 15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the Republic to commence all over
again another proceeding, as the trial court and Court of Appeals had required, was to
generate unwarranted delay and create needless repetition of proceedings:

More importantly, as we see it, dismissing the complaint on the ground that the
Republic of the Philippines is not the proper party would result in needless delay in the
settlement of this matter and also in derogation of the policy against multiplicity of
suits. Such a decision would require the Philippine Ports Authority to refile the very
same complaint already proved by the Republic of the Philippines and bring back as it
were to square one. 16 (Emphasis supplied)
As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the
Philippines for the ISA upon the ground that the action for expropriation could not prosper because
the basis for the proceedings, the ISA's exercise of its delegated authority to expropriate, had
become legally ineffective by reason of the expiration of the statutory term of the agent or
delegated i.e., ISA. Since, as we have held above, the powers and functions of ISA have reverted to
the Republic of the Philippines upon the termination of the statutory term of ISA, the question
should be addressed whether fresh legislative authority is necessary before the Republic of the
Philippines may continue the expropriation proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested primarily in the legislative department
of the government, we believe and so hold that no new legislative act is necessary should the
Republic decide, upon being substituted for ISA, in fact to continue to prosecute the expropriation
proceedings. For the legislative authority, a long time ago, enacted a continuing or standing
delegation of authority to the President of the Philippines to exercise, or cause the exercise of, the
power of eminent domain on behalf of the Government of the Republic of the Philippines. The 1917
Revised Administrative Code, which was in effect at the time of the commencement of the present
expropriation proceedings before the Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. In addition
to his general supervisory authority, the President of the Philippines shall have such
other specific powers and duties as are expressly conferred or imposed on him by law,
and also, in particular, the powers and duties set forth in this Chapter.
Among such special powers and duties shall be:
xxx xxx xxx
(h) To determine when it is necessary or advantageous to exercise the right of eminent
domain in behalf of the Government of the Philippines; and to direct the Secretary of
Justice, where such act is deemed advisable, to cause the condemnation proceedings to
be begun in the court having proper jurisdiction. (Emphasis supplied)
The Revised Administrative Code of 1987 currently in force has substantially reproduced the
foregoing provision in the following terms:
Sec. 12. Power of eminent domain. The President shall determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of the
National Government, anddirect the Solicitor General, whenever he deems the action

advisable, to institute expopriation proceedings in the proper court. (Emphasis

supplied)
In the present case, the President, exercising the power duly delegated under both the 1917
and 1987 Revised Administrative Codes in effect made a determination that it was necessary
and advantageous to exercise the power of eminent domain in behalf of the Government of
the Republic and accordingly directed the Solicitor General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after becoming once more the
depository of primary legislative power, had not enacted a statute extending the term of ISA, such
non-enactment must be deemed a manifestation of a legislative design to discontinue or abort the
present expropriation suit. We find this argument much too speculative; it rests too much upon
simple silence on the part of Congress and casually disregards the existence of Section 12 of the
1987 Administrative Code already quoted above.
Other contentions are made by private respondent MCFC, such as, that the constitutional
requirement of "public use" or "public purpose" is not present in the instant case, and that the
indispensable element of just compensation is also absent. We agree with the Court of Appeals in
this connection that these contentions, which were adopted and set out by the Regional Trial Court
in its order of dismissal, are premature and are appropriately addressed in the proceedings before
the trial court. Those proceedings have yet to produce a decision on the merits, since trial was still
on going at the time the Regional Trial Court precipitously dismissed the expropriation proceedings.
Moreover, as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded
an opportunity to determine whether or not, or to what extent, the proceedings should be
continued in view of all the subsequent developments in the iron and steel sector of the country
including, though not limited to, the partial privatization of the NSC.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to
the extent that it affirmed the trial court's order dismissing the expropriation proceedings, is hereby
REVERSED and SET ASIDE and the case is REMANDED to the court a quo which shall allow the
substitution of the Republic of the Philippines for petitioner Iron and Steel Authority and for further
proceedings consistent with this Decision. No pronouncement as to costs.
SO ORDERED.
Romero, Melo, Vitug and Panganiban, JJ., concur.

4. LDB V ASSOCIATE OF LUZON

G.R. No. 120319 October 6, 1995
LUZON
DEVELOPMENT
BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in her
capacity as VOLUNTARY ARBITRATOR, respondents.

ROMERO, J.:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:
Whether or not the company has violated the Collective Bargaining Agreement
provision and the Memorandum of Agreement dated April 1994, on promotion.
At a conference, the parties agreed on the submission of their respective Position Papers on
December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position
Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995
no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective
Bargaining Agreement provision nor the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary
Arbitrator and to prohibit her from enforcing the same.
In labor law context, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have bound
themselves to accept the decision of the arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on which it is based, as either
compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of their
dispute through arbitration by a third party. 1The essence of arbitration remains since a resolution
of a dispute is arrived at by resort to a disinterested third party whose decision is final and binding

on the parties, but in compulsory arbitration, such a third party is normally appointed by the
government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made,
pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third person
for a final and binding resolution. 2Ideally, arbitration awards are supposed to be complied with by
both parties without delay, such that once an award has been rendered by an arbitrator, nothing is
left to be done by both parties but to comply with the same. After all, they are presumed to have
freely chosen arbitration as the mode of settlement for that particular dispute. Pursuant thereto,
they have chosen a mutually acceptable arbitrator who shall hear and decide their case. Above all,
they have mutually agreed to de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to
include therein provisions for a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. 3 For this purpose,
parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or
include a procedure for their selection, preferably from those accredited by the National
Conciliation and Mediation Board (NCMB). Article 261 of the Labor Code accordingly provides for
exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the
interpretation or implementation of the CBA and (2) the interpretation or enforcement of company
personnel policies. Article 262 authorizes them, but only upon agreement of the parties, to exercise
jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the
following enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of
such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the National Labor Relations Commission (NLRC) for that matter. 4 The state
of our present law relating to voluntary arbitration provides that "(t)he award or decision of the
Voluntary Arbitrator . . . shall be final and executory after ten (10) calendar days from receipt of the
copy of the award or decision by the parties," 5 while the "(d)ecision, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the Commission by any or both parties within ten
(10) calendar days from receipt of such decisions, awards, or orders." 6 Hence, while there is an
express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with
respect to an appeal from the decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not,
elevated to the Supreme Court itself on a petition for certiorari, 7 in effect equating the voluntary
arbitrator with the NLRC or the Court of Appeals. In the view of the Court, this is illogical and
imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of courts
and awards of quasi-judicial agencies must become final at some definite time, this Court ruled that
the awards of voluntary arbitrators determine the rights of parties; hence, their decisions have the
same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., 9 this
Court ruled that "a voluntary arbitrator by the nature of her functions acts in a quasi-judicial
capacity." Under these rulings, it follows that the voluntary arbitrator, whether acting solely or in a
panel, enjoys in law the status of a quasi-judicial agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the latter. 10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals
shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions, including the Securities and Exchange Commission, the
Employees Compensation Commission and the Civil Service Commission, except those
falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third paragraph

and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not
strictly be considered as a quasi-judicial agency, board or commission, still both he and the panel
are comprehended within the concept of a "quasi-judicial instrumentality." It may even be stated
that it was to meet the very situation presented by the quasi-judicial functions of the voluntary
arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating under the
Construction Industry Arbitration Commission, 11 that the broader term "instrumentalities" was
purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency. 12 Thus, the terms governmental
"agency" or "instrumentality" are synonymous in the sense that either of them is a means by which
a government acts, or by which a certain government act or function is performed. 13 The word
"instrumentality," with respect to a state, contemplates an authority to which the state delegates
governmental power for the performance of a state function. 14 An individual person, like an
administrator or executor, is a judicial instrumentality in the settling of an estate, 15 in the same
manner that a sub-agent appointed by a bankruptcy court is an instrumentality of the court, 16 and
a trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17
The voluntary arbitrator no less performs a state function pursuant to a governmental power
delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within the
contemplation of the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his
functions and powers are provided for in the Labor Code does not place him within the exceptions
to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted
that, although the Employees Compensation Commission is also provided for in the Labor Code,
Circular No. 1-91, which is the forerunner of the present Revised Administrative Circular No. 1-95,
laid down the procedure for the appealability of its decisions to the Court of Appeals under the
foregoing rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of
B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise
be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative
Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated
therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to
provide a uniform procedure for the appellate review of adjudications of all quasi-judicial
entities 18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution
or another statute. Nor will it run counter to the legislative intendment that decisions of the NLRC
be reviewable directly by the Supreme Court since, precisely, the cases within the adjudicative

competence of the voluntary arbitrator are excluded from the jurisdiction of the NLRC or the labor
arbiter.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known
as the Arbitration Law, arbitration is deemed a special proceeding of which the court specified in
the contract or submission, or if none be specified, the Regional Trial Court for the province or city
in which one of the parties resides or is doing business, or in which the arbitration is held, shall have
jurisdiction. A party to the controversy may, at any time within one (1) month after an award is
made, apply to the court having jurisdiction for an order confirming the award and the court must
grant such order unless the award is vacated, modified or corrected. 19
In effect, this equates the award or decision of the voluntary arbitrator with that of the regional
trial court. Consequently, in a petition for certiorari from that award or decision, the Court of
Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. As a matter of
policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature for
proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.
SO ORDERED.
Padilla, Regalado, Davide, Jr., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Francisco and
Hermosisima, Jr., JJ., concur.
Feliciano, J., concurs in the result.
Narvasa, C.J. and Melo, J. are on leave.

5. SUGAR LAB V CA

6. MALAGA V PENACHOS
FIRST DIVISION
[G.R. No. 86695, September 03, 1992]
MARIA ELENA MALAGA, DOING BUSINESS UNDER THE NAME B.E. CONSTRUCTION; JOSIELEEN
NAJARRO, DOING BUSINESS UNDER THE NAME BEST BUILT CONSTRUCTION; JOSE N. OCCEA,
DOING BUSINESS UNDER THE NAME THE FIRM OF JOSE N. OCCEA; AND THE ILOILO BUILDERS
CORPORATION, PETITIONERS, VS. MANUEL R. PENACHOS, JR., ALFREDO MATANGGA, ENRICO TICAR
AND TERESITA VILLANUEVA, IN THEIR RESPECTIVE CAPACITIES AS CHAIRMAN AND MEMBERS OF
THE PRE-QUALIFICATION BIDS AND AWARDS COMMITTEE (PBAC) - BENIGNO PANISTANTE, IN HIS
CAPACITY AS PRESIDENT OF ILOILO STATE COLLEGE OF FISHERIES, AS WELL AS IN THEIR RESPECTIVE
PERSONAL CAPACITIES; AND HON. LODRIGIO L. LEBAQUIN, RESPONDENTS.
DECISION

CRUZ, J.:
This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from
issuing injunctions in cases involving infrastructure projects of the government.
The facts are not disputed.
The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-qualification, Bids and
Awards Committee (henceforth PBAC) caused the publication in the November 25, 26, 28, 1988
issues of the Western Visayas Daily an Invitation to Bid for the construction of a Micro Laboratory
Building at ISCOF. The notice announced that the last day for the submission of pre-qualification
requirements (PRE C-1)* was December 2, 1988, and that the bids would be received and opened
on December 12, 1988, at 3 o'clock in the afternoon.[1]
Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name
of B.E. Construction and Best Built Construction, submitted their pre-qualification documents at
two o'clock in the afternoon of December 2, 1988. Petitioner Jose Occea submitted his own PREC1 on December 5, 1988. All three of them were not allowed to participate in the bidding because
their documents were considered late, having been submitted after the cut-off time of ten o'clock
in the morning of December 2, 1988.

On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo
against the chairman and members of PBAC in their official and personal capacities. The plaintiffs
claimed that although they had submitted their PRE-C1 on time, the PBAC refused without just
cause to accept them. As a result, they were not included in the list of pre-qualified bidders, could
not secure the needed plans and other documents, and were unable to participate in the scheduled
bidding.
In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of
their PRE-C1 documents. They also asked that if the bidding had already been conducted, the
defendants be directed not to award the project pending resolution of their complaint.
On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from
conducting the bidding and awarding the project.[2]
On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground
that the court was prohibited from issuing restraining orders, preliminary injunctions and
preliminary mandatory injunctions by P.D. 1818.
The decree reads pertinently as follows:
Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order,
preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy
involving an infrastructure project, or amining, fishery, forest or other natural resource
development project of the government, or any public utility operated by the government,
including among others public utilities for the transport of the goods or commodities, stevedoring
and arrastre contracts, to prohibit any person or persons, entity or government official from
proceeding with, or continuing the execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity necessary for such execution,
implementation or operation.
The movants also contended that the question of the propriety of a preliminary injunction had
become moot and academic because the restraining order was received late, at 2 o'clock in the
afternoon of December 12, 1988, after the bidding had been conducted and closed at eleven thirty
in the morning of that date.
In their opposition to the motion, the plaintiffs argued against the applicability of P.D. 1818,
pointing out that while ISCOF was a state college, it had its own charter and separate existence and
was not part of the national government or of any local political subdivision. Even if P.D.1818 were
applicable, the prohibition presumed a valid and legal government project, not one tainted with
anomalies like the project at bar.
They also cited Filipinas Marble Corp. vs. IAC,[3] where the Court allowed the issuance of a writ of
preliminary injunction despite a similar prohibition found in P.D. 385. The Court therein stated that:

The government, however, is bound by basic principles of fairness and decency under the due
process clause of the Bill of Rights. P.D. 385 was never meant to protect officials of governmentlending institutions who take over the management of a borrower corporation, lead that
corporation to bankruptcy through mismanagement or misappropriation of its funds, and who,
after ruining it, use the mandatory provisions of the decree to avoid the consequences of their
misdeeds (p. 188, underscoring supplied).
On January 2, 1989, the trial court lifted the restraining order and denied the petition for
preliminary injunction. It declared that the building sought to be constructed at the ISCOF was an
infrastructure project of the government falling within the coverage of P.D. 1818. Even if it were
not, the petition for the issuance of a writ of preliminary injunction would still fail because the
sheriff's return showed that PBAC was served a copy of the restraining order after the bidding
sought to be restrained had already been held. Furthermore, the members of the PBAC could not
be restrained from awarding the project because the authority to do so was lodged in the President
of the ISCOF, who was not a party to the case.[4]
In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its
separate and distinct corporate personality. It is also stressed again that the prohibition under P.D.
1818 could not apply to the present controversy because the project was vitiated with
irregularities, to wit:
1. The invitation to bid as published fixed the deadline of submission of pre-qualification document
on December 2, 1988 without indicating any time, yet after 10:00 o'clock of the given date, the
PBAC already refused to accept petitioners' documents.
2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at
10:00 o'clock in the morning.
3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed
"Invitation to Bid" form, which by law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the
particulars of the project subject of bidding for the purposes of
(i) enabling bidders to make an intelligent and accurate bids;
(ii) for PBAC to have a uniform basis for evaluating the bids;
(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a
project.
Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities
therein were left blank.[5] And although the project in question was a "Construction," the private
respondents used an Invitation to Bid form for "Materials."[6]
The petitioners also point out that the validity of the writ of preliminary injunction had not yet
become moot and academic because even if the bids had been opened before the restraining order
was issued, the project itself had not yet been awarded. The ISCOF president was not an
indispensable party because the signing of the award was merely a ministerial function which he
could perform only upon the recommendation of the Award Committee. At any rate, the complaint
had already been duly amended to include him as a party defendant.

In their Comment, the private respondents maintain that since the members of the board of
trustees of the ISCOF are all government officials under Section 7 of P.D. 1523 and since the
operations and maintenance of the ISCOF are provided for in the General Appropriations Law, it
should be considered a government institution whose infrastructure project is covered by P.D.
1818.
Regarding the schedule for pre-qualification, the private respondents insist that PBAC posted on the
ISCOF bulletin board an announcement that the deadline for the submission of pre-qualification
documents was at 10 o'clock of December 2, 1988, and the opening of bids would be held at 1
o'clock in the afternoon of December 12, 1988. As of ten o'clock in the morning of December 2,
1988, B.E. Construction and Best Built Construction had filed only their letters of intent. At two
o'clock in the afternoon, B.E. and Best Built file through their common representative, Nenette
Garuello, their pre-qualification documents which were admitted but stamped "submitted late."
The petitioners were informed of their disqualification on the same date, and the disqualification
became final on December 6, 1988. Having failed to take immediate action to compel PBAC to prequalify them despite their notice of disqualification, they cannot now come to this Court to
question the bidding proper in which they had not participated.
In the petitioners' Reply, they raise as an additional irregularity the violation of the rule that where
the estimated project cost is from P1M to P5M, the issuance of plans, specifications and proposal
book forms should be made thirty days before the date of bidding.[7] They point out that these
forms were issued only on December 2, 1988, and not at the latest on November 12, 1988, the
beginning of the 30-day period prior to the scheduled bidding.
In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were
received although filed late and were reviewed by the Award Committee, which discovered that the
contractors had expired licenses. B.E.'s temporary certificate of Renewal of Contractor's License
was valid only until September 30, 1988, while Best Built's license was valid only up to June 30,
1988.
The Court has considered the arguments of the parties in light of their testimonial and
documentary evidence and the applicable laws and jurisprudence. It finds for the petitioners.
The 1987 Administrative Code defines a government instrumentality as follows:
Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if
not all corporate powers, administering special funds, and enjoying operational autonomy, usually
through a charter. This term includes regulatory agencies, chartered institutions, and governmentowned or controlled corporations. (Sec. 2 (5) Introductory Provisions).
The same Code describes a chartered institution thus:

Chartered institution - refers to any agency organized or operating under a special charter, and
vested by law with functions relating to specific constitutional policies or objectives. This term
includes the state universities and colleges, and the monetary authority of the state. (Sec. 2 (12)
Introductory Provisions).
It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered
by P.D. 1818.
There are also indications in its charter that ISCOF is a government instrumentality. First, it was
created in pursuance of the integrated fisheries development policy of the State, a priority program
of the government to effect the socio-economic life of the nation. Second, the Treasurer of the
Republic of the Philippines shall also be the ex-officio Treasurer of the state college with its
accounts and expenses to be audited by the Commission on Audit or its duly authorized
representative. Third, heads of bureaus and offices of the National Government are authorized to
loan or transfer to it, upon request of the president of the state college, such apparatus,
equipment, or supplies and even the services of such employees as can be spared without serious
detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of
the funds of the National Treasury and it was also decreed in its charter that the funds and
maintenance of the state college would henceforth be included in the General Appropriations
Law.[8]
Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said
decree.
In the case of Datiles and Co. vs. Sucaldito,[9] this Court interpreted a similar prohibition contained
in P.D. 605, the law after which P.D. 1818 was patterned. It was there declared that the prohibition
pertained to the issuance of injunctions or restraining orders by courts against administrative acts
in controversies involving facts or the exercise of discretion in technical cases. The Court observed
that to allow the courts to judge these matters would disturb the smooth functioning of the
administrative machinery. Justice Teodoro Padilla made it clear, however, that on issues definitely
outside of this dimension and involving questions of law, courts could not be prevented by P.D. No.
605 from exercising their power to restrain or prohibit administrative acts.
We see no reason why the above ruling should not apply to P.D. 1818.
There are at least two irregularities committed by PBAC that justified injunction of the bidding and
the award of the project.
First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed
these deadlines without prior notice to prospective participants.
Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government
infrastructure contracts, PBAC shall provide prospective bidders with the Notice to Pre-qualification

and other relevant information regarding the proposed work. Prospective contractors shall be
required to file their ARC-Contractors Confidential Application for Registration & Classifications &
the PRE-C2 Confidential Pre-qualification Statement for the Project (prior to the amendment of the
rules, this was referred to as Pre-C1) not later than the deadline set in the published Invitation to
Bid, after which date no PRE-C2 shall be submitted and received. Invitations to Bid shall be
advertised for at least three times within a reasonable period but in no case less than two weeks in
at least two newspapers of general circulations.[10]
PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour
thereof, and announced that the opening of bids would be at 3 o'clock in the afternoon of
December 12, 1988. This schedule was changed and a notice of such change was merely posted at
the ISCOF bulletin board. The notice advanced the cut-off time for the submission of prequalification documents to 10 o'clock in the morning of December 2, 1988, and the opening of bids
to 1 o'clock in the afternoon of December 12, 1988.
The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of
the PBAC meeting held on December 6, 1988. While it may be true that there were fourteen
contractors who were pre-qualified despite the change in schedule, this fact did not cure the defect
of the irregular notice. Notably, the petitioners were disqualified because they failed to meet the
new deadline and not because of their expired licenses.**
We have held that where the law requires a previous advertisement before government contracts
can be awarded, non-compliance with the requirement will, as a general rule, render the same void
and of no effect.[11] The fact that an invitation for bids has been communicated to a number of
possible bidders is not necessarily sufficient to establish compliance with the requirements of the
law if it is shown that other possible bidders have not been similarly notified.[12]
Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and
proposal book forms for the project to be bid thirty days before the date of bidding if the estimated
project cost was between P1M and P5M. PBAC has not denied that these forms were issued only on
December 2, 1988, or only ten days before the bidding scheduled for December 12, 1988. At the
very latest, PBAC should have issued them on November 12, 1988, or 30 days before the scheduled
bidding.
It is apparent that the present controversy did not arise from the discretionary acts of the
administrative body nor does it involve merely technical matters. What is involved here is noncompliance with the procedural rules on bidding which required strict observance. The purpose of
the rules implementing P.D. 1594 is to secure competitive bidding and to prevent favoritism,
collusion and fraud in the award of these contracts to the detriment of the public. This purpose was
defeated by the irregularities committed by PBAC.
It has been held that the three principles in public bidding are the offer to the public, an
opportunity for competition and a basis for exact comparison of bids. A regulation of the matter

which excludes any of these factors destroys the distinctive character of the system and thwarts the
purpose of its adoption.[13]
In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and
the bidding that caused the elimination of petitioners B.E. and Best Built. It was not because of their
expired licenses, as private respondents now claim. Moreover, the plans and specifications which
are the contractors' guide to an intelligent bid, were not issued on time, thus defeating the
guaranty that contractors be placed on equal footing when they submit their bids. The purpose of
competitive bidding is negated if some contractors are informed ahead of their rivals of the plans
and specifications that are to be the subject of their bids.
P.D. 1818 was not intended to shield from judicial scrutiny irregularites committed by
administrative agencies such as the anomalies above described. Hence, the challenged restraining
order was not improperly issued by the respondent judge and the writ of preliminary injunction
should not have been denied. We note from Annex Q of the private respondent's memorandum,
however, that the subject project has already been "100% completed as to the Engineering
Standard." This fait accompli has made the petition for a writ of preliminary injunction moot and
academic.
We come now to the liabilities of the private respondents.
It has been held in a long line of cases that a contract granted without the competitive bidding
required by law is void, and the party to whom it is awarded cannot benefit from it.[14] It has not
been shown that the irregularities committed by PBAC were induced by or participated in by any of
the contractors. Hence, liability shall attach only to the private respondents for the prejudice
sustained by the petitioners as a result of the anomalies described above.
As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may
not be awarded to them. Moral damages do not appear to be due either. Even so, the Court cannot
close its eyes to the evident bad faith that characterized the conduct of the private respondents,
including the irregularities in the announcement of the bidding and their efforts to persuade the
ISCOF president to award the project after two days from receipt of the restraining order and
before they moved to lift such order. For such questionable acts, they are liable in nominal
damages at least in accordance with Article 2221 of the Civil Code, which states:
Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant may be vindicated or, recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
These damages are to be assessed against the private respondents in the amount of P10,000.00
each, to be paid separately for each of petitioners B.E. Construction and Best Built Construction.
The other petitioner, Occea Builders, is not entitled to relief because it admittedly submitted its
pre-qualification documents on December 5, 1988, or three days after the deadline.

WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12,
1988, as not covered by the prohibition in P.D. 1818; b) ordering the chairman and the members of
the PBAC board of trustees, namely, Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar, and
Teresita Villanueva, to each pay separately to petitioners Maria Elena Malaga and Josieleen Najarro
nominal damages of P10,000.00 each; and c) removing the said chairman and members from the
PBAC board of trustees, or whoever among them is still incumbent therein, for their malfeasance in
office. Costs against PBAC.
Let a copy of this decision be sent to the Office of the Ombudsman.
SO ORDERED.Grio-Aquino, Medialdea, and Bellosillo, JJ., concur.

7. HERNANDEZ V STO. TOMAS

G.R. No. 116418 March 7, 1995
SALVADOR
C.
FERNANDEZ
and
ANICIA
M.
DE
LIMA, petitioners,
vs.
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA, Commissioner, Civil
Service Commission, respondents.

FELICIANO, J.:
In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a Temporary Restraining
Order, petitioners Salvador C. Fernandez and Anicia M. de Lima assail the validity of Resolution No.
94-3710 of the Civil Service Commission ("Commission") and the authority of the Commission to
issue the same.
Petitioner Fernandez was serving as Director of the Office of Personnel Inspection and Audit
("OPIA") while petitioner de Lima was serving as Director of the Office of the Personnel Relations
("OPR"), both at the Central Office of the Civil Service Commission in Quezon City, Metropolitan
Manila. While petitioners were so serving, Resolution No. 94-3710 signed by public respondents
Patricia A.. Sto. Tomas and Ramon Ereneta, Jr., Chairman and Commissioner, respectively, of the
Commission, was issued on 7 June 1994. 1 Resolution No. 94-3710 needs to be quoted in full:
RESOLUTION NO. 94-3710
WHEREAS, Section 17 of Book V of Executive Order 292 provides that ". . . as an
independent constitutional body, the Commission may effect changes in the
organization as the need arises;"
WHEREAS, the Commission finds it imperative to effect changes in the organization to
streamline its operations and improve delivery of public service;
WHEREAS, the Commission finds it necessary to immediately effect changes in the
organization of the Central Offices in view of the need to implement new programs in
lieu of those functions which were transferred to the Regional Offices;
WHEREFORE, foregoing premises considered, the Commission hereby RESOLVES to
effect the following changes in its organization, specifically in the Central Offices:
1. The OCSS [Office of Career Systems and Standards], OPIA [Office of Personnel
Inspection and Audit] and OPR [Office of Personnel Relations] are merged to form the
Research and Development Office (RDO).

2. The Office for Human Resource Development (OHRD) is renamed Human Resource
Development Office (HRDO).
3. The following functions and the personnel assigned to the unit performing said
functions are hereby transferred to HRDO:
a. Administration of the Honor and Awards program under OCSS;
b. Registration and Accreditation of Unions under OPR; and
c. Accreditation of Agencies to take final action on appointments under
OPIA.
4. The Office for Central Personnel Records (OCPR) is renamed Management
Information Office (MIO).
5. The Information technology functions of OPM and the personnel assigned to the
unit are transferred to MIO.
6. The following functions of OPM and the personnel assigned to the unit performing
said functions are hereby transferred to the Office of the Executive Director:
a. Financial Audit and Evaluation;
b. Internal Management and Improvement;
c. Research and Statistics; and
d. Planning and Programming.
7. The library service and its personnel under OCPR are transferred to the Central
Administrative Office.
8. The budget allocated for the various functions shall be transferred to the Offices
where the functions are transferred. Records, fixtures and equipment that go with the
functions shall be moved to where the functions are transferred.
Annex A contains the manning list for all the offices, except the OCES.
The changes in the organization and in operations shall take place before end of July
1994.
Done in Quezon City, July 07, 1994.

(Signed)
Patricia
Chairman

A.

(Signed)
Did
Ramon
P.
Ereneta,
Commissioner Commissioner
Attested
(Signed)
Carmencita
Board Secretary V 2

Sto.

Jr.,

not
Thelma

Tomas

P.

participate
Gaminde
by:

Giselle

B.

Dayson

During the general assembly of officers and employees of the Commission held in the morning of 28
July 1994, Chairman Sto. Tomas, when apprised of objections of petitioners, expressed the
determination of the Commission to implement Resolution No. 94-3710 unless restrained by higher
authority.
Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, the Court required
public respondents to file a Comment on the Petition. On 21 September 1994, petitioners filed an
Urgent Motion for Issuance of a Temporary Restraining Order, alleging that petitioners had
received Office Orders from the Commission assigning petitioner Fernandez to Region V at Legaspi
City and petitioner de Lima to Region III in San Fernando, Pampanga and praying that public
respondents be restrained from enforcing these Office Orders. The Court, in a Resolution dated 27
September 1994, granted this Motion and issued the Temporary Restraining Order prayed for by
petitioners.
The Commission filed its own Comment, dated 12 September 1994, on the Petition and then moved
to lift the Temporary Restraining Order. The Office of the Solicitor General filed a separate
Comment dated 28 November 1994, defending the validity of Resolution No. 94-3710 and urging
dismissal of the Petition. Petitioners filed separate Replies to these Comments. The Commission in
turn filed a Rejoinder (denominated "Comment [on] the Reply").
The principal issues raised in this Petition are the following:
(1) Whether or not the Civil Service Commission had legal authority to issue Resolution
No. 94-3710 to the extent it merged the OCSS [Office of Career Systems and
Standards], the OPIA [Office of Personnel Inspection and Audit] and the OPR [Office of
Personnel Relations], to form the RDO [Research and Development Office]; and
(2) Whether or not Resolution No. 94-3710 violated petitioners' constitutional right to
security of tenure.
I.

The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25 July 1987) sets out, in
Book V, Title I, Subtitle A, Chapter 3, the internal structure and organization of the Commission in
the following terms:
Sec. 16. Offices in the Commission The Commission shall have the following offices:
(1) The Office of the Executive Director . . .
(2) The Merit System Protection Board . . .
(3) The Office of Legal Affairs . . .
(4) The Office of Planning and Management . . .
(5) The Central Administrative Office . . .
(6) The Office of Central Personnel Records . . .
(7)
The
Office
Compensation . . .
(8)
The
Placement . . .

Office

of
of

Position
Recruitment,

Classification

and

Examination

and

(9) The Office of Career Systems and Standards shall provide leadership and assistance
in the formulation and evaluation of personnel systems and standards relative to
performance appraisal, merit promotion and employee incentive benefits and awards.
(10) The Office of Human Resource Development . . .
(11) The Office of Personnel Inspection and Audit shall develop policies, standards,
rules and regulations for the effective conduct of inspection and audit of personnel and
personnel management programs and the exercise of delegated authority; provide
technical and advisory services to Civil Service Regional Offices and government
agencies in the implementation of their personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance in the
development and implementation of policies, standards, rules and regulations
governing corporate officials and employees in the areas of recruitment, examination,
placement, career development, merit and awards systems, position classification and
compensation, performance appraisal, employee welfare and benefits, discipline and
other aspects of personnel management on the basis of comparable industry practices.
(13) The Office of the Corporate Affairs . . .
(14) The Office of Retirement Administration . . .

(15) The Regional and Field Offices. . . . (Emphases in the original)

Immediately after the foregoing listing of offices of the Commission and their respective functions,
the 1987 Revised Administrative Code goes on to provide as follows:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed by
a Director with at least one (1) Assistant Director, and may have such divisions as are
necessary to carry out their respective functions. As an independent constitutional
body, the Commission may effect chances in the organization as the need arises.
xxx xxx xxx 3
(Emphasis supplied)
Examination of the foregoing statutory provisions reveals that the OCSS, OPIA and OPR, and as well
each of the other Offices listed in Section 16 above, consist of aggregations of Divisions, each of
which Divisions is in turn a grouping of Sections. Each Section, Division and Office comprises a
group of positions within the agency called the Civil Service Commission, each group being
entrusted with a more or less definable function or functions. These functions are related to one
another, each of them being embraced by a common or general subject matter. Clearly, each Office
is an internal department or organizational unit within the Commission and that accordingly, the
OCSS, OPIA and OPR, as well as all the other Offices within the Commission constitute
administrative subdivisions of the CSC. Put a little differently, these offices relate to the internal
structure of the Commission.
What did Resolution No. 94-3710 of the Commission do? Examination of Resolution No. 94-3710
shows that thereby the Commission re-arranged some of the administrative units (i.e., Offices)
within the Commission and, among other things, merged three (3) of them (OCSS, OPIA and OPR) to
form a new grouping called the "Research and Development Office (RDO)." The same
Resolution renamed some of the Offices of the Commission, e.g., the Office for Human Resource
Development (OHRD) was renamed Human Resource Development Office (HRDO); the Office for
Central Personnel Records (OCPR) was renamed Management Information Office (MIO). The
Commission also re-allocated certain functions moving some functions from one Office to
another; e.g., the information technology function of OPM (Office of Planning and Management)
was transferred to the newly named Management Information Office (MIO). This re-allocation or
re-assignment of some functions carried with it the transfer of the budget earmarked for such
function to the Office where the function was transferred. Moreover, the personnel, records,
fixtures and equipment that were devoted to the carrying out of such functions were moved to the
Offices to where the functions were transferred.
The objectives sought by the Commission in enacting Resolution No. 94-3710 were described in
that Resolution in broad terms as "effect[ing] changes in the organization to streamline [the
Commission's] operations and improve delivery of service." These changes in internal organization
were rendered necessary by, on the one hand, the decentralization and devolution of the
Commission's functions effected by the creation of fourteen (14) Regional Offices and ninety-five

(95) Field Offices of the Commission throughout the country, to the end that the Commission and
its staff may be brought closer physically to the government employees that they are mandated to
serve. In the past, its functions had been centralized in the Head Office of the Commission in
Metropolitan Manila and Civil Service employees all over the country were compelled to come to
Manila for the carrying out of personnel transactions. Upon the other hand, the dispersal of the
functions of the Commission to the Regional Offices and the Field Offices attached to various
governmental agencies throughout the country makes possible the implementation of new
programs of the Commission at its Central Office in Metropolitan Manila.
The Commission's Office Order assigning petitioner de Lima to the CSC Regional Office No. 3 was
precipitated by the incumbent Regional Director filing an application for retirement, thus
generating a need to find a replacement for him. Petitioner de Lima was being assigned to that
Regional Office while the incumbent Regional Director was still there to facilitate her take over of
the duties and functions of the incumbent Director. Petitioner de Lima's prior experience as a labor
lawyer was also a factor in her assignment to Regional Office No. 3 where public sector unions have
been very active. Petitioner Fernandez's assignment to the CSC Regional Office No. 5 had, upon the
other hand, been necessitated by the fact that the then incumbent Director in Region V was under
investigation and needed to be transferred immediately to the Central Office. Petitioner Fernandez
was deemed the most likely designee for Director of Regional Office No. 5 considering that the
functions previously assigned to him had been substantially devolved to the Regional Offices such
that his reassignment to a Regional Office would result in the least disruption of the operations of
the Central Office. 4
It thus appears to the Court that the Commission was moved by quite legitimate considerations of
administrative efficiency and convenience in promulgating and implementing its Resolution No. 943710 and in assigning petitioner Salvador C. Fernandez to the Regional Office of the Commission in
Region V in Legaspi City and petitioner Anicia M. de Lima to the Commission's Regional Office in
Region
III
in
San
Fernando,
Pampanga.
It
is
also
clear
to
the Court that the changes introduced and formalized through Resolution No. 94-3710 renaming of existing Offices; re-arrangement of the groupings of Divisions and Sections composing
particular Offices; re-allocation of existing functions (and related personnel; budget, etc.) among
the re-arranged Offices are precisely the kind of internal changes which are referred to in Section
17 (Book V, Title I, Subtitle A, Chapter 3) of the 1987 Revised Administrative Code), quoted above,
as "chances in the organization" of the Commission.
Petitioners argue that Resolution No. 94-3710 effected the "abolition" of public offices, something
which may be done only by the same legislative authority which had created those public offices in
the first place.
The Court is unable, in the circumstances of this case, to accept this argument. The term "public
office" is frequently used to refer to the right, authority and duty, created and conferred by law, by
which, for a given period either fixed by law or enduring at the pleasure of the creating power, an
individual is invested with some portion of the sovereign functions of government, to be exercised
by that individual for the benefit of the public. 5 We consider that Resolution No. 94-3710

has not abolished any public office as that term is used in the law of public officers. 6 It is essential
to note that none of the "changes in organization" introduced by Resolution No. 94-3710 carried
with it or necessarily involved the termination of the relationship of public employment between the
Commission and any of its officers and employees. We find it very difficult to suppose that the 1987
Revised Administrative Code having mentioned fourteen (14) different "Offices" of the Civil Service
Commission, meant to freeze those Offices and to cast in concrete, as it were, the internal
organization of the commission until it might please Congress to change such internal organization
regardless of the ever changing needs of the Civil Service as a whole. To the contrary, the legislative
authority had expressly authorized the Commission to carry out "changes in the organization," as
the need [for such changes] arises." 7 Assuming, for purposes of argument merely, that legislative
authority was necessary to carry out the kinds off changes contemplated in Resolution No. 94-3710
(and the Court is not saying that such authority is necessary), such legislative authority was validly
delegated to the Commission by Section 17 earlier quoted. The legislative standards to be observed
and respected in the exercise of such delegated authority are set out not only in Section 17 itself
(i.e., "as the need arises"), but also in the Declaration of Policies found in Book V, Title I, Subtitle A,
Section 1 of the 1987 Revised Administrative Code which required the Civil Service Commission
as the central personnel agency of the Government [to] establish a
career service, adopt measures to promote efficiency [and] responsiveness . . . in
the civil service . . . and that personnel functions shall be decentralized, delegating the
corresponding authority to the departments, offices and agencies where such functions
can be effectively performed. (Emphasis supplied)
II.
We turn to the second claim of petitioners that their right to security of tenure was breached by the
respondents in promulgating Resolution No. 94-3710 and ordering petitioners' assignment to the
Commission's Regional Offices in Regions III and V. Section 2(3) of Article IX(B) of the 1987
Constitution declared that "no officer or employee of the Civil Service shall be removed or
suspended except for cause provided by law." Petitioners in effect contend that they were
unlawfully removed from their positions in the OPIA and OPR by the implementation of Resolution
No. 94-3710 and that they cannot, without their consent, be moved out to the Regional Offices of
the Commission.
We note, firstly, that appointments to the staff of the Commission are not appointments to a
specified public office but rather appointments to particular positions or ranks. Thus, a person may
be appointed to the position of Director III or Director IV; or to the position of Attorney IV or
Attorney V; or to the position of Records Officer I or Records Officer II; and so forth. In the instant
case, petitioners were each appointed to the position of Director IV, without specification of any
particular office or station. The same is true with respect to the other persons holding the same
position or rank of Director IV of the Commission.

Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative Code recognizes
reassignment as a management prerogative vested in the Commission and, for that matter, in any
department or agency of government embraced in the civil service:
Sec. 26. Personnel Actions. . . .
xxx xxx xxx
As used in this Title, any action denoting the movement or progress of personnel in the
civil service shall be known as personnel action. Such action shall include appointment
through certification, promotion, transfer, re-instatement, re-employment, detail,
reassignment, demotion, and separation.All personnel actions shall be in accordance
with such rules, standards, and regulations as may be promulgated by the Commission.
xxx xxx xxx
(7) Reassignment. An employee may be re-assigned from one organizational unit to
another in the same agency, Provided, That such re-assignment shall not involve
a reduction in rank status and salary. (Emphasis supplied)
It follows that the reassignment of petitioners Fernandez and de Lima from their previous positions
in OPIA and OPR, respectively, to the Research and Development Office (RDO) in the Central Office
of the Commission in Metropolitan Manila and their subsequent assignment from the RDO to the
Commission's Regional Offices in Regions V and III had been effected with express statutory
authority and did not constitute removals without lawful cause. It also follows that such reassignment did not involve any violation of the constitutional right of petitioners to security of
tenure considering that they retained their positions of Director IV and would continue to enjoy the
same rank, status and salary at their new assigned stations which they had enjoyed at the Head
Office of the Commission in Metropolitan Manila. Petitioners had not, in other words, acquired a
vested right to serve at the Commission's Head Office.
Secondly, the above conclusion is compelled not only by the statutory provisions relevant in the
instant case, but also by a long line of cases decided by this Court in respect of different agencies or
offices of government.
In one of the more recent of these cases, Department of Education Culture and Sports, etc., et
al. v. Court of Appeals, et al., 8 this Court held that a person who had been appointed as "Secondary
School Principal II" in the Division of City Schools, District II, Quezon City, National Capital Region,
and who had been stationed as High School Principal in the Carlos Albert High School in Quezon for
a number of years, could lawfully be reassigned or transferred to the Manuel Roxas High School,
also in Quezon City, without demotion in rank or diminution of salry. This Court held:
The aforequoted provision of Republic Act No. 4670 particularly Section 6 thereof
which provides that except for cause and in the exigencies of the service no teacher
shall be transferred without his consent from one station to another, finds no

application in the case at bar as this is predicated upon the theory that the teacher
concerned is appointed not merely assigned to a particular station. Thus:
The rule pursued by plaintiff only goes so far as
the appointed indicates a specification. Otherwise, the constitutionally
ordained security of tenure cannot shield her. In appointments of this
nature, this Court has consistently rejected the officer's demand to remain
even as public service dictates that a transfer be made in a particular
station. Judicial attitude toward transfers of this nature is expressed in the
following statement in Ibaez, et al. vs. Commission on Elections, et al.
(G.R.
No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]);
That security of tenure is an essential and constitutionally
guaranteed feature of our Civil Service System, is not open to
debate. The mantle of its protection extends not only against
removals without cause but also against unconsented
transfer which, as repeatedly enunciatEd, are tantamount to
removals which are within the ambit of the fundamental
guarantee. However, the availability of that security of tenure
necessarily depends, in the first instance, upon the nature of
the appointment (Hojilla vs. Marino, 121 Phil. 280 [1965].)
Such that the rule which proscribes transfers without consent
as anathema to the security of tenure is predicated upon the
theory that the officer involved is appointed not
merely assigned to a particular station(Miclat v. Ganaden,
et al., 108 Phil. 439 [1960]; Jaro v. Hon. Valencia, et al., 118
Phil. 728 [1963]). [Brillantes v. Guevarra, 27 SCRA 138 (1969)]
The appointment of Navarro as principal does not refer to any particular station or
school. As such, she could be assigned to any station and she is not entitled to stay
permanently at any specific school. (Bongbong v. Parado, 57 SCRA 623) When she was
assigned to the Carlos Albert High School, it could not have been with the intention to
let her stay in said school permanently. Otherwise, her appointment would have so
stated. Consequently, she may be assigned to any station or school in Quezon City as
the exigencies of public service require even without consent. As this Court ruled
inBrillantes
v. Guevarra,
27
SCRA
138,
143
Plaintiff's confident stride falters. She took too loose a view of the
applicable jurisprudence. Her refuge behind the mantle of security of
tenure guaranteed by the Constitution is not impenetrable. She proceeds
upon the assumption that she occupies her station in Sinalang Elementary
School by appointment. But her first appointment as Principal merely

reads thus: "You are hereby appointed a Principal (Elementary School) in

the Bureau of Public Schools, Department of Education", without
mentioning her station. She cannot therefore claim security of tenure as
Principal of Sinalang Elementary School or any particular station. She may
be assigned to any station as exigency of public service requires, even
without her consent. She thus has no right of choice. 9 (Emphasis supplied;
citation omitted)
In
the
very
recent
case
of Fernando,
et
al. v. Hon. Sto. Tomas,
etc.,
et
10
a1., the Court addressed appointments of petitioners as "Mediators-Arbiters in the National
Capital Region" in dismissing a challenge on certiorari to resolutions of the CSC and orders of the
Secretary of Labor. The Court said:
Petitioners were appointed as Mediator Arbiters in the National Capital Region. They
were not, however, appointed to a specific station or particular unit of the Department
of Labor in the National Capital Region (DOLE-NCR). Consequently, they can always be
reassigned from one organizational unit to another of the same agency where, in the
opinion of respondent Secretary, their services may be used more effectively. As
such they can neither claim a vested right to the station to which they were assigned
nor to security of tenure thereat. As correctly observed by the Solicitor General,
petitioners' reassignment is not a transfer for they were not removed from their
position as med-arbiters. They were not given new appointments to new positions. It
indubitably follows, therefore, that Memorandum Order No. 4 ordering their
reassignment in the interest of the service is legally in order.11 (Emphases supplied)
In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the Bureau of Public
Schools of the Department of Education, Culture and Sports, ruled as follows:
After a careful scrutiny of the records, it is to be underscored that the appointment of
private respondent Yap is simply that of a District Supervisor of the Bureau of Public
Schools which does not indicate a specific station (Rollo, p. 13). A such, she could be
assigned to any station and she is no entitled to stay permanently at any specific
station (Bongbong v. Parado, 57 SCRA 623 [1974]; Department of Education, Culture
and Sports v. Court of Appeals [G.R. 81032, March 22, 1990] citingBrillantes v.
Guevarra [27 SCRA 138 [1969]). 13
Again, in Ibaez v. Commission on Elections, 14 the Court had before it petitioners' appointments as
"Election Registrars in the Commission of Elections," without any intimation to what city,
municipality or municipal district they had been appointed as such. 15 The Court held that since
petitioners "were not appointed to, and consequently not entitled to any security of tenure or
permanence in, any specific station," "on general principles, they [could] be transferred as the
exigencies of the service required," and that they had no right to complain against any change in
assignment. The Court further held that assignment to a particular station after issuance of the
appointment was not necessary to complete such appointment:

. . . . We cannot subscribe to the theory that an assignment to a particular station, in

the light of the terms of the appointments in question, was necessary to complete the
said appointments. The approval thereof by the Commissioner of Civil Service gave
those appointments the stamp of finality.With the view that the respondent
Commission then took of its power in the premises and the demand of the mission it
set out to accomplish with the appointments it extended, said appointments were
definitely meant to be complete as then issued. The subsequent assignment of the
appointees thereunder that the said respondent Commission held in reserve to be
exercised as the needs of each locality justified did not in any way detract from the
perfection attained by the appointments beforehand. And the respective appointees
were entitled only to such security of tenure as the appointment papers concerned
actually conferred not in that of any place to which they may have been
subsequently assigned. . . . As things stand, in default of any particular station stated in
their respective appointments, no security of tenure can be asserted by the petitioners
on the basis of the mere assignments which were given to them. A contrary rule will
erase altogether the demarcation line we have repeatedly drawn
between appointment and assignment as two distinct concepts in the law of public
officers. 16 (Emphases supplied)
The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare Office Incharge, Division
of Urban, Rural and Community Administration, Social Welfare Administration." She was assigned
as Social Welfare Incharge of the Mountain Province, by an office order of the Administrator, Social
Welfare Administration. After a little more than a year; petitioner was assigned elsewhere and
respondent Ganaden transferred to petitioner's first station in Baguio City. The Court ruled that
petitioner was not entitled to remain in her first station, In Jaro v. Hon. Valencia, et al., 18 petitioner
Dr. Jaro had been appointed "Physician in the Municipal Maternity and Charity Clinics, Bureau of
Hospitals." He was first assigned to the Municipal Maternity and Charity Clinics in Batulati, Davao,
and later to the corresponding clinic in Saug, Davao and then to Catil, Davao. He was later assigned
to the Municipality of Padada, also of Davao Province. He resisted his last assignment and
brought mandamus against the Secretary of Health to compel the latter to return him to his station
in Catil, Davao as Municipal Health Officer thereof. The Court, applying Miclat v. Ganaden dismissed
this Petition holding that his appointment not being to any specific station but as a physician in the
Municipal Maternity and Charity Clinics, Bureau of Hospitals, he could be transferred or assigned to
any station where, in the opinion of the Secretary of Health, his services may be utilized more
effectively. 19
Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of petitioner Sta. Maria as
"Dean, College of Education, University of the Philippines." Dean Sta. Maria was transferred by the
President of the University of the Philippines to the Office of the President, U.P., without demotion
in rank or salary, thereby acceding to the demands of student activists who were boycotting their
classes in the U.P. College of Education. Dean Sta. Maria assailed his transfer as an illegal and
unconstitutional removal from office. In upholding Dean Sta. Maria's claim, the Court, speaking
through Mr. Justice Sanchez, laid down the applicable doctrine in the following terms:

4. Concededly, transfers there are which do not amount to removal. Some such transfer
can be effected without the need for charges being preferred, without trial or hering,
and even without the consent of the employee.
The clue to such transfers may be found in the "nature of the appointment." Where the
appointment does not indicate a specific station, an employee may be transferred or
reassigned provided the transfer affects no substantial change in title, rank and salary.
Thus one who is appointed "principal in the Bureau of Public Schools" and is
designated to head a pilot school may be transferred to the post of principal of another
school.
And the rule that outlaws unconsented transfers as anathema to security of
tenure applies only to an officer who is appointed not merely assigned to a
particular station. Such a rule does not prescribe a transfer carried out under a specific
statute that empowers the head of an agency to periodically reassign the employees
and officers in order to improve the service of the agency. The use of approved
techniques or methods in personnel management to harness the abilities of employees
to promote optimum public service cannot-be objected to. . . .
5. The next point of inquiry is whether or not Administrative Order 77 would stand the
test of validityvis-a-vis the principles just enunciated.
xxx xxx xxx
To be stressed at this point, however, is that the appointment of Sta. Maria is that of
"Dean, College of Education, University of the Philippines." He is not merely a dean "in
the university." His appointment is to a specific position; and, more importantly, to a
specific station. 21 (Citations omitted; emphases supplied)
For all the foregoing we conclude that the reassignment of petitioners Fernandez and de Lima from
their stations in the OPIA and OPR, respectively, to the Research Development Office (RDO) and
from the RDO to the Commissions Regional Offices in Regions V and III, respectively, without their
consent, did not constitute a violation of their constitutional right to security of tenure.
WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with Prayer for Writ of
Preliminary Injunction or Temporary Restraining Order is hereby DISMISSED. The Temporary
Restraining Order issued by this Court on 27 September 1994 is hereby LIFTED. Costs against
petitioners.
SO ORDERED.
Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo Quiason, Puno, Vitug,
Kapunan, Mendoza and Francisco, JJ., concur.

8. EUGENIO V CSC
G.R. No. 115863

March 31, 1995

AIDA D. EUGENIO, petitioner,

vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR ENRIQUEZ, JR.,
respondents.

PUNO, J.:
The power of the Civil Service Commission to abolish the Career Executive Service Board is
challenged in this petition for certiorari and prohibition.
First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute. She
applied for a Career Executive Service (CES) Eligibility and a CESO rank on August 2, 1993, she was
given a CES eligibility. On September 15, 1993, she was recommended to the President for a CESO
rank by the Career Executive Service Board. 1
All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service Commission 2
passed Resolution No. 93-4359, viz:
RESOLUTION NO. 93-4359
WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be administered by the Civil
Service Commission, . . .;
WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides that "The Civil Service
Commission, as the central personnel agency of the government, is mandated to establish a career
service and adopt measures to promote morale, efficiency, integrity, responsiveness,
progresiveness and courtesy in the civil service, . . .";
WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative Code of 1987 grants the
Commission the power, among others, to administer and enforce the constitutional and statutory
provisions on the merit system for all levels and ranks in the Civil Service;
WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of 1987 Provides, among
others, that The Career Service shall be characterized by (1) entrance based on merit and fitness to
be determined as far as practicable by competitive examination, or based highly technical
qualifications; (2) opportunity for advancement to higher career positions; and (3) security of
tenure;

WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code of 1987 provides that
"The third level shall cover Positions in the Career Executive Service";
WHEREAS, the Commission recognizes the imperative need to consolidate, integrate and unify the
administration of all levels of positions in the career service.
WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the Administrative Code of
1987 confers on the Commission the power and authority to effect changes in its organization as
the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil Service Commission
shall enjoy fiscal autonomy and the necessary implications thereof;
NOW THEREFORE, foregoing premises considered, the Civil Service Commission hereby resolves to
streamline reorganize and effect changes in its organizational structure. Pursuant thereto, the
Career Executive Service Board, shall now be known as the Office for Career Executive Service of
the Civil Service Commission. Accordingly, the existing personnel, budget, properties and
equipment of the Career Executive Service Board shall now form part of the Office for Career
Executive Service.
The above resolution became an impediment. to the appointment of petitioner as Civil Service
Officer, Rank IV. In a letter to petitioner, dated June 7, 1994, the Honorable Antonio T. Carpio, Chief
Presidential legal Counsel, stated:
xxx

xxx

xxx

On 1 October 1993 the Civil Service Commission issued CSC Resolution No. 93-4359 which
abolished the Career Executive Service Board.
Several legal issues have arisen as a result of the issuance of CSC Resolution No. 93-4359, including
whether the Civil Service Commission has authority to abolish the Career Executive Service Board.
Because these issues remain unresolved, the Office of the President has refrained from considering
appointments of career service eligibles to career executive ranks.
xxx

xxx

xxx

You may, however, bring a case before the appropriate court to settle the legal issues arising from
issuance by the Civil Service Commission of CSC Resolution No. 93-4359, for guidance of all
concerned.
Thank You.

Finding herself bereft of further administrative relief as the Career Executive Service Board which
recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul,
among others, resolution No. 93-4359. The petition is anchored on the following arguments:
A.
IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION USURPED THE LEGISLATIVE
FUNCTIONS OF CONGRESS WHEN IT ABOLISHED THE CESB, AN OFFICE CREATED BY LAW, THROUGH
THE ISSUANCE OF CSC: RESOLUTION NO. 93-4359;
B.
ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED THE LEGISLATIVE
FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY AUTHORIZED THE TRANSFER OF PUBLIC MONEY,
THROUGH THE ISSUANCE OF CSC RESOLUTION NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the contentions of petitioner.
Respondent Commission, however, chose to defend its ground. It posited the following position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I.
THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE PUBLIC RESPONDENTCSC.
II.
THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR APPOINTMENT TO A CESO
RANK OF PETITIONER EUGENIO WAS A VALID ACT OF THE CAREER EXECUTIVE SERVICE BOARD OF
THE CIVIL SERVICE COMMISSION AND IT DOES NOT HAVE ANY DEFECT.
III.
THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE VALIDITY OF THE
RECOMMENDATION OF THE CESB IN FAVOR OF PETITIONER EUGENIO SINCE THE PRESIDENT HAS
PREVIOUSLY APPOINTED TO CESO RANK FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID
PETITIONER. FURTHERMORE, LACK OF MEMBERS TO CONSTITUTE A QUORUM. ASSUMING THERE
WAS NO QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT CIVIL SERVICE COMMISSION BUT
OF THE PRESIDENT WHO HAS THE POWER TO APPOINT THE OTHER MEMBERS OF THE CESB.
IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED BY LAW (Sec. 12 (1),
Title I, Subtitle A, Book V of the Administrative Code of the 1987). THIS PARTICULAR ISSUE HAD
ALREADY BEEN SETTLED WHEN THE HONORABLE COURT DISMISSED THE PETITION FILED BY THE
HONORABLE MEMBERS OF THE HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A.
DATUMANONG, FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND MANUEL M. GARCIA IN G.R.
NO. 114380. THE AFOREMENTIONED PETITIONERS ALSO QUESTIONED THE INTEGRATION OF THE
CESB WITH THE COMMISSION.

We find merit in the petition. 3

The controlling fact is that the Career Executive Service Board (CESB) was created in the Presidential
Decree (P.D.) No. 1 on September 1, 1974 4 which adopted the Integrated Plan. Article IV, Chapter
I, Part of the III of the said Plan provides:
Article IV Career Executive Service
1.
A Career Executive Service is created to form a continuing pool of well-selected and
development oriented career administrators who shall provide competent and faithful service.
2.
A Career Executive Service hereinafter referred to in this Chapter as the Board, is created to
serve as the governing body of the Career Executive Service. The Board shall consist of the
Chairman of the Civil Service Commission as presiding officer, the Executive Secretary and the
Commissioner of the Budget as ex-officio members and two other members from the private sector
and/or the academic community who are familiar with the principles and methods of personnel
administration.
xxx

xxx

xxx

5.
The Board shall promulgate rules, standards and procedures on the selection, classification,
compensation and career development of members of the Career Executive Service. The Board
shall set up the organization and operation of the service. (Emphasis supplied)
It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by
the legislature. This follows an unbroken stream of rulings that the creation and abolition of public
offices is primarily a legislative function. As aptly summed up in AM JUR 2d on Public Officers and
Employees, 5 viz:
Except for such offices as are created by the Constitution, the creation of public offices is primarily a
legislative function. In so far as the legislative power in this respect is not restricted by
constitutional provisions, it supreme, and the legislature may decide for itself what offices are
suitable, necessary, or convenient. When in the exigencies of government it is necessary to create
and define duties, the legislative department has the discretion to determine whether additional
offices shall be created, or whether these duties shall be attached to and become ex-officio duties
of existing offices. An office created by the legislature is wholly within the power of that body, and
it may prescribe the mode of filling the office and the powers and duties of the incumbent, and if it
sees fit, abolish the office.
In the petition at bench, the legislature has not enacted any law authorizing the abolition of the
CESB. On the contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has
set aside funds for the operation of CESB. Respondent Commission, however, invokes Section 17,

Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987 as the source of its power
to abolish the CESB. Section 17 provides:
Sec. 17.
Organizational Structure. Each office of the Commission shall be headed by a
Director with at least one Assistant Director, and may have such divisions as are necessary
independent constitutional body, the Commission may effect changes in the organization as the
need arises.
But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together
with Section 16 of the said Code which enumerates the offices under the respondent Commission,
viz:
Sec. 16.

Offices in the Commission. The Commission shall have the following offices:

(1) The Office of the Executive Director headed by an Executive Director, with a Deputy
Executive Director shall implement policies, standards, rules and regulations promulgated by the
Commission; coordinate the programs of the offices of the Commission and render periodic reports
on their operations, and perform such other functions as may be assigned by the Commission.
(2) The Merit System Protection Board composed of a Chairman and two (2) members shall have
the following functions:
xxx

xxx

xxx

(3) The Office of Legal Affairs shall provide the Chairman with legal advice and assistance; render
counselling services; undertake legal studies and researches; prepare opinions and ruling in the
interpretation and application of the Civil Service law, rules and regulations; prosecute violations of
such law, rules and regulations; and represent the Commission before any court or tribunal.
(4) The Office of Planning and Management shall formulate development plans, programs and
projects; undertake research and studies on the different aspects of public personnel management;
administer management improvement programs; and provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with personnel, financial,
logistics and other basic support services.
(6) The Office of Central Personnel Records shall formulate and implement policies, standards,
rules and regulations pertaining to personnel records maintenance, security, control and disposal;
provide storage and extension services; and provide and maintain library services.
(7) The Office of Position Classification and Compensation shall formulate and implement
policies, standards, rules and regulations relative to the administration of position classification and
compensation.

(8) The Office of Recruitment, Examination and Placement shall provide leadership and
assistance in developing and implementing the overall Commission programs relating to
recruitment, execution and placement, and formulate policies, standards, rules and regulations for
the proper implementation of the Commission's examination and placement programs.
(9) The Office of Career Systems and Standards shall provide leadership and assistance in the
formulation and evaluation of personnel systems and standards relative to performance appraisal,
merit promotion, and employee incentive benefit and awards.
(10) The Office of Human Resource Development shall provide leadership and assistance in the
development and retention of qualified and efficient work force in the Civil Service; formulate
standards for training and staff development; administer service-wide scholarship programs;
develop training literature and materials; coordinate and integrate all training activities and
evaluate training programs.
(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and
regulations for the effective conduct or inspection and audit personnel and personnel management
programs and the exercise of delegated authority; provide technical and advisory services to Civil
Service Regional Offices and government agencies in the implementation of their personnel
programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance in the development
and implementation of policies, standards, rules and regulations in the accreditation of employee
associations or organizations and in the adjustment and settlement of employee grievances and
management of employee disputes.
(13) The Office of Corporate Affairs shall formulate and implement policies, standards, rules and
regulations governing corporate officials and employees in the areas of recruitment, examination,
placement, career development, merit and awards systems, position classification and
compensation, performing appraisal, employee welfare and benefit, discipline and other aspects of
personnel management on the basis of comparable industry practices.
(14) The Office of Retirement Administration shall be responsible for the enforcement of the
constitutional and statutory provisions, relative to retirement and the regulation for the effective
implementation of the retirement of government officials and employees.
(15) The Regional and Field Offices. The Commission shall have not less than thirteen (13)
Regional offices each to be headed by a Director, and such field offices as may be needed, each to
be headed by an official with at least the rank of an Assistant Director.
As read together, the inescapable conclusion is that respondent Commission's power to reorganize
is limited to offices under its control as enumerated in Section 16, supra. From its inception, the

CESB was intended to be an autonomous entity, albeit administratively attached to respondent

Commission. As conceptualized by the Reorganization Committee "the CESB shall be autonomous.
It is expected to view the problem of building up executive manpower in the government with a
broad and positive outlook." 6 The essential autonomous character of the CESB is not negated by its
attachment to respondent Commission. By said attachment, CESB was not made to fall within the
control of respondent Commission. Under the Administrative Code of 1987, the purpose of
attaching one functionally inter-related government agency to another is to attain "policy and
program coordination." This is clearly etched out in Section 38(3), Chapter 7, Book IV of the
aforecited Code, to wit:
(3) Attachment. (a) This refers to the lateral relationship between the department or its
equivalent and attached agency or corporation for purposes of policy and program coordination.
The coordination may be accomplished by having the department represented in the governing
board of the attached agency or corporation, either as chairman or as a member, with or without
voting rights, if this is permitted by the charter; having the attached corporation or agency comply
with a system of periodic reporting which shall reflect the progress of programs and projects; and
having the department or its equivalent provide general policies through its representative in the
board, which shall serve as the framework for the internal policies of the attached corporation or
agency.
Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service Commission,
G. R. No. 114380 where the petition assailing the abolition of the CESB was dismissed for lack of
cause of action. Suffice to state that the reliance is misplaced considering that the cited case was
dismissed for lack of standing of the petitioner, hence, the lack of cause of action.
IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent
Commission is hereby annulled and set aside. No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason,
Vitug, Kapunan and Mendoza, JJ., concur.

9. SOLID HOMES INC V PAYAWAL

G.R. No. 84811 August 29, 1989
SOLID
HOMES,
vs.
TERESITA PAYAWAL and COURT OF APPEALS, respondents.

INC., petitioner,

CRUZ, J.:
We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the
Regional Trial Court of Quezon City over a complaint filed by a buyer, the herein private
respondent, against the petitioner, for delivery of title to a subdivision lot. The position of the
petitioner, the defendant in that action, is that the decision of the trial court is null and void ab
initio because the case should have been heard and decided by what is now called the Housing and
Land Use Regulatory Board.
The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. before
the Regional Trial Court of Quezon City and docketed as Civil Case No. Q-36119. The plaintiff alleged
that the defendant contracted to sell to her a subdivision lot in Marikina on June 9, 1975, for the
agreed price of P 28,080.00, and that by September 10, 1981, she had already paid the defendant
the total amount of P 38,949.87 in monthly installments and interests. Solid Homes subsequently
executed a deed of sale over the land but failed to deliver the corresponding certificate of title
despite her repeated demands because, as it appeared later, the defendant had mortgaged the
property in bad faith to a financing company. The plaintiff asked for delivery of the title to the lot
or, alternatively, the return of all the amounts paid by her plus interest. She also claimed moral and
exemplary damages, attorney's fees and the costs of the suit.
Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, this
being vested in the National Housing Authority under PD No. 957. The motion was denied. The
defendant repleaded the objection in its answer, citing Section 3 of the said decree providing that
"the National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade
and business in accordance with the provisions of this Decree." After trial, judgment was rendered
in favor of the plaintiff and the defendant was ordered to deliver to her the title to the land or,
failing this, to refund to her the sum of P 38,949.87 plus interest from 1975 and until the full
amount was paid. She was also awarded P 5,000.00 moral damages, P 5,000.00 exemplary
damages, P 10,000.00 attorney's fees, and the costs of the suit. 1
Solid Homes appealed but the decision was affirmed by the respondent court, 2 which also berated
the appellant for its obvious efforts to evade a legitimate obligation, including its dilatory tactics
during the trial. The petitioner was also reproved for its "gall" in collecting the further amount of P
1,238.47 from the plaintiff purportedly for realty taxes and registration expenses despite its
inability to deliver the title to the land.

In holding that the trial court had jurisdiction, the respondent court referred to Section 41 of PD No.
957 itself providing that:
SEC. 41. Other remedies.-The rights and remedies provided in this Decree shall be in
addition to any and all other rights and remedies that may be available under existing
laws.
and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that
the court a quowas bereft of jurisdiction." The decision also dismissed the contrary opinion of the
Secretary of Justice as impinging on the authority of the courts of justice. While we are disturbed by
the findings of fact of the trial court and the respondent court on the dubious conduct of the
petitioner, we nevertheless must sustain it on the jurisdictional issue.
The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the National
Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under Presidential
Decree No. 957." Section 1 of the latter decree provides as follows:
SECTION 1. In the exercise of its function to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
Housing Authority shall have exclusive jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot or condominium
unit buyer against the project owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractuala statutory obligations filed by
buyers of subdivision lot or condominium unit against the owner, developer, dealer,
broker or salesman. (Emphasis supplied.)
The language of this section, especially the italicized portions, leaves no room for doubt that
"exclusive jurisdiction" over the case between the petitioner and the private respondent is vested
not in the Regional Trial Court but in the National Housing Authority. 3
The private respondent contends that the applicable law is BP No. 129, which confers on regional
trial courts jurisdiction to hear and decide cases mentioned in its Section 19, reading in part as
follows:
SEC. 19. Jurisdiction in civil cases.-Regional Trial Courts shall exercise exclusive original
jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;

(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;
xxx xxx xxx

(8) In all other cases in which the demand, exclusive of interest and cost or the value of
the property in controversy, amounts to more than twenty thousand pesos (P
20,000.00).
It stresses, additionally, that BP No. 129 should control as the later enactment, having been
promulgated in 1981, after PD No. 957 was issued in 1975 and PD No. 1344 in 1978.
This construction must yield to the familiar canon that in case of conflict between a general law and
a special law, the latter must prevail regardless of the dates of their enactment. Thus, it has been
held thatThe fact that one law is special and the other general creates a presumption that the
special act is to be considered as remaining an exception of the general act, one as a
general law of the land and the other as the law of the particular case. 4
xxx xxx xxx
The circumstance that the special law is passed before or after the general act does not
change the principle. Where the special law is later, it will be regarded as an exception
to, or a qualification of, the prior general act; and where the general act is later, the
special statute will be construed as remaining an exception to its terms, unless
repealed expressly or by necessary implication. 5
It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special law.
The argument that the trial court could also assume jurisdiction because of Section 41 of PD No.
957, earlier quoted, is also unacceptable. We do not read that provision as vesting concurrent
jurisdiction on the Regional Trial Court and the Board over the complaint mentioned in PD No. 1344
if only because grants of power are not to be lightly inferred or merely implied. The only purpose of
this section, as we see it, is to reserve. to the aggrieved party such other remedies as may be
provided by existing law, like a prosecution for the act complained of under the Revised Penal
Code. 6
On the competence of the Board to award damages, we find that this is part of the exclusive power
conferred upon it by PD No. 1344 to hear and decide "claims involving refund and any other
claims filed by subdivision lot or condominium unit buyers against the project owner, developer,

dealer, broker or salesman." It was therefore erroneous for the respondent to brush aside the welltaken opinion of the Secretary of Justice thatSuch claim for damages which the subdivision/condominium buyer may have against
the owner, developer, dealer or salesman, being a necessary consequence of an
adjudication of liability for non-performance of contractual or statutory obligation,
may be deemed necessarily included in the phrase "claims involving refund and any
other claims" used in the aforequoted subparagraph C of Section 1 of PD No. 1344. The
phrase "any other claims" is, we believe, sufficiently broad to include any and all claims
which are incidental to or a necessary consequence of the claims/cases specifically
included in the grant of jurisdiction to the National Housing Authority under the
subject provisions.
The same may be said with respect to claims for attorney's fees which are recoverable
either by agreement of the parties or pursuant to Art. 2208 of the Civil Code (1) when
exemplary damages are awarded and (2) where the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiff 's plainly valid, just and demandable
claim.
xxx xxx xxx
Besides, a strict construction of the subject provisions of PD No. 1344 which would deny
the HSRC the authority to adjudicate claims for damages and for damages and for
attorney's fees would result in multiplicity of suits in that the subdivision condominium
buyer who wins a case in the HSRC and who is thereby deemed entitled to claim
damages and attorney's fees would be forced to litigate in the regular courts for the
purpose, a situation which is obviously not in the contemplation of the law. (Emphasis
supplied.) 7
As a result of the growing complexity of the modern society, it has become necessary to create
more and more administrative bodies to help in the regulation of its ramified activities. Specialized
in the particular fields assigned to them, they can deal with the problems thereof with more
expertise and dispatch than can be expected from the legislature or the courts of justice. This is the
reason for the increasing vesture of quasi-legislative and quasi-judicial powers in what is now not
unreasonably called the fourth department of the government.
Statutes conferring powers on their administrative agencies must be liberally construed to enable
them to discharge their assigned duties in accordance with the legislative purpose. 8 Following this
policy in Antipolo Realty Corporation v. National Housing Authority, 9 the Court sustained the
competence of the respondent administrative body, in the exercise of the exclusive jurisdiction
vested in it by PD No. 957 and PD No. 1344, to determine the rights of the parties under a contract
to sell a subdivision lot.
It remains to state that, contrary to the contention of the petitioner, the case of Tropical Homes v.
National Housing Authority 10 is not in point. We upheld in that case the constitutionality of the

procedure for appeal provided for in PD No. 1344, but we did not rule there that the National
Housing Authority and not the Regional Trial Court had exclusive jurisdiction over the cases
enumerated in Section I of the said decree. That is what we are doing now.
It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down
at any time, even on appeal before this Court. 11 The only exception is where the party raising the
issue is barred by estoppel, 12which does not appear in the case before us. On the contrary, the
issue was raised as early as in the motion to dismiss filed in the trial court by the petitioner, which
continued to plead it in its answer and, later, on appeal to the respondent court. We have no
choice, therefore, notwithstanding the delay this decision will entail, to nullify the proceedings in
the trial court for lack of jurisdiction.
WHEREFORE, the challenged decision of the respondent court is REVERSED and the decision of the
Regional Trial Court of Quezon City in Civil Case No. Q-36119 is SET ASIDE, without prejudice to the
filing of the appropriate complaint before the Housing and Land Use Regulatory Board. No costs.
SO ORDERED.
Narvasa, Gancayco, Gri;o-Aquino and Medialdea, JJ., concur.

10. MATIENZO V ABELLERA

G.R. No. L-45839 June 1, 1988
RUFINO MATIENZO, GODOFREDO ESPIRITU, DIOSCORRO FRANCO, AND LA SUERTE
TRANSPORTATION
CORPORATION, petitioners,
vs.
HON. LEOPOLDO M. ABELLERA, ACTING CHAIRMAN OF THE BOARD OF TRANSPORTATION, HON.
GODOFREDO Q. ASUNCION, MEMBER OF THE BOARD OF TRANSPORTATION, ARTURO DELA
CRUZ, MS TRANSPORTATION CO., INC., NEW FAMILIA TRANSPORTATION CO., ROBERTO
MOJARES, ET AL.,respondents.

GUTIERREZ, JR., J.:

This is a petition for certiorari and prohibition, with application for preliminary injunction, seeking
the annulment and inhibition of the grant or award of provisional permits or special authority by
the respondent Board of Transportation (BOT) to respondent taxicab operators, for the operation
and legalization of "excess taxicab units" under certain provisions of Presidential Decree No. 101
"despite the lapse of the power to do so thereunder," and "in violation of other provisions of the
Decree, Letter of Instructions No. 379 and other relevant rules of the BOT."
The petitioners and private respondents are all authorized taxicab operators in Metro Manila. The
respondents, however, admittedly operate "colorum" or "kabit" taxicab units. On or about the
second week of February, 1977, private respondents filed their petitions with the respondent Board
for the legalization of their unauthorized "excess" taxicab units citing Presidential Decree No. 101,
promulgated on January 17, 1973, "to eradicate the harmful and unlawful trade of clandestine
operators, by replacing or allowing them to become legitimate and responsible operators." Within a
matter of days, the respondent Board promulgated its orders setting the applications for hearing
and granting applicants provisional authority to operate their "excess taxicab units" for which
legalization was sought. Thus, the present petition.
Opposing the applications and seeking to restrain the grant of provisional permits or authority, as
well as the annulment of permits already granted under PD 101, the petitioners allege that the BOT
acted without jurisdiction in taking cognizance of the petitions for legalization and awarding special
permits to the private respondents.
Presidential Decree No. 101 vested in the Board of Transportation the power, among others "To
grant special permits of limited term for the operation of public utility motor vehicles as may, in the
judgment of the Board, be necessary to replace or convert clandestine operators into legitimate
and responsible operators." (Section 1, PD 101)
Citing, however, Section 4 of the Decree which provides:

SEC. 4. Transitory Provision. Six months after the promulgation of this Decree, the
Board of Transportation, the Bureau of Transportation, The Philippine Constabulary,
the city and municipal forces, and the provincial and city fiscals shall wage a concerted
and relentless drive towards the total elimination and punishment of all clandestine
and unlawful operators of public utility motor vehicles."
the petitioners argue that neither the Board of Transportation chairman nor any member thereof
had the power, at the time the petitions were filed (i.e. in 1977), to legitimize clandestine
operations under PD 101 as such power had been limited to a period of six (6) months from and
after the promulgation of the Decree on January 17, 1973. They state that, thereafter, the power
lapses and becomes functus officio.
To reinforce their stand, the petitioners refer to certain provisions of the Rules and Regulations
implementing PD 101 issued by respondent Board, Letter of Instructions No. 379, and BOT
Memorandum Circular No. 76-25 (a). In summary, these rules provide inter alia that (1) only
applications for special permits for "colorum" or "kabit" operators filed before July 17, 1973 shall be
accepted and processed (Secs. 3 and 16 (c), BOT-LTC-HPG Joint Regulations Implementing PD 101,
pp. 33 and 47, Rollo); (2) Every provisional authority given to any taxi operator shall be cancelled
immediately and no provisional authority shall thereafter be issued (par. 6, Letter of Instructions
No. 379, issued March 10, 1976, p. 58, Rollo); (3) Effective immediately, no provisional authorities
on applications for certificates of public convenience shall be granted or existing provisional
authorities on new applications extended to, among others, taxi denominations in Metro Manila
(BOT Memorandum Circular No. 75-25 (a), August 30, 1976, p. 64, Rollo); (4) All taxis authorized to
operate within Metro Manila shall obtain new special permits from the BOT, which permits shall be
the only ones recognized within the area (par. 8, LOI No. 379, supra); and (5) No bonafide applicant
may apply for special permit to operate, among others, new taxicab services, and, no application
for such new service shall be accepted for filing or processed by any LTC agency or granted under
these regulations by any LTC Regional Office until after it shall have announced its program of
development for these types of public motor vehicles (Sec. 16d, BOT-LTC-HPG Joint Regulations, p.
47, Rollo).
The petitioners raise the following issues:
I. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO GRANT
PROVISIONAL PERMITS TO OPERATE DESPITE THE BAN THEREON UNDER LETTER OF
INSTRUCTIONS NO. 379;
II. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO LEGALIZE,
AT THIS TIME, CLANDESTINE AND UNLAWFUL TAXICAB OPERATIONS UNDER SECTION
1, P.D. 101; AND
III. WHETHER OR NOT THE PROCEDURE BEING FOLLOWED BY THE BOARD IN THE
CASES IN QUESTION SATISFIES THE PROCEDURAL DUE PROCESS REQUIREMENTS. (p.
119, Rollo)

We need not pass upon the first issue raised anent the grant of provisional authority to
respondents. Considering that the effectivity of the provisional permits issued to the respondents
was expressly limited to June 30, 1977, as evidenced by the BOT orders granting the same (Annexes
G, H, I and J among others) and Memorandum Circular No. 77-4 dated January 20, 1977 (p. 151,
Rollo), implementing paragraph 6 of LOI 379 (ordering immediate cancellation of all provisional
authorities issued to taxicab operators, supra), which provides:
5. After June 30, 1977, all provisional authorities are deemed cancelled, even if
hearings on the main application have not been terminated.
the issue is MOOT and ACADEMIC. Only the issue on legalization remains under consideration.
Justifying its action on private respondent's applications, the respondent Board emphasizes public
need as the overriding concern. It is argued that under PD 101, it is the fixed policy of the State "to
eradicate the harmful and unlawful trade of clandestine operators by replacing or allowing them to
become legitimate and responsible ones" (Whereas clause, PD 101). In view thereof, it is
maintained that respondent Board may continue to grant to "colorum" operators the benefits of
legalization under PD 101, despite the lapse of its power, after six (6) months, to do so, without
taking punitive measures against the said operators.
Indeed, a reading of Section 1, PD 101, shows a grant of powers to the respondent Board to issue
provisional permits as a step towards the legalization of colorum taxicab operations without the
alleged time limitation. There is nothing in Section 4, cited by the petitioners, to suggest the
expiration of such powers six (6) months after promulgation of the Decree. Rather, it merely
provides for the withdrawal of the State's waiver of its right to punish said colorum operators for
their illegal acts. In other words, the cited section declares when the period of moratorium
suspending the relentless drive to eliminate illegal operators shall end. Clearly, there is no
impediment to the Board's exercise of jurisdiction under its broad powers under the Public Service
Act to issue certificates of public convenience to achieve the avowed purpose of PD 101 (Sec. 16a,
Public Service Act, Nov. 7, 1936).
It is a settled principle of law that in determining whether a board or commission has a certain
power, the authority given should be liberally construed in the light of the purposes for which it
was created, and that which is incidentally necessary to a full implementation of the legislative
intent should be upheld as being germane to the law. Necessarily, too, where the end is required,
the appropriate means are deemed given (Martin, Administrative Law, 1979, p. 46). Thus, as
averred by the respondents:
... [A]ll things considered, the question is what is the best for the interest of the public.
Whether PD 101 has lost its effectiveness or not, will in no way prevent this Board
from resolving the question in the same candor and spirit that P.D. 101 and LOI 379
were issued to cope with the multifarious ills that plague our transport system. ...
(Emphasis supplied) (pp. 91-92, Rollo)

This, the private respondents appreciate, as they make reference to PD 101, merely to cite the
compassion with which colorum operators were dealt with under the law. They state that it is "in
the same vein and spirit that this Honorable Board has extended the Decree of legalization to the
operatives of the various PUJ and PUB services along legislative methods," that respondents pray
for authorization of their colorum units in actual operation in Metro Manila (Petitions for
Legalization, Annexes E & F, par. 7, pp. 65-79, Rollo).
Anent the petitioners' reliance on the BOT Rules and Regulations Implementing PD 101 as well as its
Memorandum Circular No. 76-25(a), the BOT itself has declared:
In line with its duty to rationalize the transport industry, the Board shall. from time to
time, re- study the public need for public utilities in any area in the Philippines for the
purpose of re- evaluating the policies. (p. 64, Rollo)
Thus, the respondents correctly argue that "as the need of the public changes and oscillates with
the trends of modern life, so must the Memo Orders issued by respondent jibe with the dynamic
and flexible standards of public needs. ... Respondent Board is not supposed to 'tie its hands' on its
issued Memo Orders should public interest demand otherwise" (Answer of private respondents, p.
121, Rollo).
The fate of the private respondent's petitions is initially for the Board to determine. From the
records of the case, acceptance of the respondent's applications appears to be a question correctly
within the discretion of the respondent Board to decide. As a rule, where the jurisdiction of the BOT
to take cognizance of an application for legalization is settled, the Court enjoins the exercise thereof
only when there is fraud, abuse of discretion or error of law. Furthermore, the court does not
interfere, as a rule, with administrative action prior to its completion or finality . It is only after
judicial review is no longer premature that we ascertain in proper cases whether the administrative
findings are not in violation of law, whether they are free from fraud or imposition and whether
they find substantial support from the evidence.
Finally, with respect to the last issue raised by the petitioners alleging the denial of due process by
respondent Board in granting the provisional permits to the private respondents and in taking
cognizance of their applications for legalization without notice and hearing, suffice it to say that PD
101 does not require such notice or hearing for the grant of temporary authority . The provisional
nature of the authority and the fact that the primary application shall be given a full hearing are the
safeguards against its abuse. As to the applications for legalization themselves, the Public Service
Act does enjoin the Board to give notice and hearing before exercising any of its powers under Sec.
16 thereof. However, the allegations that due process has been denied are negated by the hearings
set by the Board on the applications as expressed in its orders resolving the petitions for special
permits (Annexes G, H, I, pp. 80-102, Rollo).
The Board stated:

The grounds involved in the petition are of first impression. It cannot resolve the issue
ex-parte. It needs to hear the views of other parties who may have an interest, or
whose interest may be affected by any decision that this Board may take.
The Board therefore, decides to set the petition for hearing.
xxx xxx xxx
As to the required notice, it is impossible for the respondent Board to give personal notice to all
parties who may be interested in the matter, which parties are unknown to it. Its aforementioned
order substantially complies with the requirement. The petitioners having been able to timely
oppose the petitions in question, any lack of notice is deemed cured.
WHEREFORE. the petition is hereby DISMISSED for lack of merit. The questioned orders of the then
Board of Transportation are AFFIRMED.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur

11. PHIL AM V ANSALDO

G.R. No. 76452 July 26, 1994
PHILIPPINE AMERICAN LIFE INSURANCE COMPANY and RODRIGO DE LOS REYES, petitioners,
vs.
HON. ARMANDO ANSALDO, in his capacity as Insurance Commissioner, and RAMON MONTILLA
PATERNO, JR., respondents.
Ponce Enrile, Cayetano, Reyes and Manalastas for petitioners.
Oscar Z. Benares for private respondent.

QUIASON, J.:
This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court, with
preliminary injunction or temporary restraining order, to annul and set aside the Order dated
November 6, 1986 of the Insurance Commissioner and the entire proceedings taken in I.C. Special
Case No. 1-86.
We grant the petition.
The instant case arose from a letter-complaint of private respondent Ramon M. Paterno, Jr. dated
April 17, 1986, to respondent Commissioner, alleging certain problems encountered by agents,
supervisors, managers and public consumers of the Philippine American Life Insurance Company
(Philamlife) as a result of certain practices by said company.
In a letter dated April 23, 1986, respondent Commissioner requested petitioner Rodrigo de los
Reyes, in his capacity as Philamlife's president, to comment on respondent Paterno's letter.
In a letter dated April 29, 1986 to respondent Commissioner, petitioner De los Reyes suggested that
private respondent "submit some sort of a 'bill of particulars' listing and citing actual cases, facts,
dates, figures, provisions of law, rules and regulations, and all other pertinent data which are
necessary to enable him to prepare an intelligent reply" (Rollo, p. 37). A copy of this letter was sent
by the Insurance Commissioner to private respondent for his comments thereon.
On May 16, 1986, respondent Commissioner received a letter from private respondent maintaining
that his letter-complaint of April 17, 1986 was sufficient in form and substance, and requested that
a hearing thereon be conducted.
Petitioner De los Reyes, in his letter to respondent Commissioner dated June 6, 1986, reiterated his
claim that private respondent's letter of May 16, 1986 did not supply the information he needed to
enable him to answer the letter-complaint.

On July 14, a hearing on the letter-complaint was held by respondent Commissioner on the validity
of the Contract of Agency complained of by private respondent.
In said hearing, private respondent was required by respondent Commissioner to specify the
provisions of the agency contract which he claimed to be illegal.
On August 4, private respondent submitted a letter of specification to respondent Commissioner
dated July 31, 1986, reiterating his letter of April 17, 1986 and praying that the provisions on
charges and fees stated in the Contract of Agency executed between Philamlife and its agents, as
well as the implementing provisions as published in the agents' handbook, agency bulletins and
circulars, be declared as null and void. He also asked that the amounts of such charges and fees
already deducted and collected by Philamlife in connection therewith be reimbursed to the agents,
with interest at the prevailing rate reckoned from the date when they were deducted.
Respondent Commissioner furnished petitioner De los Reyes with a copy of private respondent's
letter of July 31, 1986, and requested his answer thereto.
Petitioner De los Reyes submitted an Answer dated September 8, 1986, stating inter alia that:
(1) Private respondent's letter of August 11, 1986 does not contain any of the
particular information which Philamlife was seeking from him and which he promised
to submit.
(2) That since the Commission's quasi-judicial power was being invoked with regard to
the complaint, private respondent must file a verified formal complaint before any
further proceedings.
In his letter dated September 9, 1986, private respondent asked for the resumption of the hearings
on his complaint.
On October 1, private respondent executed an affidavit, verifying his letters of April 17, 1986, and
July 31, 1986.
In a letter dated October 14, 1986, Manuel Ortega, Philamlife's Senior Assistant Vice-President and
Executive Assistant to the President, asked that respondent Commission first rule on the questions
of the jurisdiction of the Insurance Commissioner over the subject matter of the letters-complaint
and the legal standing of private respondent.
On October 27, respondent Commissioner notified both parties of the hearing of the case on
November 5, 1986.
On November 3, Manuel Ortega filed a Motion to Quash Subpoena/Notice on the following
grounds;
1. The Subpoena/Notice has no legal basis and is premature because:

(1) No complaint sufficient in form and contents has been filed;

(2) No summons has been issued nor received by
the respondent De los Reyes, and hence, no
jurisdiction has been acquired over his person;
(3) No answer has been filed, and hence, the
hearing scheduled on November 5, 1986 in the
Subpoena/Notice, and wherein the respondent is
required to appear, is premature and lacks legal
basis.
II. The Insurance Commission has no jurisdiction over;
(1) the subject matter or nature of the action; and
(2) over the parties involved (Rollo, p. 102).
In the Order dated November 6, 1986, respondent Commissioner denied the Motion to Quash. The
dispositive portion of said Order reads:
NOW, THEREFORE, finding the position of complainant thru counsel tenable and
considering the fact that the instant case is an informal administrative litigation falling
outside the operation of the aforecited memorandum circular but cognizable by this
Commission, the hearing officer, in open session ruled as it is hereby ruled to deny the
Motion to Quash Subpoena/Notice for lack of merit (Rollo, p. 109).
Hence, this petition.
II
The main issue to be resolved is whether or not the resolution of the legality of the Contract of
Agency falls within the jurisdiction of the Insurance Commissioner.
Private respondent contends that the Insurance Commissioner has jurisdiction to take cognizance
of the complaint in the exercise of its quasi-judicial powers. The Solicitor General, upholding the
jurisdiction of the Insurance Commissioner, claims that under Sections 414 and 415 of the
Insurance Code, the Commissioner has authority to nullify the alleged illegal provisions of the
Contract of Agency.
III
The general regulatory authority of the Insurance Commissioner is described in Section 414 of the
Insurance Code, to wit:

The Insurance Commissioner shall have the duty to see that all laws relating to
insurance, insurance companies and other insurance matters, mutual benefit
associations and trusts for charitable uses are faithfully executed and to perform the
duties imposed upon him by this Code, . . .
On the other hand, Section 415 provides:
In addition to the administrative sanctions provided elsewhere in this Code, the
Insurance Commissioner is hereby authorized, at his discretion, to impose upon
insurance companies, their directors and/or officers and/or agents, for any willful
failure or refusal to comply with, or violation of any provision of this Code, or any
order, instruction, regulation or ruling of the Insurance Commissioner, or any
commission of irregularities, and/or conducting business in an unsafe and unsound
manner as may be determined by the the Insurance Commissioner, the following:
(a) fines not in excess of five hundred pesos a day; and
(b) suspension, or after due hearing, removal of
directors and/or officers and/or agents.
A plain reading of the above-quoted provisions show that the Insurance Commissioner has the
authority to regulate the business of insurance, which is defined as follows:
(2) The term "doing an insurance business" or "transacting an insurance business,"
within
the
meaning
of
this
Code,
shall
include
(a) making or proposing to make, as insurer, any insurance contract;
(b) making, or proposing to make, as surety, any contract of suretyship as a vocation
and not as merely incidental to any other legitimate business or activity of the surety;
(c) doing any kind of business, including a reinsurance business, specifically recognized
as constituting the doing of an insurance business within the meaning of this Code; (d)
doing or proposing to do any business in substance equivalent to any of the foregoing
in a manner designed to evade the provisions of this Code. (Insurance Code, Sec. 2[2];
Emphasis supplied).
Since the contract of agency entered into between Philamlife and its agents is not included within
the meaning of an insurance business, Section 2 of the Insurance Code cannot be invoked to give
jurisdiction over the same to the Insurance Commissioner. Expressio unius est exclusio alterius.
With regard to private respondent's contention that the quasi-judicial power of the Insurance
Commissioner under Section 416 of the Insurance Code applies in his case, we likewise rule in the
negative. Section 416 of the Code in pertinent part, provides:
The Commissioner shall have the power to adjudicate claims and complaints involving
any loss, damage or liability for which an insurer may be answerable under any kind of
policy or contract of insurance, or for which such insurer may be liable under a

contract of suretyship, or for which a reinsurer may be used under any contract or
reinsurance it may have entered into, or for which a mutual benefit association may be
held liable under the membership certificates it has issued to its members, where the
amount of any such loss, damage or liability, excluding interest, costs and attorney's
fees, being claimed or sued upon any kind of insurance, bond, reinsurance contract, or
membership certificate does not exceed in any single claim one hundred thousand
pesos.
A reading of the said section shows that the quasi-judicial power of the Insurance Commissioner is
limited by law "to claims and complaints involving any loss, damage or liability for which an insurer
may be answerable under any kind of policy or contract of insurance, . . ." Hence, this power does
not cover the relationship affecting the insurance company and its agents but is limited to
adjudicating claims and complaints filed by the insured against the insurance company.
While the subject of Insurance Agents and Brokers is discussed under Chapter IV, Title I of the
Insurance Code, the provisions of said Chapter speak only of the licensing requirements and
limitations imposed on insurance agents and brokers.
The Insurance Code does not have provisions governing the relations between insurance companies
and their agents. It follows that the Insurance Commissioner cannot, in the exercise of its quasijudicial powers, assume jurisdiction over controversies between the insurance companies and their
agents.
We have held in the cases of Great Pacific Life Assurance Corporation v. Judico, 180 SCRA 445
(1989), andInvestment Planning Corporation of the Philippines v. Social Security Commission, 21
SCRA 904 (1962), that an insurance company may have two classes of agents who sell its insurance
policies: (1) salaried employees who keep definite hours and work under the control and
supervision of the company; and (2) registered representatives, who work on commission basis.
Under the first category, the relationship between the insurance company and its agents is
governed by the Contract of Employment and the provisions of the Labor Code, while under the
second category, the same is governed by the Contract of Agency and the provisions of the Civil
Code on the Agency. Disputes involving the latter are cognizable by the regular courts.
WHEREFORE, the petition is GRANTED. The Order dated November 6, 1986 of the Insurance
Commission is SET ASIDE.
SO ORDERED.
Cruz, Davide, Jr. and Kapunan, JJ., concur.
Bellosillo, J,. is on leave.

12. GTEB V CA
G.R. No. 114711 February 13, 1997
GARMENTS
and
TEXTILE
EXPORT
BOARD
(GTEB), petitioner,
vs.
COURT OF APPEALS and AMERICAN INTER-FASHION CORPORATION, respondents.
G.R. No. 115889 February 13, 1997
AMERICAN
INTER-FASHION
CORPORATION, petitioner,
vs.
GLORIOUS SUN FASHION GARMENTS MANUFACTURING (PHILS.), INC. and GARMENTS and
TEXTILE EXPORT BOARD (GTEB), respondents.

HERMOSISIMA, JR., J.:

The doctrine of "primary jurisdiction" of Government administrative agencies has herein come into
play. Should courts of justice interfere with their purely administrative and discretionary functions
and have supervisory powers over their proceedings and actions involving the exercise of judgment
and findings of fact? Verily, over matters falling under their jurisdiction, we have repeatedly held
that administrative agencies are in a better position to pass judgment thereon and their findings of
fact in that regard are generally accorded respect, if not finality, by the courts. 1
In this connection, the Garments and Textile Export Board (GTEB) filed the herein petition
for Certiorari from the January 21, 1994 Decision and the March 22, 1994 Resolution of the Court of
Appeals in CA-G.R. SP No. 31596 (G.R. No. 114711). Up for our resolution likewise is the petition
for Certiorari filed by the American Inter-Fashion Corporation (AIFC) against the GTEB Resolution of
June 21, 1994 (G.R. No. 115889). These petitions, being interrelated, were ordered consolidated.
Antecedent facts to set us on a proper perspective are those lucidly set out by the Court of Appeals:
Petitioner American Inter-Fashion Corporation (AIFC) was a corporation organized
under Philippine Laws engaged in the business of manufacturing and exporting
garments. Prior to its incorporation, the original incorporators of AIFC were awarded
the initial export quota (EQ) allocation by virtue of the resolution of the Garments &
Export Textile Board (GTEB) dated July 30, 1984.
Before AIFC's incorporation, Glorious Sun, a corporation organized under Philippine
Laws sometime in 1977, was a recipient of a substantial number of EQ allocations from
the GTEB. On April 27, 1984, Glorious Sun was charged before the GTEB in OSC No. 84B-1 with, and was found guilty of, misdeclaration of values of its imported raw
materials resulting in dollar salting, and other related frauds, in connection with its

importations in 1983. As a result, the EQs of Glorious Sun as well as its license to
operate a bonded manufacturing warehouse were cancelled and its stockholders and
officers were disqualified from engaging in garment exports. Its export quotas were
thereafter given to two newly-formed corporations the De Soleil Apparel
Manufacturing Corporation (De Soleil) and the herein petitioner American InterFashion Corporation (AIFC). These corporations were joint ventures of Hongkong
investors and majority stockholders of Glorious Sun on one hand and, allegedly, one
member of the family and one crony of President Marcos on the other (American
Inter-Fashion Corp. vs. Office of the President, 197 SCRA 409, 413 & 414 [1991]). The
cancelled EQs of Glorious Sun which were given to AIFC pertains to those under Cat
347/8 equivalent to 113,341-3 dozens which are the subject of dispute between GTEB
and petitioner. Glorious Sun continues to claim its rights over the aforementioned EQ.
In the meantime, AIFC was able to maintain its EQ from 1984 up to the time of the
filing of this petition (except for a brief period between 1986 and 1989 when AIFC was
placed under sequestration) by continuously exporting or shipping out at least 95% of
its current allocation as required by the rules and regulations of the GTEB. This fact was
not denied by the respondents.
With the establishment of a new government in 1986, Glorious Sun, on September 7,
1989, filed an appeal with the Office of the President, which, in turn, set aside the
GTEB decision adverse to Glorious Sun and remanded the case for genuine hearings
where due process would be accorded both parties (supra). This decision was upheld
by the Supreme Court in a petition docketed as G.R. No. 92422 and entitled American
Inter-Fashion Corporation vs. Office of the President, GTEB and Glorious Sun. On May
23, 1991 and July 2, 1991, the Supreme Court, after finding that ". . . American InterFashion . . . was created obviously to be the recipient of export quotas arbitrarily
removed from the rightful owner [Glorious Sun]", affirmed the decision of the Office of
the President remanding the case for further proceedings to the GTEB (supra, p. 426).
Pending its appeal to the Office of the President, Glorious Sun filed before the
Securities and Exchange Commission (SEC) a Petition to Declare the Forfeiture of the
Registration of AIFC on June 16, 1987. This was docketed as SEC-AC No. 319. On May
24, 1990, the PED ordered there revocation of AIFC's registration on the ground of
"fraud". AIFC thereafter appealed to the SEC en banc, but the latter upheld the
revocation on May 22, 1992. The subsequent Motion for Reconsideration of AIFC was
also denied by the SEC on September 16, 1992.
On September 30, 1992, the Petition for Review filed by AIFC before this Court
docketed as CA-G.R. No. 29017 was denied for having been filed beyond the
reglementary period. This denial was upheld by the Supreme Court (3rd Division) in a
Petition for Review docketed as G.R. No. 107742. AIFC's subsequent Motion for
Reconsideration was likewise denied on February 17, 1993 and on July 1, 1993, the

Supreme Court, en banc, upheld the cancellation of petitioner's certificate of

registration with finality.
Meanwhile, on August 20, 1992, after further proceedings were conducted in OSC No.
84-B-1 concerning Glorious Sun's alleged violations and frauds, the GTEB adopted a
resolution which reads as follows:
"NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved:
1. The instant case is hereby terminated with prejudice;
2. The disqualification of Glorious Sun and its principal stockholders and
officers from engaging in the garments export business is hereby lifted;
3. The bonded manufacturing warehouse license of Glorious Sun shall be
restored subject to the condition that it shall within a reasonable period of
time, comply with the requirements for the operation of a BMW, and
4. The Board hereby awards to Glorious Sun the cancelled EQs of De Soleil Apparel
Manufacturing Corporation as follows:
1.1 US Cat 347/348 = 63.839 dozens
1.2 Cat 2 Canada = 123.587 pieces
5. The Board, under existing rules, regulations and policies, is not in a position to
restore the balance of the cancelled quotas.
(NOTE): Because:
1.1 Subject quota is currently being performed by AIF;
1.2 AIF vigorously contests Glorious Sun's claim for restoration, on the
ground that AIF has already acquired vested rights over the quota;
1.3 The pending case with SEC (SEC-AC319) filed by Glorious Sun for
cancellation of AIFC's corporate registration;
1.4 May 22, 1992-SEC, en banc Resolution cancelling AIFC's registration;
1.5 Pendency of AIFC's appeal with the Court of Appeals filed on
September 25, 1992. (Comments, Rollo, p. 78).
Incidentally, Glorious Sun also filed on September 21, 1992, GTEB Case No. 92-50 for
the cancellation of the subject quotas allotted to AIFC and for restoration of the same
to Glorious Sun. This case has not yet been resolved by GTEB.

AIFC, on the other hand, prior to the Supreme Court denial of its petition for review of
the cancellation of its registration, requested the GTEB to release its EQ allocation for
1993. This request was, however, refused by the GTEB in a resolution dated January
11, 1993, for the following reasons:
". . . relative to the request of American Inter-Fashion Corp. for the release
of its 1993 Initial EQ/CEA entitlements under Cat. 347/8:
After a thorough discussion on the matter and, upon motion duly made
and seconded, it was
RESOLVED, That pending final decision/resolution of the Supreme Court in
the case of American Inter-Fashion Corp. (AIFC) vs. SEC, the request of
AIFC for release of its 1993 Initial EQ/CEA entitlements under Cat. 347/8,
be, as it is hereby DEFERRED, pending study by the Committee created
under GTEB Office Order No. 92-1, dated September 11, 1992, and
superseded by Office Order No. 92-2, dated November 7, 1992, to study
and attend to the request of AIFC pertaining to the release of its export
quotas which shall submit its findings/comments and recommendation on
the matter to the Board in its next meeting. However, with regard to
subject firm's goods ready for shipment, it can participate in the EQ
allocation (flexibility) when the same is offered to enable them to fulfill
their commitments."
The above-quoted resolution was the subject of the petition filed by AIFC before the
respondent Judge after GTEB refused to lift said order. This case which was docketed
as Special Civil Action Case No. 93-1173 for Certiorari, prayed for the annulment of
GTEB's aforementioned order, for the issuance of a temporary injunction restraining
the implementation of said order, and for the immediate release of the regular EQ of
AIFC for 1993. A temporary restraining order (Annex D) was thereafter issued by
respondent Judge on April 13, 1993, enjoining GTEB from implementing its questioned
order and from otherwise delaying the release of AIFC's EQ entitlement for 1993.
On April 20, 1993, GTEB filed a Motion to Dismiss and also moved to quash the abovementioned temporary restraining order. Thereafter, on May 3, 1993, the respondent
Judge issued one of the Orders herein questioned which reads as follows:
"For resolution is the petitioner's prayer for the issuance of a writ of a
preliminary prohibitory injunction . . . enjoining the GTEB and all persons
acting under them from implementing the resolution of the respondent
GTEB, suspending the petitioner's export quota entitlement for 1993 and,
a writ of preliminary mandatory injunction commanding the GTEB to
release the petitioner's 1993 initial export quotas.
xxx xxx xxx

It is clear from the express terms of the questioned Resolution of the

respondent Garments & Textile Export Board that the petitioner's export
quota has not been "suspended" as claimed by the petitioner but was
merely "deferred" pending a study of certain matters by the committee
created by GTEB. Said resolution further made provisions for the
petitioner's goods which are ready for shipment by stating in the
questioned resolution that "with regard to subject firm's goods ready for
shipment, it can participate in the REA flexibility when the same is offered
to enable them to fulfill their commitments.
Thus it is clear that the respondent GTEB has not as of this time,
suspended or cancelled the petitioner's Export Quota but merely deferred
its release to the petitioner pending the resolution of certain matters. As a
further indication that the GTEB has not suspended the petitioner's export
quota, is the fact that it has provided for temporary measures which
allows the petitioner to ship its products which are ready for shipment in
order not to unduly cause damage to the petitioner.
WHEREFORE, in view of all the foregoing, the petitioner's prayer for writs
of preliminary prohibitory and mandatory injunctions are hereby DENIED."
(Annex A; Rollo, pp. 23-24)
AIFC's subsequent motion for reconsideration was likewise denied (Annex D). Hence,
the instant petition.
Despite the Supreme Court's final decision upholding the cancellation of AIFC's
certificate of registration, the latter, on July 13, 1993, filed another Petition
for Certiorari before the Supreme Court docketed as SC-G.R. No. 110771, against SEC
and Glorious Sun, assailing the SEC decision dated May 22, 1992 which ordered the
revocation of AIFC's certificate of registration, and seeking to stop the cancellation of
its certificate of registration. This petition (G.R. No. 110771) was denied by the
Supreme Court on August 11, 1992 on the ground that the questioned decision of the
SEC "is the same decision assailed in a petition for review on certiorari filed with [the
Supreme Court] on 23 November 1992 under Rule 45 of the Rules of Court, docketed
as G.R. No. 107742. Records show that the petition (in G.R. No. 107742)
was denied and a motion for reconsideration of said denial wasdenied with finality in
the resolution of the Court en banc, dated 01 July 1993' (Annex A to Respondent's
Memorandum; Rollo, p. 326). Petitioner's Motion for Reconsideration in G.R. No.
110771 is still pending resolution by the Supreme Court.
In the meantime, AIFC was awarded by the GTEB a REA-Flexibility quota of exactly the
same category and amount as that which is the subject of this petition the release of
which was deferred by the GTEB. This was done by the GTEB allegedly so as not to
prejudice AIFC's export commitments pending any action on its request for the release

of its 1993 EQs. AIFC had allegedly performed on the REA-Flex quota since January
1993 up to the present (Annex B to Respondent's Memorandum). The GTEB also
allowed AIFC to continue importing raw materials "to service the balance of its REAFlex quota" (Annex C; Respondents' Memorandum, p. 17). Incidentally, the difference
between the REA-Flex quota and the regular quota entitlement, is that the latter may
be subject to restoration for the next quota year depending on performance of and
compliance while the former is only good for one-time use and may not be carried
over to the next quota year (Respondent's Memorandum, p. 16;Rollo,
p. 326).
On September 10, 1993, this Court in the instant petition and through the former
Seventeenth Division, required petitioner to amend its petition to include AIFCInternational Fashion Corporation (hereinafter, AIFC-International) as co-petitioner
considering AIFC's manifestation that it underwent a business reorganization which
resulted in the establishment of AIFC-International as its wholly-owned subsidiary
and the transfer to the latter of AIFC's regular export allocation with the GTEB (p.
167,Rollo).
Respondent GTEB objected to AIFC's motion to join AIFC-International as co-petitioner
because the latter allegedly does not have any interest in the case at bar. Furthermore,
the SEC had issued a restraining order on August 31, 1993 enjoining AIFC or any of its
agents from transferring and conveying its assets to AIFC-International or any other
subsidiary of AIFC (Annex A; p. 220, Rollo). The restraining order was issued in
connection with SEC Case No. 08-93-4546 filed by Yeung Chun Kam, Yeung Chun Ho,
and Archie Chan vs. American Inter-Fashion Crop. (Annex B, p. 221, Rollo).
It seems that Yeung Chun Kam, Yeung Chun Ho and Archie Chan are among the
stockholders of petitioner AIFC known as the "Hongkong Investors" who allegedly own
an aggregate thirty-three percent (33%) of the total subscription of AIFC's capital stock
of P2.5 Million. They alleged in their petition that they voted against the resolution
adopted by AIFC which increased the corporation's capital stock from P2 Million to P60
Million, which resolved that the authorized capital stock be paid-up with the advances
of the Campa Group representing 63% of the subscription of the capital stock of AIFC,
and which also resolved that the corporation's creditors-stockholders would be given
the right to subscribe to the authorized capital stocks by converting their advances to
the Corporation into equity.
The Hongkong group allegedly disagreed with and voted against the resolution since
they wanted the additional paid-up capital to be entirely in cash with all the
stockholders infusing new money. The resolution was allegedly not implemented,
instead, the Hongkong group claims to have discovered that without their knowledge
the Campa group organized and registered a partnership called American Inter-fashion
Ltd., Co., as well as another subsidiary, the AIFC-International. Claiming that these acts
of establishing the two business entities violated their rights as minority stockholders

of AIFC, Yeung Chun Ho, Yeung Chun Kam and Archie Chan filed SEC Case No. 08-934546 seeking to restrain the transfer and conveyance of AIFC's assets to AIFCInternational and American Inter-Fashion Ltd., Co.; to cause the appointment of
trustees for the purpose of the liquidation of AIFC under Sec. 122 of the Corporation
Code; and to order AIFC to provide Yeung Chun Kam company copies of its financial
statements from 1989 to 1993 and to render an accounting of its operations during the
said years (Rollo, pp. 222 to 235). This case is still pending before the SEC. 2
As can be seen, there were triggered by the controversy of the parties herein innumerable
pleadings and interminable complaints:
On April 7, 1993, AIFC filed a petition for certiorari, prohibition and mandamus under Rule 65
against the GTEB with the Regional Trial Court of Makati, Branch 138, entitled "American InterFashion Corporation, Petitioner, v. Garments and Textile Export Board, Respondent" docketed as
Civil Case No. 93-1173 (Annex "D" of GTEB's petition).
In the said petition AIFC sought to annul, on the alleged ground of lack of jurisdiction or grave abuse
of discretion, the GTEB's Resolution dated January 11, 1993 deferring AIFC's request for the release
of its 1993 EQs (Initial EQ/CEA entitlements under Cat. 347/8) for the reasons therein stated. Said
Resolution provided in part:
RESOLVED, that pending final decision/resolution of the Supreme Court on the case of
American Inter-Fashion Corp. (AIFC) vs. SEC, the request of AIFC for release of its 1993
Initial EQ/CEA entitlements under Cat. 347/8, be, as it is hereby DEFERRED pending
study by the Committee created under GTEB Office Order No. 92-1, dated September
11, 1992, and superseded by Office Order No. 92-2, dated November 17, 1992, to
study and attend to the request of AIFC pertaining to the release of its export quotas
which shall submit its findings/comments and recommendation on the matter to the
Board in its next meeting. However, with regard to subject firm's goods ready for
shipment, it can participate in the REA flexibility when the same is offered to enable
them to fulfill their commitments.
On April 13, 1993, the trial court issued a temporary restraining order against GTEB pending hearing
on AIFC's application for the issuance of a writ of preliminary prohibitory injunction.
On April 24, 1993, GTEB filed its "1. Motion to Dismiss the Instant Petition and 2. Motion to Quash
or Recall the Temporary Restraining Order." 3
On April 29, 1993, GTEB filed its "Motion to Resolve Motion to Dismiss Prior to Hearing of the
Petition for Injunction." 4
On or about 19 April 1993, Glorious Sun Fashion Garments Manufacturing (Phils.), Inc. (Glorious
Sun) filed an "Urgent 1) Motion for Leave to Intervene and File Answer as Respondent-Intervenor
and 2) Motion to Quash or Recall Temporary Restraining Order." This motion was opposed by AIFC.

In its Order dated May 3, 1993, the trial court denied AIFC's application for the issuance of the writs
of preliminary prohibitory and mandatory injunction. The pertinent portions of the May 3, 1993
Order 5 state:
It is clear from the express terms of the questioned Resolution of the respondent
Garments and Textile Export Board that the petitioner's export quota has not been
"suspended" as claimed by the petitioner but was only "Deferred" pending a study of
certain matters by the committee created by GTEB. Said resolution further made
provisions for the petitioner's goods which are ready for shipment by stating in the
questioned resolution that "with regard to subject firm's goods ready for shipment, it
can participate in the REA flexibility when the same is offered to enable them to fulfill
their commitments."
Thus, it is clear that the respondent GTEB has not as of this time, suspended or
cancelled the petitioner's Export Quota but merely deferred its release to the
petitioner pending the resolution of certain matters. As a further indication that the
GTEB has not suspended the petitioner's export quota, is the fact that it has provided
for temporary measures which allows the petitioner to ship its products which are
ready for shipment in order not to unduly cause damage to the petitioner.
WHEREFORE, in view of all the foregoing, the petitioner's prayer for writs of
preliminary prohibitory and mandatory injunctions are hereby DENIED.
Through its Order dated May 25, 1993, 6 the trial court denied AIFC's motion for reconsideration of
the May 3, 1993 Order. As a result thereof, AIFC filed with the Court of Appeals a petition
for certiorari and mandamus from the aforementioned Orders of the trial court in Civil Case No. 931173 (docketed as CA-G.R. SP No. 31596) where it prayed that the May 3, 1993 and May 25, 1993
Orders be set aside and a writ of mandamus be issued directing the GTEB to release AIFC's EQs for
1993.
Thereafter, AIFC filed a "Manifestation" where it alleged that in July 1993, it underwent a business
reorganization which resulted in the establishment of a wholly-owned subsidiary, the AIFC
International Fashion Corporation. AIFC further alleged that its regular export quota allocation with
the GTEB was transferred to the aforesaid subsidiary, for which reason, the said subsidiary may be
joined as a co-petitioner in CA-G.R. SP No. 31596.
After the GTEB filed its "Comments" on the petition in CA-G.R. SP No. 31596 on August 19,
1993, 7 AIFC filed a "Motion" 8 where it prayed that AIFC International Fashion Corporation be
joined as a co-petitioner. Thereafter, on or about August 26, 1993, AIFC (and AIFC International)
filed a "Reply" to the Comments of GTEB. 9
Subsequent to the above, on September 14, 1993, upon being directed by the Court of Appeals to
amend its petition to include "AIFC International Fashion Corporation" as co-petitioner, AIFC filed
an amended petition. 10

After hearing the oral arguments of the GTEB and AIFC, and after receiving their respective
memoranda, 11 as well as other additional pleadings (including an "Addendum To Respondent's
Memorandum" 12 filed by the GTEB for purposes of informing the Court of Appeals of this Court's
September 22, 1993 Resolution issued in G.R. No. 110771 denying with finality AIFC's motion for
reconsideration of the August 11, 1993 Resolution dismissing the said petition, and affirmed the
revocation of AIFC's certificate of corporate registration), or on January 21, 1994, the Court of
Appeals rendered the Decision subject of GTEB's petition in G.R. No. 114711 in favor of AIFC and
AIFC International, 13 annulling the trial court's Orders of May 3, 1993 and May 25, 1993 in this
wise:
WHEREFORE, the instant petition is GRANTED and the Orders of the respondent Judge
dated May 3, 1993 and May 25, 1993 are hereby annuled and set aside with no
pronouncement as to costs.
On February 11, 1994, the GTEB filed a "Motion For Reconsideration" 14 of the 21 January 1994
Decision.
Shortly thereafter, motions to intervene as well as motions for reconsideration of the said Decision
were filed by Glorious Sun Fashion Garments Manufacturing Co., (Phils.) Inc. and by the minority
stockholders of AIFC (Yeung Chun Kam, Yeung Chun Ho and Archie Chan).
On or about January 31, 1994, on the ground that the Court of Appeals in its January 21, 1994
Decision had granted the petition, AIFC and AIFC International filed a "Motion For Issuance Of Writ
Of Mandamus" 15 asking that a writ of mandamus be issued to compel the GTEB to release EQs for
1993 to AIFC.
On February 15, 1994, the GTEB filed its "Opposition To Petitioners' Motion for Issuance of Writ
of Mandamus. 16
On March 22, 1994, the Court of Appeals issued its Resolution 17 denying (1) AIFC and AIFC
International's motion for the issuance of a writ of mandamus, (2) the motions for intervention filed
by Glorious Sun, and Yeung Chun Kam, et al., and (3) GTEB's motion for reconsideration. The more
pertinent portions of said Resolution read:
It bears stressing that the subject matter of the petition as well as of the decision
sought to be reconsidered was only the 1993 allocation. Our decision herein did not
concern itself with, nor was it called upon to rule upon, any future allocations the grant
or release of which is the prerogative of the GTEB in accordance with law.
We never ordered the GTEB to release the 1993 allocation to AIFC, since the lapse of
the year 1993 had rendered this issue moot and academic.
We wish to make it clear that this Court is not intruding in, nor are we adjudicating
upon ourselves, the powers and functions of the GTEB. The decision to annul the
orders in question was called for in view of the grave abuse of discretion exercised

both by GTEB and the lower court in refusing to release petitioner's 1993 allocations
despite the fact that it was clearly entitled to such release. This is well within the
jurisdiction of this Court which has the authority to check the abuses which may have
been committed by any officer, board or tribunal exercising judicial functions (Sec. 1,
Rule 65, Rules of Court).
Neither are we ordering the GTEB to release or grant export quota allocations to the
transferee of AIFC's 1993 EQ allocations. The decision never granted such right to the
transferee since we know that this issue is solely within the jurisdiction of the GTEB.
What the decision discussed was petitioner's act of transferring the interest and assets
of the former AIFC to its transferee. We do not consider this as an adjudication of GTEB
functions.
As regards the Motions to Intervene filed by Glorious Sun and Yeung Chun Kam and
company, we find said motions improper. Intervention is not an independent action
but is auxiliary and supplemental to existing litigation (Clareza vs. Rosales, 2 SCRA 455).
The office of a petition for certiorari is only to check abuses or excesses in the exercise
by a tribunal, board or officer, of its judicial functions and not to determine the
respective rights and interests of the parties in the subject matter of the litigation. This
petition is therefore not the proper forum for the discussion of the respective rights
either or Glorious Sun or Yeung Chun Kam, and company. Whether or not Glorious Sun
is entitled to quota allocations is an issue which could be properly raised before the
GTEB. And regarding the interests of Yeung Chun Kam and company vis-a-vis those of
AIFC's, the same should be properly ventilated in another appropriate proceeding.
Moreover, intervention is generally allowed only before or during trial (Sec. 2, Rule 12,
Rules of Court) unless there are strong considerations to allow such intervention. None
exists in this case.
In view of the denial of the Motions to Intervene filed by Glorious Sun, Yeung Chun
Kam and company, there is no reason for us to discuss their motions for
reconsideration.
WHEREFORE, premises considered, petitioner's Motion for the issuance of a Writ
of Mandamus is DENIED. GTEB's motion for reconsideration is also DENIED as well as
the Motions for Intervention filed by Glorious Sun, Yeung Chun Kam, Yeung Chun Ho,
and Archie Chan.
GTEB thus filed its petition in G.R. No. 114711, where it prayed:
WHEREFORE, premises considered, it is respectfully prayed that the 21 January 1994
Decision and 22 March 1994 Resolution of the Court of Appeals (except insofar as the
latter correctly denied AIFC and AIFC International Fashion Corporation's "Motion For
Issuance Of Writ Of Mandamus') BE ANNULLED AND SET ASIDE; and that instead a

Resolution be issued DISMISSING the petition in CA-G.R. SP No. 31596 in its entirety for
being moot and academic and/or for lack of merit.
AIFC's petition in G.R. No. 115889, on the other hand, is an offshoot of the petition filed by Glorious
Sun with the GTEB on 21 September 1992. 18 In said GTEB petition, 19 Glorious Sun prayed that the
export quotas which the GTEB had earlier awarded to AIFC on August 1, 1984 pursuant to its April
27, 1984 Decision in Adm. Case No. OSC 84-B-1, be cancelled and returned to Glorious Sun, on the
alleged ground that AIFC was not qualified to the said awards under the policies, rules and
regulations of the GTEB, and more specifically because:
a. AIFC, at the time of the award on August 1, 1984, did not have its own in-house
production capacity; in this connection, AIFC, to this date, still has no in-house
production capacity as it has continued not owning any factory, plant, or even a single
sewing machine, nor can it show any lease agreement for the use of any
manufacturing facilities;
b. AIFC had no personality at the time of the award on August 1, 1984 as it was not yet
a corporation, its incorporation having been effected only on September 6, 1984; in
this connection, on May 22, 1992, the certificate of registration of AIFC was revoked by
order of the Securities and Exchange Commission on the ground that the same was
secured through fraud; and
c. AIFC, upon its incorporation, included as stockholders persons who were at the time
disqualified from engaging in the garments export business.
The events leading to the filing of GTEB Case No. 92-50 are in turn summed up in the succeeding
paragraphs of Glorious Sun's "Comment on Petition with Memorandum" dated August 1, 1995: 20
8. On 27 April 1984, the GTEB, on the basis of trumped-up charges of misdeclaration of
importations, issued a Decision in Adm. Case No. OSC 84-B-1, cancelling the export
quotas and export authorizations of Glorious Sun, and on 01 August 1984 illegally
awarded part thereof to AIFC. The dispositive portion of said Decision reads thus:
WHEREFORE, the Board finds that the Respondent firm violated its rules
and regulations on importations and hereby imposes the following
administrative penalties:
1. Cancellation of Export Quotas and Export Authorizations of the firm and
disqualification of the firm and the major stockholders and officers from
engaging in garment exports;
2. Cancellation of the firm's license to operate a bonded manufacturing
warehouse.

The Board will likewise endorse the case to the Presidential Anti-Dollar
Salting Task Force for further investigation and prosecution and will
request the Bureau of Customs to seal the firm's bonded manufacturing
warehouse and to conduct an inventory of the contents thereof.
9. Subsequently, Glorious Sun appealed the said Decision to the Office of the
President. On September 7, 1989, the Office of the President, in O.P. Case No. 3781,
nullified the Decision of the GTEB in the succeeding manner:
WHEREFORE, the case is hereby remanded to the Garments and Textile
Export Board for further proceedings, affording the Appellant an
opportunity (a) of full disclosure of all the evidence and/or GTEB records
relative to the charges in the Show Cause Order dated February 14, 1984,
which evidence/records must be properly identified and their due
execution and existence duly established by appropriate competent
witnesses, and (b) of rebutting the same evidence/records through the
presentation of additional evidence, after which the Board may, on the
basis of said evidence and records, maintain or revise its decision in this
case.
10. Thereafter, acting on Motions for Reconsideration of its September 7, 1989
decision, the Office of the President, on February 20, 1990, expanded its previous
decision. The pertinent portion of the Resolution denying said motions are hereunder
quoted, to wit:
It is, however, insisted by the movants that the GTEB decision of April 27,
1984 had already become final and that Glorious Sun abandoned its right
when it elevated the case to the Supreme Court by way of certiorari,
docketed as G.R. No. 67180, "Glorious Sun Fashion Garments and Textile
Manufacturing Company (Philippines), Inc. vs. Garments and Textile
Export Board, etc. et al." We disagree. For, as explicitly shown by the
resolution promulgated on June 4, 1984 by the Supreme Court in the said
case and as found by this Office in the decision presently sought to be
reconsidered, the said April 27, 1984 decision was rendered by the GTEB
in flagrant violation of Glorious Sun's right to due process. Hence, the
GTEB may be said to have "acted without or in excess of jurisdiction and
with grave abuse of discretion" (Barranza vs. Campos, Jr. 120 SCRA 881,
888-889) and, therefore, the said decision is null and void (Bacus vs. Ople,
132 SCRA 690, 710; Free Employees and Workers Assn. [FEWA] vs. Court
of Industrial Relations, 14 SCRA 781, 784-787) as if it was not rendered at
all. As succinctly held by the Supreme Court:
In this jurisdiction, a void judgment or order is in legal effect
no judgment or order. By it no rights are divested. From it no

rights can be obtained. Being worthless, it neither binds nor

bars anyone. All acts performed under it and all claims
flowing out of it are void (Paredes vs. Moya, 61 SCRA 525,
533, citing Chavez vs. Court of Appeals, 24 SCRA 663, 685;
Comia vs. Nicolas, 29 SCRA 492, 503-504, quoting Chavez vs.
CA, supra, and Gomez vs. Concepcion, 47 Phil. 717, 722).
Thus, being null and void, rendered as it was in violation of
the due process clause (Bacus vs. Ople, supra) and
consequently for want of jurisdiction (Barranza vs. Campos,
Jr., supra), the GTEB decision of April 27, 1984 "is not a
decision in contemplation of law" (Planas vs. Collector of
Internal Revenue, 3 SCRA 395, 399) and is, therefore,
"inexistent" (Free Telephone Workers Union vs. PLDT, 160
SCRA 43, 46). Consequently, the same decision can "never
become final" (Manila Railroad Company vs. Moya, 14 SCRA
358, 363-364), much less executory (Planas vs. Collector of
Internal Revenue, supra). Indeed, the parties attempting to
enforce (such void judgment) may be responsible as
"trespassers" (Comia vs. Nicolas, supra, at p. 504).
What right then could Glorious Sun have abandoned when, as
illustrated by the aforecited authorities, the void and
inexistent GTEB decision of April 27, 1984 neither vests nor
divests any rights, neither binds nor bars anyone?
11. The Decision of the Office of the President was in turn upheld by the Supreme
Court in a Resolution dated May 23, 1991 and another Resolution dated July 2, 1991 in
American Inter-Fashion Corporation v. Office of the President (197 SCRA 409 [1991]).
In said case, the Supreme Court, citing Mabuhay Textile Mills Corporation v. Ongpin
(141 SCRA 437 [1986]), ruled that the export quota allocations of Glorious Sun had
evolved into some form of property right, which should not be removed from it
arbitrarily and without due process. Thus:
Contrary to the petitioner's posture, the record clearly manifests that in
cancelling the export quotas of the private respondent GTEB violated the
private respondent's constitutional right to due process. Before the
cancellation in 1984, the private respondent had been enjoying export
quotas granted to it since 1977. In effect the private respondent's export
quota allocation which initially was a privilege evolved into some form of
property right which should not be removed from it arbitrarily and
without due process only to hurriedly confer it on another. Thus, in the
case of Mabuhay Textile Mills Corporation v. Ongpin (Ibid), we stated:

In the case at bar, the petitioner was never given the chance
to present its side before its export quota allocations were
revoked and its officers suspended. While it is true that such
allocations as alleged by the Board are mere privileges which
it can revoke and cancel as it may deem fit, these privileges
have been accorded to petitioner for so long that they have
become impressed with property rights especially since not
only do these privileges determine the continued existence of
the petitioner with assets of over P80,000,000.00 but also the
livelihood of some 700,000 workers who are employed by the
petitioner and their families. . . . (Emphasis supplied).
The decision penned by Deputy Executive Secretary
Magdangal B. Elma and the resolution penned by Acting
Deputy Executive Secretary Mariano Sarmiento II are not
tainted in the slightest by any grave abuse of discretion. They
outline in detail why the private respondent was denied due
process when its export quotas were cancelled by GTEB. The
findings are supported by the records.
Finally, American Inter-Fashion is hardly the proper party to
question the Malacaang decision. It was incorporated after
the incidents in this case happened. It was created obviously
to be the recipient of export quotas arbitrarily removed from
the rightful owner. It was sequestered precisely because of
the allegation that it is a crony corporation which profited
from an act of injustice inflicted on another private
corporation.
xxx xxx xxx
PREMISES CONSIDERED, the motion for reconsideration is
GRANTED. The instant petition is DISMISSED. The questioned
decision and resolution of the Office of the President are
hereby AFFIRMED (American Inter-Fashion Corporation v.
Office of the President, 197 SCRA 409 [1991]).
12. After the aforementioned Decision of the Office of the President was affirmed by
the Supreme Court, and pursuant to the directive embodied in the said O.P. Decision,
the case was remanded to the GTEB for further proceedings. However, while Glorious
Sun presented additional evidence in support of its position, the GTEB did not, as it
could not, present any evidence relative to the charges in the show Cause Order dated
14 February 1984. Instead, and in view of this dearth of evidence against Glorious Sun,
the GTEB encouraged the latter to enter into a compromise agreement.

13. Glorious Sun assented to the execution of a compromise agreement primarily on

the basis of an understanding with the GTEB that insofar as the balance of the export
quotas due to Glorious Sun was concerned (which quotas AIFC was illegally and
obstinately holding on to), Glorious Sun would be allowed to initiate separate
proceedings for the recovery thereof against AIFC. Incidentally, this arrangement was
rendered necessary by the fact that AIFC was never a proper party to, and had no
personality to participate in Adm. Case No. OSC 84-B-1.
14. On August 20, 1992, the GTEB finally dismissed the complaint against Glorious Sun
which formed the basis for the April 27, 1984 decision, restoring part of the export
quota allocations of Glorious Sun. The dispositive portion of the said Resolution reads:
NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved that:
a) The instant case is hereby terminated with prejudice;
b) The disqualification of Glorious Sun and its principal stockholders and
officers from engaging in the garments export business is hereby lifted;
c) The bonded manufacturing warehouse license of Glorious Sun shall be
restored subject to the condition that it shall within a reasonable period of
time, comply with the requirements for the operations of a BMW, and
d) The Board hereby awards to Glorious Sun the canceled EQs of De Soleil
Apparel Manufacturing Corporation as follows:
1. US Cat. 347/348-63,839 dzs.
2. Cat. 2 Canada-123,587 pcs.
e) The Board, under existing rules, regulations and policies, is not in a
position to restore the balance of the cancelled quotas (p. 4, GTEB
Resolution dated August 20, 1992).
15. It will be noted that the Board restored to Glorious Sun the portion of the export
quotas illegally taken away from Glorious Sun and given to DE Soleil Apparel
Manufacturing Corporation (DSA), the same having been already taken back by the
Board by cancellation. But, as stated above, with respect to the balance of the export
quotas illegally taken away from Glorious Sun still being stubbornly illegally held on to
by AIFC, additional steps became necessary for the recovery thereof.
16. Accordingly, on September 21, 1992, Glorious Sun filed GTEB Case No. 92-50 for
the cancellation of the quotas illegally awarded to AIFC and for the restoration of the
said quotas to Glorious Sun.

17. On August 3, 1993, the Hearing Officer submitted his Report with the
recommendation that AIFC's export quotas he revoked/cancelled and the same be
returned or awarded to Glorious Sun subject to GTEB rules and regulations on
performance and forfeiture. However, instead of approving the Report of the Hearing
Officer assigned to hear the case and who conducted the proceedings, the GTEB
appointed a committee to prepare a Report.
18. The Committee submitted its Report and Recommendation under date of May 10,
1994. On June 21, 1994, the GTEB issued a Resolution adopting and approving in toto
the Report and Recommendation. The pertinent portion of the Resolution reads:
THE FOREGOING PREMISES CONSIDERED, the Board hereby RESOLVES:
1. That the export quotas and export authorizations awarded to AIFC be
cancelled;
2. That the petition of Glorious Sun to be restored the export quota
allocations which were awarded to AIFC be denied;
3. That said export quotas and export authorizations of AIFC be reverted
to the allocable balance (open basket) which shall be made available to
other garment manufacturers, including Glorious Sun, for application
therefor; and
4. That AIFC's motion to dismiss be denied for lack of any merit.
19. AIFC filed the instant petition to annul the above-quoted June 21, 1994 Resolution
of the GTEB, as well as to compel the latter to restore the cancelled export
authorizations which AIFC claims it is entitled to.
After Glorious Sun presented evidence in support of its petition in GTEB Case No. 92-50, AIFC filed a
motion to dismiss the same for lack of jurisdiction. 21 On June 21, 1994, the GTEB issued its
resolution subject of AIFC's petition in G.R. No. 115889, 22 the entirety whereof reads as follows:
RESOLVED, that the findings and recommendation of the Committee on Administrative
Case No. 92-50, as contained in Annex "C", be, as they are hereby ADOPTED and
APPROVED, in toto, wit:
1. That the export quotas and export authorizations awarded to AIFC be
cancelled;
2. That the petition of Glorious Sun to be restored the export allocations
which were awarded to AIFC be denied;

3. That the said export quotas and export authorizations of AIFC be

reverted to the allocable balance which shall be made available to other
garment manufacturers, including Glorious Sun, for application therefor;
4. That AIFC's motion to dismiss be denied for lack of merit.
Consequently, on 6 July 1994, AIFC filed its petition in G.R. No. 115889, where it sought to:
(a) annul and set aside the respondent Garments and Textile Export Board's (GTEB's)
resolution dated 21 June 1994 in GTEB Case No. 92-0, entitled Glorious Sun vs. AIFC, for
having been issued without or in excess of jurisdiction, or in grave abuse of discretion;
and
(b) have respondent GTEB commanded to restore or release petitioner AIFC's regular
export quota entitlement for 1994. 23
Simultaneous with the filing of its petition, AIFC filed a motion to consolidate the said petition with
GTEB's petition in G.R. No. 114711. On July 20, 1994, after praying for time for the filing thereof,
Glorious Sun filed, in G.R. No. 115889, a "Motion for Outright Dismissal of the Petition (with
Opposition to Motion to Consolidate)", where it sought the dismissal of said petition on the
grounds that (1) AIFC has no personality to file the petition; (2) AIFC failed to exhaust administrative
remedies; and (3) AIFC is guilty of forum-shopping.
In view of Our July 20, 1994 Resolution: (1) requiring the respondents in G.R. No. 115889 to
comment on the petition, and not to file a motion to dismiss, and (2) granting AIFC's motion to
consolidate, Glorious Sun filed a "Manifestation" on August 15, 1994 whereby it withdrew the
aforesaid "Motion for Outright Dismissal of the Petition (with Opposition to Motion to
Consolidate)." At the same time it made manifest its intention to file a motion for reconsideration
of the same July 20, 1994 Resolution insofar as it ordered AIFC's petition in G.R. No. 115889
consolidated with the GTEB's petition in G.R. No. 114711.
Accordingly, on September 7, 1994, Glorious Sun filed a "Motion for Reconsideration 24 with Motion
to Suspend Period to File Comment."
However, prior to the filing of Glorious Sun's aforesaid "Motion for Reconsideration, etc.," or on
September 5, 1994, we issued our Resolution in the above-numbered cases, where we resolved to:
(a) NOTE WITHOUT ACTION the motions filed by: (1) Glorious Sun Fashion Garments
Manufacturing in G.R. No. 115889 for first and second extensions totalling fifteen (15)
days from July 13, 1994 within which to file motion to dismiss petition and opposition
to the motion to consolidate; and (2) American Inter-Fashion Corporation [N.B. this
should have read "Glorious Sun Fashion Garments Manufacturing" in G.R. No. 114711
for the outright dismissal of the case with opposition to the motion to consolidate, it
appearing that the: (1) motion for outright dismissal with opposition to the motion to
consolidate was withdrawn by private respondent Glorious Sun Fashion Garments

Manufacturing in G.R. No. 115889 through its manifestation dated August 11, 1994;
and (2) motion to consolidate these cases was granted by the Second Division on July
20, 1994;
(b) GRANT the motions of: (1) private respondent American Inter-Fashion corporation:
(aa) for a fourth (final) extension of five (5) days from July 23, 1994 within which to file
comment on the petition for review on certiorari; and (bb) to admit comment on the
petition in G.R. No. 114711;
(c) NOTE the: (1) urgent motion of petitioner in G.R. No. 115889 to resolve application
for temporary restraining order or injunction; and (2) comment on the petition with
motion for the issuance of a show cause order filed by private respondent American
Inter-Fashion Corporation in G.R. No. 114711;
(d) require the petitioners [N.B. this should have read petitioner] to file a REPLY within
ten (10) days from notice hereof to the comment on the petition filed by American
Inter-Fashion Corporation; and
(e) NOTE the manifestation dated August 12, 1994 by Atty. Benjamin D. de Asis,
manifesting his withdrawal as counsel for petitioner Garments and Textile Export
Board in G.R. No. 114711 but require aforesaid counsel to SUBMIT the conformity of
his client within five (5) days from notice hereof. 25
Thereafter, Glorious Sun filed on September 22, 1994 with the First Division of this Court, its
"Manifestation and Motion to Suspend Further Proceedings Until After Resolution by Second
Division of Motion for Reconsideration of Order of July 20, 1994 on Consolidation." 26 On the other
hand, the GTEB, pursuant to Our above directive, filed its Reply to AIFC's Comment in G.R. No.
115889.
AIFC, as petitioner in G.R. No. 114711, filed with the Second Division of this Court an "Urgent
Motion to Resolve Application for Injunction," 27 which it followed up with an "Urgent Motion to
Restore Status Quo Ante." 28 The latter motion was filed with the Third Division of this Court, to
whom the above-numbered petitions had, in the meantime, been assigned. In response to these
urgent motions, Glorious Sun filed, also with the Third Division of this Court, its "Comment (Re:
Petitioner's Urgent Motions: [1] to Resolve Application for Injunction; and [2] to Restore Status Quo
Ante)" where it argued that:
I. The First Division of this Honorable Court, as far back as 05 September 1994, had
already acted upon petitioner's urgent motion for the issuance of a temporary
restraining order or injunction, by merely noting the same.
II. In any event, the instant motions should nevertheless be denied, there being
absolutely no showing that petitioner is clearly entitled to injunctive relief. 29

Subsequent to the filing of the above pleadings, AIFC filed yet another "Urgent Motion to Resolve,"
to which Glorious Sun replied through a pleading denominated as "Manifestation (Re: Petitioner's
March 30, 1995 Urgent Motion to Resolve) with Motion for Summary Dismissal and Motion to Cite
Petitioner for Direct Contempt (For Violation of SC Revised Circular 28-91)." 30
On April 3, 1995, we issued a resolution, the pertinent portions whereof reads:
Considering the allegations contained, the issues raised and the arguments adduced in
the petitions for review on certiorari, as well as the respective comments of the private
respondents thereon and the replies of petitioner to said comments, the Court
Resolved to give DUE COURSE to the petition, and to require the parties to FILE their
respective MEMORANDA in both cases, within twenty (20) days from notice.
The Court further Resolved:
xxx xxx xxx
(b) to NOTE:
(1) the urgent motion to resolve application for injunction, dated March 2,
1995, filed by counsel for petitioner American Inter-Fashion Corporation;
and
(2) the urgent motion to restore status quo ante, dated March 14, 1995,
filed by counsel for petitioner.
Thereafter, both American Inter-Fashion Corporation and the GTEB filed their respective
Memoranda. On the other hand, on August 4, 1995, Glorious Sun filed its "Comment on Petition
with Memorandum," 31 which pleading included the succeeding explanatory remarks:
1. At the outset, it should be mentioned that contrary to the 05 April 1995 Resolution
of the Honorable Court, Glorious Sun has not yet filed its comment to American InterFashion Corporation's (AIFC's) petition in the above-numbered case.
2. On 07 September 1994, Glorious Sun filed a motion for reconsideration of the order
of this Honorable Court which consolidated the instant petition with the petition of the
Garments and Textile Export Board (GTEB) in G.R. No. 114711. Glorious Sun included in
said motion for reconsideration a "Motion to Suspend Period to File Comment,"
pending resolution by the Honorable Court of the consolidation incident.
3. Subsequent thereto, or on 22 September 1994, Glorious Sun filed a "Manifestation
and Motion to Suspend Further Proceedings Until After Resolution by Second
Division of Motion for Reconsideration of Order of July 20, 1994 on Consolidation.

4. In view of the filing of the aforementioned motions, Glorious Sun held off the filing
of its comment to the petition until said motions were resolved by the Honorable
Court. To this day, however, no resolution has as yet been rendered by the Honorable
Court relative to the above-stated motions.
5. We surmise that the comment being referred to by the Honorable Court as having
been filed by Glorious Sun is that which the latter filed in connection with AIFC's
Urgent Motions (1) to Resolve Application for Injunction; and (2) to Restore Status Quo
Ante.
6. Be that as it may, Glorious Sun is filing the instant pleading which it prays be treated
as its comment and memorandum. 32
A "Motion for Leave to Intervene and Submit Manifestation" 33 in the above-entitled cases was
subsequently filed by Messrs. Yeung Chun Kam and Yeung Chun Ho, who purport to be the
Hongkong investors referred to by American Inter-Fashion Corporation in its 23 June 1995
Memorandum.
On July 19, 1996, Glorious Sun filed a "Manifestation," whereby it informed this Court of the May
20, 1996 Order of the Securities and Exchange Commission (SEC), the entirety whereof reads thus:
The articles of incorporation of American Inter-Fashion Corporation (the new AIFC, for
short) with SEC Reg. No. AS093-008101-A reveal that said corporation was formed for
the purpose of re-registering American Inter-Fashion Corporation (the old AIFC) with
SEC Reg. No. 12236 registered with the SEC on July 16, 1985 and that the same appear
to have been approved by the Commission en banc in its Commission meeting held on
October 14, 1993. What was actually approved in said meeting was the "registration of
a new corporation" and that it was not the intention of this Commission to approve the
re-registration of the old AIFC.
American Inter-Fashion Corporation (SEC Reg. 12236), whose corporate registration
had been ordered revoked, cannot avoid liquidation by reason of the revocation of its
franchise and it cannot also be allowed to continue its business by virtue of its socalled "re-registration."
Viewed in this light, this Commission en banc hereby RECALLS the certificate of
registration issued to American Inter-Fashion Corporation on October 14, 1993 under
SEC Reg. No. AS093-008101-A without prejudice to the registration of a new
corporation. 34
In the same "Manifestation," Glorious Sun prayed, among others, for the dismissal of the aboveentitled petitions, citing as ground therefor the above-quoted SEC Order recalling American InterFashion Corporation's certificate of registration. Thereafter, American Inter-Fashion Corporation
filed its "Counter Manifestation (To Glorious Sun's Manifestation dated July 15, 1996)," 35 to which

Glorious
Sun
-Manifestation). 36

responded

by

way

of

its

"Reply

(Re:

Counter

In G.R. No. 114711, the GTEB made the following assignment of errors:
I. The respondent Court of Appeals erred gravely in failing to rule that it had no
jurisdiction over the petition in CA-G.R. SP No. 31596.
II. The respondent Court of Appeals erred gravely in failing to rule that the petition in
CA-G.R. SP No. 31596 did not state a cause of action against GTEB.
III. The respondent Court of Appeals erred gravely in failing to hold that the 11 January
1993 Resolution issued by GTEB was valid and in the proper exercise of its
administrative discretion and jurisdiction.
IV. The respondent Court of Appeals erred gravely in failing to hold that the petition in
CA-G.R. SP No. 31596 was rendered moot and academic in its entirety by the mere
passage of the year 1993.
V. The respondent Court of Appeals erred gravely in failing to deny and/or to dismiss
the petition in CA-G.R. SP No. 31596 for lack of merit. 37
On the other hand, AIFC makes the following assignment of errors in its petition: 38
The GTEB has no jurisdiction to take cognizance of Glorious Sun's action against AIFC
for "recovery" of property. 39
In any case, the GTEB's issuance of a resolution deciding the action on its "merits"
without hearing AIFC's evidence is a violation of AIFC's right to due process. 40
The GTEB's cancellation of AIFC's EQs is a confiscation of property without due process
of law. 41
THE ISSUES
1. Considering that AIFC's Certificate of Registration had been effectively revoked by the Securities
and Exchange Commission on May 22, 1990, may AIFC still engage in business and claim
entitlement to the export allocations subject of these petitions?
2. Does the Garments and Textile Export Board (GTEB) have the power and authority to grant or
cancel export quotas or authorizations?
3. Did the GTEB, in issuing the assailed Resolutions, afford AIFC the right to due process?
I

This is not the first time that we have been asked to resolve an issue relative to AIFC's corporate
personality. In G.R. No. 110711, entitled "American Inter-Fashion Corporation v. Securities and
Exchange Commission, et al.," this Court en banc upheld the resolutions of the Prosecution and
Enforcement Department (PED) of the Securities and Exchange Commission (SEC) in PED Case No.
87-0321 revoking AIFC's certificate of registration, on the basis of Glorious Sun's assertions that
AIFC committed fraud and misrepresentation in securing said certificate of registration, after we
had likewise effectively upheld the very same resolutions in an earlier petition filed by AIFC, entitled
"American Inter-Fashion Corporation v. Court of Appeals, et al." 42
In said G.R. No. 110711, we recounted the factual circumstances pertinent to the revocation of
AIFC's certificate of registration in the succeeding manner:
The complaint was assigned for investigation and hearing to SEC's Prosecution and
Enforcement Department (PED). On 14 May 1990, PED issued a resolution
recommending the revocation of petitioner's SEC certificate of registration; however,
on 24 May 1990, PED issued an amended resolution this time revoking the said
certificate on the basis of its ruling that "there was in effect no payment of at least
P1,657,000.00 of the P2,500,000.00 supposed payment on subscription, contrary to
the treasurer's affidavit that the subscription of P2,500,000.00 was fully paid and the
payment had been fully received." In PED's resolution of 15 October 1990, petitioner's
motion for reconsideration was denied.
Acting on petitioner's appeal (docketed as Sec-AC No. 319) from the said resolutions of
PED, the SEC affirmed the same, in its decisions of 22 May 1992. A copy of which was
received by petitioner on 25 May 1992. Petitioner's motion for reconsideration was
denied by the SEC in the latter's order dated September 16, 1992, copy of which order
was received by petitioner's counsel on September 18, 1992 (three [3] SEC
commissioners concurred; two [2] dissented). On September 25, 1992, petitioner then
filed a petition for review with the Court of Appeals docketed as CA-G.R. SP No. 29017.
But on September 30, 1992, the Court of Appeals dismissed the petition on the ground
that it was filed late (last day to file petition was on September 19, 1992, but petition
was filed only on September 25, 1992, thus, petition was filed six [6] days late).
On November 23, 1992, petitioner filed a petition for review (under Rule 45 of the
Rules of Court) with this Court, docketed as G.R. No. 107742 assailing the resolution of
the Court of Appeals in said CA-G.R. SP No. 29017, and questioning the SEC decision of
22 May 1992 in SEC-AC No. 319. On January 13, 1993, this Court (Third Division) denied
AIFC's petition, thus affirming the Court of Appeals' assailed resolution of September
30, 1992, on the ground that the appellate court committed no reversible error in
dismissing the petition in CA-G.R. SP No. 29017. Petitioner's motion for reconsideration
was referred to the Court en banc. On July 1, 1993 the Court en banc denied with
finality petitioner's motion for reconsideration and held that the reason given by
petitioner's counsel for late filing of its petition (i.e. petition was filed late with the
Court of Appeals because petitioner's counsel Atty. Ceniza of Sycip Law got seriously ill)

was not a valid excuse and not a compelling reason to reconsider the Court's resolution
of January 13, 1993.
Petitioner's counsel has filed the present petition (filed on 13 July 1993) under Rule
65 of the Rules of Court, assailing the same PED resolutions and SEC decision assailed
in G.R. No. 107742 (filed under Rule 45 of the Rules), this time on the ground that they
were issued or rendered without jurisdiction.
As earlier noted, substantially and even principally the same issues and subject matter
are raised and involved in the present petition (filed under Rule 65 of the Rules of
Court) and those in the petition in G.R. No. 107742 (filed under Rule 45 of the Rules).
In said G.R. No. 107742, petitioner had availed of the remedy of appeal
by certiorari, i.e., appealing from the decision of the Court of Appeals in CA-G.R. SP No.
29017. Settled is the rule that a special civil action of certiorari (under Rule 65) is not a
substitute for a lost appeal (Bank of America, et al., vs. CA, G.R. No. 78917, June 8,
1990, 186 SCRA 417).
By the resolution of this Court en banc, dated July 1, 1993, rendered in G.R. No.
107742, the petitioner's privilege (or opportunity) to question the SEC decision dated
May 22, 1993 rendered in SEC-AC No. 319 was lost when the Court sitting en
banc denied with finality the motion of petitioner to reconsider this Court's resolution
of 13 January 1993, denying its petition for review (G.R. No. 107742).
Thus, since petitioner had already lost its privilege to question the SEC resolution dated
May 22, 1992, petitioner can no longer assail the same SEC resolution, not even
by certiorari under Rule 65 of the Rules of Court. A contrary rule would swamp this
Court with petitions for certiorari under Rule 65 after an appeal is lost under Rule 45 of
the Rules. This would subvert the long established public policy that litigations must
come to an end at one time or other.
But even granting ex gratia arguendo that petitioner can still avail itself of the remedy
of a special civil action of certiorari (under Rule 65) said remedy should be availed of
within a reasonable period from the date of receipt of the assailed order/decision.
In Reas vs. Bonife, we held that "a petition forcertiorari under Rule 65 is required to be
filed within a reasonable period, no time frame being provided in the Rules within
which such petition has to be filed." In the subsequent case of Philsec Workers' Union
vs. Hon. Romeo A. Young (Resolution dated 22 January 1992, G.R. No. 101734), it was
held that ninety (90) days from notice of the questioned order/decision is a reasonable
period within which to file a petition for certiorari under Rule 65.
In the present petition, the assailed decision of the respondent SEC dated May 22,
1992, was received by petitioner's counsel on May 25, 1992, and the SEC's resolution
denying petitioner's motion for reconsideration was received by petitioner
on September 18, 1992. The present petition was filed on July 13, 1993. From

September 18, 1992 to July 13, 1993, almost ten (10) months had lapsed. Undoubtedly,
said period of ten (10) months is no longer a "reasonable period" within which a
petition for certiorari under Rule 65 may be filed.
As earlier said the denial of the petition in G.R. No. 107742 is final. We must all be
reminded of the settled rule that once a judgment has become final, the issues raised
therein should be laid to rest. Hence, the issues raised anew regarding the again
assailed decision of SEC, dated May 22, 1992, in SEC-AC No. 319, are no longer open to
debate and/or adjudication.
ACCORDINGLY, the present petition is DISMISSED. 43
It appears that subsequent to the revocation of AIFC's certificate of registration, or on October 14,
1993, AIFC registered anew with the SEC, this time under SEC Reg. No. AS093-008101-A under the
name and style: AIFC International Fashion Corporation. Evidently then, the AIFC which filed the
petition in G.R. No. 115889 is the AIFC which was "re-registered" on the above date,
the original AIFC's certificate of registration having been revoked with finality by virtue of our
resolutions referred to in our above-quoted 11 August 1993 Resolution. 44 In the same manner, the
AIFC which the GTEB refers to in its petition in G.R. No. 114711 could not have been any one other
than this same "re-registered" AIFC, said petition having been filed subsequent to the revocation of
the original AIFC's certificate of registration.
It is obvious that the "re-registered" AIFC does not possess the legal personality necessary for it to
prosecute these petitions. In view of the May 20, 1990 Order of the SEC, "the certificate of
registration issued to American Inter-Fashion Corporation on October 14, 1993 under SEC Reg. No.
AS093-008101-A" 45 was revoked. For all legal intents and purposes. AIFC no longer exists, and it
may no longer claim to be entitled to the export allocations subject of these petitions. After all, it
stands to reason that where there is no claimant, there can be no claim. The AIFC International is a
personality separate and distinct from AIFC. For this reason, we cannot grant to AIFC International
Fashion Corporationthe personality to pursue the petition in G.R. No. 114711. It has not applied for
and is thus equally devoid of any personality to lay claim on the export allocations subject of said
petition.
In fine, if only for AIFC's lack of legal personality to maintain its claim relative to the export
allocations subject of these petitions, its petition in G.R. No. 115889 is rendered dismissible. On the
other hand, and in view likewise of this lack of legal personality, we would be justified in annulling
the January 26, 1994 and March 22, 1994 Resolutions of the Court of Appeals in CA-G.R. SP No.
31596, and in dismissing the said petition, as prayed for by the GTEB in G.R. No. 114711.
II
In support of its assertion that it is "the sole entity possessed with the power, jurisdiction and
discretion to grant and disapprove export allocations such as export quotas," the GTEB makes
reference to Executive Order No. 537, as amended, including its implementing rules and
regulations, and the fact that among the functions of the GTEB therein enumerated are "the

approval of export allocations, as well as the monitoring, administration and regulation

thereof." 46 Citing the doctrine of primary jurisdiction, the GTEB further argues that being "a highly
specialized administrative agency endowed with regulatory and quasi-judicial powers . . . it enjoys
the fundamental presumption that it has the technical expertise and mastery over such specialized
matters, so much so that its findings as to the latter would ordinarily deserve the respect of the
courts." 47
AIFC, on the other hand, argues that inasmuch as none of the powers specified in Executive Order
537, specifically Section 3 thereof, gives the GTEB any judicial powers, nor any specific jurisdiction
to hear and decideactions, as the term is understood under Section 1, Rule 2 of the Rules of Court,
and inasmuch as GTEB Case No. 92-50 is such an action between private litigants, the GTEB has no
jurisdiction over said case. 48 To reinforce its argument, AIFC cites our ruling in Globe Wireless
Ltd. v. PSC. 49 In said case, we held:
Too basic in administrative law to need citation of jurisprudence is the rule that the
jurisdiction and powers of administrative agencies . . . are limited to those expressly
granted or necessarily implied from those granted in the legislation creating such body;
and any order without or beyond such jurisdiction is void and ineffective . . . . 50
For its part, Glorious Sun joins the GTEB in the latter's assertion that it is the GTEB which has the
jurisdiction to act and rule on Glorious Sun's petition for the cancellation and restoration to it of the
quotas awarded to AIFC. Thus it argues:
48. Contrary to AIFC's assertions, it is beyond dispute that the GTEB has the jurisdiction
to act and rule on Glorious Sun's Petition for the cancellation and restoration to it of
the quotas illegally awarded to AIFC. A simple reference to the pertinent provisions of
the various Executive Orders (E.O.s) relative to the functions of the GTEB easily reveals
as much.
49. Under E.O. No. 952, which amended E.O. Nos. 537 and 823, it is provided:
Sec 1. Section 3 subparagraphs (a), (h), and (i) of Executive Order No. 537
[on the powers and functions of the Board] is hereby amended to read as
follows:
xxx xxx xxx
(h) In case of violations of its rules and regulations, cancel or suspend
quota allocations, export authorizations and licenses for the operations of
bonded garment manufacturing warehouses or disqualify the firm and/or
its principal stockholders and officers from engaging in garment exports
and from doing business with the Board; . . .
50. Thus, if only on the basis of the above-quoted provision, and even in the face of the
criteria set forth in Globe, it is at once evident that the power to adjudicate on the

question of the AIFC's entitlement to the subject EQs is "necessarily implied" from the
Board's power to "cancel or suspend quota allocations, export authorizations and
licenses."
xxx xxx xxx
51. However, in addition to the above, E.O. No. 913, entitled "Strengthening the RuleMaking and Adjudicatory Powers of the Minister of Trade and Industry in Order to
Further Protect Consumers,' was likewise issued, which E.O., we respectfully submit,
made the GTEB's power to adjudicate on the question of the AIFC's entitlement to the
subject EQs more than just being merely "necessarily implied."
52. Thus, Section 5 of Article III of the above-numbered E.O. reads:
Sec. 5. Formal investigation. (a) Whenever the Minister has verified
that violation/s of "Trade and Industry Laws" has/have been committed,
he may motu proprio charge said violator/s, and thereafter proceed with a
formal investigation, independent of the corresponding criminal or civil
action for the said violation/s. The imposition of administrative penalties
in the formal investigation is without prejudice to the imposition of
penalties in the criminal action and/or judgment in the civil action, and
vice versa.Provided, however, that in deciding the case the Minister or the
judge, as the case may be, shall consider the decision of the other and
impose further penalties, or consider the penalties imposed by the other
as already sufficient, as his sense of justice dictates.
(b) The Minister may proceed to hear and determine the violation in the
absence of any party who has been served with notice to appear in the
hearing.
(c) The Minister shall use every and all reasonable means to ascertain the
facts of the case speedily and objectively without regard to technicalities
of law or procedure and strict rules of evidence prevailing in courts of law
and equity. The Minister shall decide the case within thirty working days
from the time the formal investigation was terminated.
(d) The minister shall have the same power to punish direct and indirect
contempts granted to superior courts under Rule 71 of the Rules of Court
and the power to issue subpoena duces tecum.
(e) When the "trade and industry law" violated provides for its own
administrative procedure and penalties, including a procedure where a
Board Council, Authority, or Committee takes part as a body, the Minister
shall have the option of selecting that procedure and penalties or the
procedure and penalties provided in this Executive Order. If he opts for

the latter, the approval of such Board, Council, Authority, or Committee of

the Minister's decision shall not be necessary.
53. The above-quoted provisions are very significant in light of the definition of the
"Ministry" as the Ministry of Trade and Industry "and/or any of its bureaus, offices, or
attached agencies, or any other office, unit or committee by whatever name which is
placed under or attached to the Ministry of Trade and Industry (Section 1, Article I,
E.O. 913; Emphasis supplied)." The GTEB is one such bureau, office or agency.
54. In this connection, AIFC's statement to the effect that GTEB Case No. 92-50 is an
action by one party against another for the enforcement or protection of a right, is not
entirely accurate. It will be remembered that said GTEB case was initiated
principally for the purpose of securing the cancellation of EQs being illegally held onto
by AIFC, a proceeding which is undoubtedly within the ambit of the Board's powers;
that Glorious Sun stood to benefit from such cancellation was merely incidental to said
proceeding. 51
After examining the arguments raised by all parties concerned, we find the arguments of the GTEB
and Glorious Sun to be impressed with merit, and accordingly hold that the power and jurisdiction
to adjudicate on the question of AIFC's entitlement to the export allocations subject of the aboveentitled petitions (be they export quotas or export authorizations), which includes the discretion to
grant and disapprove said export allocations, belongs solely to the GTEB, and not to the regular
courts.
Semantics notwithstanding, it cannot be denied that GTEB Case No. 92-50 was instituted by
Glorious Sun for the purpose of securing the cancellation of EQs then alleged by it as being illegally
held by AIFC. This being the case, it likewise cannot be denied that, as Glorious Sun correctly
observes, such a proceeding is clearly within the ambit of the GTEB's powers, more specifically, the
power granted to it by Section 3 subparagraph (h) of Executive Order No. 537 (as amended by E.O.
No. 952) to "cancel or suspend quota allocations, export authorizations and licenses for the
operations of bonded garment manufacturing warehouses or disqualify the firm and/or its principal
stockholders and officers from engaging in garment exports and from doing business with the
Board," in case of violations of its rules and regulations.
In light of the above, AIFC's reliance on our ruling in Globe Wireless Ltd. v. PSC, 52 is clearly
misplaced. On the basis of the provisions of law cited by both the GTEB and Glorious Sun, that the
power to adjudicate on the question of an entity's entitlement to export allocations was expressly
granted to the GTEB, or at the very least, was necessarily impliedfrom the power to cancel or
suspend quota allocations, is beyond cavil.
In addition, we must take judicial notice of the fact that AIFC, in cases involving the same
controversy as that in the above-entitled petitions, has recognized the exclusive jurisdiction of the
GTEB to award or cancel export allocations to deserving entities.

AIFC categorically declared in its "Motion to Dismiss," Civil Case No. 93-138 53 that "Executive Order
No. 537, as amended by Executive Order Nos. 823 and 952, vests upon defendant GTEB exclusive
jurisdiction to grant export quota allocations," and that "(u)nder the doctrine of primary
jurisdiction, only defendant GTEB has the authority to award/cancel export quotas." In fact, it is
noteworthy that in said motion to dismiss, AIFC relied upon the very principles cited by both the
GTEB and Glorious Sun in the above-entitled petitions in support of their argument that it is the
GTEB which has jurisdiction over the export allocations subject of said petitions, to wit:
Courts of justice should not generally interfere with purely administrative and
discretionary functions; that courts have no supervisory power over the proceedings
and actions of the administrative departments of the government involving the
exercise of judgment and findings of fact, because by reason of their special knowledge
and expertise over matters falling under their jurisdiction, the latter are in a better
position to pass judgment on such matters and their findings of facts in that regard are
generally accorded respect, if not finality, by the courts. (Ateneo de Manila v. CA, 145
SCRA 105) 54
AIFC reiterated this stance in its "Motion to Dismiss" in Civil Case No. 64010 55 in this wise:
As stated above, this Court cannot grant the reliefs sought in the Complaint without
first deciding that AIFC is not entitled to EQs, and that, in effect, the EQs now in AIFC's
name should be cancelled. This power, however, has been granted not to the courts
but to the GTEB, which is vested with jurisdiction
[i]n case of violations of its rules and regulations, [to] cancel or suspend
quota allocations, export authorizations and licenses for the operations of
bonded garment manufacturing warehouses and/or to disqualify the firm
and/or its principal stockholders and officers from engaging in garment
exports and from doing business with the Board (Section 3[h], Exec. Order
No. 537 [1979], as amended by Exec. Order No. 823 [1982] and Exec.
Order No. 952 [1984]).
And even assuming for argument that it is indeed vested with original jurisdiction
to cancel EQs, under the doctrine of primary jurisdiction, this Court cannot at this time
take cognizance of the Complaint (Supra, at pp. 14-15).
Having already invoked the jurisdiction of the GTEB in earlier actions involving the same
controversy as that before us, AIFC cannot now be heard to question that same jurisdiction simply
because it was unable to obtain the reliefs prayed for by it from the GTEB. We have warned against
such a practice on more than one occasion in the past. Most recently, in St. Luke's Medical
Center, Inc. v. Torres, 56 we reiterated such warning:
It is a settled rule that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and after failing to obtain such relief, repudiate
or question that same jurisdiction. A party cannot invoke jurisdiction at one time and

reject it at another in the same controversy to suit its interests and convenience. The
Court frowns upon and does not tolerate the undesirable practice of some litigants
who submit voluntarily a cause and then accepting the judgment when favorable to
them and attacking it for lack of jurisdiction when adverse (Tajonera v. Lamaroza, 110
SCRA 447, citing Tijam v. Sibonghanoy, 23 SCRA 35) 57
III
As to the allegations of AIFC that it was deprived of due process, we find no merit to this
contention. With respect to the June 21, 1994 Resolution of the GTEB which AIFC assails in its
petition in G.R. No. 115889, it is AIFC's contention that the GTEB issued said resolution 58 without
giving AIFC the opportunity to be heard and without receiving its evidence in any form.
We disagree.
Insofar as the supposed failure of the GTEB to issue a show cause order to AIFC is concerned, we
hold that the GTEB committed no grave abuse of discretion in instituting an action against AIFC on
the basis of the allegations in Glorious Sun's petition in GTEB Case No. 92-50. It is apparent from the
rule cited by AIFC 59 that the same was aimed primarily at ensuring that if any action is to be filed
against a respondent, the same must have sufficient basis in fact. Consequently, for so long as this
goal is achieved, albeit through some other means, no undue prejudice can be caused by the nonissuance of a show-cause order. In fact, as correctly pointed out by Glorious Sun, the GTEB, as a
bureau, office or agency attached to the Ministry of Trade and Industry, may even motu
proprio charge violators of "Trade and Industry Laws," and thereafter proceed with a formal
investigation. 60
Anent AIFC's claim that it was not afforded the opportunity to present evidence in GTEB Case No.
92-50, we find such claim unworthy of belief. The GTEB, as an administrative agency, has in its favor
the presumption that it has regularly performed its official duties, including those which are quasijudicial in nature. In the absence of clear facts to rebut the same, said presumption of regularity
must be upheld. This is also but in keeping with the doctrine of primary jurisdiction.
We are inclined to give credence instead to Glorious Sun's assertions relative to AIFC's presentation
of evidence in GTEB Case No. 92-50, there being ample basis in the records therefor. Thus, after
examining the "Motion to Dismiss" filed by AIFC in GTEB Case No. 92-50, 61 we find nothing therein
to indicate that AIFC reserved its right to present evidence in said GTEB case, contrary to AIFC's
claims. On the other hand, as correctly pointed out by Glorious Sun, if any reservation was made by
AIFC in its "Sur Rejoinder (Re: Motion to Dismiss)," attached to AIFC's petition as Annex "E," this
was limited to the reservation "to raise the question of jurisdiction." 62
More importantly, it is apparent that not only was AIFC afforded the opportunity to present
evidence, it actuallytook advantage of this opportunity by presenting documentary evidence, as
asserted by Glorious Sun, an assertion which AIFC most notably failed to refute. As we have
declared time and again, what is repugnant to due process is the denial of the opportunity to be
heard. 63 That AIFC was afforded this opportunity is beyond question.

From what has been discussed the following conclusions are made:
(1) AIFC no longer has the legal personality to prosecute the above-entitled petitions and may
therefore no longer claim entitlement to the export allocations subject of these petitions;
(2) It is the GTEB, and not the regular courts, nor the Court of Appeals, has the jurisdiction to
adjudicate on the question of AIFC's entitlement to the export allocations subject to these
petitions; and
(3) AIFC's right to due process was in no wise violated by the GTEB, the former not having taken
advantage of the opportunity afforded to it to present evidence in its behalf.
WHEREFORE, AIFC's petition in G.R. No. 115889 is hereby DENIED for lack of merit, as well as for
being moot and academic, AIFC having lost the legal personality to prosecute the same. GTEB's
petition is GRANTED, and the assailed January 21, 1994 Decision and March 22, 1994 Resolution of
the Court of Appeals in CA-G.R. SP No. 31596 is hereby ANNULLED AND SET ASIDE (except insofar as
it denied AIFC and AIFC International Fashion Corporation's "Motion for Issuance of Writ
of Mandamus"). Said CA-G.R. SP No. 31596 is likewise ordered annulled and set aside.
SO ORDERED.
Padilla, Vitug and Kapunan, JJ., concur.
Bellosillo, J., took no part.