ADMIN LAW 2019 1
HLURB (PD 957/PD1344) execution in the enforcement of its decisions under P.D. No. 957,
Claims/cases over which the HLRB has exclusive jurisdiction
(Section 1, PD 1344)
Specific Performance with damages for delivery of title: CT
Torress vs Hibionada
HLURB (PD 957/PD1344
Claims/cases over which the HLRB has exclusive jurisdiction
(Section 1, PD 1344)
Specific Performance with damages for delivery of title: CT
Torress vs Hibionada
CT Torress vs Hibionada
Facts:
The petitioner as agent of private respondent Pleasantville
Development Corporation sold a subdivision lot on installment
to private respondent Efren Diongon. The installment payments
having been completed, Diongon demanded the delivery of the
certificate of title to the subject land. When neither the petitioner
nor Pleasantville complied, he filed a complaint against them for
specific performance and damages in the Regional Trial Court of
Negros Occidental.
It was then that C.T. Torres Enterprises filed a motion to dismiss
for lack of jurisdiction, contending that the competent body to
hear and decide the case was the Housing and Land Use
Regulatory Board.
Issue: w/n the RTC has jurisdiction over the case? NO
Ruling
The trial court failed to consider the express provisions of P.D.
No. 1344 and related decrees. It also erred in supposing that
only the regular courts can interpret and apply the provisions of
the Civil Code, to the exclusion of the quasi-judicial bodies.
P.D. No. 957, promulgated July 12, 1976 and otherwise known
as "The Subdivision and Condominium Buyers’ Protective
Decree," provides that the National Housing Authority shall have
exclusive authority to regulate the real estate trade and business.
P.D. No. 1344, which was promulgated April 2, 1978, and
empowered the National Housing Authority to issue writs of
1|MACACUA NARCISO PRESTO
specified the quasi-judicial jurisdiction of the agency as follows:
SECTION 1. In the exercise of its functions 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:chanrob1es virtual 1aw library
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 contractual and
statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, broker
or salesman. (Emphasis supplied)
Under E.O. No. 648 dated February 7, 1981, the regulatory
functions conferred on the National Housing Authority under
P.D. Nos. 957, 1344 and other related laws were transferred to
the Human Settlements Regulatory Commission, which was
renamed Housing and Land Use Regulatory Board by E.O. No.
90 dated December 17, 1986.
It is clear from Section 1(c) of the above quoted PD No. 1344
that the complaint for specific performance with damages filed
by Diongon with the Regional Trial Court of Negros Occidental
comes under the jurisdiction of the Housing and Land Use
Regulatory Board. Diongon is a buyer of a subdivision lot
seeking specific performance of the seller’s obligation to deliver
to him the corresponding certificate of title.
We hold, in sum, that the complaint for specific performance and
damages was improperly filed with the respondent court,
jurisdiction over the case being exclusively vested in the Housing
and Land Use Regulatory Board. We also hold that the order
denying the motion to dismiss was subject to immediate
challenge before this Court as the filing (and denial) of a motion
for reconsideration was not an indispensable requirement.
Reimbursement of expenses incurred by homeowners in
repairing their defective housing units constructed by the
developer (HLC Construction vs Emily Homeowners)

HLC Construction vs Emily Homeowners
Facts:
Respondents Emily Homes Subdivision Homeowners
Association (EHSHA) and the 150 individual members thereof
filed on October 21, 1998 a civil action for breach of contract,
damages and attorneys fees with the Regional Trial Court of
Davao del Sur, Branch 19, against petitioners, the developers of
low-cost housing units like Emily Homes
Subdivision. Respondents alleged that petitioners used
substandard materials in the construction of their houses, like
coco lumber and termite-infested door jambs. Petitioners
furthermore allegedly did not adhere to the house plan
specifications because the ceiling lines were sagging and there
were deviations from the plumb line of the mullions, door jams
(sic) and concrete columns.[3] Respondents asked petitioners to
repair their defective housing units but petitioners failed to do
so. Respondents had to repair their defective housing units
using their own funds.
On December 11, 1998, petitioners filed a motion to dismiss the
complaint, claiming that it was the Housing and Land Use
Regulatory Board (HLURB) and not the trial court which had
jurisdiction over the case. The trial court denied petitioners
motion to dismiss on the ground that the case fell within its
jurisdiction, not with the HLURB
Issue: w/n the HLURB has jurisdiction over the case?
Ruling:
Petitioners are correct that the case between them and
respondents fell within the jurisdiction of the HLURB, not the trial
court.
Trial Court find that the trial court should have dismissed the
complaint for a more important reason it had no jurisdiction
over it. It is the HLURB, not the trial court, which had jurisdiction
over respondents complaint. The HLURB[8] is the government
agency empowered to regulate the real estate trade and
business, having exclusive jurisdiction to hear and decide cases
involving:
(a) unsound real estate business practices;
(b) claims involving refunds and any other claims
filed by subdivision lot or condominium unit buyers against the
project owner, developer, dealer, broker or salesman;
2|MACACUA NARCISO PRESTO
ADMIN LAW 2019 2
(c) and cases involving specific performance of
contractual and statutory obligations filed by buyers of
subdivision lots or condominium units against the owner,
developer, dealer, broker or salesman.[9]
In this case, respondents complaint was for the reimbursement
of expenses incurred in repairing their defective housing units
constructed by petitioners. Clearly, the HLURB had jurisdiction
to hear it.
HLURB has authority to impose administrative fines under Sec
38 PD 1344 but not criminal penalties (Chua vs Ang)
HLURB is competent to award damages
Chua vs Ang
Facts:
On February 11, 1999, the petitioners (as buyers) and Fil-Estate
Properties, Inc. (FEPI, as developers) executed a Contract To
Sell2 a condominium unit. Despite the lapse of three (3) years,
FEPI failed to construct and deliver the contracted condominium
unit to the petitioners.
As a result, the petitioners filed on September 3, 2002 a
Complaint-Affidavit3 before the Office of the City Prosecutor of
Pasig City accusing the private respondents, as officers and
directors of FEPI, of violating P.D. No. 957, specifically its
Sections 17 and 20, in relation with Section 39.4 These provisions
state:
Sec. 17. Registration. - All contracts to sell, deeds of sale and
other similar instruments relative to the sale or conveyance of
the subdivision lots and condominium units, whether or not the
purchase price is paid in full, shall be registered by the seller in
the Office of the Register of Deeds of the province or city where
the property is situated.
xxx
Sec. 20. Time of Completion. - Every owner or developer shall
construct and provide the facilities, improvements,
infrastructures and other forms of development, including water
supply and lighting facilities, which are offered and indicated in
the approved subdivision or condominium plans, brochures,
prospectus, printed matters, letters or in any form of
advertisement, within one year from the date of the issuance of
the license for the subdivision or condominium project or such
other period of time as may be fixed by the Authority.

xxx
Sec. 39. Penalties. - Any person who shall violate any of the
provisions of this Decree and/or any rule or regulation that may
be issued pursuant to this Decree shall, upon conviction, be
punished by a fine of not more than twenty thousand
(P20,000.00) pesos and/or imprisonment of not more than ten
years: Provided, That in the case of corporations, partnership,
cooperatives, or associations, the President, Manager or
Administrator or the person who has charge of the
administration of the business shall be criminally responsible for
any violation of this Decree and/or the rules and regulations
promulgated pursuant thereto. [Emphasis supplied]
The petitioners alleged that the private respondents did not
construct and failed to deliver the contracted condominium unit
to them and did not register the Contract to Sell with the
Register of Deeds.
private respondent Alice Odchique-Bondoc filed a Counter-
Affidavit.5 She countered that the City Prosecutor has no
jurisdiction over the case since it falls under the exclusive
jurisdiction of the Housing and Land Use Regulatory Board
(HLURB).
Issue: w/n the City Prosecutor has jurisdiction over the case? NO
w/n the HLURB can impose administrative fines? YES
Ruling:
Generally, the extent to which an administrative agency may
exercise its powers depends largely, if not wholly, on the
provisions of the statute creating and defining the terms of the
agency’s mandate. P.D. No. 1344 clarifies and spells out the
quasi-judicial dimensions of the grant of jurisdiction to the
HLURB in the following specific terms:19
SEC. 1. In the exercise of its functions 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
3|MACACUA NARCISO PRESTO
ADMIN LAW 2019 3
C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, broker
or salesman.
The extent of its quasi-judicial authority, on the other hand, is
defined by the terms of P.D. No. 957 whose Section 3 provides:
x x x National Housing Authority [now HLURB]. - The National
Housing Authority shall have exclusive jurisdiction to regulate
the real estate trade and business in accordance with the
provisions of this Decree.
The provisions of P.D No. 957 were intended to encompass all
questions regarding subdivisions and condominiums. The
intention was to provide for an appropriate government agency,
the HLURB, to which all parties – buyers and sellers of
subdivision and condominium units - may seek remedial
recourse. The law recognized, too, that subdivision and
condominium development involves public interest and welfare
and should be brought to a body, like the HLURB, that has
technical expertise.20 In the exercise of its powers, the HLURB, on
the other hand, is empowered to interpret and apply contracts,
and determine the rights of private parties under these
contracts. This ancillary power, generally judicial, is now no
longer with the regular courts to the extent that the pertinent
HLURB laws provide.21
Significantly, nothing in P.D. No. 957 vests the HLURB with
jurisdiction to impose the Section 39 criminal penalties. What
the Decree provides is the authority of the HLURB to impose
administrative fines under Section 38, as implemented by the
Rules Implementing the Subdivision and Condominium Buyer’s
Protective Decree. This Section of the Decree provides:
Sec. 38. Administrative Fines. – The Authority may prescribe and
impose fines not exceeding ten thousand pesos for violations of
the provisions of this Decree or of any rule or regulation
thereunder. Fines shall be payable to the Authority and
enforceable through writs of execution in accordance with the
provisions of the Rules of Court.1avvphi1
The Implementing Rules, for their part, clarify that "The
implementation and payment of administrative fines shall not
preclude criminal prosecution of the offender under Section 39
of the Decree." Thus, the implementing rules themselves
expressly acknowledge that two separate remedies with
differing consequences may be sought under the Decree,
specifically, the administrative remedy and criminal prosecution.

In the present case, the petitioners have expressly chosen to
pursue the criminal prosecution as their remedy but the
prosecutor dismissed their complaint. The prosecutor’s dismissal
for prematurity was apparently on the view that an
administrative finding of violation must first be obtained before
recourse can be made to criminal prosecution.
In the present case, forum shopping is not even a matter for
consideration since the petitioners have chosen to pursue only
one remedy – criminal prosecution. Thus, we see no bar to their
immediate recourse to criminal prosecution by filing the
appropriate complaint before the prosecutor’s office.
In light of these legal realities, we hold that the public
respondent prosecutors should have made a determination of
probable cause in the complaint before them, instead of simply
dismissing it for prematurity.
Action to declare void a mortgage of lot done in violation of
PD 957 and annul a foreclosure sale (Home Banker vs CA)
Mere allegation of relationship between subdivision owner
and a lot buyer does not vest automatic jurisdiction in the
HLURB. Decisive element is the nature of the action
enumerated in Sec. 1, PD 1344 [Transfer of townhouse to
third-party in violation of contract to sell, not with HLURB
(Cadimas vs Carrion)
HLURB and not SEC has jurisdiction over complaint vs
respondent under receivership for specific performance re:
basic homeowners’ needs (Arranza vs BF Homes)
HOME BANKERS SAVINGS & TRUST CO., Petitioner, versus
THE HONORABLE COURT OF APPEALS, PABLO N. AREVALO,
FRANCISCO A. UY, SPOUSES LEANDRO A. SORIANO, JR. and
LILIAN SORIANO, ALFREDO LIM and FELISA CHI
LIM/ALFREDO LIM,
G.R. No. 128354 | 2005-04-26
FACTS:Respondents entered into separate contracts to sell with
TransAmerican Sales and Exposition (TransAmerican) through
the latter's Owner/General Manager, Engr. Jesus Garcia,
involving certain portions of land together with one unit three-
storey townhouse to be built on each portion. Without approval
of the HLURB, the spouses Garcia mortgaged the property in
order to obtain loan from Home Bankers Savings and Trust
Company (formerly Home Savings Bank and Trust Company) a
loan in the amount of P4,000,000.00. When the loan became
4|MACACUA NARCISO PRESTO
ADMIN LAW 2019 4
due, Garcia failed to pay his obligation to petitioner.
Consequently, petitioner instituted an extrajudicial
foreclosure[8] on the subject lots and being the highest bidder
in the public auction, a certificate of sale[9] in its favor was issued
by the sheriff on February 26, 1990. Subsequently, the sheriff's
certificate of sale was registered and annotated on the titles of
the subject lots in the Register of Deeds of Quezon City.
Respondents filed a complaint with the Office of Appeals,
Adjudication and Legal Affairs (OAALA), HLURB, against
Garcia/TransAmerican as seller/developer of the property and
petitioner, as indispensable party, for non-delivery of titles and
non-completion of the subdivision project.[10] They prayed for
the completion of the units, annulment of the mortgage in favor
of petitioner, release of the mortgage on the lots with fully paid
owners and delivery of their titles, and for petitioner to compute
individual loan values of amortizing respondents and to accept
payments from them and damages.
The HLURB ruled that the mortgage executed by and between
respondents Engr. Jesus Garcia/TransAmerican Sales and
Exposition and Home Bankers Savings and Trust Company
(formerly Home Savings Bank and Trust Company) to be
unenforceable as against all the complainants;
ISSUE: Whether or not the HLURB has jurisdiction to nullify or
declare unenforceable the real estate mortgage validly
constituted by the owner?
RULING:YES. The jurisdiction of the HLURB to regulate the real
estate trade is broad enough to include jurisdiction over
complaints for specific performance of the sale, or annulment of
the mortgage, of a condominium unit, with damages.
Under Section 18 of P.D. No. 957, it is provided that no mortgage
on any unit or lot shall be made by the owner or developer
without prior written approval of the authority. Such approval
shall not be granted unless it is shown that the proceeds of the
mortgage loan shall be used for the development of the
condominium or subdivision project and effective measures
have been provided to ensure such utilization. As in the Union
 ADMIN LAW 2019 5

Bank, the mortgage was constituted on the subject lots in favor
of petitioner without the prior written approval from the HLURB,
thus HLURB has jurisdiction to rule on the validity of the
mortgage.
jurisdiction of the HLURB. There is nothing in the allegations in
the complaint or in the terms and conditions of the contract to
sell that would suggest that the nature of the controversy calls
for the application of either P.D. No. 957 or P.D. No. 1344 insofar
as the extent of the powers and duties of the HLURB is
concerned.

MARJORIE B. CADIMAS, by her Attorney-In-Fact,

Note particularly paragraphs (b) and (c) of Sec. 1, P.D. No. 1344
VENANCIO Z. ROSALES, Petitioner, versus MARITES
as worded, where the HLURB's jurisdiction concerns cases
CARRION and GEMMA HUGO, Respondents.
commenced by subdivision lot or condominium unit buyers. As
G.R. No. 180394 | 2008-09-29 to paragraph (a), concerning "unsound real estate practices," the
logical complainants would be the buyers and customers against
the sellers (subdivision owners and developers or condominium
builders and realtors), and not vice versa.[20]
FACTS: Marjorie Cadimas and Marites Carrion entered into a
Contract to Sell wherein Cadimas sold to Carrion a town house
The complaint does not allege that petitioner is a subdivision lot
for the sum of P330,000.00 to be paid in installments. According
buyer. The contract to sell does not contain clauses which would
to petitioner, Carrion had violated paragraph 8 of said contract
indicate that petitioner has obligations in the capacity of a
when she transferred ownership of the property to respondent
subdivision lot developer, owner or broker or salesman or a
Hugo under the guise of a special power of attorney, which
person engaged in real estate business. From the face of the
authorized the latter to manage and administer the property for
complaint and the contract to sell, petitioner is an ordinary seller
and in behalf of respondent Carrion. Allegedly, petitioner asked
of an interest in the subject property who is seeking redress for
respondent Carrion in writing to explain the alleged violation but
the alleged violation of the terms of the contract to sell.
the latter ignored petitioner's letter, prompting petitioner to
Petitioner's complaint alleged that a contract to sell over a
demand in writing that Carrion and Hugo vacate the property
townhouse was entered into by and between petitioner and
and to cancel the contract.[6] Thus, a complaint[5] for
respondent Carrion and that the latter breached the contract
accionreivindicatoria and damages were filed.
when Carrion transferred the same to respondent Hugo without
petitioner's consent.[21] Thus, petitioner sought the cancellation
of the contract and the recovery of possession and ownership of
Respondent Hugo filed a Motion To Dismiss[8] on her behalf the town house. Clearly, the complaint is well within the
and on behalf of respondent Carrion on 18 November 2004, jurisdiction of the RTC.
citing the grounds of lack of jurisdiction to hear the case on the
part of the RTC and estoppel and/or laches on the part of
petitioner. Respondent Hugo argued that the Housing and Land
Use Regulatory Board (HLURB) has jurisdiction over the
complaint because ultimately, the sole issue to be resolved was
whether petitioner, as the owner and developer of the
subdivision on which the subject property stood, was guilty of
committing unsound real estate business practices.

ISSUE:Whether or not the RTC has jurisdiction over the

complaint for accionreivindicatoria?

RULING:Yes. We agree with the ruling of the RTC that it has

jurisdiction over the case based on the allegations of the
complaint. Nothing in the complaint or in the contract to sell
suggests that petitioner is the proper party to invoke the
5|MACACUA NARCISO PRESTO

JESUS LIM ARRANZA; LORENZO CINCO; QUINTIN TAN;
JOSE ESCOBAR; ELBERT FRIEND; CLASSIC HOMES VILLAGE
ASSOCIATION, INC.; BF NORTHWEST HOMEOWNERS'
ASSOCIATION, INC.; and UNITED BF HOMEOWNERS'
ASSOCIATIONS, INC., petitioners, vs. B.F. HOMES, INC. AND
THE HONORABLE COURT OF APPEALS, respondent.
G.R. No. 131683 | 2000-06-19
FACTS:BF Homes, Inc. (BFHI), is a domestic corporation engaged
in developing subdivisions and selling residential lots, one of
which was the BF Homes Parañaque Subdivision. When the
Central Bank ordered the closure of Banco Filipino, which had
substantial investments in respondent BFHI, respondent filed
with the SEC a petition for rehabilitation and a declaration that
it was in a state of suspension of payments. Thus the SEC
appointed Atty. Florencio B. Orendain as a Receiver, and
approved a Revised Rehabilitation Plan.
As a Receiver, Atty. Orendain instituted a central security system
and unified the sixty~five homeowners' associations into an
umbrella homeowners' association called United BF
Homeowners' Associations, Inc. (UBFHAI), which was thereafter
incorporated with the Home Insurance and Guaranty
Corporation (HIGC).[1] In 1989, respondent, through Orendain,
turned over to UBFHAI control and administration of security in
the subdivision, the Clubhouse and the open spaces along
Concha Cruz Drive. Through the Philippine Waterworks and
Construction Corporation (PWCC), respondent's managing
company for waterworks in the various BF Homes subdivisions,
respondent entered into an agreement with UBFHAI for the
annual collection of community assessment fund and for the
purchase of eight new pumps to replace the over~capacitated
pumps in the old wells.
On 7 November 1994, Orendain was relieved by the SEC of his
duties as a Receiver, and a new Board of Receivers consisting of
eleven members of respondent's Board of Directors was
appointed for the implementation of Phases II and III of
respondent's rehabilitation.[2] The new Board, through its
Chairman, Albert C. Aguirre, revoked the authority given by
Orendain to use the open spaces at Concha Cruz Drive and
to collect community assessment funds; deferred the
purchase of new pumps; recognized BF Parañaque
Homeowners' Association, Inc., (BFPHAI) as the representative of
all homeowners in the subdivision; took over the management
6|MACACUA NARCISO PRESTO
ADMIN LAW 2019 6
of the Clubhouse; and deployed its own security guards in the
subdivision.
Petitioners filed with the HLURB a class suit "for and in behalf of
the more than 7,000 homeowners in the subdivision" against
respondent BFHI, BF Citiland Corporation, PWCC and A.C.
Aguirre Management corporation "to enforce the rights of
purchasers of lots" in BF Homes Parañaque.[3] Petitioners
raised "issues" on the following basic needs of the homeowners:
rights~of~way; water; open spaces; road and perimeter wall
repairs; security; and the interlocking corporations that allegedly
made it convenient for respondent "to compartmentalize its
obligations as general developer, even if all of these are hooked
into the water, roads, drainage and sewer systems of the
subdivision."[4]
Petitioners thereafter filed an urgent motion for a
cease~and~desist/status quo order. Acting on this motion,
HLURB Arbiter Charito M. Bunagan issued a 20~day temporary
restraining order to avoid rendering nugatory and ineffectual
any judgment that could be issued in the case;[7] and
subsequently, an Order granting petitioners' prayer for
preliminary injunction was issued enjoining and restraining
respondent BF Homes, Incorporated, its agents and all persons
acting for and in its behalf from taking over/administering the
Concha Garden Row, from issuing stickers to residents and non-
residents alike for free or with fees, from preventing necessary
improvements and repairs of infrastructures within the authority
and administration of complainant UBFHAI, and from directly
and indirectly taking over security in the eight (8) exit points of
the subdivision or in any manner interfering with the processing
and vehicle control in subject gates and otherwise to remove its
guards from the gates upon posting of a bond of One Hundred
Thousand Pesos (P100,000.00) which bond shall answer for
whatever damages respondents may sustain by reason of the
issuance of the writ of preliminary injunction if it turns out that
complainant is not entitled thereto.[8]
Respondent thus filed with the Court of Appeals a petition for
certiorari and prohibition. It contended in the main that the
HLURB acted "completely without jurisdiction" in issuing
the Order granting the writ of preliminary injunction
considering that inasmuch as respondent is under
receivership, the "subject matter of the case is one exclusively
within the jurisdiction of the SEC”.

ISSUE:Whether it is the Securities and Exchange Commission
(SEC) or the Housing and Land Use Regulatory Board (HLURB)
that has jurisdiction over a complaint filed by subdivision
homeowners against a subdivision developer that is under
receivership for specific performance regarding
homeowners' needs such as water, security and open spaces.
RULING: The HLURB has jurisdiction over the complaint.
In the case at bar, petitioners' complaint is for specific
performance to enforce their rights as purchasers of subdivision
lots as regards rights of way, water, open spaces, road and
perimeter wall repairs, and security. Indisputably then, the
HLURB has jurisdiction over the complaint.
The fact that respondent is under receivership does not divest
the HLURB of that jurisdiction. A receiver is a person appointed
by the court, or in this instance, by a quasi~judicial
administrative agency, in behalf of all the parties for the purpose
of preserving and conserving the property and preventing its
possible destruction or dissipation, if it were left in the
possession of any of the parties.[19] It is the duty of the receiver
to administer the assets of the receivership estate; and in the
management and disposition of the property committed to his
possession, he acts in a fiduciary capacity and with impartiality
towards all interested persons.[20] The appointment of a
receiver does not dissolve a corporation, nor does it interfere
with the exercise of its corporate rights.[21] In this case where
there appears to be no restraints imposed upon respondent as
it undergoes rehabilitation receivership,[22] respondent
continues to exist as a corporation and hence, continues or
should continue to perform its contractual and statutory
responsibilities to petitioners as homeowners.
Receivership is aimed at the preservation of, and at making more
secure, existing rights; it cannot be used as an instrument for the
destruction of those rights.[23]
No violation of the SEC order suspending payments to creditors
would result as far as petitioners' complaint before the HLURB is
concerned. To reiterate, what petitioners seek to enforce are
respondent's obligations as a subdivision developer. Such claims
are basically not pecuniary in nature although it could
incidentally involve monetary considerations. All
petitioners' claims entail is the exercise of proper subdivision
7|MACACUA NARCISO PRESTO
ADMIN LAW 2019 7
management on the part of the SEC~appointed Board of
Receivers towards the end that homeowners shall enjoy the ideal
community living that respondent portrayed they would have
when they bought real estate from it.
basic
There is forum Shopping where HL Carlos (Contractor) sues
before HLURB to enforce contract to purchase and files
another suit in the court to collect money re: unpaid billings
from construction Contract (Marina Properties Corp vs Ca)
Marina Properties vs Ca
Facts:
Marina Properties is a real estate development corporation.
Marina and HL Carlos Corporation entered into a construction
project involving the Marina Bay Homes Condo. As incentive
to complete the construction, Marina allowed HL Carlos to
purchase a condominium unit. However, after partial payment
by HL Carlos in the Contract to Purchase and Sell, Marina
refused to deliver the condo unit. Feeling aggrieved, HL Carlos
sued Marina before the RTC for collection of sum of money
regarding unpaid billings from construction contract and
before the Housing and Land Use Regulatory Board
(HLURB)for specific performance with damages for Marina’s
unilateral cancellation of contract to buy and sell the unit.
Marina claims the case filed before HLURB should be dismissed
due to litispendencia and forum shopping.
Issues:
Whether filing 2 cases before RTC and HLURB is proper (yes)
Whether there is forum shopping (no)
Ruling:
Yes, filing before RTC and HLURB at the same time is proper.
NO FORUM SHOPPING
HL CARLOS was not guilty of forum shopping when it sued
MARINA before the HLURB to enforce their Contract To
Purchase and To Sell. Forum shopping is the act of a party
against whom an adverse judgment has been rendered in one
that
forum, of seeking another (and possibly favorable) opinion in
another forum other than by appeal or the special civil action
 ADMIN LAW 2019 8

of certiorari, or the institution of two (2) or more actions or Note:

proceedings grounded on the same cause on the supposition
that one or the other court might look with favor upon the
party. Contrary to MARINAs assertion, H.L. CARLOS complaint
Two cases involve two different issues and separate causes of
was hardly a duplication of Civil Case No. 89-5870 which was
action. No forum shopping.
filed to collect the sum of money corresponding to unpaid
billings from their Construction Contract. The cause of action Securities Regulation Code
in the civil case was, therefore, totally distinct from the cause
of action in the complaint before the HLURB. For this reason, RA 8799
neither could there have been splitting of a cause of action.

--amendedPD 902-A
We likewise uphold the finding that MARINAs cancellation of
the Contract To Buy and To Sell was clearly illegal. Prior to --transferred jurisdiction of SEC over intra-corporate or
MARINAs unilateral act of rescission, H.L. CARLOS had already partnership cases to the courts
paid P1,810,330.70, or more than 50% of the contract price of
P3,614,000.00.
SEC vs Interport

Facts:
As to the governing law, Section 24 of P.D. 957 provides:

Interport Resources Corporation (IRC) and Ganda Holdings

SEC.24. Failure to pay installments. -- The rights of the buyer in
the event of his failure to pay the installments due for reasons
other than failure of the owner or developer to develop the
project shall be governed by Republic Act No. 6552.
Then among the requirements of R.A. No. 6552, in order to
effect the cancellation of a contract, a notarial cancellation
must first be had. Therefore, absent this,
MARINAscancellation of its contract with H.L. CARLOS was
void.
In conclusion, cases involving specific performance of
contractual and statutory obligations, filed by buyers of
subdivision lots or condominium units against the owner,
developer, dealer, broker or salesman fall under the
jurisdiction of the HLURB. It is incumbent upon said
administrative agency, in the exercise of its powers and
functions, to interpret and apply contracts, determine the
rights of the parties under these contracts, and award
damages whenever appropriate.
Berhad (GHB) entered into a Memorandum of Agreement,
whereby IRC acquired entire capital stock of Ganda Energy
Holdings Inc. (GEHI) for the operation of a 102 megawatt gas
turbine power-generating barge. Consequently, Securities and
Exchange Commission (SEC) discovered that IRC failed to make
timely public disclosures of its negotiations with Ganda.
According to SEC, IRC violated the Rules on Disclosure of
Material Facts (Old Securities Act of 1936) when it failed to
make timely disclosure of its negotiations with GHB.
According to IRC, SEC had no authority to investigate the
subject matter, since under Section 8 of Presidential Decree
No. 902-A, as amended by Presidential Decree No. 1758,
jurisdiction was conferred upon the Prosecution and
Enforcement Department (PED) of the SEC.
However, the court promulgated a decision stating that “no
criminal complaint may be filed by SEC without violating
IRC directors’ right to due process”.
Issue:

Whether SEC has authority to initiate and file criminal suit

against IRC and its directors (yes)

8|MACACUA NARCISO PRESTO


Ruling:
Yes, SEC has authority to file criminal complaint against IRC and
directors for violations of the Revised Securities Act.
The SEC retained the jurisdiction to investigate violations of
the Revised Securities Act, reenacted in the Securities
Regulations Code, despite the abolition of the PED.
In the absence of any constitutional or statutory infirmity,
which may concern Sections 30 and 36 of the Revised
Securities Act, this Court upholds these provisions as legal and
binding. It is well settled that every law has in its favor the
presumption of validity. Unless and until a specific provision of
the law is declared invalid and unconstitutional, the same is
valid and binding for all intents and purposes.The mere
absence of implementing rules cannot effectively invalidate
provisions of law, where a reasonable construction that will
support the law may be given.
Section 30 of the Revised Securities Act
Sec. 30. Insider's duty to disclose when trading. - (a) It shall be
unlawful for an insider to sell or buy a security of the issuer, if
he knows a fact of special significance with respect to the
issuer or the security that is not generally available, unless (1)
the insider proves that the fact is generally available or (2) if
the other party to the transaction (or his agent) is identified,
(a) the insider proves that the other party knows it, or (b) that
other party in fact knows it from the insider or otherwise.
(b) "Insider" means (1) the issuer, (2) a director or officer of, or
a person controlling, controlled by, or under common control
with, the issuer, (3) a person whose relationship or former
relationship to the issuer gives or gave him access to a fact of
special significance about the issuer or the security that is not
generally available, or (4) a person who learns such a fact from
any of the foregoing insiders as defined in this subsection, with
knowledge that the person from whom he learns the fact is
such an insider.
(c) A fact is "of special significance" if (a) in addition to being
material it would be likely, on being made generally available,
to affect the market price of a security to a significant extent,
9|MACACUA NARCISO PRESTO
ADMIN LAW 2019 9
or (b) a reasonable person would consider it especially
important under the circumstances in determining his course
of action in the light of such factors as the degree of its
specificity, the extent of its difference from information
generally available previously, and its nature and reliability.
(d) This section shall apply to an insider as defined in
subsection (b) (3) hereof only to the extent that he knows of a
fact of special significance by virtue of his being an insider.
Section 36(a) of the Revised Securities Act
As regards Section 36(a) of the Revised Securities Act,
respondents claim that the term "beneficial ownership" is
vague and that it requires implementing rules to give effect to
the law. Section 36(a) of the Revised Securities Act is a
straightforward provision that imposes upon (1) a beneficial
owner of more than ten percent of any class of any equity
security or (2) a director or any officer of the issuer of such
security, the obligation to submit a statement indicating his or
her ownership of the issuer's securities and such changes in his
or her ownership thereof. The said provision reads:
Sec. 36. Directors, officers and principal stockholders. - (a)
Every person who is directly or indirectly the beneficial owner
of more than ten per centum of any [class] of any equity
security which is registered pursuant to this Act, or who is [a]
director or an officer of the issuer of such security, shall file, at
the time of the registration of such security on a securities
exchange or by the effective date of a registration statement
or within ten days after he becomes such a beneficial owner,
director or officer, a statement with the Commission and, if
such security is registered on a securities exchange, also with
the exchange, of the amount of all equity securities of such
issuer of which he is the beneficial owner, and within ten days
after the close of each calendar month thereafter, if there has
been a change in such ownership during such month, shall file
with the Commission, and if such security is registered on a
securities exchange, shall also file with the exchange, a
statement indicating his ownership at the close of the calendar

month and such changes in his ownership as have occurred
during such calendar month.
Toll Regulatory Board
PD 1112
Section 3. Powers and Duties of the Board. The Board shall
have in addition to its general powers of administration the
following powers and duties:
(d) Issue, modify and promulgate from time to time the rates
of toll that will be charged the direct users of toll facilities and
upon notice and hearing, to approve or disapprove petitions
for the increase thereof. Decisions of the Board on petitions
for the increase of toll rate shall be appealable to the Office of
the President within ten (10) days from the promulgation
thereof. Such appeal shall not suspend the imposition of the
new rates, provided however, that pending the resolution of
the appeal, the petitioner for increased rates in such case shall
deposit in a trust fund such amounts as may be necessary to
reimburse toll payers affected in case a reversal of the
decision.
(e) To grant authority to operate a toll facility and to issue
therefore the necessary "Toll Operation Certificate" subject to
such conditions as shall be imposed by the Board
Padua vs Ranada
Facts:
Citra Manila Tollways Corporation filed before Toll Regulatory
Board an application for the interim adjustment of the toll
rates at the Metro Manila Skyway Project. TRB issued
resolution authorizing provisional toll rate adjustments. Padua
and Zialcita questioned the validity of the resolution on the
following grounds: no required publication, violation of due
process, 3 of members signed without attending the hearing,
toll rate adjustments are exhorbitant, and TRB violated its own
charter (PD 1112) without the benefit of any public hearing.
Issue:
10 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 10
Whether Toll Regulatory Board could authorize the provisional
toll rate adjustment (yes)
Ruling:
Obviously, the laws and the TRB Rules of Procedure have
provided the remedies of an interested Expressways user.[23]
The initial proper recourse is to file a petition for review of the
adjusted toll rates with the TRB. The need for a prior resort to
this body is with reason. The TRB, as the agency assigned to
supervise the collection of toll fees and the operation of toll
facilities, has the necessary expertise, training and skills to
judiciously decide matters of this kind. As may be gleaned from
the petition, the main thrust of petitioner Zialcitas argument is
that the provisional toll rate adjustments are exorbitant,
oppressive, onerous and unconscionable. This is obviously a
question of fact requiring knowledge of the formula used and
the factors considered in determining the assailed rates.
Definitely, this task is within the province of the TRB.
We take cognizance of the wealth of jurisprudence on the
doctrine of primary administrative jurisdiction and exhaustion
of administrative remedies. In this era of clogged court
dockets, the need for specialized administrative boards or
commissions with the special knowledge, experience and
capability to hear and determine promptly disputes on
technical matters or intricate questions of facts, subject to
judicial review in case of grave abuse of discretion, is
indispensable. Between the power lodged in an administrative
body and a court, the unmistakable trend is to refer it to the
former."
Securities Regulation Code (RA 8799)
INTRA-CORPORATE CASES; JURISDICTION - RA 8799 amended
PD 902-A and transferred jurisdiction of SEC over intra-
corporate or partnership cases to the courts.
A criminal charge for violation of the code is a specialized
disputes that should first be looked into by the SEC under the
doctrine of primary jurisdiction and if it finds probable cause,
it should refer to the DOJ for PI (SEC vs Interport Resources)
SEC investigation interrupts prescriptive period
TOLL REGULATORY BOARD (PD1112)
Remedy of the interested expressway user who finds the toll
rate adjustments to be onerous, oppressive and exorbitant is
 ADMIN LAW 2019 11

to file a petition for review of the adjusted toll rates with the Luzon Tollways, providing for the detailed terms and conditions
TRB. The issue involves question fact. for the construction, maintenance and operation of the
expressway.[2]
TRB decision is appealable within 10 days to the office of the
president.
(Padua vs Ranada)
As expressly set out in P.D. 1113 and reiterated in P.D. 1894,
(Francisco vs TRB)
PNCC may sell or assign its franchise thereunder granted or cede
the usufruct[4] thereof upon the Presidents approval.[5] This same

Francisco vs TRB provision on franchise transfer and cession of usufruct is likewise

found in P.D. 1112.[6]
Facts:

The antecedent facts are as follows

Then came the 1987 Constitution with its franchise provision.[7]
On March 31, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. (P.D.) 1112, authorizing the In 1993, the Government Corporate Counsel (GCC), acting on

establishment of toll facilities on public improvements.[1] This PNCCs request, issued Opinion No. 224, s. 1993,[8] later affirmed

issuance, in its preamble, explicitly acknowledged the huge by the Secretary of Justice,[9] holding that PNCC may, subject to
financial requirements and the necessity of tapping the certain clearance and approval requirements, enter into a joint
resources of the private sector to implement the governments venture (JV) agreement (JVA) with private entities without going

infrastructure programs. In order to attract private sector into public bidding in the selection of its JV partners.PNCCs

involvement, P.D. 1112 allowed the collection of toll fees for the query was evidently prompted by the need to seek out
use of certain public improvements that would allow a alternative sources of financing for expanding and improving
reasonable rate of return on investments. The same decree existing expressways, and to link them to economic zones in the

created the Toll Regulatory Board (TRB) and invested it under north and to the CALABARZON area in the south.
Section 3 (a) (d) and (e) with the power to enter, for the Republic,
into contracts for the construction, maintenance and operation
of tollways, grant authority to operate a toll facility, issue The Issues
therefor the necessary Toll Operation Certificate (TOC) and fix
initial toll rates, and, from time to time, adjust the same after due whether the TRB is vested with the power and authority to grant
notice and hearing. what amounts to a franchise over tollway facilities; third,
corollary to the second, whether the TRB can enter into TOAs
On the same date, P.D. 1113 was issued, granting to the and, at the same time, promulgate toll rates and rule on petitions
Philippine National Construction Corporation (PNCC), then for toll rate adjustments; fourth,
known as the Construction and Development Corporation of the
Philippines (CDCP), for a period of thirty years from May 1977 or
up to May 2007 a franchise to construct, maintain and operate
TRB Empowered to Grant Authority to Operate
toll facilities in the North Luzon and South Luzon Expressways,
with the right to collect toll fees at such rates as the TRB may fix
Toll Facility /System
and/or authorize. Particularly, Section 1 of P.D. 1113 delineates
the coverage of the expressways
from Balintawak, Caloocan City to Carmen, Rosales, Pangasinan
and from Nichols, Pasay City to Lucena, Quezon. And because It is abundantly clear that Sections 3 (a) and (e) of P.D. 1112 in
the franchise is not self-executing, as it was in fact made subject, relation to Section 4 of P.D. 1894 have invested the TRB with
under Section 3 of P.D. 1113, to such conditions as may be sufficient power to grant a qualified person or entity with
imposed by the Board in an appropriate contract to be executed authority to construct, maintain, and operate a toll facility and to
for such purpose, TRB and PNCC signed in October 1977, a Toll issue the corresponding toll operating permit or TOC.
Operation Agreement (TOA) on the North Luzon and South

11 | M A C A C U A N A R C I S O P R E S T O
 ADMIN LAW 2019 12

Sections 3 (a) and (e) of P.D. 1112 and Section 4 of P.D. 1894
amply provide the power to grant authority to operate toll
facilities:
Section 3. Powers and Duties of the Board. The Board shall have
in addition to its general powers of administration the following
powers and duties:
purpose, without the prior approval of the President of the
Philippines. In the event of any valid transfer of the Toll
Operation Certificate, the Transferee shall be subject to all the
conditions, terms, restrictions and limitations of this Decree as
fully and completely and to the same extent as if the Toll
Operation Certificate has been granted to the same person, firm,
company, corporation or other commercial or legal entity.

(4) That in time of war, rebellion, public peril, emergency,

calamity, disaster or disturbance of peace and order, the
(a) Subject to the approval of the President of the Philippines, to
President of the Philippines may cause the total or partial closing
enter into contracts in behalf of the Republic of
of the toll facility or order to take over thereof by the
the Philippines with persons, natural or juridical, for the
Government without prejudice to the payment of just
construction, operation and maintenance of toll facilities such as
compensation.
but not limited to national highways, roads, bridges, and public
thoroughfares. Said contract shall be open to citizens of
the Philippines and/or to corporations or associations qualified
under the Constitution and authorized by law to engage in toll (5) That no guarantee, Certificate of Indebtedness, collateral,
operations; securities, or bonds shall be issued by any government agency
or government-owned or controlled corporation on any
financing program of the toll operator in connection with his
undertaking under the Toll Operation Certificate.
xxxx

(6) The Toll Operation Certificate may be amended, modified

(e) To grant authority to operate a toll facility and to issue
or revoked whenever the public interest so requires.
therefore the necessary Toll Operation Certificate subject to such
conditions as shall be imposed by the Board including inter alia
the following:
(a) The Board shall promulgate rules and regulations
governing the procedures for the grant of Toll Certificates. The
rights and privileges of a grantee under a Toll Operation
(1) That the Operator shall desist from collecting toll upon the
Certificate shall be defined by the Board.
expiration of the Toll Operation Certificate.

(b) To issue rules and regulations to carry out the purposes of

(2) That the entire facility operated as a toll system including all
this Decree.
operation and maintenance equipment directly related thereto
shall be turned over to the government immediately upon the
expiration of the Toll Operation Certificate.
SECTION 4. The Toll Regulatory Board is hereby given
jurisdiction and supervision over the GRANTEE with respect to
the Expressways, the toll facilities necessarily appurtenant
(3) That the toll operator shall not lease, transfer, grant the
thereto and, subject to the provisions of Section 8 and 9 hereof,
usufruct of, sell or assign the rights or privileges acquired under
the toll that the GRANTEE will charge the users thereof.
the Toll Operation Certificate to any person, firm, company,
corporation or other commercial or legal entity, nor merge with
any other company or corporation organized for the same

12 | M A C A C U A N A R C I S O P R E S T O
 ADMIN LAW 2019 13

By explicit provision of law, the TRB was given the power to grant power to issue such authorization for certain classes of public
administrative franchise for toll facility projects. utilities.[35] (Emphasis ours.)

We are unable to agree with petitioners stance and their undue

reliance on Article XII, Section 11 of the Constitution, which
states that:
SEC. 11. No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted
except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least
sixty per centum of whose capital is owned by such citizens, nor
shall such franchise, certificate, or authorization be exclusive in
character or for a longer period than fifty years.Neither shall any
such franchise or right be granted except under the condition
that it shall be subject to amendment, alteration, or repeal by
the Congress when the common good so requires x x x.
The limiting thrust of the foregoing constitutional provision on
the grant of franchise or other forms of authorization to operate
public utilities may, in context, be stated as follows: (a) the grant
shall be made only in favor of qualified Filipino citizens or
corporations; (b) Congress can impair the obligation of
franchises, as contracts; and (c) no such authorization shall be
exclusive or exceed fifty years.
A franchise is basically a legislative grant of a special privilege to
a person.[33] Particularly, the term, franchise, includes not only
authorizations issuing directly from Congress in the form of
statute, but also those granted by administrative agencies to
which the power to grant franchise has been delegated by
Congress.[34] The power to authorize and control a public utility
is admittedly a prerogative that stems from the Legislature. Any
suggestion, however, that only Congress has the authority to
grant a public utility franchise is less than accurate. As stressed
in Albano v. Reyesa case decided under the aegis of the 1987
Constitutionthere is nothing in the Constitution remotely
indicating the necessity of a congressional franchise before each
and every public utility may operate, thus:
In such a case, therefore, a special franchise directly emanating
from Congress is not necessary if the law already specifically
authorizes an administrative body to grant a franchise or to
award a contract.[36] This is the same view espoused by the
Secretary of Justice in his opinion dated January 9, 2006, when
he stated:
That the administrative agencies may be vested with the
authority to grant administrative franchises or concessions over
the operation of public utilities under their respective
jurisdiction and regulation, without need of the grant of a
separate legislative franchise, has been upheld by the Supreme
Court x x x.[37]
Under the 1987 Constitution, Congress has an explicit authority
to grant a public utility franchise. However, it may validly
delegate its legislative authority, under the power of subordinate
legislation,[38] to issue franchises of certain public utilities to
some administrative
agencies. In Kilusang Mayo Uno Labor Center v. Garcia, Jr., We
explained the reason for the validity of subordinate legislation,
thus:
Such delegation of legislative power to an administrative
agency is permitted in order to adapt to the
increasing complexity of modern life. As subjects for
governmental regulation multiply, so does the difficulty of
administering the laws. Hence, specialization even in
legislation has become necessary.[39] (Emphasis ours.)

That the Constitution provides x x x that the issuance of a

franchise, certificate or other form of authorization for the
As aptly pointed out by the TRB and other private respondents,
operation of a public utility shall be subject to amendment,
the Land Transportation Franchising and Regulatory Board
alteration or repeal by Congress does not necessarily imply x
(LTFRB), the Civil Aeronautics Board (CAB), the National
x x that only Congress has the power to grant such
Telecommunications Commission (NTC), and the Philippine
authorization. Our statute books are replete with laws
Ports Authority (PPA), to name a few, have been such delegates.
granting specified agencies in the Executive Branch the
The TRB may very well be added to the growing list, having been

13 | M A C A C U A N A R C I S O P R E S T O

statutorily endowed, as earlier indicated, the power to grant to
qualified persons, authority to construct road projects and
operate thereon toll facilities. Such grant, as evidenced by the
corresponding TOC or set out in a TOA, may be amended,
modified, or revoked [by the TRB] whenever the public interest
so requires.[40]
Third Issue: TRBs Power to Enter into Contracts; Issue,
Modify And Promulgate Toll Rates; and to Rule on Petitions
Relative to Toll Rates Level and Increases Valid
The petitioners in the special civil actions cases would have the
Court declare as invalid (a) Section 3 (a) and (d) of P.D. 1112
(which accord the TRB, on one hand, the power to enter into
contracts for the construction, and operation of toll facilities,
while, on the other hand, granting it the power to issue and
promulgate toll rates) and (b) Section 8 (b) of P.D. 1894 (granting
TRB adjudicatory jurisdiction over matters involving toll rate
movements). As submitted, granting the TRB the power to award
toll contracts is inconsistent with its quasi-judicial function of
adjudicating petitions for initial toll and periodic toll rate
adjustments. There cannot, so petitioners would postulate, be
impartiality in such a situation.
The assailed provisions of P.D. 1112 and P.D. 1894 read:
P.D. 1112
Section 3. Powers and Duties of the Board. The Board shall have
in addition to its general powers of administration the following
powers and duties:
(a) Subject to the approval of the President of the Philippines, to
enter into contracts in behalf of the Republic of the Philippines
with persons, natural or juridical, for the construction, operation
and maintenance of toll facilities such as but not limited to
national highways, roads, bridges, and public thoroughfares.
Said contract shall be open to citizens of the Philippines and/or
14 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 14
to corporations or associations qualified under the Constitution
and authorized by law to engage in toll operations;
(d) Issue, modify and promulgate from time to time the rates of
toll that will be charged the direct users of toll facilities
and upon notice and hearing, to approve or disapprove
petitions for the increase thereof.Decisions of the Board on
petitions for the increase of toll rate shall be appealable to the
Office of the President within ten (10) days from the
promulgation thereof. Such appeal shall not suspend the
imposition of the new rates, provided however, that pending the
resolution of the appeal, the petitioner for increased rates in
such case shall deposit in a trust fund such amounts as may be
necessary to reimburse toll payers affected in case a reversal of
the decision. (Emphasis ours.)
P.D. 1894
SECTION 8. x x x
(b) For the Metro Manila Expressway and such extensions,
linkages, stretches and diversions of the Expressways which may
henceforth be constructed, maintained and operated by the
GRANTEE, the GRANTEE shall collect toll at such rates as shall
initially be approved by the Toll Regulatory Board. The Toll
Regulatory Board shall have the authority to approve such initial
toll rates without the necessity of any notice and hearing, except
as provided in the immediately succeeding paragraph of this
Section. For such purpose, the GRANTEE shall submit for the
approval of the Toll Regulatory Board the toll proposed to be
charged the users. After approval of the toll rate(s) by the Toll
Regulatory Board and publication thereof by the GRANTEE once
in a newspaper of general circulation, the toll shall immediately
be enforceable and collectible upon opening of the expressway
to traffic use.
Any interested Expressways users shall have the right to file,
within a period of ninety (90) days after the date of publication
of the initial toll rate, a petition with the Toll Regulatory Board
for a review of the initial toll rate; provided, however, that the
filing of such petition and the pendency of the resolution thereof

shall not suspend the enforceability and collection of the toll in
question. The Toll Regulatory Board, at a public hearing called
for the purpose after due notice, shall then conduct a review of
the initial toll shall be appealable (sic) to the Office of the
President within ten (10) days from the promulgation
thereof. The GRANTEE may be required to post a bond in such
amount and from such surety or sureties and under such terms
and conditions as the Toll Regulatory Board shall fix in case of
any petition for review of, or appeal from, decisions of the Toll
Regulatory Board.
In case it is finally determined, after a review by the Toll
Regulatory Board or appeal therefrom, that the GRANTEE is not
entitled, in whole or in part, to the initial toll, the GRANTEE shall
deposit in the escrow account the amount collected under the
approved initial toll fee and such amount shall be refunded to
Expressways users who had paid said toll in accordance with the
procedure as may be prescribed or promulgated by the Toll
Regulatory Board. (Emphasis ours.)
The petitioners are indulging in gratuitous, if not unfair,
conclusion as to the capacity of the TRB to act as a fair and
objective tribunal on matters of toll fee fixing.
Administrative bodies have expertise in specific matters within
the purview of their respective jurisdictions. Accordingly, the law
concedes to them the power to promulgate implementing rules
and regulations (IRR) to carry out declared statutory policies
provided that the IRR conforms to the terms and standards
prescribed by that statute.[72]
The Court does not perceive an irreconcilable clash in the
enumerated TRBs statutory powers, such that the exercise of one
negates another. The ascription of impartiality on the part of the
TRB cannot, under the premises, be accorded cogency.
Petitioners have not shown that the TRB lacks the expertise,
competence and capacity to implement its mandate of
balancing the interests of the toll-paying motoring public and
the imperative of allowing the concessionaires to recoup their
investment with reasonable profits. As it were, Section 9 of P.D.
1894 provides a parametric formula for adjustment of toll rates
that takes into account the Peso-US Dollar exchange rate,
15 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 15
interest rate and construction materials price index, among
other verifiable and quantifiable variables.
While not determinative of the issue immediately at hand, the
grant to and the exercise by an administrative agency of
regulating and allowing the operation of public utilities and, at
the same time, fixing the fees that they may charge their
customers is now commonplace. It must be presumed that the
Congress, in creating said agencies and clothing them with both
adjudicative powers and contract-making prerogatives, must
have carefully studied such dual authority and found the same
not breaching any constitutional principle or concept.[73] So
must it be for P.D. Nos. 1112 and 1894.
The Court can take judicial cognizance of the exercise by the
LTFRB and NTC both spin-off agencies of the now defunct Public
Service Commission of similar concurrent powers. The LTFRB,
under Executive Order No. (E.O.) 202,[74] series of 1987, is
empowered,[75] among others, to regulate the operation of
public utilities or for hire vehicles and to grant franchises or
certificates of public convenience (CPC); and to fix rates or fares,
to approve petitions for fare rate increases and to resolve
oppositions to such petitions.
The NTC, on the other hand, has been granted similar powers of
granting franchises, allocating areas of operations, rate-fixing
and to rule on petitions for rate increases under E.O. 546,[76] s. of
1979.
The Energy Regulatory Commission (ERC) likewise enjoys on the
one hand, the power (a) to grant, modify or revoke an authority
to operate facilities used in the generation of electricity, and on
the other, (b) to determine, fix and approve rates and tariffs of
transmission, and distribution retail wheeling charges and tariffs
of franchise electric utilities and all electric power rates including
that which is charged to end-users.[77] In Chamber of Real Estate
and Builders Association, Inc. v. ERC, We even categorically stated
that the ERC is a quasi-judicial and quasi-legislative
regulatory body created under Section 38 of the EPIRA, [and] x
x x an administrative agency vested with broad regulatory and
monitoring functions over the Philippine electric industry to
ensure its successful restructuring and modernization x x x.[78]
 ADMIN LAW 2019 16

To summarize, the fact that an administrative agency is
exercising its administrative or executive functions (such as the
granting of franchises or awarding of contracts) and at the same
time exercising its quasi-legislative (e.g. rule-making) and/or
quasi-judicial functions (e.g. rate-fixing), does not support a
finding of a violation of due process or the Constitution. In C.T.
Torres Enterprises, Inc. v. Hibionada,[79] We explained the
rationale, thus:
It is by now commonplace learning that
administrative agencies exercise and perform adjudicatory
powers and functions, though to a limited extent only. Limited
delegation of judicial or quasi-judicial authority
administrative agencies (e.g. the Securities and Exchange
Commission and the National Labor Relations Commission) is
well recognized in our jurisdiction, basically because the
need for special competence and experience has been
recognized as essential in the resolution of questions of
complex or specialized character and because of a
companion recognition that the dockets of our regular
courts have remained crowded and clogged.
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
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 unquestionably called the fourth
department of the government.
controversies which cannot possibly be handled by regular
courts. (Emphasis ours.)
Rule on primary jurisdiction applies only where admin
agency exercises quasi-judicial or adjudicatory functions.
Here, RTC has jurisdiction over Sanchez’ complaint for
damages vs. UST. He did not violate rule vs. forum shopping
when he sought recourse with both the CHED and RTC. Sec.
8, RA 7722 (Higher Education Act of 1994) does not contain
any express grant to CHED of quasi-judicial power.
many (UST vs Sanchez
UST VS SANCHEZ
to
FACTS
This case began with a Complaint[3] for Damages filed by
respondent Danes B. Sanchez (respondent) against the University of
Santo Tomas (UST) and its Board of Directors, the Dean and the
Assistant Dean of the UST College of Nursing, and the University
Registrar for their alleged unjustified refusal to release the respondents
Transcript of Records (ToR).
In his Complaint, respondent alleged that he graduated from UST on
April 2, 2002 with a Bachelors Degree of Science in Nursing. He was
included in the list of candidates for graduation and attended
ramified graduation ceremonies. On April 18, 2002, respondent sought to
secure a copy of his ToR with the UST Registrars Office, paid the
required fees, but was only given a Certificate of Graduation by the
Registrar.
The respondent prayed that the RTC order UST to release his ToR and
hold UST liable for actual, moral, and exemplary damages, attorneys
fees, and the costs of suit.

After the parties filed their responsive pleadings,[6] petitioners filed a

xxxx
Supplement to their Motion to Dismiss,[7] alleging that respondent

sought administrative recourse before the Commission on Higher

There is no question that a statute may vest exclusive original Education (CHED) through a letter-complaint dated January 21,
jurisdiction in an administrative agency over certain disputes
2003. Thus, petitioners claimed that the CHED had primary jurisdiction
and controversies falling within the agency's special
expertise. The very definition of an administrative agency to resolve matters pertaining to school controversies, and the filing of
includes its being vested with quasi-judicial powers. The the instant case was premature.
ever increasing variety of powers and functions given to
administrative agencies recognizes the need for the active
ISSUE: Whether The CHED exercises quasi-judicial power over
intervention of administrative agencies in matters calling
for technical knowledge and speed in countless controversies involving school matters and has primary jurisdiction

16 | M A C A C U A N A R C I S O P R E S T O

over respondents demand for the release of his ToR. Thus,
respondent failed to exhaust administrative remedies;
The doctrine of exhaustion of administrative remedies does not
apply in this case.
The doctrine of exhaustion of administrative remedies requires
that where a remedy before an administrative agency is
provided, the administrative agency concerned must be given
the opportunity to decide a matter within its jurisdiction before
an action is brought before the courts.[12]Failure to exhaust
administrative remedies is a ground for dismissal of the
action.[13]
In this case, the doctrine does not apply because petitioners
failed to demonstrate that recourse to the CHED is mandatory
or even possible in an action such as that brought by the
respondent, which is essentially one for mandamus and
damages. The doctrine of exhaustion of administrative remedies
admits of numerous exceptions,[14] one of which is where the
issues are purely legal and well within the jurisdiction of the
trial court, as in the present case.[15] Petitioners liability if any
for damages will have to be decided by the courts, since any
judgment inevitably calls for the application and the
interpretation of the Civil Code.[16] As such, exhaustion of
administrative remedies may be dispensed with.
In addition, the rule on primary jurisdiction applies only where the
administrative agency exercises quasi-judicial or adjudicatory
functions.[18] Thus, an essential requisite for this doctrine to apply is the
actual existence of quasi-judicial power.[19] However, petitioners have
not shown that the CHED possesses any such power to investigate facts
or ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions.[20] Indeed, Section 8 of Republic Act No.
7722[21] otherwise known as the Higher Education Act of 1994, certainly
does not contain any express grant to the CHED of judicial or quasi-
judicial power.
Distinction between fixing of initial toll rates and fixing of
period/interim or subsequent toll rates: the hearing required
under PD 1894 refers to notice and hearing for the approval
or denial of petitions for toll rates, not fixing of initial toll
rates which is without necessity of hearing unless a
challenge on the initial toll rates fixed ensues that public
hearings are required. (Francisco vs TRB)
17 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 17
FRANCISCO VS TRB
The antecedent facts are as follows
On March 31, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. (P.D.) 1112, authorizing the
establishment of toll facilities on public improvements.[1] This
issuance, in its preamble, explicitly acknowledged the huge
financial requirements and the necessity of tapping the
resources of the private sector to implement the governments
infrastructure programs. In order to attract private sector
involvement, P.D. 1112 allowed the collection of toll fees for the
use of certain public improvements that would allow a
reasonable rate of return on investments. The same decree
created the Toll Regulatory Board (TRB) and invested it under
Section 3 (a) (d) and (e) with the power to enter, for the Republic,
into contracts for the construction, maintenance and operation
of tollways, grant authority to operate a toll facility, issue
therefor the necessary Toll Operation Certificate (TOC) and fix
initial toll rates, and, from time to time, adjust the same after due
notice and hearing.
On the same date, P.D. 1113 was issued, granting to the
Philippine National Construction Corporation (PNCC), then
known as the Construction and Development Corporation of the
Philippines (CDCP), for a period of thirty years from May 1977 or
up to May 2007 a franchise to construct, maintain and operate
toll facilities in the North Luzon and South Luzon Expressways,
with the right to collect toll fees at such rates as the TRB may fix
and/or authorize. Particularly, Section 1 of P.D. 1113 delineates
the coverage of the expressways
from Balintawak, Caloocan City to Carmen, Rosales, Pangasinan
and from Nichols, Pasay City to Lucena, Quezon. And because
the franchise is not self-executing, as it was in fact made subject,
under Section 3 of P.D. 1113, to such conditions as may be
imposed by the Board in an appropriate contract to be executed
for such purpose, TRB and PNCC signed in October 1977, a Toll
Operation Agreement (TOA) on the North Luzon and South
Luzon Tollways, providing for the detailed terms and conditions
for the construction, maintenance and operation of the
expressway.[2]
As expressly set out in P.D. 1113 and reiterated in P.D. 1894,
PNCC may sell or assign its franchise thereunder granted or cede
the usufruct[4] thereof upon the Presidents approval.[5] This same
provision on franchise transfer and cession of usufruct is likewise
found in P.D. 1112.[6]
Then came the 1987 Constitution with its franchise provision.[7]

In 1993, the Government Corporate Counsel (GCC), acting on
PNCCs request, issued Opinion No. 224, s. 1993,[8] later affirmed
by the Secretary of Justice,[9] holding that PNCC may, subject to
certain clearance and approval requirements, enter into a joint
venture (JV) agreement (JVA) with private entities without going
into public bidding in the selection of its JV partners.PNCCs
query was evidently prompted by the need to seek out
alternative sources of financing for expanding and improving
existing expressways, and to link them to economic zones in the
north and to the CALABARZON area in the south.
The Issues
whether the TRB is vested with the power and authority to grant
what amounts to a franchise over tollway facilities; third,
corollary to the second, whether the TRB can enter into TOAs
and, at the same time, promulgate toll rates and rule on petitions
for toll rate adjustments; fourth,
TRB Empowered to Grant Authority to Operate
Toll Facility /System
It is abundantly clear that Sections 3 (a) and (e) of P.D. 1112 in
relation to Section 4 of P.D. 1894 have invested the TRB with
sufficient power to grant a qualified person or entity with
authority to construct, maintain, and operate a toll facility and to
issue the corresponding toll operating permit or TOC
Sections 3 (a) and (e) of P.D. 1112 and Section 4 of P.D. 1894
amply provide the power to grant authority to operate toll
facilities:
Section 3. Powers and Duties of the Board. The Board shall have
in addition to its general powers of administration the following
powers and duties:
(a) Subject to the approval of the President of the Philippines, to
enter into contracts in behalf of the Republic of
the Philippines with persons, natural or juridical, for the
construction, operation and maintenance of toll facilities such as
but not limited to national highways, roads, bridges, and public
thoroughfares. Said contract shall be open to citizens of
the Philippines and/or to corporations or associations qualified
18 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 18
under the Constitution and authorized by law to engage in toll
operations;
xxxx
(e) To grant authority to operate a toll facility and to issue
therefore the necessary Toll Operation Certificate subject to such
conditions as shall be imposed by the Board including inter alia
the following:
(1) That the Operator shall desist from collecting toll upon the
expiration of the Toll Operation Certificate.
(2) That the entire facility operated as a toll system including all
operation and maintenance equipment directly related thereto
shall be turned over to the government immediately upon the
expiration of the Toll Operation Certificate.
(3) That the toll operator shall not lease, transfer, grant the
usufruct of, sell or assign the rights or privileges acquired under
the Toll Operation Certificate to any person, firm, company,
corporation or other commercial or legal entity, nor merge with
any other company or corporation organized for the same
purpose, without the prior approval of the President of the
Philippines. In the event of any valid transfer of the Toll
Operation Certificate, the Transferee shall be subject to all the
conditions, terms, restrictions and limitations of this Decree as
fully and completely and to the same extent as if the Toll
Operation Certificate has been granted to the same person, firm,
company, corporation or other commercial or legal entity.
(4) That in time of war, rebellion, public peril, emergency,
calamity, disaster or disturbance of peace and order, the
President of the Philippines may cause the total or partial closing
of the toll facility or order to take over thereof by the
Government without prejudice to the payment of just
compensation.
(5) That no guarantee, Certificate of Indebtedness, collateral,
securities, or bonds shall be issued by any government agency
or government-owned or controlled corporation on any

financing program of the toll operator in connection with his
undertaking under the Toll Operation Certificate.
(6) The Toll Operation Certificate may be amended, modified
or revoked whenever the public interest so requires.
(a) The Board shall promulgate rules and regulations
governing the procedures for the grant of Toll Certificates. The
rights and privileges of a grantee under a Toll Operation
Certificate shall be defined by the Board.
(b) To issue rules and regulations to carry out the purposes of
this Decree.
SECTION 4. The Toll Regulatory Board is hereby given
jurisdiction and supervision over the GRANTEE with respect to
the Expressways, the toll facilities necessarily appurtenant
thereto and, subject to the provisions of Section 8 and 9 hereof,
the toll that the GRANTEE will charge the users thereof.
By explicit provision of law, the TRB was given the power to grant
administrative franchise for toll facility projects.
We are unable to agree with petitioners stance and their undue
reliance on Article XII, Section 11 of the Constitution, which
states that:
SEC. 11. No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted
except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least
sixty per centum of whose capital is owned by such citizens, nor
shall such franchise, certificate, or authorization be exclusive in
character or for a longer period than fifty years.Neither shall any
such franchise or right be granted except under the condition
that it shall be subject to amendment, alteration, or repeal by
the Congress when the common good so requires x x x.
The limiting thrust of the foregoing constitutional provision on
the grant of franchise or other forms of authorization to operate
public utilities may, in context, be stated as follows: (a) the grant
shall be made only in favor of qualified Filipino citizens or
19 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 19
corporations; (b) Congress can impair the obligation of
franchises, as contracts; and (c) no such authorization shall be
exclusive or exceed fifty years.
A franchise is basically a legislative grant of a special privilege to
a person.[33] Particularly, the term, franchise, includes not only
authorizations issuing directly from Congress in the form of
statute, but also those granted by administrative agencies to
which the power to grant franchise has been delegated by
Congress.[34] The power to authorize and control a public utility
is admittedly a prerogative that stems from the Legislature. Any
suggestion, however, that only Congress has the authority to
grant a public utility franchise is less than accurate. As stressed
in Albano v. Reyesa case decided under the aegis of the 1987
Constitutionthere is nothing in the Constitution remotely
indicating the necessity of a congressional franchise before each
and every public utility may operate, thus:
That the Constitution provides x x x that the issuance of a
franchise, certificate or other form of authorization for the
operation of a public utility shall be subject to amendment,
alteration or repeal by Congress does not necessarily imply x
x x that only Congress has the power to grant such
authorization. Our statute books are replete with laws
granting specified agencies in the Executive Branch the
power to issue such authorization for certain classes of public
utilities.[35] (Emphasis ours.)
In such a case, therefore, a special franchise directly emanating
from Congress is not necessary if the law already specifically
authorizes an administrative body to grant a franchise or to
award a contract.[36] This is the same view espoused by the
Secretary of Justice in his opinion dated January 9, 2006, when
he stated:
That the administrative agencies may be vested with the
authority to grant administrative franchises or concessions over
the operation of public utilities under their respective
jurisdiction and regulation, without need of the grant of a
separate legislative franchise, has been upheld by the Supreme
Court x x x.[37]

Under the 1987 Constitution, Congress has an explicit authority
to grant a public utility franchise. However, it may validly
delegate its legislative authority, under the power of subordinate
legislation,[38] to issue franchises of certain public utilities to
some administrative
agencies. In Kilusang Mayo Uno Labor Center v. Garcia, Jr., We
explained the reason for the validity of subordinate legislation,
thus:
Such delegation of legislative power to an administrative
agency is permitted in order to adapt to
increasing complexity of modern life. As subjects for
governmental regulation multiply, so does the difficulty of
administering the laws. Hence, specialization even
legislation has become necessary.[39] (Emphasis ours.)
As aptly pointed out by the TRB and other private respondents,
the Land Transportation Franchising and Regulatory Board
(LTFRB), the Civil Aeronautics Board (CAB), the National
Telecommunications Commission (NTC), and the Philippine
Ports Authority (PPA), to name a few, have been such delegates.
The TRB may very well be added to the growing list, having been
statutorily endowed, as earlier indicated, the power to grant to
qualified persons, authority to construct road projects and
operate thereon toll facilities. Such grant, as evidenced by the
corresponding TOC or set out in a TOA, may be amended,
modified, or revoked [by the TRB] whenever the public interest
so requires.[40]
Third Issue: TRBs Power to Enter into Contracts; Issue,
Modify And Promulgate Toll Rates; and to Rule on Petitions
Relative to Toll Rates Level and Increases Valid
The petitioners in the special civil actions cases would have the
Court declare as invalid (a) Section 3 (a) and (d) of P.D. 1112
(which accord the TRB, on one hand, the power to enter into
contracts for the construction, and operation of toll facilities,
while, on the other hand, granting it the power to issue and
promulgate toll rates) and (b) Section 8 (b) of P.D. 1894 (granting
20 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 20
TRB adjudicatory jurisdiction over matters involving toll rate
movements). As submitted, granting the TRB the power to award
toll contracts is inconsistent with its quasi-judicial function of
adjudicating petitions for initial toll and periodic toll rate
adjustments. There cannot, so petitioners would postulate, be
impartiality in such a situation.
The assailed provisions of P.D. 1112 and P.D. 1894 read:
the
P.D. 1112
in
Section 3. Powers and Duties of the Board. The Board shall have
in addition to its general powers of administration the following
powers and duties:
(a) Subject to the approval of the President of the Philippines, to
enter into contracts in behalf of the Republic of the Philippines
with persons, natural or juridical, for the construction, operation
and maintenance of toll facilities such as but not limited to
national highways, roads, bridges, and public thoroughfares.
Said contract shall be open to citizens of the Philippines and/or
to corporations or associations qualified under the Constitution
and authorized by law to engage in toll operations;
(d) Issue, modify and promulgate from time to time the rates of
toll that will be charged the direct users of toll facilities
and upon notice and hearing, to approve or disapprove
petitions for the increase thereof.Decisions of the Board on
petitions for the increase of toll rate shall be appealable to the
Office of the President within ten (10) days from the
promulgation thereof. Such appeal shall not suspend the
imposition of the new rates, provided however, that pending the
resolution of the appeal, the petitioner for increased rates in
such case shall deposit in a trust fund such amounts as may be
necessary to reimburse toll payers affected in case a reversal of
the decision. (Emphasis ours.)
P.D. 1894
 ADMIN LAW 2019 21

SECTION 8. x x x The petitioners are indulging in gratuitous, if not unfair,

conclusion as to the capacity of the TRB to act as a fair and
objective tribunal on matters of toll fee fixing.

(b) For the Metro Manila Expressway and such extensions,

linkages, stretches and diversions of the Expressways which may
henceforth be constructed, maintained and operated by the Administrative bodies have expertise in specific matters within
GRANTEE, the GRANTEE shall collect toll at such rates as shall the purview of their respective jurisdictions. Accordingly, the law
initially be approved by the Toll Regulatory Board. The Toll concedes to them the power to promulgate implementing rules
Regulatory Board shall have the authority to approve such initial and regulations (IRR) to carry out declared statutory policies
toll rates without the necessity of any notice and hearing, except provided that the IRR conforms to the terms and standards
as provided in the immediately succeeding paragraph of this prescribed by that statute.[72]
Section. For such purpose, the GRANTEE shall submit for the
approval of the Toll Regulatory Board the toll proposed to be
charged the users. After approval of the toll rate(s) by the Toll
The Court does not perceive an irreconcilable clash in the
Regulatory Board and publication thereof by the GRANTEE once
enumerated TRBs statutory powers, such that the exercise of one
in a newspaper of general circulation, the toll shall immediately
negates another. The ascription of impartiality on the part of the
be enforceable and collectible upon opening of the expressway
TRB cannot, under the premises, be accorded cogency.
to traffic use.
Petitioners have not shown that the TRB lacks the expertise,
competence and capacity to implement its mandate of
balancing the interests of the toll-paying motoring public and
Any interested Expressways users shall have the right to file, the imperative of allowing the concessionaires to recoup their
within a period of ninety (90) days after the date of publication investment with reasonable profits. As it were, Section 9 of P.D.
of the initial toll rate, a petition with the Toll Regulatory Board 1894 provides a parametric formula for adjustment of toll rates
for a review of the initial toll rate; provided, however, that the that takes into account the Peso-US Dollar exchange rate,
filing of such petition and the pendency of the resolution thereof interest rate and construction materials price index, among
shall not suspend the enforceability and collection of the toll in other verifiable and quantifiable variables.
question. The Toll Regulatory Board, at a public hearing called
for the purpose after due notice, shall then conduct a review of
the initial toll shall be appealable (sic) to the Office of the
While not determinative of the issue immediately at hand, the
President within ten (10) days from the promulgation
grant to and the exercise by an administrative agency of
thereof. The GRANTEE may be required to post a bond in such
regulating and allowing the operation of public utilities and, at
amount and from such surety or sureties and under such terms
the same time, fixing the fees that they may charge their
and conditions as the Toll Regulatory Board shall fix in case of
customers is now commonplace. It must be presumed that the
any petition for review of, or appeal from, decisions of the Toll
Congress, in creating said agencies and clothing them with both
Regulatory Board.
adjudicative powers and contract-making prerogatives, must
have carefully studied such dual authority and found the same
not breaching any constitutional principle or concept.[73] So
In case it is finally determined, after a review by the Toll must it be for P.D. Nos. 1112 and 1894.
Regulatory Board or appeal therefrom, that the GRANTEE is not
entitled, in whole or in part, to the initial toll, the GRANTEE shall
deposit in the escrow account the amount collected under the
The Court can take judicial cognizance of the exercise by the
approved initial toll fee and such amount shall be refunded to
LTFRB and NTC both spin-off agencies of the now defunct Public
Expressways users who had paid said toll in accordance with the
Service Commission of similar concurrent powers. The LTFRB,
procedure as may be prescribed or promulgated by the Toll
under Executive Order No. (E.O.) 202,[74] series of 1987, is
Regulatory Board. (Emphasis ours.)
empowered,[75] among others, to regulate the operation of
public utilities or for hire vehicles and to grant franchises or

21 | M A C A C U A N A R C I S O P R E S T O
 ADMIN LAW 2019 22

certificates of public convenience (CPC); and to fix rates or fares, As a result of the growing complexity of the modern society, it
to approve petitions for fare rate increases and to resolve has become necessary to create more and more administrative
oppositions to such petitions. bodies to help in the regulation of its ramified
activities. Specialized in the particular fields assigned to
The NTC, on the other hand, has been granted similar powers of them, they can deal with the problems thereof with more
granting franchises, allocating areas of operations, rate-fixing expertise and dispatch than can be expected from the
and to rule on petitions for rate increases under E.O. 546,[76] s. of legislature or the courts of justice. This is the reason for the
1979. increasing vesture of quasi-legislative and quasi-judicial
powers in what is now not unquestionably called the fourth
department of the government.
The Energy Regulatory Commission (ERC) likewise enjoys on the
one hand, the power (a) to grant, modify or revoke an authority
to operate facilities used in the generation of electricity, and on xxxx
the other, (b) to determine, fix and approve rates and tariffs of
transmission, and distribution retail wheeling charges and tariffs
of franchise electric utilities and all electric power rates including
that which is charged to end-users.[77] In Chamber of Real Estate There is no question that a statute may vest exclusive original
and Builders Association, Inc. v. ERC, We even categorically stated jurisdiction in an administrative agency over certain disputes
that the ERC is a quasi-judicial and quasi-legislative and controversies falling within the agency's special
regulatory body created under Section 38 of the EPIRA, [and] x expertise. The very definition of an administrative agency
x x an administrative agency vested with broad regulatory and includes its being vested with quasi-judicial powers. The
monitoring functions over the Philippine electric industry to ever increasing variety of powers and functions given to
ensure its successful restructuring and modernization x x x.[78] administrative agencies recognizes the need for the active
intervention of administrative agencies in matters calling
for technical knowledge and speed in countless
controversies which cannot possibly be handled by regular
To summarize, the fact that an administrative agency is courts. (Emphasis ours.)
exercising its administrative or executive functions (such as the
granting of franchises or awarding of contracts) and at the same __________________________________________________________________
time exercising its quasi-legislative (e.g. rule-making) and/or
quasi-judicial functions (e.g. rate-fixing), does not support a QUASI-JUDICIAL POWER
finding of a violation of due process or the Constitution. In C.T.
Torres Enterprises, Inc. v. Hibionada,[79] We explained the Express empowerment by law; merely incidental and in of
rationale, thus: main function

The action or discretion to investigate facts and draw

conclusions from them as basis for their official action and to
It is by now commonplace learning that many exercise discretion of a judicial nature.
administrative agencies exercise and perform adjudicatory
powers and functions, though to a limited extent only. Limited Involves: a. Taking evaluating evidence; b. Determining facts
delegation of judicial or quasi-judicial authority to based upon the evidence presented; and c. Rendering an
order or decision supported by the facts proved.
administrative agencies (e.g. the Securities and Exchange
Commission and the National Labor Relations Commission) is
well recognized in our jurisdiction, basically because the
need for special competence and experience has been
CASES
recognized as essential in the resolution of questions of
complex or specialized character and because of a PCGG is an co-equal body of the RTC. RTC cannot restrain
companion recognition that the dockets of our regular the PCGG (PCGG vs. Judge Pena)
courts have remained crowded and clogged.

22 | M A C A C U A N A R C I S O P R E S T O

PCGG VS JUDGE PENA
Facts:
On March 25, 1986, the Commission issued an order freezing the
assets, effects, documents and records of two export garment
manufacturing firms denominated as American Inter-fashion
Corporation and De Soleil Apparel Manufacturing Corporation.
Said firms had both been organized by joint venture agreement
on July 2,1984 with the approval of the Garments & Textile
Export Board.
On June 27, 1986, the Commission designated the OIC, Saludo,
and Mr.Yeung Chun Ho private respondent herein, as authorized
signatories to effect deposits and withdrawals of the funds of
the two corporations. On September 4, 1986, the Commission
designated Mr. YimKamShing as co-signatory, in the absence of
Mr. Yeung Chun Ho and Mr. Marcelo de Guzman, in the absence
of Ms. Saludo. However, in a memorandum dated February 3,
1987, and addressed to depository banks of the said two
corporations, Ms. Saludo revoked the authorizations previously
issued upon finding that Mr. YimKamShing was a Hongkong
Chinese national staying in the country on a mere tourist visa,
and designated James Dy as her co-signatory and Enrico Reyes
Santos as the other authorized signatory with Teresita Yu as the
latter's co-signatory. The said memorandum was approved by
then Commissioner Mary Concepcion Bautista of the
Commission.
On February 13, 1987, respondents Yeung Chun Kam Yeung
Chun Ho and Archie Chan who are all in Hongkong, instituted
through YimKamShing an action for damages with prayer for a
writ of preliminary injunction against the said bank, the
Commission, then Commissioner Mary Concepcion Bautista and
the OIC, Saludo, docketed as Civil Case No. 54298 of Branch 152
of the Regional Trial Court at Pasig, Metro Manila, presided by
respondent judge, and questioning the aforesaid revocation of
the authorization as signatory previously granted to Mr.
YimKamShing as private respondents' representative.
On February 20, 1987, the Commission filed a motion to dismiss
with opposition to plaintiffs' (private respondents herein) prayer
for a writ of preliminary injunction on the ground that the trial
court has no jurisdiction over the Commission or over the
subject of the case and that assuming arguendo its jurisdiction,
it acted with grave abuse of discretion since private respondents
as 33% minority shareholders are not entitled to any restraining
order or preliminary injunction.
On March 20, 1987, the Commission filed the petition at bar
questioning the jurisdiction of respondent judge's court over it
and praying for (a) the nullification of the aforesaid February 16
and March 5, 1987 orders and (b) the issuance of a writ of
23 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 23
prohibition ordering the respondent judge to cease and desist
from proceeding with the said case.
Issue: whether or not the RTC has Jurisdiction (no)
On the issue of jurisdiction squarely raised, as above indicated,
the Court sustains petitioner's stand and holds that regional trial
courts and the Court of Appeals for that matter
have no jurisdiction over the Presidential Commission on Good
Government in the exercise of its powers under the applicable
Executive Orders and Article XVIII, section 26 of the Constitution
and therefore may not interfere with and restrain or set aside the
orders and actions of the Commission. Under section 2 of the
President's Executive Order No. 14 issued on May 7, 1986, all
cases of the Commission regarding "the Funds, Moneys, Assets,
and Properties Illegally Acquired or Misappropriated by Former
President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos,
their Close Relatives, Subordinates, Business Associates,
Dummies, Agents, or Nominees" 1 whether civil or criminal, are
lodged within the "exclusive and original jurisdiction of the
Sandiganbayan" 2 and all incidents arising from, incidental to, or
related to, such cases necessarily fall likewise under the
Sandiganbayan's exclusive and original jurisdiction, subject to
review on certiorari exclusively by the Supreme Court. 3
from the foregoing discussion of the duties and functions and
the power and authority of the Commission, it exercises quasi-
judicial functions. In the exercise of quasi-judicial functions, the
Commission is a co-equal body with regional trial courts and
"co-equal bodies have no power to control the other."
The Solicitor General correctly submits that the lack of
jurisdiction of regional trial courts over quasi-judicial agencies is
recognized in section 9, paragraph 3 of Batas PambansaBlg. 129
(the Judiciary Reorganization Act of 1980), which otherwise vests
exclusive appellate jurisdiction in the Court of Appeals over all
final judgment, decisions, resolutions, orders, or awards of
regional trial courts and quasi judicial agencies,
instrumentalities, boards or commissions. But as already
indicated hereinabove, the Court of Appeals is not vested with
appellate or supervisory jurisdiction over the Commission.
Executive Order No. 14, which defines the jurisdiction over cases
involving the ill-gotten wealth of former President Marcos, his
wife, Imelda, members of their immediate family, close relatives,
subordinates, close and/or business associates, dummies,
agents and nominees, specifically provides in section 2 that "The
Presidential Commission on Good Government shall file all such
cases, whether civil or criminal, with the Sandiganbayan which
shall have exclusive and original jurisdiction thereof."
Necessarily, those who wish to question or challenge the
Commission's acts or orders in such cases must seek recourse in
the same court, the Sandiganbayan, which is vested with
exclusive and original jurisdiction. The Sandiganbayan's
decisions and final orders are in turn subject to review on
certiorari exclusively by this Court.

The action of the POEA to grant, deny, suspend, or revoke a
license of any private placement agency is quasi-judicial.
POEA, on its own initiative, may conduct the necessary
proceedings for suspension or cancellation of license of any
private placement agency on any of grounds mentioned
therein (Sanado vs CA)
Sañado vs Court of Appeals
FACTS: Sañado was issued by the now defunct Philippine
Fisheries Commission an Ordinary Fishpond Permit covering an
area of 50 hectares. On July 16, 1973, Sañado executed a
contract with Nepomuceno wherein the latter agreed to develop
30 hectares of the 50 hectares covered by Sañado's fishpond
permit. Two days later, the parties modified this earlier
agreement by excluding the area of 10 hectares already
cultivated and fully developed and providing that the contract is
renewable on terms acceptable to both of them.
On September 28, 1979, the Director of Fisheries and Aquatic
Resources recommended to the then Ministry of Natural
Resources the conversion of Sanado’s fishpond permit into a 25-
year fishpond loan agreement which covered a reduced area of
26.745 hectares. Accordingly, a Fishpond Lease Agreement was
issued.
On July 17, 1981, Sañado filed a complaint against Nepomuceno
with the RTC for recovery of possession and damages, alleging
that Nepomuceno failed to deliver Sañados share of the net
harvest among other things. While this case was pending, the
then Minister of Agriculture and Food canceled the Fishpond
Lease Agreement, forfeiting the improvements thereon in favor
of government. Later, said order was reconsidered to the extent
that Nepomuceno was given priority to apply for the area and
that his improvements thereon were not considered forfeited in
favor of the government.
Sañado elevated the matter to the Office of the President but
appeal was dimissed. Meanwhile, the trial court rendered a
decision over Sañado's complaint for recovery of possession in
his favor.
ISSUE: Whether or not the decision of the Office of the President
in cancelling petitioner's lease agreement should be given
weight
RULING: Yes. The action of an administrative agency in granting
or denying, or in suspending or revoking, a license, permit,
franchise, or certificate of public convenience and necessity is
administrative or quasi-judicial. The act is not purely
administrative but quasi-judicial or adjudicatory since it is
dependent upon the ascertainment of facts by the
administrative agency, upon which a decision is to be made and
rights and liabilities determined. As such, the July 31, 1989
24 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 24
decision of the Office of the President is explicitly an official act
of and an exercise of quasi-judicial power by the Executive
Department headed by the highest officer of the land. It thus
squarely falls under matters relative to the executive department
which courts are mandatorily tasked to take judicial notice of
under Section 1, Rule 129 of the Rules of Court. Judicial notice
must be taken of the organization of the Executive Department,
its principal officers, elected or appointed, such as the President,
his powers and duties.
The rendition of the subject July 31, 1989 Malacañang decision
is premised on the essential function of the executive
department — which is to enforce the law. In this instance, what
is being enforced is Presidential Decree No. 704 which
consolidated and revised all laws and decrees affecting fishing
and fisheries. Such enforcement must be true to the policy
behind such laws which is "to accelerate and promote the
integrated development of the fishery industry and to keep the
fishery resources of the country in optimum productive
condition through proper conservation and protection" (Section
2, P.D. No. 704).
Further, the issue of whether or not petitioner is still entitled to
possession of the subject fishpond area is underpinned by an
ascertainment of facts. And such task belongs to the
administrative body which has jurisdiction over the matter — the
Ministry of Agriculture and Food. The policy of the courts as
regards such factual findings is not to interfere with actions of
the executive branch on administrative matters addressed to the
sound discretion of government agencies. This policy is specially
applicable in the grant of licenses, permits, and leases, or the
approval, rejection, or revocation of applications therefor. Such
respect is based on the time-honored doctrine of separation of
powers and on the fact that these bodies are considered co-
equal and coordinate rank as courts. The only exception is when
there is a clear showing of capricious and whimsical exercise of
judgment or grave abuse of discretion, which we find absent in
the case at bar.
The reasons given by the Office of the President in dismissing
petitioner's appeal are quite clear. Transferring or subletting the
fishpond granted to a licensee without the consent or approval
of the administrative body concerned, as well as the failure to
develop the area required by the fisheries rules, are definitely
solid and logical grounds for the cancellation of one's license.
Withal, if petitioner disagrees with the decision of the Office of
the President, he should have elevated the matter by petition for
review before the Court of Appeals for the latter's exercise of
judicial review. Nowhere in the record do we find such action on
petitioner's part.
Understandably, to restore petitioner to the possession of the
fishpond area is to totally disregard the July 31, 1989 decision of
the Office of the President which can hardly be described as an
unrelated matter, considering its patent implications in the result

of both Civil Case No. 2085 and CA-G.R. CV No. 23165. For how
could the appellate court award possession to the very same
party whose license has been cancelled by the executive or
administrative officer tasked to exercise licensing power as
regards the development of fishpond areas, and which
cancellation has been sustained by the Office of the President?
Petitioner must remember the essence of the grant of a license.
It is not a vested right given by the government but a privilege
with corresponding obligations and is subject to governmental
regulation. Hence, to allow petitioner to possess the subject area
is to run counter to the execution and enforcement of the July
31, 1989 decision which would easily lose its "teeth" or force if
petitioner were restored in possession.
EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and
TELECOMMUNICATIONS TECHNOLOGIES, INC., petitioners,
vs. INTERNATIONAL COMMUNICATION CORPORATION,
respondent.
FACTS:
International Communication Corporation, now known as Bayan
Telecommunications Corporation or Bayantel, applied and was
given by the NTC a Provisional Authority (PA) on March 3, 1995,
to install, operate and provide local exchange service in Quezon
City, Malabon and Valenzuela, Metro Manila, and the entire Bicol
region. Meanwhile, petitioner Telecommunications
Technologies Philippines, Inc. (TTPI), as an affiliate of petitioner
Eastern Telecommunications Philippines, Inc. (ETPI), was granted
by the NTC a PA on September 25, 1996, to install, operate and
maintain a local exchange service in the Provinces of Batanes,
Cagayan Valley, Isabela, Kalinga-Apayao, Nueva Vizcaya, Ifugao,
Quirino, the cities of Manila and Caloocan, and the Municipality
of Navotas, Metro Manila.
It appears, however, that before TTPI was able to fully
accomplish its rollout obligation, ICC applied for and was given
a PA by the NTC on November 10, 1997, to install, operate and
maintain a local exchange service in Manila and Navotas,[6] two
areas which were already covered by TTPI under its PA dated
September 25, 1996.
Aggrieved, petitioners filed a petition for review with the Court
of Appeals with application for a temporary restraining order
and a writ of preliminary injunction, docketed as CA-G.R. SP No.
46047, arguing that the NTC committed grave abuse of
discretion in granting a provisional authority to respondent ICC
to operate in areas already assigned to TTPI.
25 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 25
ISSUE:
Whether the NTC has the authority to grant a Provisional
Authority to Bayantel to operate LEC services in Manila and
Navotas which are areas already assigned to petitioner TTPI
under a prior and subsisting PA?
RULING:
YES. The power of the NTC to grant a provisional authority has
long been settled. As the regulatory agency of the national
government with jurisdiction over all telecommunications
entities, it is clothed with authority and given ample discretion
to grant a provisional permit or authority.[11] It also has the
authority to issue Certificates of Public Convenience and
Necessity (CPCN) for the installation, operation, and
maintenance of communications facilities and services, radio
communications systems, telephone and telegraph systems,
including the authority to determine the areas of operations of
applicants for telecommunications services.[12] In this regard,
the NTC is clothed with sufficient discretion to act on matters
solely within its competence.[13]
In granting ICC the PA to operate a local exchange carrier service
in the Manila and Navotas areas, the NTC took into
consideration ICCs financial and technical resources and found
them to be adequate. The NTC also noted ICCs performance in
complying with its rollout obligations under the previous PA
granted to it, thus:
With the proven track record of herein applicant as one of the
pacesetters in carrying out its landlines commitment in its
assigned areas, applicant can best respond to public demand for
faster installation of telephone lines in Manila and Navotas.
The grant of this application is, therefore, a fitting recognition
that should be accorded to any deserving applicant, such as
herein applicant ICC whose remarkable performance in terms of
public service as mandated by Executive Order 109 and Republic
Act No. 7925 has persuaded this Commission to affix the stamp
of its approval.[14]
The Court will not interfere with these findings of the NTC, as
these are matters that are addressed to its sound discretion,
being the government agency entrusted with the regulation of
activities coming under its special and technical forte.[15]
Moreover, the exercise of administrative discretion is a policy

decision and a matter that can best be discharged by the
government agency concerned, and not by the courts.[16]
SPOUSES BERNYL BALANGAUAN & KATHERENE
BALANGAUAN VS CA
FACTS:
Katherene was a Premier Customer Services Representative of
HSBC where she managed the account of Roger Dwayne York.
When York inquired of his deposit in the amount of P
2,500,000.00, the PCSR Representative who attended him, could
not find any record of said placement in the banks data base. So
as not to ruin its name and goodwill among its clients,
respondent HSBC reimbursed York the P2,500,000.00.
Thus, HSBC filed a a criminal complaint for Estafa and/or
Qualified Estafa, against its employee petitioner-Spouses Bernyl
Balangauan (Bernyl) and Katherene Balangauan (Katherene).
However, the Assistant City Prosecutor dismissed the complaint
for lack of probable cause which was affirmed by the DOJ.
Respondent HSBC then went to the Court of Appeals by means
of a Petition for Certiorari under Rule 65 of the Revised Rules of
Court where it promulgated its Decision granting respondent
HSBCs petition, thereby annulling and setting aside the twin
resolutions of the DOJ.
The CA found fault in the DOJs failure to identify and discuss the
issues raised by the respondent HSBC in its Petition for Review
filed therewith. And, in support thereof, respondent HSBC
maintains that it is incorrect to argue that it was not necessary
for the Secretary of Justice to have his resolution recite the facts
and the law on which it was based, because courts and quasi-
judicial bodies should faithfully comply with Section 14, Article
VIII of the Constitution requiring that decisions rendered by
them should state clearly and distinctly the facts of the case and
the law on which the decision is based.
ISSUE:
Whether the preliminary investigation is a quasi-judicial
proceeding?
26 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 26
RULING:
NO. It must be remembered that a preliminary investigation is
not a quasi-judicial proceeding, and that the DOJ is not a quasi-
judicial agency exercising a quasi-judicial function when it
reviews the findings of a public prosecutor regarding the
presence of probable cause. In Bautista v. Court of Appeals,[34]
this Court held that a preliminary investigation is not a quasi-
judicial proceeding, thus:
[T]he prosecutor in a preliminary investigation does not
determine the guilt or innocence of the accused. He does not
exercise adjudication nor rule-making functions. Preliminary
investigation is merely inquisitorial, and is often the only means
of discovering the persons who may be reasonably charged with
a crime and to enable the fiscal to prepare his complaint or
information. It is not a trial of the case on the merits and has no
purpose except that of determining whether a crime has been
committed and whether there is probable cause to believe that
the accused is guilty thereof. While the fiscal makes that
determination, he cannot be said to be acting as a quasi-court,
for it is the courts, ultimately, that pass judgment on the accused,
not the fiscal.
Though some cases[35] describe the public prosecutors power
to conduct a preliminary investigation as quasi-judicial in nature,
this is true only to the extent that, like quasi-judicial bodies, the
prosecutor is an officer of the executive department exercising
powers akin to those of a court, and the similarity ends at this
point.[36] A quasi-judicial body is an organ of government other
than a court and other than a legislature which affects the rights
of private parties through either adjudication or rule-
making.[37] A quasi-judicial agency performs adjudicatory
functions such that its awards, determine the rights of parties,
and their decisions have the same effect as judgments of a court.
Such is not the case when a public prosecutor conducts a
preliminary investigation to determine probable cause to file an
Information against a person charged with a criminal offense, or
when the Secretary of Justice is reviewing the formers order or
resolutions. In this case, since the DOJ is not a quasi-judicial
body, Section 14, Article VIII of the Constitution finds no
application. Be that as it may, the DOJ rectified the shortness of
its first resolution by issuing a lengthier one when it resolved
respondent HSBCs motion for reconsideration.
ODCHIGUE-BONDOC VS TAN TIONG BIO

By Marie Myrtle Paz L. Viva
FACTS:
Tan Tiong Bio (Respondent) filed a complaint for estafa against
Fil-Estate officials including its Corporate Secretary, Atty Alice
Odchigue-Bondoc (petitioner). Petitioner denies the allegations.
I her counter-affidavit, she filed a complaint for perjury against
petitioner but it was dismissed for insufficiency of evidence.
The DOJ, by resolution signed by the Chief State Prosecutor for
the Secretary of Justice, motu proprio dismissed the petition on
finding that there was no showing of any reversible error.
The CA set aside the DOJ Secretary’s resolution holding that it
committed grave abuse of discretion in issuing its Resolution
dismissing respondent’s petition for review without therein
expressing clearly and distinctly the facts on which the dismissal
was based, in violation of Sec. 14, Art. VIII of the Constitution (No
decision shall be rendered by any court without expressing
therein clearly and distinctly the facts and the law on which it is
based).
Petitioner asserts in this present petition for review on certiorari
that the requirement in Sec. 14, Art. VIII of the Constitution
applies only to decisions of “courts of justice”, and it does not
extend to decisions or rulings of executive departments such as
the DOJ.
Respondent counters that the constitutional requirement is not
limited to courts as it extends to quasi-judicial and
administrative bodies, as well as to preliminary investigations
conducted by these tribunals.
ISSUE:
1. Whether or not a prosecutor exercises quasi-judicial power?
NO
2. Whether or not the DOJ Secretary exercises quasi-judicial
power? NO
RULING:
1. No. A prosecutor does not exercise adjudication or rule-
making powers. A preliminary investigation is not a quasi-
judicial proceeding, but is merely inquisitorial since the
prosecutor does not determine the guilt of innocence of the
accused. While the prosecutor makes the determination whether
a crime has been committed and whether there is probable
27 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 27
cause, he cannot be said to be acting as a quasi-court, for it is
the courts, ultimately, that pass judgment on the accused.
2. No. The Secretary of Justice in reviewing a prosecutor’s order
or resolution via appeal or petition for review cannot be
considered a quasi-judicial proceeding since the DOJ is not a
quasi-judicial body. Sec 14, Art. VIII of the Constitution does not
thus extend to resolutions issued by the DOJ Secretary.
A preliminary investigation is not a quasi-judicial proceeding
since "the prosecutor in a preliminary investigation does not
determine the guilt or innocence of the accused."
x x x [A prosecutor] does not exercise adjudication nor rule-
making functions. Preliminary investigation is merely
inquisitorial, and is often the only means of discovering the
persons who may be reasonably charged [of] a crime and to
enable the [prosecutor] to prepare his complaint or information.
It is not a trial of the case on the merits and has no purpose
except that of determining whether a crime has been committed
and whether there is probable cause to believe that the accused
is guilty thereof. While the [prosecutor] makes that
determination, he cannot be said to be acting as a quasi-court,
for it is the courts, ultimately, that pass judgment on the accused,
not the [prosecutor]. (emphasis and underscoring supplied)
A preliminary investigation thus partakes of an investigative or
inquisitorial power for the sole purpose of obtaining information
on what future action of a judicial nature may be taken.
When the Secretary of Justice is convinced that a petition for
review does not suffer any of the infirmities laid down in Section
7, it can decide what action to take (i.e., reverse, modify, affirm
or dismiss the appeal altogether), conformably with Section 12.
In other words, Sections 7 and 12 are part of a two-step
approach in the DOJ Secretary’s review power.
As for respondent’s reliance on Adasa, it too fails for, unlike in
the case of Adasa, herein petitioner has not been arraigned as in
fact no Information has been filed against her. In the absence of
grave abuse of discretion on the part of a public prosecutor who
alone determines the sufficiency of evidence that will establish
probable cause in filing a criminal information, courts will not
interfere with his findings; otherwise, courts would be swamped

with petitions to review the exercise of discretion on his part
each time a criminal complaint is dismissed or given due course.
UP BOARD OF REGENTS VS COURT OF APPEALS AND
AROKIASWAMY WILLIAM MARGARET CELINE
By Marie Myrtle Paz L. Viva
FACTS:
Arokiaswamy William Margaret Celine (private respondent) a
citizen of India enrolled doctoral program in UP CSSP Diliman
QC. She is ready for oral defense with selected panel members
Drs. E. Arsenio Manuel, Serafin Quiason, Sri Skandarajah, Noel
Teodoro, and Isagani Medina, the last included as the dean’s
representative.
Even though Dr. Medina noticed that there were portions of her
dissertation that was lifted from different sources without proper
acknowledgement, she was still allowed to continue to with her
oral defense. Four (4) out five (5) give her a passing mark with
condition to incorporate the suggestion made by the panel
members. Dr. Medina did not sign the approval form. Dr.
Teodoro also noted that a revision should be submitted.
On March 24, 1993, The CSSP College Faculty Assembly
approved her graduation pending the final revised copies of her
dissertation. Private respondent submitted the supposedly final
revised copies although petitioners maintained that suggestions
were not incorporated. She left a copy for Dr. Teodoro and Dr.
Medina and did not wait for their approval relying to the Dean
Paz remarks during previous meeting that a majority vote was
sufficient for her to pass. The supposedly revised copies were
later disapproved by Dr. Teodoro and Dr. Medina.
Private respondent was disappointed with the administration.
She charged Dr. Diokno and Medina with maliciously working
for the disapproval of her dissertation and further warned Dean
Paz against encouraging perfidious act against her. Dean Paz
attempts to exclude the private respondent in the graduating list
in a letter addressed to the Vice Chancellor for Academic Affairs
(Dr. Milagros Ibe), pending for clarification of her charges
against panel members and accusations relating to her
dissertation. Unfortunately, the letter did not reach on time and
the respondent was allowed to graduate. Dean Paz wrote a letter
that she would not be granted an academic clearance unless she
substantiated the accusations. In a letter addressed to Dean Paz,
28 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 28
Dr. Medina formally charged private respondent with plagiarism
and recommended for the withdrawal of her doctorate degree.
Dean Paz formed an ad-hoc committee (Ventura Committee) to
investigate and recommend to Chancellor Dr. Roman to
withdraw her doctorate degree. Private respondent was
informed of the charges in a letter. Ventura Committee finds at
90 instances or portions of thesis lifted from other sources with
no proper acknowledgement. After it was unanimously
approved and endorsed from the CSSP and Univ. Council the
recommendation for withdrawal was endorsed to Board of
Regents who deferred its actions to study further for legal
implications. Private respondent was provided with a copy of
findings and in return she also submitted her written
explanation. Another meeting was scheduled to discuss her
answer.
Zafaralla Committee was also created and recommends private
respondent for withdrawal of her degree after establishing the
facts the there were massive lifting from published sources and
the private respondent also admits herself of being guilty of
plagiarism.
On the basis of the report and recommendation of the University
Council, the Board of Regents send a letter to inform private
respondent that it was resolved by majority to withdraw your
doctorates degree.
On August 10, 1995, private respondent then filed a petition for
mandamus with a prayer for a writ of preliminary mandatory
injunction and damages to RTC QC. She alleged that petitioners
had unlawfully withdrawn her degree without justification and
without affording her procedural due process. She prayed that
petitioners be ordered to restore her degree and to pay her
P500, 000.00 as moral and exemplary damages and P1,
500,000.00 as compensation for lost earnings. RTC dismissed for
lack of merit. The Court of Appeals reversed the lower court’s
decision and ordered to restore her doctorates degree.
ISSUE:
Whether or not the degree conferred upon a student may be
withdrawn. YES.
RULING:
The CA decisions was based on grounds that the private
respondent was denied of due process and that she graduated
and no longer in the ambit of disciplinary powers of UP.

In all investigations held by the different committee assigned to
investigate the charges, the private respondent was heard on her
defense. In fact she was informed in writing about the charges
and was provided with a copy from the investigating committee.
She was asked to submit her explanation which she forwarded.
Private respondent also discussed her case with the UP
Chancellor and Zafaralla Committee during their meetings. She
was given the opportunity to be heard and explain her side but
failed to refute the charges of plagiarism against her.
The freedom of a university does not terminate upon the
"graduation" of a student, as the Court of Appeals held because
the "graduation" of such a student that is in question. The
investigation began before graduation. She was able to
graduate because there were many investigations conducted
before the Board finally decided that she should not have been
allowed to graduate.
The court held that academic freedom is guaranteed to
institutions of higher learning by Art XIV of the 1987
Constitution. This freedom includes deciding whom a university
will confer degrees on. If the degree is procured by error or fraud
then the Board of Regents, subject to due process being
followed, may cancel that degree.
Art. XIV, Section 5 par. 2 of the Constitution provides that
"academic freedom shall be enjoyed in all institutions of higher
learning."
It is a freedom granted to "institutions of higher learning" which
is thus given "a wide sphere of authority certainly extending to
the choice of students." If such institution of higher learning can
decide who can and who cannot study in it, it certainly can also
determine on whom it can confer the honor and distinction of
being its graduates.
Carino vs CHR
Facts:
Some 800 public school teachers including Manila Public School
Teachers Association (MPSTA) and Alliance of Concerned
Teachers (ACT), undertook "mass concerted actions" after a
29 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 29
protest rally at the DECS premises without disrupting classes as
a last call for the government to negotiate the granting of
demands but no response from the Secretary of Education. The
teachers participating in the mass actions were served with an
order of the Secretary of Education to return to work in 24 hours
or face dismissal, and a memorandum directing the DECS
officials concerned to initiate dismissal proceedings against
those who did not comply and to hire their replacements. Those
directives notwithstanding, the mass actions continued into the
week, with more teachers joining in the days that followed.
The teachers submitted sworn statements to the Commission on
Human Rights to complain that while they were participating in
peaceful mass actions, they suddenly learned of their
replacements as teachers, allegedly without notice and
consequently for reasons completely unknown to them.
Through the Office of the Solicitor General, Secretary Cariño
prayed for dismissal of the case, alleging as grounds that the
complaint states no cause of action and that the CHR has no
jurisdiction over the case
Issue:
WON CHR can take cognizance of the case?
SC:
NO. CHR has no power to adjudicate. Decision of DECS secretary
is appealed to the President.
The Court declares the Commission on Human Rights to have
no such power; and that it was not meant by the fundamental
law to be another court or quasi-judicial agency in this country,
or duplicate much less take over the functions of the latter.
The most that may be conceded to the Commission in the way
of adjudicative power is that it may investigate, i.e., receive
evidence and make findings of fact as regards claimed human
rights violations involving civil and political rights. But fact
finding is not adjudication, and cannot be likened to the judicial
function of a court of justice, or even a quasi-judicial agency or
official. The function of receiving evidence and ascertaining
therefrom the facts of a controversy is not a judicial function,
properly speaking. To be considered such, the faculty of
receiving evidence and making factual conclusions in a
controversy must be accompanied by the authority of applying
the law to those factual conclusions to the end that the

controversy may be decided or determined authoritatively,
finally and definitively, subject to such appeals or modes of
review as may be provided by law. This function, to repeat, the
Commission does not have.
Biraogovs PTC
Facts:
President Benigno Simeon Aquino III issued Executive Order No.
1 creating the Philippine Truth Commission of 2010.
PTC is an ad hoc body formed under the Office of the President
with the primary task to investigate reports of graft and
corruption committed by third-level public officers and
employees, their co-principals, accomplices and accessories
during the previous administration, and to submit its finding and
recommendations to the President, Congress and the
Ombudsman.
Issue:
WON PTC is vested with quasi-judicial powers?
SC:
NO. The power of the Truth Commission is only to investigate.
The Presidents power to conduct investigations to ensure that
laws are faithfully executed is well recognized. It flows from the
faithful-execution clause of the Constitution under Article VII,
Section 17 thereof. As the Chief Executive, the president
represents the government as a whole and sees to it that all laws
are enforced by the officials and employees of his department.
He has the authority to directly assume the functions of the
executive department.
Invoking this authority, the President constituted the PTC to
primarily investigate reports of graft and corruption and to
recommend the appropriate action. As previously stated, no
quasi-judicial powers have been vested in the said body as it
cannot adjudicate rights of persons who come before it. It has
been said that Quasi-judicial powers involve the power to hear
and determine questions of fact to which the legislative policy is
to apply and to decide in accordance with the standards laid
down by law itself in enforcing and administering the same law.
30 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 30
In simpler terms, judicial discretion is involved in the exercise of
these quasi-judicial power, such that it is exclusively vested in
the judiciary and must be clearly authorized by the legislature in
the case of administrative agencies.
The distinction between the power to investigate and the
power to adjudicate was delineated by the Court in Cario v.
Commission on Human Rights.
"Investigate," commonly understood, means to examine,
explore, inquire or delve or probe into, research on, study. The
dictionary definition of "investigate" is "to observe or study
closely: inquire into systematically: "to search or inquire into: x x
to subject to an official probe x x: to conduct an official inquiry."
The purpose of investigation, of course, is to discover, to find
out, to learn, obtain information. Nowhere included or intimated
is the notion of settling, deciding or resolving a controversy
involved in the facts inquired into by application of the law to
the facts established by the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o
follow up step by step by patient inquiry or observation. To trace
or track; to search into; to examine and inquire into with care
and accuracy; to find out by careful inquisition; examination; the
taking of evidence; a legal inquiry;" "to inquire; to make an
investigation," "investigation" being in turn described as "(a)n
administrative function, the exercise of which ordinarily does not
require a hearing. xx an inquiry, judicial or otherwise, for the
discovery and collection of facts concerning a certain matter or
matters."
"Adjudicate," commonly or popularly understood, means to
adjudge, arbitrate, judge, decide, determine, resolve, rule on,
settle. The dictionary defines the term as "to settle finally (the
rights and duties of the parties to a court case) on the merits of
issues raised: x x to pass judgment on: settle judicially: x x act as
judge." And "adjudge" means "to decide or rule upon as a judge
or with judicial or quasi-judicial powers: x x to award or grant
judicially in a case of controversy x x."
In the legal sense, "adjudicate" means: "To settle in the exercise
of judicial authority. To determine finally. Synonymous with
adjudge in its strictest sense;" and "adjudge" means: "To pass on
judicially, to decide, settle or decree, or to sentence or condemn.
xx. Implies a judicial determination of a fact, and the entry of a
judgment." [Italics included. Citations Omitted]

Fact-finding is not adjudication and it cannot be likened to
the judicial function of a court of justice, or even a quasi-
judicial agency or office. The function of receiving evidence
and ascertaining therefrom the facts of a controversy is not a
judicial function. To be considered as such, the act of receiving
evidence and arriving at factual conclusions in a controversy
must be accompanied by the authority of applying the law to
the factual conclusions to the end that the controversy may be
decided or resolved authoritatively, finally and definitively,
subject to appeals or modes of review as may be provided by
law. Even respondents themselves admit that the commission is
bereft of any quasi-judicial power.
Contrary to petitioners apprehension, the PTC will not supplant
the Ombudsman or the DOJ or erode their respective powers. If
at all, the investigative function of the commission will
complement those of the two offices. As pointed out by the
Solicitor General, the recommendation to prosecute is but a
consequence of the overall task of the commission to conduct a
fact-finding investigation. The actual prosecution of suspected
offenders, much less adjudication on the merits of the charges
against them, is certainly not a function given to the commission.
The phrase, when in the course of its investigation, under Section
2(g), highlights this fact and gives credence to a contrary
interpretation from that of the petitioners. The function of
determining probable cause for the filing of the appropriate
complaints before the courts remains to be with the DOJ and the
Ombudsman.
At any rate, the Ombudsmans power to investigate under R.A.
No. 6770 is not exclusive but is shared with other similarly
authorized government agencies.
Note:
PTC has all the powers of an investigative body. But it is not a
quasi-judicial body as it cannot adjudicate, arbitrate, resolve,
settle, or render awards in disputes between contending parties.
All it can do is gather, collect and assess evidence of graft and
corruption and make recommendations. It may have subpoena
powers but it has no power to cite people in contempt, much
less order their arrest. Although it is a fact-finding body, it
cannot determine from such facts if probable cause exists as to
warrant the filing of an information in our courts of law.
Pichay vs Ochoa
31 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 31
Facts:
Former President Gloria Macapagal-Arroyo issued Executive
Order No. 12 (E.O. 12) creating the Presidential Anti-Graft
Commission (PAGC) and vesting it with the power to investigate
or hear administrative cases or complaints for possible graft and
corruption, among others, against presidential appointees and
to submit its report and recommendations to the
President.Subsequent President Benigno Simeon Aquino III
issued Executive Order No. 13 (E.O. 13), abolishing the PAGC and
transferring its functions to the Office of the Deputy Executive
Secretary for Legal Affairs (ODESLA), more particularly to its
newly-established Investigative and Adjudicatory Division
(IAD).Finance Secretary Cesar V. Purisima filed before the IAD-
ODESLA a complaint affidavit for grave misconduct against
Prospero A. Pichay, Jr., Chairman of the Board of Trustees of the
Local Water Utilities Administration (LWUA). However, Pichay
moved for dismissal since a case is already pending before the
Ombudsman involving the same transaction.
Issue:
WON IAD-ODESLA has quasi-judicial powers
SC:
NO, investigate only.
Under E.O. 12, the PAGC was given the authority to "investigate
or hear administrative cases or complaints against all
presidential appointees in the government" and to "submit its
report and recommendations to the President." The IAD-
ODESLA is a fact-finding and recommendatory body to the
President, not having the power to settle controversies and
adjudicate cases
As the Court ruled in Cariño v. Commission on Human Rights,
and later reiterated in Biraogo v. The Philippine Truth
Commission:
Fact-finding is not adjudication and it cannot be likened to the
judicial function of a court of justice, or even a quasi-judicial
agency or office. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial
function. To be considered as such, the act of receiving evidence
and arriving at factual conclusions in a controversy must be
accompanied by the authority of applying the law to the factual
conclusions to the end that the controversy may be decided or

determined authoritatively, finally and definitively, subject to
such appeals or modes of review as may be provided by law.
The President's authority to issue E.O. 13 and constitute the IAD-
ODESLA as his fact-finding investigator cannot be doubted.
After all, as Chief Executive, he is granted full control over the
Executive Department to ensure the enforcement of the laws.
Section 17, Article VII of the Constitution provides:
Section 17. The President shall have control of all the executive
departments, bureaus and offices. He shall ensure that the laws
be faithfully executed.
The obligation to see to it that laws are faithfully executed
necessitates the corresponding power in the President to
conduct investigations into the conduct of officials and
employees in the executive department.
The IAD-ODESLA does not encroach upon the powers and duties
of the Ombudsman.
Contrary to petitioner's contention, the IAD-ODESLA did not
encroach upon the Ombudsman's primary jurisdiction when it
took cognizance of the complaint affidavit filed against him
notwithstanding the earlier filing of criminal and administrative
cases involving the same charges and allegations before the
Office of the Ombudsman. The primary jurisdiction of the
Ombudsman to investigate and prosecute cases refers to
criminal cases cognizable by the Sandiganbayan and not to
administrative cases. It is only in the exercise of its primary
jurisdiction that the Ombudsman may, at any time, take over the
investigation being conducted by another investigatory agency.
Jalosjos Jr. Vs Comelec
Facts:
DominadorJalosjos and AgapitoCardino were candidates for
Mayor of Dapitan City, Zamboanga del Norte in the May 2010
elections. Jalosjos was running for his third term. Cardino
opposed, filed a petition under Section 78 of the Omnibus
Election Code to deny due course and to cancel the certificate
of candidacy of Jalosjos. Cardino asserted that Jalosjos made a
false material representation in his certificate of candidacy when
he declared under oath that he was eligible for the Office of
Mayor.
32 | M A C A C U A N A R C I S O P R E S T O
ADMIN LAW 2019 32
Cardino claimed that long before Jalosjos filed his certificate of
candidacy, Jalosjos had already been convicted by final
judgment for robbery and sentenced to prisión mayor.
Accordingly,Jalosjos has not yet served his sentence. Jalosjos
admitted his conviction but stated that he had already been
granted probation. Cardino countered that the RTC revoked
Jalosjos’ probation. Jalosjos refuted Cardino and stated that the
RTC issued an Order declaring that Jalosjos had duly complied
with the order of probation. Jalosjos further stated that during
the 2004 elections the COMELEC denied a petition for
disqualification filed against him on the same grounds.
However, the COMELEC First Division granted Cardino’s petition
and cancelled Jalosjos’ certificate of candidacy.Jalosjos claimed
that Comelec erred when it cancelled his certificate of candidacy
without making a finding that he committed a deliberate
misrepresentation as to his qualifications, as Jalosjos relied in
good faith upon a previous COMELEC decision declaring him
eligible for the same position from which he is now being
ousted. Furthermore, the Resolutions were allegedly issued in
violation of the COMELEC Rules of Procedure.
Issue:
WON Comelec should have made a finding as to his alleged
deliberate misrepresentation concerning his qualifications
SC:
NO.
Comelec did not exercise its quasi-judicial functions, nor violated
petitioner’s right to due process, when it motu proprio issued
Res. 9613 cancelling his CoC as it did not assume jurisdiction
over any pending petition or resolve any election case before it.
It merely performed its legal duty to cancel the Certificate of
Candidacy of one suffering from accessory penalty of perpetual
disqualification to run by virtue of final judgment, even without
a petition under Omnibus Election Code or under Sec. 40 of the
Local Government Code. This is an exercise of its administrative
power. Comelec is duty bound to enforce and/or administer
laws relative to the conduct of election.