Anda di halaman 1dari 9



MARCH 26, 2011 ~ VBDIAZ


G.R. No. 120319

October 6, 1995

FACTS: From a submission agreement of the LDB and the Association of Luzon Development Bank Employees (ALDBE) arose an arbitration

case to resolve the following issue:

Whether or not the company has violated the CBA provision and the MOA on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers. Atty. Garcia, in her capacity as Voluntary Arbitrator,

received ALDBE’s Position Paper ; LDB, on the other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator

reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB.

Without LDB’s Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the CBA provision nor the MOA on promotion.

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator and to prohibit her from enforcing

the same.

ISSUE: WON a voluntary arbiter’s decision is appealable to the CA and not the SC

HELD: the Court resolved to REFER this case to the Court of Appeals.


The jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited compared to the original jurisdiction of

the labor arbiter and the appellate jurisdiction of the NLRC for that matter. The “(d)ecision, awards, or orders of the Labor Arbiter are final and

executory unless appealed to the Commission …” Hence, while there is an express mode of appeal from the decision of a labor arbiter, Republic

Act No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not, elevated to the SC itself on a petition

for certiorari, in effect equating the voluntary arbitrator with the NLRC or the CA. In the view of the Court, this is illogical and imposes an

unnecessary burden upon it.

In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of courts and awards of quasi-judicial

agencies must become final at some definite time, this Court ruled that the awards of voluntary arbitrators determine the rights of parties; hence,

their decisions have the same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., this Court ruled that “a

voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity.” Under these rulings, it follows that the voluntary arbitrator,

whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but independent of, and apart from, the NLRC since his

decisions are not appealable to the latter.

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of RTC s and quasi-judicial agencies,

instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees Compensation Commission and

the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the

Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third

paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-judicial agency,

board or commission, still both he and the panel are comprehended within the concept of a “quasi-judicial instrumentality.”

An “instrumentality” is anything used as a means or agency. Thus, the terms governmental “agency” or “instrumentality” are synonymous in the

sense that either of them is a means by which a government acts, or by which a certain government act or function is performed. The word

“instrumentality,” with respect to a state, contemplates an authority to which the state delegates governmental power for the performance of a

state function. An individual person, like an administrator or executor, is a judicial instrumentality in the settling of an estate, in the same manner

that a sub-agent appointed by a bankruptcy court is an instrumentality of the court, and a trustee in bankruptcy of a defunct corporation is an

instrumentality of the state.

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions therefor in the

Labor Code and he falls, therefore, within the contemplation of the term “instrumentality” in the aforequoted Sec. 9 of B.P. 129. The fact that his

functions and powers are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial

instrumentality as contemplated therein.

It will be noted that, although the Employees Compensation Commission is also provided for in the Labor Code, Circular No. 1-91, which is the

forerunner of the present Revised Administrative Circular No. 1-95, laid down the procedure for the appealability of its decisions to the CA under

the foregoing rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129. A fortiori, the decision or

award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the CA, in line with the procedure outlined in Revised

Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is deemed

a special proceeding of which the court specified in the contract or submission, or if none be specified, the RTC for the province or city in which

one of the parties resides or is doing business, or in which the arbitration is held, shall have jurisdiction.

In effect, this equates the award or decision of the voluntary arbitrator with that of the RTC. Consequently, in a petition for certiorari from that

award or decision, the CA must be deemed to have concurrent jurisdiction with the SC. As a matter of policy, this Court shall henceforth remand

to the Court of Appeals petitions of this nature for proper disposition.


1. In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence and

arguments presented by such parties who have bound themselves to accept the decision of the arbitrator as final and binding. Arbitration may be

classified, on the basis of the obligation on which it is based, as either compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are

compelled to accept the resolution of their dispute through arbitration by a third party. 1The essence of arbitration remains since a resolution of a

dispute is arrived at by resort to a disinterested third party whose decision is final and binding on the parties, but in compulsory arbitration, such a

third party is normally appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in their

collective agreement, to an impartial third person for a final and binding resolution. 2Ideally, arbitration awards are supposed to be complied with

by both parties without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply

with the same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for that particular dispute. Pursuant

thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually agreed to de bound

by said arbitrator’s decision.

2. Article 261 of the Labor Code accordingly provides for exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over

(1) the interpretation or implementation of the CBA and

(2) the interpretation or enforcement of company personnel policies.

Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over other labor disputes.

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within

thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes,

the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms

and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-

employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)

regardless of whether accompanied with a claim for reinstatement.

Iron and Steel Authority vs. Court of AppealsGR No. 102976, October 25, 1995FACTS:The Iron and Steel Authority (ISA)
was created by PD No. 272, in order, generally, to develop and promote the iron and steel industry in the Philippines.
Initially, it was created for a term of 5 years but when its original term expired,its term was extended for another 10 years
by EO No. 555. The National Steel Corporation (NSC) then a wholly owned subsidiary of the National Development
Corporation which is an entity wholly owned by the National Government embarked on an expansion program which includes
the construction of a steel mill in Iligan City. Proclamation No. 2239was issued by the President withdrawing from sale or
settlement a tract of land in Iligan City to be used by the NSC.However, certain portions of the public land under
Proclamation 2239 were occupied by Maria Cristina Fertilizer Co.(MCFC). LOI No. 1277 was issued directing NSC to
negotiate with the owners of MCFC for and on behalf of the
Government for the compensation of MCFC’s present occupancy rights on the subject land. The LOI directed that ISA
may exercise the power of eminent domain should the negotiations fail. The negotiations failed and ISA
commencedexpropriation proceedings against MCFC. While trial was on-going the statutory existence of ISA had expired
promptingMCFC to file the dismissal of the case since ISA has ceased to be a juridical person.
The trial court granted
MCFC’s motion
to dismiss anchoring on the Rules of Court that “only natural or juridical persons or entities authorized by law may be parties
to a civil case.”
ISA moved for a reconsideration contending that despite the expiration of its term, its juridicialexistence continued until
the winding up of its affairs could be completed. In the alternative ISA urged that the Rep. ofthe Philippines should be
allowed to be substituted in its place. The RTC denied its motion for reconsideration. This wasaffirmed by the CA.
ISSUE:Whether or not the Republic of the Philippines is entitled to be substituted for ISA in view of the expiration of
ISA’s term.
HELD:There is no provision in PD No. 272 recognizing ISA as possessing general or comprehensive juridical
personalityseparate and distinct from that of the Government. ISA in fact appears to be a non-incorporated agency
orinstrumentality of the Government of the Republic of the Philippines.
It is common knowledge that other agencies orinstrumentalities of the Government of the Republic are case in corporate
form, that is to say, are incorporated agenciesor instrumentalities, sometimes with and other times without capital stock,
and accordingly vested with a juridical personality distinct from the personality of the Republic.
The term “Authority” has been used t
o designate bothincorporated and non-incorporated agencies or instrumentalities of the Government.
The Court considers that ISA is properly regarded as an agent or delegate of the Republic of the Philippines.
TheRepublic itself is a body corporate and juridical person vested with full panoply of powers and attributes which are
compendiously described as “legal personality.”
When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as theassets and
liabilities of that agency revert back to, and are re-assumed by, the Republic of the Philippines, in the absenceof special
provisions of law specifying some other disposition thereof
such as e.g. devolution or transmission of
such powers, duties, functions, etc. to some other identified successor agency or instrumentality of the Republic of thePhilip
pines. When the expiring agency is an incorporated one, the consequences of such expiry must be looked for, in the first
instance, in the charter of that agency and, by way of supplementation in the provisions of the Corporation Code.
Since ISA is a non-incorporated agency or instrumentality of the Republic, its powers, duties, functions, assets andliabilities
are properly regarded as folded back into the Government of the Philippines and hence assumed once again bythe Republic,
no special statutory provision having been shown to have mandated succession thereto by some otherentity or agency of
the Republic.
It follows that the Republic of the Philippines is entitled to be substituted in the expropriation proceedings as party-
plaintiff in lieu of ISA, the statutory term of ISA having expired. The expiration of ISA’s statutory did not by itself
require or justify the dismissal of the eminent domain proceedings. Further, no new legislative act is necessary should
theRepublic decide, upon being substituted for ISA, in fact to continue to prosecute the expropriation proceedings.


G.R. No. 149179, 17 July 2005

PLDT is a holder of a legislative franchise under Act No. 3436 to render local and
international telecommunications services. On 24 August 1991, the terms and
conditions of its franchise were consolidated under Republic Act No. 7082 (Public
Telecommunications Policy Act of the Philippines), Section 12 of which embodies the so-
called “in-lieu-of-all-taxes” clause, whereunder PLDT shall pay a franchise tax
equivalent to three percent (3%) of all its gross receipts, which franchise tax shall be “in
lieu of all taxes”.
In August 1995, the City of Bacolod, invoking its authority under Section 137, in relation
to Section 151 and Section 193 of the Local Government Code, made an assessment on
PLDT for the payment of franchise tax due the City. Complying therewith, PLDT began
paying the City franchise tax from the year 1994 until the third quarter of 1998, at which
On 2 June 1998, the Department of Finance through its Bureau of Local Government
Finance (BLGF), issued a ruling to the effect that as of 16 March 1995, the effectivity
date of the R.A. No. 7925, PLDT, among other telecommunication companies, became
exempt from local franchise tax. Invoking the BLGF’s ruling, PLDT then stopped paying
local franchise and business taxes to Bacolod City starting the fourth quarter of 1998.
Sometime in 1999, PLDT applied for the issuance of a Mayor’s Permit but the City of
Bacolod withheld issuance thereof pending PLDT’s payment of its franchise tax liability
for the fourth quarter of 1998 and for the year 1999, in the aggregate amount of
PhP1,782,836.40, excluding surcharges and interest.

WHETHER OR NOT Section 23 of R.A. No. 7925 operates to exempt petitioner PLDT
from the payment of franchise tax imposed by the respondent City of Bacolod.


No, Section 23 does not operate to exempt PLDT from the payment of franchise tax
imposed upon it by the City of Bacolod.

According to Section 23 of R.A. No. 7925:

Equality of Treatment in the Telecommunications Industry – Any advantage, favor, privilege,

exemption, or immunity granted under existing franchises, or may hereafter be granted
shall ipso facto become part of previously granted telecommunications franchises and
shall be accorded immediately and unconditionally to the grantees of such franchises:
Provided, however, That the foregoing shall neither apply to nor affect provisions of
telecommunications franchises concerning territory covered by the franchise, the life
span of the franchise, or the type of the service authorized by the franchise.

In this case, Section 23 cannot be considered as having amended petitioner’s franchise

so as to entitle it to exemption from the imposition of local franchise taxes, as it does not
appear that Congress intended it to operate as a blanket tax exemption to all
telecommunications entities. The ‘exemption’, used in Section 23 of R.A. No. 7925, is
too general. Even as it is a state policy to promote a level playing field in the
communications industry, the term ‘exemption’ in Section 23 does not mean tax
exemption. The term refers to exemption from certain regulations and requirements
imposed by the National Telecommunications Commission (NTC).

Hence, the Supreme Court (SC) denied PLDT’s petition, in the same ruling as PLDT v.
City of Davao. Inherently, tax exemption must be expressed in the statute in clear
language that leaves no doubt of the intention of the legislature to grant such
exemption. And, even if it is granted, tax exemption is strictly construed against the
taxpayer and liberally construed in favor of the government. The SC held that that the
“in-lieu-of-all-taxes” clause does not refer to “tax exemption” but to “tax exclusion” nor
‘exemption’ in Section 23 means tax exemption. Consequently, the petitioner is liable to
pay local franchise taxes covering fourth quarter of 1998 and for the year 1999

SOLID HOMES v. TERESITA PAYAWAL, GR No. 84811, 1989-08-29

The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc.
before the Regional Trial Court of Quezon City and docketed as Civil Case No. Q-36119.
The plaintiff alleged that... the defendant contracted to sell to her a subdivision lot in
Marikina on June 9, 1975, for the agreed price of P28,080.00, and that by September 10,
1981, she had already paid the defendant the total amount of P38,949.87 in monthly
installments and... interests. Solid Homes subsequently executed a deed of sale over the
land but failed to deliver the corresponding certificate of title despite her repeated demands
because, as it appeared later, the defendant had mortgaged the property in bad faith to a...
financing company. The plaintiff asked for delivery of the title to the lot or, alternatively, the
return of all the amounts paid by her plus interest. She also claimed moral and exemplary...
damages, attorney's fees and the costs of the suit.
Solid Homes moved to dismiss the complaint on the ground that the court had no
jurisdiction, this being vested in the National Housing Authority under PD No. 957. The
motion was denied. The defendant... repleaded the objection in its answer, citing Section 3
of the said decree providing that "the National Housing Authority shall have exclusive
jurisdiction to regulate the real estate trade and business in accordance with the provisions
of this Decree." After... trial, judgment was rendered in favor of the plaintiff and the
defendant was ordered to deliver to her the title to the land or, failing this, to refund to her
the sum of P38,949.87 plus interest from 1975 and until the full amount was paid. She...
was also awarded P5,000.00 moral damages, P5,000.00 exemplary damages, P10,000.00
attorney's fees, and the costs of the suit.
Solid Homes appealed but the decision was affirmed by the respondent court,[2] which also
berated the appellant for its obvious efforts to evade a legitimate obligation, including its
dilatory tactics during... the trial. The petitioner was also reproved for its "gall" in collecting
the further amount of P1,238.47 from the plaintiff purportedly for realty taxes and
registration expenses despite its inability to deliver the title to the land.
In holding that the trial court had jurisdiction, the respondent court referred to Section 41 of
PD No. 957 itself providing that:
SEC. 41. Other remedies. - The rights and remedies provided in this Decree shall be in
addition to any and all other rights and remedies that may be... available under existing
and declared that "its clear and unambiguous tenor undermine (d) the (petitioner's)
pretension that the court a quo was bereft of jurisdiction." The decision also dismissed the
contrary opinion of the Secretary of Justice as impinging on the... authority of the courts of
jurisdictional issue.
The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the
National Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions
Under Presidential Decree No. 957." Section 1 of the latter decree provides as... follows:
SECTION 1. In the exercise of its function to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
Housing Authority shall have... exclusive jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot or condominium unit
buyer against the project owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by
buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker
or salesman.
The language of this section, especially the underscored portions, leaves no room for doubt
that "exclusive jurisdiction" over the case between the petitioner and the private respondent
is vested not in the Regional Trial Court but in the National Housing
The private respondent contends that the applicable law is BP No. 129, which confers on
regional trial courts jurisdiction to hear and decide cases mentioned in its Section 19,
reading in part as follows:
SEC. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction... over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts
The fact that one law is special and the other general creates a presumption that the special
act is to be considered as remaining an exception of the general act, one as a general law
of the land and the other as the law of the... particular case.
It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special
On the competence of the Board to award damages, we find that this is part of the exclusive
power conferred upon it by PD No. 1344 to hear and decide "claims involving refund and
any other claims filed by subdivision lot or condominium unit buyers against... the project
owner, developer, dealer, broker or salesman." It was therefore erroneous for the
respondent to brush aside the well-taken opinion of the Secretary of Justice that ?
Such claim for damages which the subdivision/condominium buyer may have against the
owner, developer, dealer or salesman, being a necessary consequence of an adjudication
of liability for non-performance of contractual or statutory obligation, may be deemed...
necessarily included in the phrase "claims involving refund and any other claims" used in
the aforequoted subparagraph C of Section 1 of PD No. 1344. The phrase "any other
claims" is, we believe, sufficiently broad to include any and all claims... which are incidental
to or a necessary consequence of the claims/cases specifically included in the grant of
jurisdiction to the National Housing Authority under the subject provisions.
The same may be said with respect to claims for attorney's fees which are recoverable
either by agreement of the parties or pursuant to Art. 2208 of the Civil Code (1) when
exemplary damages are awarded and (2) where the defendant acted in gross and evident
bad faith... in refusing to satisfy the plaintiff's plainly valid, just and demandable claim.
x x x
Besides, a strict construction of the subject provisions of PD No. 1344 which would deny the
HSRC the authority to adjudicate claims for damages and for damages and for attorney's
fees would result in multiplicity of suits in that the subdivision/condominium buyer... who
wins a case in the HSRC and who is thereby deemed entitled to claim damages and
attorney's fees, would be forced to litigate in the regular courts for the purpose, a situation
which is obviously not in the contemplation of the law.
As a result of the growing complexity of the modern society, it has become necessary to
create more and more administrative bodies to help in the regulation of its ramified
Statutes conferring powers on their administrative agencies must be liberally construed to
enable them to discharge their assigned duties in accordance with the legislative purpose.