administrative law cases - chapter 2

CASE DIGEST: CHAPTER II ADMINISTRATIVE LAW, LAW ON LOCAL GOVERNMENT & ELECTION LAW

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Classification of Administrative Bodies

1) PRESIDENTIAL ANTI-DOLLAR SALTING TASK FORCE

vs. CA, Gr. No. 83578, 171 SCRA 348, March 16, 1989

2) UNITED RESIDENTS OF DOMINICAN HILLS, INC. vs.

COSLAP, 353 SCRA 689, G.R. No. 135945, March 7, 2001

3) LEYSON vs. OFFICE OF THE OMBUDSMAN

331 SCRA 227, G.R. No. 134990, April 27, 2000

4) MALAGA vs. PENACHOS

213 SCRA 516, Gr. No. 86695, September 3, 1992

5) BEJA SR. vs. CA

207 SCRA 689, G.R. No. 97149, March 31, 1992

6) BLAQUERA vs. ALCALA

295 SCRA 336, G.R. No. 109406, September 11, 1998

7) DELA LLANA vs. ALBA

112 SCRA 294, G.R. No. L-57883, March 12, 1982

8) IRON AND STEEL AUTHORITY vs. CA

249 SCRA 538, G.R. No. 102976, October 25, 1995

9) BARBO ET AL vs. COA

Gr. No. 157542, October 10, 2008

10) CHAVEZ vs NATIONAL HOUSING AUTHORITY ET AL

530 SCRA 235, G.R. No. 164527, August 15, 2007


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PRESIDENTIAL ANTI-DOLLAR SALTING TASK FORCE vs. CA

Gr. No. 83578, 171 SCRA 348, March 16, 1989

Facts:

The PASTF was created by virtue of PD 1936 to serve as

the President's arm called upon to combat the vice of dollar salting

or the black marketing and salting of foreign exchange. State

Prosecutor Jose B. Rosales, who was assigned with the Presidential

Anti-Dollar Salting Task. The President's arm assigned to investigate

and prosecute so-called "dollar salting" activities in the country.

PADS issued search warrants against certain companies.

Issue:

Whether or not the PADS is a quasi-judicial body to issue

search warrants under the 1973 Constitution.

Held:

No. The court ruled that PADS was not granted by law to issue a warrant

of arrest. A quasi-judicial body has been defined as "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.

It is the basic function of these bodies to adjudicate claims

and/or to determine rights, and unless their decisions are

seasonably appealed to the proper reviewing authorities, the same

attain finality and become executory. A perusal of the Presidential

Anti-Dollar Salting Task Force's organic act, Presidential Decree No.

1936, as amended by Presidential Decree No. 2002, convinces the Court that the

Task Force was not meant to exercise quasi-judicial functions, that is, to

try and decide claims and execute its judgments. As the President's

arm called upon to combat the vice of "dollar salting" or the black

marketing and salting of foreign exchange, it is tasked alone by the

Decree to handle the prosecution of such activities, but nothing

more.

A quasi-judicial body has been defined as "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." The most common types of such bodies have been

listed as follows:

(1) Agencies created to function in situations wherein the

government is offering some gratuity, grant, or special privilege, like

the defunct Philippine Veterans Board, Board on Pensions for

Veterans, and NARRA, and Philippine Veterans Administration.

(2) Agencies set up to function in situations wherein the

government is seeking to carry on certain government functions, like

the Bureau of Immigration, the Bureau of Internal Revenue, the

Board of Special Inquiry and Board of Commissioners, the Civil

Service Commission, the Central Bank of the Philippines.


government is performing some business service for the public, like

the Bureau of Posts, the Postal Savings Bank, Metropolitan

Waterworks & Sewerage Authority, Philippine National Railways, the

Civil Aeronautics Administration.


government is seeking to regulate business affected with public

interest, like the Fiber Inspections Board, the Philippine Patent

Office, Office of the Insurance Commissioner.


government is seeking under the police power to regulate private

business and individuals, like the Securities & Exchange Commission,

Board of Food Inspectors, the Board of Review for Moving Pictures,

and the Professional Regulation Commission.


government is seeking to adjust individual controversies because of

some strong social policy involved, such as the National Labor

Relations Commission, the Court of Agrarian Relations, the Regional

Offices of the Ministry of Labor, the Social Security Commission,

Bureau of Labor Standards, Women and Minors Bureau.

As may be seen, it is the basic function of these bodies to

adjudicate claims and/or to determine rights, and unless its decision

are seasonably appealed to the proper reviewing authorities, the

same attain finality and become executory. A perusal of the

Presidential Anti-Dollar Salting Task Force's organic act, Presidential

Decree No. 1936, as amended by Presidential Decree No. 2002,

convinces the Court that the Task Force was not meant to exercise

quasi-judicial functions, that is, to try and decide claims and execute

its judgments. As the President's arm called upon to combat the vice

of "dollar salting" or the blackmarketing and salting of foreign

exchange

UNITED RESIDENTS OF DOMINICAN HILLS, INC. vs. COSLAP

353 SCRA 689, G.R. No. 135945, March 7, 2001

Facts:

The property being fought over by the parties is a 10.36-

hectare property in Baguio City called Dominican Hills, formerly

registered in the name of Diplomat Hills, Inc. The property was

mortgaged to the United Coconut Planters Bank (UCPB) which

eventually foreclosed the mortgage thereon and acquired the same

as highest bidder.

On April 11, 1983, it was donated to the Republic of the

Philippines by UCPB through its President, Eduardo Cojuangco. The

deed of donation stipulated that Dominican Hills would be utilized

for the "priority programs, projects, activities in human settlements

and economic development and governmental purposes" of the

Ministry of Human Settlements.

President Corazon C. Aquino issued Executive Order No. 85

abolishing the Office of Media Affairs and the Ministry of Human

Settlements. All agencies under the latter's supervision as well as all

its assets, programs and projects, were transferred to the

Presidential Management Staff (PMS).

On October 18, 1988, the PMS received an application from

petitioner UNITED RESIDENTS OF DOMINICAN HILL, INC to acquire a

portion of the Dominican Hills property. HOME INSURANCE

GUARANTY CORPORATION (HIGC) consented to act as originator for

UNITED. A Memorandum of Agreement was signed by and among

the PMS, the HIGC, and UNITED. The Memorandum of Agreement


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called for the PMS to sell the Dominican Hills property to HIGC which

would, in turn, sell the same to UNITED. The parties agreed on a

selling price of P75.00 per square meter.

Private respondents entered the Dominican Hills property

allocated to UNITED and constructed houses thereon. Petitioner was

able to secure a demolition order from the city mayor.

Unable to stop the razing of their houses, private respondents,

under the name DOMINICAN HILL BAGUIO RESIDENTS HOMELESS

ASSOCIATION filed an action for injunction, in the Regional Trial

Court of Baguio City, Branch 4. Private respondents were able to

obtain a temporary restraining order but their prayer for a writ of

preliminary injunction was later denied in an Order dated March 18,

1996.

While Civil Case No. 3316-R was pending, the ASSOCIATION,

this time represented by the Land Reform Beneficiaries Association,

Inc filed a complaint praying for damages, injunction and annulment

of the said Memorandum of Agreement between UNITED and HIGC.

Demolition Order No. 1-96 was subsequently implemented by

the Office of the City Mayor and the City Engineer's Office of Baguio

City. However, petitioner avers that private respondents returned

and reconstructed the demolished structures.

To forestall the re-implementation of the demolition order,

private respondents filed on September 29, 1998 a petition for

annulment of contracts with prayer for a temporary restraining

order in the Commission on the Settlement of Land Problems

(COSLAP) against petitioner, HIGC, PMS, the City Engineer's Office,

the City Mayor, as well as the Register of Deeds of Baguio City. On

the very same day, public respondent COSLAP issued the contested

order requiring the parties to maintain the status quo.

Without filing a motion for reconsideration from the aforesaid

status quo order, petitioner filed the instant petition questioning the

jurisdiction of the COSLAP.

Issues:

Whether or not the commission on the settlement of land

problems [coslap] created under executive order no. 561 by the

office of the philippines empowered to hear and try a petition for

annulment of contracts with prayer for a temporary restraining

order and thus, arrogate unto itself the power to issue status quo

order and conduct a hearing thereof?

Assuming that the commission on the settlement of land

problems has jurisdiction on the matter, is it exempted from

observing a clear case of forum shopping on the part of the private

respondents?

Held:

1. COSLAP is not justified in assuming jurisdiction over the

controversy. It may not assume jurisdiction over cases which are

already pending in the regular courts.

Section 3(2) of Executive Order 561 speaks of any resolution,

order or decision of the COSLAP as having the "force and effect of a

regular administrative resolution, order or decision." The

qualification places an unmistakable emphasis on the administrative

character of the COSLAP's determination, amplified by the

statement that such resolutions, orders or decisions "shall be

binding upon the parties therein and upon the agency having

jurisdiction over the same."

An agency is defined by statute as "any of the various units of

the Government, including a department, bureau, office,

instrumentality, or government-owned or controlled corporation, or

a local government or a distinct unit therein."

A department, on the other hand, "refers to an executive

department created by law." Whereas, a bureau is understood to

refer "to any principal subdivision of any department."

In turn, an office "refers, within the framework of

governmental organization, to any major functional unit of a

department or bureau including regional offices. It may also refer to

any position held or occupied by individual persons, whose functions

are defined by law or regulation."

An instrumentality is deemed to refer "to any agency of the

National Government, not integrated within the department

framework, vested with special functions or jurisdiction by law,

endowed with some if not all corporate powers, administering

special funds and enjoying operational autonomy, usually through a

charter. This term includes regulatory agencies, chartered

institutions and government-owned or controlled corporations."

section 3(2) of Executive Order 561 patently indicates that

the COSLAP's dispositions are binding on administrative or

executive agencies.

2. Private respondents, in filing multiple petitions, have mocked

our attempts to eradicate forum shopping and have thereby upset

the orderly administration of justice. They sought recourse from

three (3) different tribunals in order to obtain the writ of injunction

they so desperately desired.

A scrutiny of the pleadings filed before the trial courts and

the COSLAP sufficiently establishes private respondents' propensity

for forum shopping. We lay the premise that the certification against

forum shopping must be executed by the plaintiff or principal party,

and not by his counsel. Hence, one can deduce that the certification

is a peculiar personal representation on the part of the principal

party, an assurance given to the court or other tribunal that there

are no other pending cases involving basically the same parties,

issues and causes of action. In the case at bar, private respondents'

litany of omissions range from failing to submit the required

certification against forum shopping to filing a false certification, and

then to forum shopping itself. First, the petition filed before the

COSLAP conspicuously lacked a certification against forum shopping.

Second, it does not appear from the record that the ASSOCIATION

informed Branch 4 of the Regional Trial Court of Baguio City before

which Civil Case No. 3316-R was pending, that another action, Civil

Case No. 3382-R, was filed before Branch 61 of the same court.

Another group of homeless residents of Dominican Hill, the LAND

REFORM BENEFICIARIES ASSOCIATION, INC. initiated the latter case.


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LEYSON vs. OFFICE OF THE OMBUDSMAN

331 SCRA 227, G.R. No. 134990, April 27, 2000

Facts:

Respondent Oscar A. Torralba, president of the CIIF,

committed a breach in his contract with P. P charged D with

violation of the Anti-Graft and Corrupt Practices Act before the

Ombusdman. P also filed a collection case before the RTC against D.

public respondent dismissed the complaint based on its finding that

the case was a simple case of breach of contract with damages

which should have been filed in the regular court. The Office of the

Ombudsman has no jurisdiction to determine the legality or validity

of the termination of the contract entered into by Coconut Industry

Investment Fund - CIIF and International Towage and Transport

Corporation - ITTC. Besides the entities involved are private

corporations (over) which this Office has no jurisdiction.

Issue:

Whether or not the Office of the Ombudsman has no

jurisdiction over the case. Or Whether or not the contention of the

Office of the Ombudsman is correct in dismissing the complaint.

Held:

Yes. The jurisprudential rules invoked by petitioner in

support of his claim that the CIIF companies are government owned

and/or controlled corporations are incomplete without resorting to

the definition of "government owned or controlled corporation"

contained in par. (13), Sec. 2, Introductory Provisions of the

Administrative Code of 1987, i. e., any agency organized as a stock or

non-stock corporation vested with functions relating to public needs

whether governmental or proprietary in nature, and owned by the

Government directly or through its instrumentalities either wholly,

or, where applicable as in the case of stock corporations, to the

extent of at least fifty-one (51) percent of its capital stock.

The definition mentions three (3) requisites, namely, first,

any agency organized as a stock or non-stock corporation; second,

vested with functions relating to public needs whether

governmental or proprietary in nature; and, third, owned by the

Government directly or through its instrumentalities either wholly,

or, where applicable as in the case of stock corporations, to the

extent of at least fifty-one (51) percent of its capital stock.

In the present case, all three (3) corporations comprising

the CIIF companies were organized as stock corporations. The UCPB-

CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares

of GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.

Obviously, the below 51% shares of stock in LEGASPI OIL removes

this firm from the definition of a government owned or controlled

corporation. Our concern has thus been limited to GRANEXPORT and

UNITED COCONUT as we go back to the second requisite.

Unfortunately, it is in this regard that petitioner failed to

substantiate his contentions. There is no showing that GRANEXPORT

and/ or UNITED COCONUT was vested with functions relating to

public needs whether governmental or proprietary in nature unlike

PETROPHIL in Quimpo. The Court thus concludes that the CIIF

companies are, as found by public respondent, private corporations

not within the scope of its jurisdiction.

MALAGA vs. PENACHOS

213 SCRA 516, Gr. No. 86695, September 3, 1992

Facts:

The Iloilo State College of Fisheries (ISCOF) through its Pre-

qualifications, Bids and Awards Committee (PBAC) caused the

publication in the November 25, 26 and 28, 1988 issues of the

Western Visayas Daily an Invitation to Bid for the construction of a

Micro Laboratory Building at ISCOF. The notice announced that the

last day for the submission of pre-qualification requirements was on

December 2, 1988, and that the bids would be received and opened

on December 12, 1988 at 3 o'clock in the afternoon.

Petitioners Malaga and Najarro, doing business under the

name of BE Construction and Best Built Construction, respectively,

submitted their pre-qualification documents at two o'clock in the

afternoon of December 2, 1988. Petitioner Occeana submitted his

own PRE-C1 on December 5, 1988. All three of them were not

allowed to participate in the bidding as their documents were

considered late.

On December 12, 1988, the petitioners filed a complaint

with the Iloilo RTC against the officers of PBAC for their refusal

without just cause to accept them resulting to their non-inclusion in

the list of pre-qualified bidders. They sought to the resetting of the

December 12, 1988 bidding and the acceptance of their

documents. They also asked that if the bidding had already been

conducted, the defendants be directed not to award the project

pending resolution of their complaint.

On the same date, Judge Lebaquin issued a restraining

order prohibiting PBAC from conducting the bidding and award the

project. The defendants filed a motion to lift the restraining order on

the ground that the court is prohibited from issuing such order,

preliminary injunction and preliminary mandatory injunction in

government infrastructure project under Sec. 1 of P.D. 1818. They

also contended that the preliminary injunction had become moot

and academic as it was served after the bidding had been awarded

and closed.

On January 2, 1989, the trial court lifted the restraining

order and denied the petition for preliminary injunction. It declared

that the building sought to be constructed at the ISCOF was an

infrastructure project of the government falling within the coverage

of the subject law.

Issue:

Whether or not ISCOF is a government instrumentality

subject to the provisions of PD 1818?

Held:

ISCOF is a government instrumentality but it does not

automatically follow that it is covered by the protective prohibition

in PD 1818 on injunctions.

The 1987 Administrative Code defines a government

instrumentality as follows:

Instrumentality refers to any agency of the National

Government, not integrated within the department framework,

vested with special functions or jurisdiction by law, endowed with

some if not all corporate powers, administering special funds, and


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enjoying operational autonomy, usually through a charter. This term

includes regulatory agencies, chartered institutions, and

government-owned or controlled corporations. (Sec. 2 (5)

Introductory Provisions).

The same Code describes a chartered institution thus:

Chartered institution - refers to any agency organized or

operating under a special charter, and vested by law with functions

relating to specific constitutional policies or objectives. This term

includes the state universities and colleges, and the monetary

authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a

chartered institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a

government instrumentality.

First, it was created in pursuance of the integrated

fisheries development policy of the State, a priority program of the

government to effect the socio-economic life of the nation.

Second, the Treasurer of the Republic of the Philippines

shall also be the ex-officio Treasurer of the state college with its

accounts and expenses to be audited by the Commission on Audit or

its duly authorized representative.

Third, heads of bureaus and offices of the National

Government are authorized to loan or transfer to it, upon request of

the president of the state college, such apparatus, equipment, or

supplies and even the services of such employees as can be spared

without serious detriment to public service. Lastly, an additional

amount of P1.5M had been appropriated out of the funds of the

National Treasury and it was also decreed in its charter that the

funds and maintenance of the state college would henceforth be

included in the General Appropriations Law.

Nevertheless, it does not automatically follow that ISCOF is

covered by the prohibition in the said decree as there are

irregularities present surrounding the transaction that justified the

injunction issued as regards to the bidding and the award of the

project (citing the case of Datiles vs. Sucaldito).

BEJA SR. vs. CA

207 SCRA 689, G.R. No. 97149, March 31, 1992

Facts:

Fidencio Beja Sr. an employee of Philippine ports

authority, hired as Arrastre supervisor in 1975. and later on

appointed as terminal supervisor in 1988. On October 21, 1988, the

General Manager, Rogelio A. Dayan filed administrative case against

Beja Sr. and Villaluz for grave dishonesty. Grave misconduct willful

violation of reasonable office rules and regulations and conduct

prejudicial to the best interest of the service. Consequently they

were preventively suspended for the charges. After preliminary

investigation conducted by the district attorney for region X,

administrative case no. 11-04-88 was considered closed for lack of

merit. On December 13, 1988 another administrative case was filed

against Beja by the PPA manager also for dishonesty grave

misconduct violation of office rules and regulations, conduct

prejudicial to the best interest of the service and for being

notoriously undesirable. Beja was also placed under preventive

suspension pursuant to sec. 412 of PD No. 807.

The case was redocketed as administrative case n o. PPA-

AAB-1-049-89 and thereafter, the PPA indorsed it to the AAB for

appropriate action. The AAB proceeded to hear the case and gave

Beja an opportunity to present evidence. However, on February 20,

1989, Beja filed petition for certiorari with preliminary injunction

before the Regional Trial Court of Misamis Oriental. Two days later,

he filed with the ABB a manifestation and motion to suspend the

hearing of administrative case no. PPA-AAB-1-049-89 on account of

the pendency of the certiorari proceeding before the court. AAB

denied the motion and continued with the hearing of the

administrative case. Thereafter, Beja moved for the dismissal of the

certiorari case and proceeded to file before the Court for a petition

for certiorari with preliminary injunction and/or temporary

restraining order.

Issue:

Whether or not the Administrative Action Board of DOTC

has jurisdiction over administrative cases involving personnel below

the rank of Assistant General Manager of the Philippine Ports

Authority, an attached agency of DOTC.

Held:

The PPA General Manager is the disciplining authority who

may, by himself and without the approval of the PPA Board of

Directors, subject a respondent in an administrative case to

preventive suspension. His disciplining powers are sanctioned not

only by Sec.8 of PD no. 857 but also by Sec. 37 of PD no. 807

granting the heads of agencies the Jurisdiction to investigate and

decide matters involving disciplinary actions against officers and

employees in the PPA.

With respect to the issue, the Court qualifiedly rules in

favor of the petitioner. The PPA was created through PD no. 505

dated July 1974. Under the Law, the corporate powers of the PPA

were vested in a governing Board of Directors known as the

Philippine Ports Authority Council. Sec. 5(i) of the same decree gave

the council the power to appoint, discipline and remove, and

determine the composition of the technical staff of the authority

and other personnel. On December 23, 1975, PD no. 505 was

substituted by PD no. 857 sec. 4(a) thereof created the Philippine

Ports Authority which would be attached to the then Department of

Public Works, Transportation and Communication. When Executive

order no. 125 dated January 30, 1987 reorganizing the Ministry of

Transportation and Communication was issued, the PPA retained its

attached status.

Administrative Code of 1987 classiffied PPA as an attached

agency to the DOTC. Book IV of the Administrative Code of 1987,

the other two being supervision and control and administrative

supervision, Attachment is defined as the lateral relationship

between the department or its equivalent and the attached agency

or corporation for purposes of policy and program coordination.


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An attached agency has a larger measure of independence

from the Department to which it is attached than one which is under

departmental supervision and control or administrative supervision.

This is borne out by the lateral relationship between the

Department and the attached agency. The attachment is merely for

policy and program coordination.

With respect to administrative matters, the independence

of an attached agency from the department control and supervision

is furthermore reinforced by the fact that even an agency under a

Departments administrative supervision is free from Departmental

interference with respect to appointments and other personnel

actions in accordance with the decentralization of personnel

functions under the administrative Code of 1987.

The Law impliedly grants the general Manager with the

approval of the PPA board of Directors the power to investigate its

personnel below the rank of Assistant Manager who may be charged

with an administrative offense. During such investigation, the PPA

General Manager, may subject the employee concerned to

preventive suspension.

The investigation should be conducted in accordance with

the procedure set out in Sec. 38 of PD no. 807. The Decision of the

Court of Appeal is AFFIRMED as so far as it upholds the power of the

PPA General Manager to to subject petitioner to preventive

suspension and REVERSED insofar as it validates the jurisdiction of

the DOTC and/or the AAB to act on administrative case no. PPA

AAB-1-049-89. The AAB decision in said cased is hereby declared

NULL and VOID and the case is REMANDED to the PPA whose

General Manager shall conduct with dispatch its reinvestigation.

BLAQUERA vs. ALCALA

295 SCRA 336, G.R. No. 109406, September 11, 1998

Facts:

On Feb. 21, 1992, then Pres. Aquino issued AO 268 which

granted each official and employee of the government the

productivity incentive benefits in a maximum amount equivalent to

30% of the employees one month basic salary but which amount

not be less than P2, 000.00. Said AO provided that the productivity

incentive benefits shall be granted only for the year 1991.

Accordingly, all heads of agencies, including government boards of

government-owned or controlled corporations and financial

institutions, are strictly prohibited from granting productivity

incentive benefits for the year 1992 and future years pending the

result of a comprehensive study being undertaken by the Office of

the Pres.

The petitioners, who are officials and employees of several

government departments and agencies, were paid incentive benefits

for the year 1992. Then, on Jan. 19, 1993, then Pres. Ramos issued

AO 29 authorizing the grant of productivity incentive benefits for the

year1992 in the maximum amount of P1,000.00 and reiterating the

prohibition under Sec. 7 of AO 268, enjoining the grant of

productivity incentive benefits without prior approval of the

President. Sec. 4 of AO 29 directed all departments, offices

and agencies which authorized payment of productivity incentive

bonus for the year 1992 in excess of P1, 000.00 to immediately

cause the refund of the excess. In compliance therewith, the

heads of the departments or agencies of the government concerned

caused the deduction from petitioners salaries or allowances of the

amounts needed to cover the alleged overpayments.

Petitioner contends that the Philippine Tourism Authority

is a government-owned and controlled corporation performing

proprietary function, and therefore the Secretary of Labor and

Employment and Secretary of Finance exceeded their authority in

issuing the aforestated Supplemental Rules Implementing RA 6971.

Issues:

Whether or not the PTA is within the purview of RA 6971

and AO 29 does not apply.

Whether or not AO 29 and AO 268 were issued in the valid

exercise of presidential control over the executive departments.

Held:

No. Government-owned and controlled corporations may

perform governmental or proprietary functions or both, depending

on the purpose for which they have been created. If the purpose, is

to obtain special corporate benefits or earn pecuniary profit, the

function is proprietary. If it is in the interest of health, safety and for

the advancement of public good and welfare, affecting the public in

general, the function is governmental. Powers classified as

"proprietary" are those intended for private advantage and benefit.

The powers and functions of PTA are predominantly

governmental, principally geared towards the development and

promotion of tourism in the scenic Philippine archipelago. But it is

irrefutable that PTA also performs proprietary functions, as

envisaged by its charter. Reliance on the above analysis of the

functions and powers of PTA does not suffice for the determination

of whether or not it is within the coverage of RA 6971. For us to

resolve the issues raised here solely on the basis of the classification

of PTA's powers and functions may lead to the rendition of

judgment repugnant to the legislative intent and to established

doctrines, as well, such as on the prohibition against government

workers to strike. Under RA 6971, the workers have the right to

strike. To ascertain whether PTA is within the ambit of RA 6971,

there is need to find out the legislative intent, and to refer to other

provisions of RA 6971 and other pertinent laws, that may aid the

Court in ruling on the right or officials and employees of PTA to

receive bonuses under RA 8971.

Government corporations may be created by special

charters or by incorporation under the general corporation law.

Those created by special charters are governed by the Civil Service

Law while those incorporated under the general corporation law are

governed by the Labor Code.

The legislative intent to place only government-owned and

controlled corporations performing proprietary functions under the

coverage of RA 6971 is gleanable from the other provisions of the

law. The Court finds no reversible error in the finding by respondent

Commission that PTA is not within the purview of RA 6971. As

regards the promulgation of implementing rules and regulations, it

bears stressing that the "power of administrative officials to


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promulgate rules in the implementation of the statute is necessarily

limited to what is provided for in the legislative enactment." 26 In

the case under scrutiny, the Supplementary Rules Implementing RA

6971 issued by the Secretary of Labor and Employment and the

Secretary of Finance accord with the intendment and provisions of

RA 6971. Consequently, not being covered by RA 6971, AO 29

applies to the petitioner.

Yes. The Pres. is the head of the government.

Governmental power and authority are exercised and implemented

through him. His power includes the control of executive

departments as provided under Sec. 17, Art. VII of the Constitution.

Control means the power of an officer to alter or modify or

set aside what a subordinate officer had done in the performance of

his duties and to substitute the judgment of the former for that of

the latter. The Pres. can, by virtue of his power of control, review,

modify, alter or nullify any action or decision of his subordinate in

the executive departments, bureau or offices under him.

When the Pres. issued AO 29 limiting the amount of

incentive benefits, enjoining heads of government agencies from

granting incentive benefits without approval from him and directing

the refund of the excess over the prescribed amount, the Pres. was

just exercising his power of control over executive departments.

The Pres. issued subject AOs to regulate the grant of

productivity incentive benefits and to prevent discontent,

dissatisfaction and demoralization among government personnel by

committing limited resources of government for the equal payment

of incentives andawards. The Pres. was only exercising his power of

control by modifying the acts of the heads of the

government agencies whogranted incentive benefits to their

employees without appropriateclearance from the Office of the

Pres., thereby resulting in the uneven distribution of government

resources.

The Presidents duty to execute the law is of constitutional

origin. So, too, is his control of executive departments.

DELA LLANA vs. ALBA

112 SCRA 294, G.R. No. L-57883, March 12, 1982

Facts:

De La Llana, et. al. filed a Petition for Declaratory Relief

and/or for Prohibition, seeking to enjoin the Minister of the Budget,

the Chairman of the Commission on Audit, and the Minister of

Justice from taking any action implementing BP 129 which mandates

that Justices and judges of inferior courts from the CA to MTCs,

except the occupants of the Sandiganbayan and the CTA, unless

appointed to the inferior courts established by such act, would be

considered separated from the judiciary. It is the termination of

their incumbency that for petitioners justify a suit of this character,

it being alleged that thereby the security of tenure provision of the

Constitution has been ignored and disregarded.

Petitioner challenged the constitutionality of BP 129

(Judicial Reorganization Act of 1980) for, among other things,

undermining the independence of the judiciary by violating the right

of incumbent lower court judges to security of tenure. The law

decreed that all justices and judges of inferior courts from the CA to

municipal courts, except the Sandiganbayan and the Court of Tax

Appeals, unless appointed to inferior courts established by said law

would be deemed separated from the judiciary upon the completion

of the reorganization. The said BP 129 was enacted as a direct

response to the public clamor for judicial reform.

The petitioners main argument is that the decision to

discipline or dismiss from the service lower court judges is the sole

prerogative of the SC, just as the power of Congress to determine

disorderly behavior of its members is exclusive. Hence, it is

contended that the law had the effect of circumventing security of

tenure by indirection; the abolition of courts was a mere ploy for

removing judicial officers who should only be removed by the SC.

Issues:

1. Whether or not BP 129 suffers from constitutional

infirmity.

2. Whether or not the reorganization violates the security

of tenure of justices and judges as provided for under the

Constitution.

Held:

1. No. The authority of the Congress to abolish offices is

implicit in its express power to create offices. Well-recognized is its

power to create courts and allocate their respective jurisdictions and

as can be necessarily implied therefrom, the authority to abolish

courts. Obviously, the abolition of a court results in the termination

of the tenure of the judicial officer who occupies the office

abolished.

However, in order to be valid, abolition must not be

employed as a scheme for circumventing the guarantee of security

of tenure. Abolition will be justified when done in good faith and not

for political or personal reasons. In such case, it can be logically said

that there is no removal from the office because a removal

presupposes that the office exists after the officers ouster.

If created by the Constitution itself, the administrative

body can be altered or abolished only by constitutional amendment;

but where the body was created only by statute, the legislature that

breathed life into it can amend or even repeal its charter, thereby

resulting in its abolition, which is justified if made in good faith and

not attended by grave abuse of discretion.

BP 129 does not suffer from any constitutional infirmity

because the abolition of certain judicial offices was done in good

faith. This being the case, the executive is entitled to exercise its

constitutional power to fill the newly created judicial positions

without any obligation to consult the SC and to accord its views the

fullest consideration.

2. No. What is involved in this case is not the removal or

separation of the judges and justices from their services. What is

important is the validity of the abolition of their offices. Well-settled

is the rule that the abolition of an office does not amount to an


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illegal removal of its incumbent is the principle that, in order to be

valid, the abolition must be made in good faith.

Removal is to be distinguished from termination by virtue

of valid abolition of the office. There can be no tenure to a non-

existent office. After the abolition, there is in law no occupant. In

case of removal, there is an office with an occupant who would

thereby lose his position. It is in that sense that from the standpoint

of strict law, the question of any impairment of security of tenure

does not arise.

IRON AND STEEL AUTHORITY vs. CA

249 SCRA 538, G.R. No. 102976, October 25, 1995

Facts:

Petitioner Iron and Steel Authority (ISA) was created by

Presidential Decree No. 272 dated August 9, 1973 in order, to

develop and promote the iron and steel industry in the Philippines.

P.D. No. 272 initially created petitioner ISA for a term of 5 years, and

when ISAs original term expired on October 10, 1978, its term was

extended for another 10 years.

The National Steel Corporation (NSC) then a wholly owned

subsidiary of the National Development Corporation, which is itself

an entity wholly owned by the National Government, embarked on

an expansion program embracing, among other things, the

construction of an integrated steel mill in Iligan City. Pursuant to the

expansion program of the NSC, Proclamation No. 2239 was issued by

the President of the Philippines on November 16, 1982 withdrawing

from sale or settlement a large tract of public land located in Iligan

City and reserving that land for the use and immediate occupancy of

NSCs.

Since certain portions of the public land subject matter of

Proclamation No. 2239 were occupied by a non-operational

chemical fertilizer plant owned by private respondent Maria Cristina

Fertilizer Corporation (MCFC), LOI No. 1277, also dated 16

November 1982, was issued directing the NSC to negotiate with the

owners of MCFC, for and on behalf of the Government, for the

compensation of MCFCs present occupancy rights on the subject

land. LOI No. 1277 also directed that should NSC and private

respondent MCFC fail to reach an agreement within a period of

60 days from the date of the LOI, petitioner ISA was to exercise its

power of eminent domain under P.D. No. 272 and to initiate

expropriation proceedings in respect of occupancy rights of private

respondent MCFC relating to the subject public land as well as the

plant itself and related facilities and to cede the same to the NSC.

Negotiations between NSC and private respondent MCFC

did fail.

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:

Yes. Clearly, ISA was vested with some of the powers or

attributes normally associated with juridical personality but did not

possess general or comprehensive juridical personality separate and

distinct from that of the Government. The ISA in fact appears to the

Court to be a non-incorporated agency or instrumentality of the

Government of the Republic of the Philippines. ISA may thus be

properly regarded as an agent or delegate of the Republic of the

Philippines.

When the statutory term of a non-incorporated agency

expires, the powers, duties and functions as well as the assets and

liabilities of that agency revert back to, and are re-assumed by, the

Republic of the Philippines, in the absence of special provisions of

law specifying some other disposition thereof such as, e.g.,

devolution or transmission of such powers, duties, functions, etc. to

some other identified successor agency or instrumentality of the

Republic of the Philippines. When the expiring agency is an

incorporated one, the consequences of such expiry must be looked

for in the charter of that agency and, by way of supplementation, in

the provisions of the Corporation Code. Since, in the instant case,

ISA is a non-incorporated agency or instrumentality of the Republic,

its powers, duties, functions, assets and liabilities are properly

regarded as folded back into the Government of the Republic of the

Philippines and hence assumed once again by the Republic, no

special statutory provision having been shown to have mandated

succession thereto by some other entity or agency of the Republic.

In the instant case, ISA instituted the expropriation

proceedings in its capacity as an agent or delegate or representative

of the Republic of the Philippines pursuant to its authority under

P.D. No. 272.

From the foregoing premises, it follows that the Republic

of the Philippines is entitled to be substituted in the expropriation

proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA

having expired. Put a little differently, the expiration of ISA's

statutory term did not by itself require or justify the dismissal of the

eminent domain proceedings.


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BARBO ET AL vs. COA

Gr. No. 157542, October 10, 2008

Facts:

Petitioners are officials of the Local Water Utilities

Administration (LWUA) and designated members of the Interim

Board of Directors of the San Fernando Water District (SFWD).

On December 4, 1995 and February 12 1996, the LWUA

Board of Trustees issued Board Resolution No. 313, Series of 1995

and Board Resolution No. 39, Series of 1996 respectively. These

Board Resolutions authorized the Board of Directors of SFWD to

receive reimbursable allowances in the form of Representation and

Transportation Allowance (RATA), Travel Allowance, and

Extraordinary & Miscellaneous Expense (EME); Christmas Bonus;

Uniform Allowance; Rice Allowance; Medical and Dental Benefits;

and Productivity Incentive Bonus.

Pursuant to the said Board Resolutions, petitioners

received EME, Rice Allowance, Christmas Bonus, and Productivity

Bonus from SFWD during the calendar years starting 1994 until

1996.

On June 30, 1997, a Special Audit Team of COA Regional

Office No. III at San Fernando, Pampanga audited the financial

accounts of SFWD for the period covering January 1, 1994 to July 15,

1996. The COA Special Audit Team disallowed the payment of the

above-mentioned benefits and allowances received by petitioners

after the same were found to be excessive and contrary to Sections

228, 162 and 163 of the Government Accounting and Auditing

Manual (GAAM) and to Civil Service Commission (CSC) Resolution

No. 954073 in relation to Section 13 of Presidential Decree (PD) No.

198 (Provincial Water Utilities Act of 1973) as amended. Thus,

petitioners were directed to refund the benefits and allowances

subject of the disallowance. The Regional Director, affirmed the

Special Audit Team's Notice of Disallowance No. 97-004 (94, 95, 96).

COA denied the petition for review and affirmed the ruling

of the COA Regional Director as contained in its First Indorsement.

The COA stressed that the Directors of local water districts (LWDs)

were prohibited from receiving compensation other than per diems

and that LWUA Board Resolution Nos. 313 and 39 were contrary to

the law which it intended to implement, specifically, Section 13 of

PD No. 198, as amended. Citing the case Peralta v. Mathay, the COA

declared that the subject bonuses and allowances received by

petitioners constituted additional compensation or remuneration.

The dispositive portion of the decision reads:

Issues:

1. Whether or not respondent has jurisdiction to moto propio

declare LWUA Board Resolution No. 313 as amended by Resolution

39 to be totally in conflict with Sec 13 of PD 198 as amended.

2. Whether or not Sec. 13 of PD 198 as amended, prohibit

petitioners entitlement to RATA, EME, BONUSES and OTHER

BENEFITS and ALLOWANCES.

3. Whether or not Petitioners are liable to settle / refund the

disallowed allowances, Bonuses and Other Benefits received by

petitioners.

Held:

1. Petitioners contend that the COA lacks jurisdiction to

declare whether or not LWUA Board Resolution Nos. 313 and 39 are

consistent with Section 13 of PD No. 198, as amended, on matters

pertaining to the compensation and "other benefits" of the Directors

of the LWD. This is allegedly the function of the courts.

The Court has already settled this issue in a myriad of

cases. Particularly, in Rodolfo S. de Jesus [Catbalogan Water District]

v. COA, the Court upheld the authority and jurisdiction of the COA to

rule on the legality of the disbursement of government funds by a

water district and declared that such power does not conflict with

the jurisdiction of the courts, the DBM, and the LWUA. Citing Section

2, Subdivision D, Article IX of the 1987 Constitution the Court

declared that it is the mandate of the COA to audit all government

agencies, including government-owned and controlled corporations

with original charters. Indeed, the Constitution specifically vests in

the COA the authority to determine whether government entities

comply with laws and regulations in disbursing government funds,

and to disallow illegal or irregular disbursements of government

funds. This independent constitutional body is tasked to be vigilant

and conscientious in safeguarding the proper use of the

government's, and ultimately the people's, property.

2. A water district is a government-owned and controlled

corporation with a special charter since it is created pursuant to a

special law, Presidential Decree 198. It is undeniable that PD 198

expressly prohibits the grant of RATA, EME, and bonuses to

members of the board of Water Districts. Section 13 of PD 198, as

amended, reads as follows:

Compensation. - Each director shall receive a per diem, to

be determined by the board, for each meeting of the board actually

attended by him, but no director shall receive per diems in any given

month in excess of the equivalent of the total per diems of four

meetings in any given month. No director shall receive other

compensation for services to the district. Any per diem in excess of

P50 shall be subject to approval of the Administration.

In Baybay Water District v. Commission on Audit, the

members of the board of Baybay Water District also questioned the

disallowance by the COA of payment of RATA, rice allowance and

excessive per diems. The Court ruled that pursuant to PD 198,

members of the board of water districts cannot receive allowances

and benefits more than those allowed by PD 198. Construing Section

13 of PD 198, in Baybay, the Court declared:

xxx Under 13 of this Decree, per diem is precisely

intended to be the compensation of members of board of directors

of water districts. Indeed, words and phrases in a statute must be

given their natural, ordinary, and commonly-accepted meaning, due

regard being given to the context in which the words and phrases

are used. By specifying the compensation which a director is entitled

to receive and by limiting the amount he/she is allowed to receive in

a month, and, in the same paragraph, providing "No director shall

receive other compensation" than the amount provided for per

diems, the law quite clearly indicates that directors of water districts

are authorized to receive only the per diem authorized by law and

no other compensation or allowance in whatever form.


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Section 13 of PD 198 is clear enough that it needs no interpretation.

It expressly prohibits the grant of compensation other than the

payment of per diem, thus pre-empting the exercise of any

discretion by water districts in paying other allowances and bonuses.

3. While we sustain the disallowance of the above benefits

by respondent COA, however, we find that the SFWD affected

personnel who received the above mentioned benefits and

privileges acted in good faith under the honest belief that Board

Resolution Nos. 313 and 39 authorized such payment.

Petitioners here received the additional allowances and

bonuses in good faith under the honest belief that LWUA Board

Resolution No. 313 authorized such payment. At the time

petitioners received the additional allowances and bonuses, the

Court had not yet decided Baybay Water District. Petitioners had no

knowledge that such payment was without legal basis. Thus, being in

good faith, petitioners need not refund the allowances and bonuses

they received but disallowed by the COA.

CHAVEZ vs NATIONAL HOUSING AUTHORITY ET AL

530 SCRA 235, G.R. No. 164527, August 15, 2007

Facts:

On March 19, 1993, the National Housing Authority (NHA)

and R-II Builders, Inc. (RBI) entered into a Joint Venture Agreement

(JVA) for the development of the Smokey Mountain dumpsite and

reclamation area to be converted into a low cost medium rise

housing complex and industrial/commercial site. The Project will

involve 79 hectares of reclaimed land (it was initially 40 hectares but

the JVA was amended). The JVA also provides that as part of the

consideration for the Project, NHA will convey a portion of the

reclaimed lands to RBI. The reclamation of the area was made; and

subsequently, Special Patents were issued conveying the reclaimed

land to NHA.

On August 5, 2004, former Solicitor General Francisco I.

Chavez filed this Petition for Prohibition and Mandamus seeking to

declare NULL and VOID the Joint Venture Agreement (JVA) and the

Smokey Mountain Development and Reclamation Project, and all

other agreements in relation thereto, for being Unconstitutional and

Invalid.

Issues:

1. Whether or not the NHA and RBI have been granted the

power and authority to reclaim lands of the public domain. (Chavez

claims that the power to reclaim lands of public domain is vested

exclusively with PEA).

2. Whether or not the NHA and RBI were given the power and

authority by DENR to reclaim foreshore and submerged lands, as

required (Chavez claims that they were not).

3. Whether or not the RBI, being a private corporation, is

barred by the Constitution to acquire lands of public domain.

Held:

1. Yes. Although PEA was designated under EO 525 as the

agency primarily responsible for integrating, directing, and

coordinating all reclamation projects, its charter does not mention

that it has the exclusive and sole power and authority to reclaim

lands of public domain. In fact, EO 525 provides that reclamation

projects may also be undertaken by a national government agency

or entity authorized by its charter to reclaim land.

There are 3 requisites to a legal and valid reclamation

project:

a. approval by the President;

b. favorable recommendation of PEA; and

c. undertaken by any of the ff:

i. PEA

ii. any person or entity pursuant to a

contract it executed with PEA

iii. the National government agency or

entity authorized under its charter to

reclaim lands subject to consultation

with PEA.

Applying the above requirements, the SC concluded that

the Project has met all 3 requirements:

a. There was ample approval by the President of the

Philippines. Presidents Aquino and Ramos issued Proclamations

approving and implementing the reclamation of lands.

b. There was an implied grant of a favorable endorsement

of the reclamation phase from PEA. This is shown in the fact that

PEA was a member of the EXECOM which was in charge of

overseeing the implementation of the Project.

c. The reclamation was undertaken by the NHA, a national

government agency authorized to reclaim lands under its charter

and other laws. While the charter of NHA does not explicitly

mention reclamation in any of its listed powers, such power is

implied since it is vital or incidental to achieving the objective of an

urban land reform and housing program.

2. Yes. The DENR exercises exclusive jurisdiction on the

management and disposition of all lands of the public domain. As

such, it decides whether areas, like foreshore or submerged lands,

should be reclaimed or not and whether they should be classified as

alienable and disposable.

In this case, when the President approved and ordered the

development of a housing project with the corresponding

reclamation work, making DENR a member of the EXECOM

(committee tasked to implement the project), the required

authorization from the DENR to reclaim land can be deemed

satisfied. Also, the issuance of the Environmental Compliance

Certificates by the DENR shows its ratification of the reclamation

project.

3. No. RA 6957, as amended (BOT Law), states that a

contractor can be paid a portion as percentage of the reclaimed

land subject to the constitutional requirement that only Filipino

citizens or corporations with at least 60% Filipino equity can acquire

the same. In this case, RBI is a private corporation wherein Filipino

citizens own at least 60% of its shares.

administrative law cases - chapter 2

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