1. MAKATI STOCK EXCHANGE, INC., petitioner, vs. SECURITIES AND EXCHANGE COMMISSION and
MANILA STOCK EXCHANGE, respondents. G.R. No. L-23004 June 30, 1965
Securities and Exchange Commission; May not prohibit double listing of securities in stock exchanges.—
The Securities and Exchange Commission’s rule that a security already listed in any securities exchange
may not be listed anew in any other securities exchange is beyond the power of the Commission to
impose because it results in discrimination and violation of constitutional rights.
Same; Same; Prohibition against double listing as condition for licensing of stock exchange.—The
Securities and Exchange Commission may not validly impose as a condition precedent for the licensing
of a stock exchange its rule against double listing of securities.
This is a review of the resolution of the Securities and Exchange Commission which would deny the
Makati Stock Exchange, Inc., permission to operate a stock exchange unless it agreed not to list for
trading on its board, securities already listed in the Manila Stock Exchange.
Objecting to the requirement, Makati Stock Exchange, Inc. contends that the Commission has no power
to impose it and that, anyway, it is illegal, discriminatory and unjust.
Under the law, no stock exchange may do business in the Philippines unless it is previously registered
with the Commission by filing a statement containing the information described in Sec. 17 of the
Securities Act (Commonwealth Act 83, as amended).
It is assumed that the Commission may permit registration if the section is complied with; if not, it may
refuse. And there is now no question that the section has been complied with, or would be complied
with, except that the Makati Stock Exchange, upon challenging this particular requirement of the
Commission (rule against double listing) may be deemed to have shown inability or refusal to abide by
its rules, and thereby to have given ground for denying registration. [Sec. 17 (a) (1) and (d)].
Such rule provides: "... nor shall a security already listed in any securities exchange be listed anew in any
other securities exchange ... ."
The objection of Makati Stock Exchange, Inc., to this rule is understandable. There is actually only one
securities exchange — The Manila Stock Exchange — that has been operating alone for the past 25
years; and all — or presumably all — available or worthwhile securities for trading in the market are
now listed there. In effect, the Commission permits the Makati Stock Exchange, Inc., to deal only with
other securities. Which is tantamount to permitting a store to open provided it sells only those goods not
sold in other stores. And if there's only one existing store, 1 the result is a monopoly.
It is not farfetched to assert — as petitioner does 2 that for all practical purposes, the Commission's
order or resolution would make it impossible for the Makati Stock Exchange to operate. So, its
"permission" amounted to a "prohibition."
Apparently, the Commission acted "in the public interest." 3 Hence, it is pertinent to inquire whether
the Commission may "in the public interest" prohibit (or make impossible) the establishment of
another stock exchange (besides the Manila Stock Exchange), on the ground that the operation of two
or more exchanges adversely affects the public interest.
At first glance, the answer should be in the negative, because the law itself contemplated, and,
therefore, tacitly permitted or tolerated at least, the operation of two or more exchanges.
Wherever two or more exchanges exist, the Commission, by order, shall require and enforce uniformity
of trading regulations in and/or between said exchanges. [Emphasis Ours] (Sec. 28b-13, Securities Act.)
In fact, as admitted by respondents, there were five stock exchanges in Manila, before the Pacific War
(p. 10, brief), when the Securities Act was approved or amended. (Respondent Commission even admits
that dual listing was practiced then.) So if the existence of more than one exchange were contrary to
public interest, it is strange that the Congress having from time to time enacted legislation amending the
Securities Act, 4 has not barred multiplicity of exchanges.
Forgetting for the moment the monopolistic aspect of the Commission's resolution, let us examine the
authority of the Commission to promulgate and implement the rule in question.
It is fundamental that an administrative officer has only such powers as are expressly granted to him
by the statute, and those necessarily implied in the exercise thereof.
In its brief and its resolution now subject to review, the Commission cites no provision expressly
supporting its rule. Nevertheless, it suggests that the power is "necessary for the execution of the
functions vested in it"; but it makes no explanation, perhaps relying on the reasons advanced in support
of its position that trading of the same securities in two or more stock exchanges, fails to give protection
to the investors, besides contravening public interest. (Of this, we shall treat later) .
On the legality of its rule, the Commission's argument is that: (a) it was approved by the Department
Head — before the War; and (b) it is not in conflict with the provisions of the Securities Act. In our
opinion, the approval of the Department, 5 by itself, adds no weight in a judicial litigation; and the test is
not whether the Act forbids the Commission from imposing a prohibition, but whether
it empowers the Commission to prohibit. No specific portion of the statute has been cited to uphold
this power. It is not found in sec. 28 (of the Securities Act), which is entitled "Powers (of the
Commission) with Respect to Exchanges and Securities." 6
According to many court precedents, the general power to "regulate" which the Commission has (Sec.
33) does not imply authority to prohibit." 7
The Manila Stock Exchange, obviously the beneficiary of the disputed rule, contends that the power may
be inferred from the express power of the Commission to suspend trading in a security, under said sec.
28 which reads partly:
And if in its opinion, the public interest so requires, summarily to suspend trading in any registered
security on any securities exchange ... . (Sec. 28[3], Securities Act.)
However, the Commission has not acted — nor claimed to have acted — in pursuance of such authority,
for the simple reason that suspension under it may only be for ten days. Indeed, this section, if
applicable, precisely argues against the position of the Commission because the "suspension," if it is,
and as applied to Makati Stock Exchange, continues for an indefinite period, if not forever; whereas this
Section 28 authorizes suspension for ten days only. Besides, the suspension of trading in the security
should not be on one exchange only, but on all exchanges; bearing in mind that suspension should be
ordered "for the protection of investors" (first par., sec. 28) in all exchanges, naturally, and if "the public
interest so requires" [sec. 28(3)].
This brings up the Commission's principal conclusions underlying its determination viz.: (a) that the
establishment of another exchange in the environs of Manila would be inimical to the public interest;
and (b) that double or multiple listing of securities should be prohibited for the "protection of the
investors."
(a) Public Interest — Having already adverted to this aspect of the matter, and the emerging monopoly
of the Manila Stock Exchange, we may, at this juncture, emphasize that by restricting free competition in
the marketing of stocks, and depriving the public of the advantages thereof the Commission all
but permits what the law punishes as monopolies as "crimes against public interest." 8
"A stock exchange is essentially monopolistic," the Commission states in its resolution (p. 14-a,
Appendix, Brief for Petitioner). This reveals the basic foundation of the Commission's process of
reasoning. And yet, a few pages afterwards, it recalls the benefits to be derived "from the existence of
two or more exchanges," and the desirability of "a healthy and fair competition in the securities
market," even as it expresses the belief that "a fair field of competition among stock exchanges should
be encouraged only to resolve, paradoxically enough, that Manila Stock Exchange shall, in effect,
continue to be the only stock exchange in Manila or in the Philippines.
"Double listing of a security," explains the Commission, "divides the sellers and the buyers, thus
destroying the essence of a stock exchange as a two-way auction market for the securities, where all the
buyers and sellers in one geographical area converge in one defined place, and the bidders compete
with each other to purchase the security at the lowest possible price and those seeking to sell it
compete with each other to get the highest price therefor. In this sense, a stock exchange is essentially
monopolistic."
Inconclusive premises, for sure. For it is debatable whether the buyer of stock may get the lowest price
where all the sellers assemble in only one place. The price there, in one sale, will tend to fix the price for
the succeeding, sales, and he has no chance to get a lower price except at another stock exchange.
Therefore, the arrangement desired by the Commission may, at most, be beneficial to sellers of stock —
not to buyers — although what applies to buyers should obtain equally as to sellers (looking for higher
prices). Besides, there is the brokerage fee which must be considered. Not to mention the personality of
the broker.
(b) Protection of investors. — At any rate, supposing the arrangement contemplated is beneficial to
investors (as the Commission says), it is to be doubted whether it is "necessary" for their "protection"
within the purview of the Securities Act. As the purpose of the Act is to give adequate and effective
protection to the investing public against fraudulent representations, or false promises and the
imposition of worthless ventures, 9 it is hard to see how the proposed concentration of the market has a
necessary bearing to the prevention of deceptive devices or unlawful practices. For it is not mere
semantics to declare that acts for the protection of investors are necessarily beneficial to them; but not
everything beneficial to them is necessary for their protection.
And yet, the Commission realizes that if there were two or more exchanges "the same security may sell
for more in one exchange and sell for less in the other. Variance in price of the same security would be
the rule ... ." Needless to add, the brokerage rates will also differ.
This, precisely, strengthens the objection to the Commission's ruling. Such difference in prices and rates
gives the buyer of shares alternative options, with the opportunity to invest at lower expense; and the
seller, to dispose at higher prices. Consequently, for the investors' benefit (protection is not the word),
quality of listing 10 should be permitted, nay, encouraged, and other exchanges allowed to operate. The
circumstance that some people "made a lot of money due to the difference in prices of securities traded
in the stock exchanges of Manila before the war" as the Commission noted, furnishes no sufficient
reason to let one exchange corner the market. If there was undue manipulation or unfair advantage in
exchange trading the Commission should have other means to correct the specific abuses.
Granted that, as the Commission observes, "what the country needs is not another" market for
securities already listed on the Manila Stock Exchange, but "one that would focus its attention and
energies on the listing of new securities and thus effectively help in raising capital sorely needed by
our ... unlisted industries and enterprises."
Nonetheless, we discover no legal authority for it to shore up (and stifle) free enterprise and individual
liberty along channels leading to that economic desideratum. 11
The Legislature has specified the conditions under which a stock exchange may legally obtain a permit
(sec. 17, Securities Act); it is not for the Commission to impose others. If the existence of two competing
exchanges jeopardizes public interest — which is doubtful — let the Congress speak. 12 Undoubtedly, the
opinion and recommendation of the Commission will be given weight by the Legislature, in judging
whether or not to restrict individual enterprise and business opportunities. But until otherwise directed
by law, the operation of exchanges should not be so regulated as practically to create a monopoly by
preventing the establishment of other stock exchanges and thereby contravening:
(a) the organizers' (Makati's) Constitutional right to equality before the law;
(b) their guaranteed civil liberty to pursue any lawful employment or trade; and
(c) the investor's right to choose where to buy or to sell, and his privilege to select the brokers in his
employment. 13
And no extended elucidation is needed to conclude that for a licensing officer to deny license solely on
the basis of what he believes is best for the economy of the country may amount to regimentation or, in
this instance, the exercise of undelegated legislative powers and discretion.
Thus, it has been held that where the licensing statute does not expressly or impliedly authorize the
officer in charge, he may not refuse to grant a license simply on the ground that a sufficient number of
licenses to serve the needs of the public have already been issued. (53 C.J.S. p. 636.)
Concerning res judicata. — Calling attention to the Commission's order of May 27, 1963, which Makati
Stock did not appeal, the Manila Stock Exchange pleads the doctrine of res judicata. 14 (The order now
reviewed is dated May 7, 1964.)
It appears that when Makati Stock Exchange, Inc. presented its articles of incorporation to the
Commission, the latter, after making some inquiries, issued on May 27, 1963, an order reading as
follows.
Let the certificate of incorporation of the MAKATI STOCK EXCHANGE be issued, and if the organizers
thereof are willing to abide by the foregoing conditions, they may file the proper application for the
registration and licensing of the said Exchange.
In that order, the Commission advanced the opinion that "it would permit the establishment and
operation of the proposed Makati Stock Exchange, provided ... it shall not list for trading on its board,
securities already listed in the Manila Stock Exchange ... ."
Admittedly, Makati Stock Exchange, Inc. has not appealed from that order of May 27, 1963. Now, Manila
Stock insists on res judicata.
Why should Makati have appealed? It got the certificate of incorporation which it wanted. The condition
or proviso mentioned would only apply if and when it subsequently filed the application for
registration as stock exchange. It had not yet applied. It was not the time to question the
condition; 15 Makati was still exploring the convenience of soliciting the permit to operate subject to that
condition. And it could have logically thought that, since the condition did not affect its articles of
incorporation, it should not appeal the order (of May 27, 1963) which after all, granted the certificate of
incorporation (corporate existence) it wanted at that time.
And when the Makati Stock Exchange finally found that it could not successfully operate with the
condition attached, it took the issue by the horns, and expressing its desire for registration and license,
it requested that the condition (against double listing) be dispensed with. The order of the Commission
denying, such request is dated May 7, 1964, and is now under, review.
Indeed, there can be no valid objection to the discussion of this issue of double listing now, 16 because
even if the Makati Stock Exchange, Inc. may be held to have accepted the permission to operate with
the condition against double listing (for having failed to appeal the order of May 27, 1963), still it was
not precluded from afterwards contesting 17 the validity of such condition or rule:
(1) An agreement (which shall not be construed as a waiver of any constitutional right or any right to
contest the validity of any rule or regulation) to comply and to enforce so far as is within its powers,
compliance by its members, with the provisions of this Act, and any amendment thereto, and any rule or
regulation made or to be made thereunder. (See. 17-a-1, Securities Act [Emphasis Ours].)
Surely, this petition for review has suitably been coursed. And making reasonable allowances for the
presumption of regularity and validity of administrative action, we feel constrained to reach the
conclusion that the respondent Commission possesses no power to impose the condition of the rule,
which, additionally, results in discrimination and violation of constitutional rights.
ACCORDINGLY, the license of the petition to operate a stock exchange is approved without such
condition. Costs shall be paid by the Manila Stock Exchange. So ordered.
Cases 1. Makati Stock Exchange, Inc. v. Securities and Exchange Commission, G.R. No. L-23004, [June 30,
1965 Facts: The Securities and Exchange Commission denied the Makati Stock Exchange, Inc., permission
to operate a stock exchange unless it agreed not to list for trading on its board, securities already listed
in the Manila Stock Exchange. Under the law, no stock exchange may do business in the Philippines
unless it is previously registered with the Commission by filing a statement containing the information
described in sec. 17 of the Securities act (Commonwealth Act 83, as amended). The Commission may
permit registration if the section is complied with; if not, it may refuse. Such rule provides: ". . . nor shall
a security already listed in any securities exchange be listed anew in any other securities exchange . . ."
The objection of Makati Stock Exchange, Inc is that actually only one securities exchange — The Manila
Stock Exchange, — that has been operating alone for the past 25 years; and all — or presumably all —
available or worthwhile securities for trading in the market are now listed there. In effect, the
Commission permits the Makati Exchange, Inc., to deal only with other securities. Which is tantamount
to permitting a store to open provided it sells only those goods not sold in other stores. And if there's
only one existing store, 1 the result is a monopoly. It is not far-fetched to assert — as petitioner does 2
— that for all practical purposes, the Commission's order or resolution, would make it impossible for the
Makati Stock Exchange to operate. So, its "permission" amounted to a "prohibition". Apparently, the
Commission acted "in the public interest". 3 Hence, it is pertinent to inquire whether the Commission
may "in the public interest" prohibit (or make impossible) the establishment of another stock exchange
(besides the Manila Stock Exchange), on the ground that the operation of two or more exchanges
adversely affects the public interest. Issue/s: 1) Whether or not the commission has the authority to
promulgate the rule in question Held: 1) No. It is fundamental that an administrative officer has only
such powers as are expressly granted to him by the statute, and these necessarily implied in the exercise
thereof. In its brief and its resolution now subject to review, the Commission cites no provision expressly
supporting its rule. Nevertheless, it suggests that the power is "necessary for the execution of the
functions vested in it"; but it makes no explanation, perhaps relying on the reasons advanced in support
of its position that trading of the same securities in two or more stock exchanges, fails to give protection
to the investors, besides contravening public interest. (Of this, we shall treat later.) On the legality of its
rule, the Commission's argument is that: (a) it was approved by the Department Head — before the
War; and (b) it is not in conflict with the provisions of theSecurities Act. In our opinion, the approval of
the Department, 5 by itself, adds no weight in a judicial litigation; and the test is not whether the Act
forbids the Commission from imposing a prohibition; but whether it empowers the Commission to
prohibit. No specific portion of the statute has been cited to uphold this power. It is not found in sec. 28
(of theSecurities Act), which is entitled "Powers (of the Commission) with respect to Exchanges and
Securities". 6 According to many court precedents, the general power to "regulate" which the
Commission has (Sec. 33) does not imply authority to prohibit. 7 Thus, it has been held that where the
licensing statute does not expressly or impliedly authorize the officer in charge, he may not refuse to
grant a license simply on the ground that a sufficient number of licenses to serve the needs of the
public, have already been issued
2. RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner, vs. BOARD OF
COMMUNICATIONS and DIEGO MORALES, respondents. No. L-43653. November 29, 1977.
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner, vs. BOARD OF
COMMUNICATIONS and PACIFICO INNOCENCIO, respondents. RCPI vs. Board of Communications, 80
SCRA 471, No. L-43653, No. L-45378 November 29, 1977
Board of Communications; Board of Communications can exercise only such jurisdiction and powers
expressly or by necessary implication conferred upon it by statute.—The Public Service Commission and
its successor in interest, the Board of Communications, “being a creature of the legislature and not a
court, can exercise only such jurisdiction and powers as are expressly or by necessary implication,
conferred upon it by statute”. The functions of the Public Service Commission are limited and
administrative in nature and it has only jurisdiction and power as are expressly or by necessary
implication conferred upon it by statute. As successor in interest of the Public Service Commission, the
Board of Communications exercises the same powers, jurisdiction and functions as that provided for in
the Public Service Act for the Public Service Commission.
Same; Board of Communications with power of supervision and control only over matters related to the
issuance of the certificate of public convenience.—As provided under Section 129 of the Public Service
Act governing the organization of the Specialized Regulatory Board, the Board of Communications has
the power to issue certificates of public convenience. But this power to issue certificates of public
convenience does not carry with it the power of supervision and control over matters not related to the
issuance of the certificate of public convenience or in the performance therewith in a manner suitable to
promote public interest.
Same; Board of Communications with power to impose fine only where public service violates or fails to
comply with terms and conditions of the certificate of public convenience or the orders, decisions or
regulations of the Board.—Even assuming that the respondent Board of Communications has the power
of jurisdiction over, petitioner in the exercise of its supervision to insure adequate public service,
petitioner cannot be subjected to payment of fine under Section 21 of the Public Service Act, because
this provision of the law subjects to a fine every public service that violates or fails to comply with the
terms and conditions of any certificate or any orders, decisions or regulations of the Commission. In the
two cases, the petitioner is not being charged nor investigated for violation of the terms and conditions
of its certificate of public convenience or of any order, decision or regulations of the respondent Board
of Communications. The complaint of respondents was that they were allegedly inconvenienced or
injured by the failure of the petitioner to transmit to them telegrams informing them of the deaths of
close relatives which according to them constitute breach of contractual RCPI vs. Board of
Communications, 80 SCRA 471, No. L-43653, No. L-45378 November 29, 1977 obligation through
negligence under the Civil Code. The charges, however, do not necessarily involve petitioner’s failure to
comply with its certificate of public convenience or any order, decision or regulation of the respondent
Board of Communications.
Courts; Courts with jurisdiction over complaints for injury caused by breach of contractual obligation
arising from negligence.—If in the two cases the complainants allegedly suffered injury due to
petitioner’s breach of contractual obligation arising from negligence, the proper forum for them to
ventilate their grievances for possible recovery of damages against petitioner should be in the courts
and not in the respondent Board of Communications.
PETITIONS for review of the decision of the Board of Communications.
The facts are stated in the opinion of the Court.
These two petitions (G.R. No. L-43653 and G.R. No. L-45378) for review by certiorari of the decisions of
the Board of Communications in BC Case No. 75-01-OC, entitled “Diego T. Morales vs. Radio
Communications of the Philippines, Inc. (RCPI)” and BC Case No. 75-08-OC, entitled “Pacifico Innocencio
vs. Radio Communications of the Philippines, Inc. (RCPI),” have been consolidated as per resolution of
this Court dated March 21, 1977, as they involve the same issue as to whether the Board of
Communications has jurisdiction over claims for damages allegedly suffered by private respondents for
failure to receive telegrams sent thru the petitioner Radio Communications of the Philippines, Inc., RCPI
for short.
In BC Case No. 75-01-OC (G.R. No. L-43653) complainant respondent Diego Morales claims that while he
was in Manila his daughter sent him a telegram on October 15, 1974 from Santiago, Isabela, informing
him of the death of his wife, Mrs. Diego T. Morales. The telegram sent thru the petitioner RCPI however
never reached him. He had to be informed personally about the death of his wife and so to catch up
with the burial of his wife, he had to take the trip by airplane to Isabela. In its answer petitioner RCPI
claims that the telegram sent by respondent was transmitted from Santiago, Isabela to its Message
Center at Cubao, Quezon City but when it was relayed from Cubao, the radio signal became intermittent
making the copy received at Sta. Cruz, Manila unreadable and unintelligible. Because of the failure of
the RCPI to transmit said telegram to him, respondent allegedly suffered inconvenience and additional
expenses and prays for damages.
In BC Case No. 75-08-OC (G.R. No. L-45378) complainant respondent Pacifico Innocencio claims that on
July 13, 1975 Lourdes Innocencio sent a telegram from Paniqui, Tarlac, thru the facilities of the
petitioner RCPI to him at Barrio Lomot, Cavinti, Laguna for the purpose of informing him about the
death of their father. The telegram was never received by Pacifico Innocencio. Inspite of the non-receipt
and/or non-delivery of the message sent to said address, the sender (Lourdes Innocencio) has not been
notified about its non-delivery. As a consequence Pacifico Innocencio was not able to attend the
internment of their father at Moncada, Tarlac. Because of the failure of RCPI to deliver to him said
telegram he allegedly was “shocked when he learned about the death of their father when he visited his
hometown Moncada, Tarlac on August 14, 1975,” and thus suffered mental anguish and personal
inconveniences. Likewise, he prays for damages.
After hearing, the respondent Board in both cases held that the service rendered by petitioner was
inadequate and unsatisfactory and imposed upon the petitioner in each case a disciplinary fine of P200
pursuant to Section 21 of Commonwealth Act 146, as amended, by Presidential Decree No. 1 and Letter
of Implementation No. 1.
The main thrust of the argument of petitioner is that respondent Board has no jurisdiction to entertain
and take cognizance of complaints for injury caused by breach of contractual obligation arising from
negligence covered by Article 1170 of the Civil Code1 and injury caused by quasi delict or tort liability
under Article 2176 of the Civil Code2 which according to it should be ventilated in the proper courts of
justice and not in the Board of Communications.
We agree with petitioner RCPI. In one case We have ruled that the Public Service Commission and its
successor in interest, the Board of Communications, “being a creature of the legislature and not a court,
can exercise only such jurisdiction and powers as are expressly or by necessary implication, conferred
upon it by statute”.3 The functions of the Public Service Commission are limited and administrative in
nature and it has only jurisdiction and power as are expressly or by necessary implication conferred
upon it by statute.4 As successor in interest of the Public Service Commission, the Board of
Communications exercises the same powers, jurisdiction and functions as that provided for in the Public
Service Act for the Public Service Commission. One of these powers as provided under Section 129 of
the Public Service Act governing the organization of the Specialized Regulatory Board, is to issue
certificate of public convenience. But this power to issue certificate of public convenience does not carry
with it the power of supervision and control over matters not related to the issuance of certificate of
public convenience or in the performance therewith in a manner suitable to promote public interest.
But even assuming that the respondent Board of Communications has the power or jurisdiction over
petitioner in the exercise of its supervision to insure adequate public service, petitioner cannot be
subjected to payment of fine under Section 21 of the Public Service Act, because this provision of the
law subjects to a fine every public service that violates or fails to comply with the terms and conditions
of any certificate or any orders, decisions or regulations of the Commission. In the two cases before us
petitioner is not being charged nor investigated for violation of the terms and conditions of its certificate
of public convenience or of any order, decision or regulations of the respondent Board of
Communications. The complaint of respondents in the two cases was that they were allegedly
inconvenienced or injured by the failure of the petitioner to transmit to them telegrams informing them
of the deaths of close relatives which according to them constitute breach of contractual obligation
through negligence under the Civil Code. The charges, however, do not necessarily involve petitioner’s
failure to comply with its certificate of public convenience or any order, decision or regulation of the
respondent Board of Communications. It is clear from the record that petitioner has not been charged of
any violation or failure to comply with the terms and conditions of its certificate of public convenience
or of any order, decision or regulation of the respondent Board. The charge does not relate to the
management of the facilities and system of transmission of messages by petitioner in accordance with
its certificate of public convenience. If in the two cases before Us complainants Diego Morales and
Pacifico Innocencio allegedly suffered injury due to petitioner’s breach of contractual obligation arising
from negligence, the proper forum for them to ventilate their grievances for possible recovery of
damages against petitioner should be in the courts and not in the respondent Board of Communications.
Much less can it impose the disciplinary fine of P200 upon the petitioner. In Francisco Santiago vs. RCPI
(G.R. No. L-29236) and Constancio Langan vs. RCPI (G.R. No. L-29247), this Court speaking thru Justice
Enrique Fernando, ruled:
“There can be no justification then for the Public Service Commission (now the Board of
Communications as successor in interest) imposing the fines in these two petitions. The law cannot be
any clearer. The only power it possessed over radio companies as noted was to fix rates. It could not
take to task a radio company for any negligence or misfeasance. It was not vested with such authority.
What it did then in these two petitions lacked the impress of validity.
“In the face of the provision itself, it is rather apparent that the Public Service Commission lacked the
required power to proceed against petitioner. There is nothing in Section 21 thereof which empowers it
to impose a fine that calls for a different conclusion.”
WHEREFORE, both decisions of respondent Board of Communications in BC Case No. 75-01-OC and BC
Case No. 75-08-OC are hereby reversed, set aside, declared null and void for lack of jurisdiction to take
cognizance of both cases. Without costs.
SO ORDERED.
Decisions reversed, set aside, declared null and void for lack of jurisdiction to take cognizance of both
cases.
Notes.—The Public Service Commission is without any jurisdiction to act on complaints against radio
companies for negligence or malfeasance and to penalize them with fines. (Radio Communications of
the Philippines, Inc. vs. Santiago, 58 SCRA 493).
The orders of the Board of Communications cannot be stayed by a petition for certiorari unless the
Supreme Court orders otherwise. (Gonzales vs. Public Service Commission, 61 SCRA 504).
The mere fact that the National Power Corporation has a power plant in the same area where the
petitioner has a franchise is not sufficient basis for granting the latter tax exemption privileges given to
the NPC; it is well-settled that exemption from taxation is never presumed. (Davao Light & Power Co.,
Inc. vs. Commissioner of Customs,44 SCRA 122).
Although a motion for reconsideration is pending before the Board of Transportation, the Court will go
into the merits of the controversy and grant certiorari where there is strong public interest to have the
issue raised settled. (Arrow Transportation Corp. vs. Board of Transportation, 63 SCRA 193).
The Civil Aeronautics Board has the power to impose fines for violations of its rules and regulations.
(Civil Aeronautics Board vs. Philippine Airlines, Inc., 63 SCRA 524).
1 ART. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for damages.
2 ART. 2176. Whoever by act or omission causes damage to another there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provision of this Chapter.
3. RUFINO MATIENZO, GODOFREDO ESPIRITU, DIOSCORRO FRANCO, AND LA SUERTE
TRANSPORTATION CORPORATION, petitioners, vs. HON. LEOPOLDO M. ABELLERA, ACTING CHAIRMAN
OF THE BOARD OF TRANSPORTATION, HON. GODOFREDO Q. ASUNCION, MEMBER OF THE BOARD OF
TRANSPORTATION, ARTURO DELA CRUZ, MS TRANSPORTATION CO., INC., NEW FAMILIA
TRANSPORTATION CO., ROBERTO MOJARES, ET AL., respondents. G.R. No. L-45839 June 1, 1988
This is a petition for certiorari and prohibition, with application for preliminary injunction, seeking the
annulment and inhibition of the grant or award of provisional permits or special authority by the
respondent Board of Transportation (BOT) to respondent taxicab operators, for the operation and
legalization of "excess taxicab units" under certain provisions of Presidential Decree No. 101 "despite
the lapse of the power to do so thereunder," and "in violation of other provisions of the Decree, Letter
of Instructions No. 379 and other relevant rules of the BOT."
The petitioners and private respondents are all authorized taxicab operators in Metro Manila. The
respondents, however, admittedly operate "colorum" or "kabit" taxicab units. On or about the second
week of February, 1977, private respondents filed their petitions with the respondent Board for the
legalization of their unauthorized "excess" taxicab units citing Presidential Decree No. 101, promulgated
on January 17, 1973, "to eradicate the harmful and unlawful trade of clandestine operators, by replacing
or allowing them to become legitimate and responsible operators." Within a matter of days, the
respondent Board promulgated its orders setting the applications for hearing and granting applicants
provisional authority to operate their "excess taxicab units" for which legalization was sought. Thus, the
present petition.
Opposing the applications and seeking to restrain the grant of provisional permits or authority, as well
as the annulment of permits already granted under PD 101, the petitioners allege that the BOT acted
without jurisdiction in taking cognizance of the petitions for legalization and awarding special permits to
the private respondents.
Presidential Decree No. 101 vested in the Board of Transportation the power, among others "To grant
special permits of limited term for the operation of public utility motor vehicles as may, in the judgment
of the Board, be necessary to replace or convert clandestine operators into legitimate and responsible
operators." (Section 1, PD 101)
Citing, however, Section 4 of the Decree which provides:
SEC. 4. Transitory Provision. — Six months after the promulgation of this Decree, the Board of
Transportation, the Bureau of Transportation, The Philippine Constabulary, the city and municipal
forces, and the provincial and city fiscals shall wage a concerted and relentless drive towards the total
elimination and punishment of all clandestine and unlawful operators of public utility motor vehicles."
the petitioners argue that neither the Board of Transportation chairman nor any member thereof had
the power, at the time the petitions were filed (i.e. in 1977), to legitimize clandestine operations under
PD 101 as such power had been limited to a period of six (6) months from and after the promulgation of
the Decree on January 17, 1973. They state that, thereafter, the power lapses and becomes functus
officio.
To reinforce their stand, the petitioners refer to certain provisions of the Rules and Regulations
implementing PD 101 issued by respondent Board, Letter of Instructions No. 379, and BOT
Memorandum Circular No. 76-25 (a). In summary, these rules provide inter alia that (1) only applications
for special permits for "colorum" or "kabit" operators filed before July 17, 1973 shall be accepted and
processed (Secs. 3 and 16 (c), BOT-LTC-HPG Joint Regulations Implementing PD 101, pp. 33 and 47,
Rollo); (2) Every provisional authority given to any taxi operator shall be cancelled immediately and no
provisional authority shall thereafter be issued (par. 6, Letter of Instructions No. 379, issued March 10,
1976, p. 58, Rollo); (3) Effective immediately, no provisional authorities on applications for certificates of
public convenience shall be granted or existing provisional authorities on new applications extended to,
among others, taxi denominations in Metro Manila (BOT Memorandum Circular No. 75-25 (a), August
30, 1976, p. 64, Rollo); (4) All taxis authorized to operate within Metro Manila shall obtain new special
permits from the BOT, which permits shall be the only ones recognized within the area (par. 8, LOI No.
379, supra); and (5) No bonafide applicant may apply for special permit to operate, among others, new
taxicab services, and, no application for such new service shall be accepted for filing or processed by any
LTC agency or granted under these regulations by any LTC Regional Office until after it shall have
announced its program of development for these types of public motor vehicles (Sec. 16d, BOT-LTC-HPG
Joint Regulations, p. 47, Rollo).
The petitioners raise the following issues:
I. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO GRANT PROVISIONAL
PERMITS TO OPERATE DESPITE THE BAN THEREON UNDER LETTER OF INSTRUCTIONS NO. 379;
II. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO LEGALIZE, AT THIS TIME,
CLANDESTINE AND UNLAWFUL TAXICAB OPERATIONS UNDER SECTION 1, P.D. 101; AND
III. WHETHER OR NOT THE PROCEDURE BEING FOLLOWED BY THE BOARD IN THE CASES IN QUESTION
SATISFIES THE PROCEDURAL DUE PROCESS REQUIREMENTS. (p. 119, Rollo)
We need not pass upon the first issue raised anent the grant of provisional authority to respondents.
Considering that the effectivity of the provisional permits issued to the respondents was expressly
limited to June 30, 1977, as evidenced by the BOT orders granting the same (Annexes G, H, I and J
among others) and Memorandum Circular No. 77-4 dated January 20, 1977 (p. 151, Rollo),
implementing paragraph 6 of LOI 379 (ordering immediate cancellation of all provisional authorities
issued to taxicab operators, supra), which provides:
5. After June 30, 1977, all provisional authorities are deemed cancelled, even if hearings on the main
application have not been terminated.
the issue is MOOT and ACADEMIC. Only the issue on legalization remains under consideration.
Justifying its action on private respondent's applications, the respondent Board emphasizes public need
as the overriding concern. It is argued that under PD 101, it is the fixed policy of the State "to eradicate
the harmful and unlawful trade of clandestine operators by replacing or allowing them to become
legitimate and responsible ones" (Whereas clause, PD 101). In view thereof, it is maintained that
respondent Board may continue to grant to "colorum" operators the benefits of legalization under PD
101, despite the lapse of its power, after six (6) months, to do so, without taking punitive measures
against the said operators.
Indeed, a reading of Section 1, PD 101, shows a grant of powers to the respondent Board to issue
provisional permits as a step towards the legalization of colorum taxicab operations without the alleged
time limitation. There is nothing in Section 4, cited by the petitioners, to suggest the expiration of such
powers six (6) months after promulgation of the Decree. Rather, it merely provides for the withdrawal of
the State's waiver of its right to punish said colorum operators for their illegal acts. In other words, the
cited section declares when the period of moratorium suspending the relentless drive to eliminate illegal
operators shall end. Clearly, there is no impediment to the Board's exercise of jurisdiction under its
broad powers under the Public Service Act to issue certificates of public convenience to achieve the
avowed purpose of PD 101 (Sec. 16a, Public Service Act, Nov. 7, 1936).
It is a settled principle of law that in determining whether a board or commission has a certain power,
the authority given should be liberally construed in the light of the purposes for which it was created,
and that which is incidentally necessary to a full implementation of the legislative intent should be
upheld as being germane to the law. Necessarily, too, where the end is required, the appropriate means
are deemed given (Martin, Administrative Law, 1979, p. 46). Thus, as averred by the respondents:
... [A]ll things considered, the question is what is the best for the interest of the public. Whether PD 101
has lost its effectiveness or not, will in no way prevent this Board from resolving the question in the
same candor and spirit that P.D. 101 and LOI 379 were issued to cope with the multifarious ills that
plague our transport system. ... (Emphasis supplied) (pp. 91-92, Rollo)
This, the private respondents appreciate, as they make reference to PD 101, merely to cite the
compassion with which colorum operators were dealt with under the law. They state that it is "in the
same vein and spirit that this Honorable Board has extended the Decree of legalization to the operatives
of the various PUJ and PUB services along legislative methods," that respondents pray for authorization
of their colorum units in actual operation in Metro Manila (Petitions for Legalization, Annexes E & F, par.
7, pp. 65-79, Rollo).
Anent the petitioners' reliance on the BOT Rules and Regulations Implementing PD 101 as well as its
Memorandum Circular No. 76-25(a), the BOT itself has declared:
In line with its duty to rationalize the transport industry, the Board shall. from time to time, re- study the
public need for public utilities in any area in the Philippines for the purpose of re- evaluating the policies.
(p. 64, Rollo)
Thus, the respondents correctly argue that "as the need of the public changes and oscillates with the
trends of modern life, so must the Memo Orders issued by respondent jibe with the dynamic and
flexible standards of public needs. ... Respondent Board is not supposed to 'tie its hands' on its issued
Memo Orders should public interest demand otherwise" (Answer of private respondents, p. 121, Rollo).
The fate of the private respondent's petitions is initially for the Board to determine. From the records of
the case, acceptance of the respondent's applications appears to be a question correctly within the
discretion of the respondent Board to decide. As a rule, where the jurisdiction of the BOT to take
cognizance of an application for legalization is settled, the Court enjoins the exercise thereof only when
there is fraud, abuse of discretion or error of law. Furthermore, the court does not interfere, as a rule,
with administrative action prior to its completion or finality . It is only after judicial review is no longer
premature that we ascertain in proper cases whether the administrative findings are not in violation of
law, whether they are free from fraud or imposition and whether they find substantial support from the
evidence.
Finally, with respect to the last issue raised by the petitioners alleging the denial of due process by
respondent Board in granting the provisional permits to the private respondents and in taking
cognizance of their applications for legalization without notice and hearing, suffice it to say that PD 101
does not require such notice or hearing for the grant of temporary authority . The provisional nature of
the authority and the fact that the primary application shall be given a full hearing are the safeguards
against its abuse. As to the applications for legalization themselves, the Public Service Act does enjoin
the Board to give notice and hearing before exercising any of its powers under Sec. 16 thereof.
However, the allegations that due process has been denied are negated by the hearings set by the Board
on the applications as expressed in its orders resolving the petitions for special permits (Annexes G, H, I,
pp. 80-102, Rollo).
The Board stated:
The grounds involved in the petition are of first impression. It cannot resolve the issue ex-parte. It needs
to hear the views of other parties who may have an interest, or whose interest may be affected by any
decision that this Board may take.
The Board therefore, decides to set the petition for hearing.
xxx xxx xxx
As to the required notice, it is impossible for the respondent Board to give personal notice to all parties
who may be interested in the matter, which parties are unknown to it. Its aforementioned order
substantially complies with the requirement. The petitioners having been able to timely oppose the
petitions in question, any lack of notice is deemed cured.
WHEREFORE. the petition is hereby DISMISSED for lack of merit. The questioned orders of the then
Board of Transportation are AFFIRMED.
SO ORDERED.
4. CELIA S. VDA. DE HERRERA, petitioner, vs. EMELITA BERNARDO, EVELYN BERNARDO as Guardian of
Erlyn, Crislyn and Crisanto Bernardo,** respondents. G.R. No. 170251. June 1, 2011.*
Administrative Agencies; Commission on the Settlement of Land Problems (COSLAP); The Commission
on the Settlement of Land Problems (COSLAP) is an administrative body established as a means of
providing a mechanism for the expeditious settlement of land problems among small settlers,
landowners and members of the cultural minorities to avoid social unrest.—The COSLAP was created by
virtue of Executive Order (E.O.) No. 561, issued on September 21, 1979 by then President Ferdinand E.
Marcos. It is an administrative body established as a means of providing a mechanism for the expeditious settlement of land problems among small settlers, landowners and members of the cultural
minorities to avoid social unrest.
Same; Jurisdiction; Administrative agencies, like the Commission on the Settlement of Land Problems
(COSLAP), are tribunals of limited jurisdiction that can only wield powers which are specifically granted
to it by its enabling statute; The law does not vest jurisdiction on the Commission on the Settlement of
Land Problems (COSLAP) over any land dispute or problem.—Administrative agencies, like the COSLAP,
are tribunals of limited jurisdiction that can only wield powers which are specifically granted to it by its
enabling statute. Under Section 3 of E.O. No. 561, the COSLAP has two options in acting on a land
dispute or problem lodged before it, to wit: (a) refer the matter to the agency having appropriate
jurisdiction for settlement/resolution; or (b) assume jurisdiction if the matter is one of those
enumerated in paragraph 2 (a) to (e) of the law, if such case is critical and explosive in nature, taking
into account the large number of parties involved, the presence or emergence of social unrest, or other
similar critical situations requiring immediate action. In resolving whether to assume jurisdiction over a
case or to refer the same to the particular agency concerned, the COSLAP has to consider the nature or
classification of the land involved, the parties to the case, the nature of the questions raised, and the
need for immediate and urgent action thereon to prevent injuries to persons and damage or destruction
to property. The law does not vest jurisdiction on the COSLAP over any land dispute or problem.
Same; Same; A judgment issued by a quasi-judicial body without jurisdiction is void; It cannot be the
source of any right or create any obligation; All acts performed pursuant to it and all claims emanating
from it have no legal effect.—Since the COSLAP has no jurisdiction over the action, all the proceedings
therein, including the decision rendered, are null and void. A judgment issued by a quasi-judicial body
without jurisdiction is void. It cannot be the source of any right or create any obligation. All acts
performed pursuant to it and all claims emanating from it have no legal effect. Having no legal effect,
the situation is the same as it would be as if there was no judgment at all. It leaves the parties in the
position they were before the proceedings.
Jurisdiction; Estoppel; The fact that a person attempts to invoke unauthorized jurisdiction of a court
does not estop him from thereafter challenging its jurisdiction over the subject matter, since such
jurisdiction must arise by law and not by mere consent of the parties.—Respondents’ allegation that
petitioner is estopped from questioning the jurisdiction of the COSLAP by reason of laches does not hold
water. Petitioner is not estopped from raising the jurisdictional issue, because it may be raised at any
stage of the proceedings, even on appeal, and is not lost by waiver or by estoppel. The fact that a person
attempts to invoke unauthorized jurisdiction of a court does not estop him from thereafter challenging
its jurisdiction over the subject matter, since such jurisdiction must arise by law and not by mere
consent of the parties.
Same; Laches; Laches should be clearly present for the Sibonghanoy doctrine to apply.—In Regalado v.
Go, 514 SCRA 616 (2007), the Court held that laches should be clearly present for the Sibonghanoy
doctrine to apply, thus: Laches is defined as the “failure or neglect for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence, could or should have been done earlier, it is
negligence or omission to assert a right within a reasonable length of time, warranting a presumption
that the party entitled to assert it either has abandoned it or declined to assert it.” The ruling in People
v. Regalario that was based on the landmark doctrine enunciated in Tijam v. Sibonghanoy, 23 SCRA 29
(1968), on the matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by laches
may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should have been clearly present; that
is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party
entitled to assert it had abandoned or declined to assert it.
Land Titles; The issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be
raised in an action expressly instituted for that purpose.—The issue of the validity of the Title was
brought only during the proceedings before this Court as said title was issued in the name of petitioner’s
husband only during the pendency of the appeal before the CA. The issue on the validity of title, i.e.,
whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that
purpose and the present appeal before us, is simply not the direct proceeding contemplated by law.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set
aside the Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 73674.
The antecedents are as follows:
Respondents heirs of Crisanto S. Bernardo, represented by Emelita Bernardo, filed a complaint before
the Commission on the Settlement of Land Problems (COSLAP) against Alfredo Herrera (Alfredo) for
interference, disturbance, unlawful claim, harassment and trespassing over a portion of a parcel of land
situated at Barangay Dalig, Cardona, Rizal, with an area of 7,993 square meters. The complaint was
docketed as COSLAP Case No. 99-221.
Respondents claimed that said parcel of land was originally owned by their predecessor-in-interest,
Crisanto Bernardo, and was later on acquired by Crisanto S. Bernardo. The parcel of land was later on
covered by Tax Declaration No. CD-006-0828 under the name of the respondents.
Petitioner, on the other hand, alleged that the portion of the subject property consisting of about 700
square meters was bought by Diosdado Herrera, Alfredo’s father, from a certain Domingo Villaran. Upon
the death of Diosdado Herrera, Alfredo inherited the 700-square-meter lot.
The COSLAP, in a Resolution3 dated December 6, 1999, ruled that respondents have a rightful claim over
the subject property. Consequently, a motion for reconsideration and/or reopening of the proceedings
was filed by Alfredo. The COSLAP, in an Order4 dated August 21, 2002, denied the motion and reiterated
its Order dated December 6, 1999. Aggrieved, petitioner Celia S. Vda. de Herrera, as the surviving
spouse of Alfredo, filed a petition for certiorari with the CA.5 The CA, Twelfth Division, in its Decision
dated April 28, 2005, dismissed the petition and affirmed the resolution of the COSLAP. The CA ruled
that the COSLAP has exclusive jurisdiction over the present case and, even assuming that the COSLAP
has no jurisdiction over the land dispute of the parties herein, petitioner is already estopped from
raising the issue of jurisdiction because Alfredo failed to raise the issue of lack of jurisdiction before the
COSLAP and he actively participated in the proceedings before the said body. Petitioner filed a motion
for reconsideration, which was denied by the CA in a Resolution dated October 17, 2005.
Hence, petitioner elevated the case to this Court via Petition for Review on Certiorari under Rule 45 of
the Rules of Court, with the following issues:
I
WHETHER OR NOT COSLAP HAD JURISDICTION TO DECIDE THE QUESTION OF OWNERSHIP.
II
WHETHER OR NOT THE ISSUANCE OF A TORRENS TITLE IN THE NAME OF THE PETITIONER’S HUSBAND IN
2002 RENDERED THE INSTANT CONTROVERSY ON THE ISSUE OF OWNERSHIP OVER THE SUBJECT
PROPERTY MOOT AND ACADEMIC.6
Petitioner averred that the COSLAP has no adjudicatory powers to settle and decide the question of
ownership over the subject land. Further, the present case cannot be classified as explosive in nature as
the parties never resorted to violence in resolving the controversy. Petitioner submits that it is the
Regional Trial Court which has jurisdiction over controversies relative to ownership of the subject
property.
Respondents, on the other hand, alleged that the COSLAP has jurisdiction over the present case.
Further, respondents argued that petitioner is estopped from questioning the jurisdiction of the COSLAP
by reason of laches due to Alfredo’s active participation in the actual proceedings before the COSLAP.
Respondents said that Alfredo’s filing of the Motion for Reconsideration and/or Reopening of the
proceedings before the COSLAP is indicative of his conformity with the questioned resolution of the
COSLAP.
The main issue for our resolution is whether the COSLAP has jurisdiction to decide the question of
ownership between the parties.
The petition is meritorious.
The COSLAP was created by virtue of Executive Order (E.O.) No. 561, issued on September 21, 1979 by
then President Ferdinand E. Marcos. It is an administrative body established as a means of providing a
mechanism for the expeditious settlement of land problems among small settlers, landowners and
members of the cultural minorities to avoid social unrest.
Section 3 of E.O. No. 561 specifically enumerates the instances when the COSLAP can exercise its
adjudicatory functions:
“Section 3. Powers and Functions.—The Commission shall have the following powers and functions:
xxxx
2. Refer and follow up for immediate action by the agency having appropriate jurisdiction any land
problem or dispute referred to the Commission: Provided, That the Commission may, in the following
cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in
nature considering, for instance, the large number of the parties involved, the presence or emergence of
social tension or unrest, or other similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the public domain; and
(e) Other similar land problems of grave urgency and magnitude.”7
Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction that can only wield powers
which are specifically granted to it by its enabling statute.8 Under Section 3 of E.O. No. 561, the
COSLAP has two options in acting on a land dispute or problem lodged before it, to wit: (a) refer the
matter to the agency having appropriate jurisdiction for settlement/resolution; or (b) assume
jurisdiction if the matter is one of those enumerated in paragraph 2 (a) to (e) of the law, if such case is
critical and explosive in nature, taking into account the large number of parties involved, the presence
or emergence of social unrest, or other similar critical situations requiring immediate action. In resolving
whether to assume jurisdiction over a case or to refer the same to the particular agency concerned, the
COSLAP has to consider the nature or classification of the land involved, the parties to the case, the
nature of the questions raised, and the need for immediate and urgent action thereon to prevent
injuries to persons and damage or destruction to property. The law does not vest jurisdiction on the
COSLAP over any land dispute or problem.9
In the instant case, the COSLAP has no jurisdiction over the subject matter of respondents’ complaint.
The present case does not fall under any of the cases enumerated under Section 3, paragraph 2 (a) to
(e) of E.O. No. 561. The dispute between the parties is not critical and explosive in nature, nor does it
involve a large number of parties, nor is there a presence or emergence of social tension or unrest. It
can also hardly be characterized as involving a critical situation that requires immediate action.
It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency,
over the nature and subject matter of a petition or complaint is determined by the material allegations
therein and the character of the relief prayed for, irrespective of whether the petitioner or complainant
is entitled to any or all such reliefs.10
Respondents’ cause of action before the COSLAP pertains to their claim of ownership over the subject
property, which is an action involving title to or possession of real property, or any interest therein,11
the jurisdiction of which is vested with the Regional Trial Courts or the Municipal Trial Courts depending
on the assessed value of the subject property.12
11 An action “involving title to real property” means that the plaintiff's cause of action is based on a
claim that he owns such property or that he has the legal rights to have exclusive control, possession,
enjoyment, or disposition of the same. (Heirs of Generoso Sebe v. Heirs of Veronico Sevilla, G.R. No.
174497, October 12, 2009, 603 SCRA 395, 404).
12 Batas Pambansa Blg. 129, as amended, provides:
SEC. 19. Jurisdiction in Civil Cases.—Regional Trial Courts shall exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigations is incapable of pecuniary estimation.
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,
where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00), or for
civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except
actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which
is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts; x x x.
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in Civil Cases.—Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real
property, or any interest therein where the assessed value of the property or interest therein does not
exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed
value does not exceed Fifty thousand pesos (P50,000.00) x x x.
The case of Bañaga v. Commission on the Settlement of Land Problems,13 applied by the CA and
invoked by the respondents, is inapplicable to the present case. Bañaga involved parties with conflicting
free patent applications over a parcel of public land and pending with the Bureau of Lands. Because of
the Bureau of Land’s inaction within a considerable period of time on the claims and protests of the
parties and to conduct an investigation, the COSLAP assumed jurisdiction and resolved the conflicting
claims of the parties. The Court held that since the dispute involved a parcel of public land on a free
patent issue, the COSLAP had jurisdiction over that case. In the present case, there is no showing that
the parties have conflicting free patent applications over the subject parcel of land that would justify the
exercise of the COSLAP’s jurisdiction.
Since the COSLAP has no jurisdiction over the action, all the proceedings therein, including the decision
rendered, are null and void.14 A judgment issued by a quasi-judicial body without jurisdiction is void. It
cannot be the source of any right or create any obligation.15 All acts performed pursuant to it and all
claims emanating from it have no legal effect.16 Having no legal effect, the situation is the same as it
would be as if there was no judgment at all. It leaves the parties in the position they were before the
proceedings.17
Respondents’ allegation that petitioner is estopped from questioning the jurisdiction of the COSLAP by
reason of laches does not hold water. Petitioner is not estopped from raising the jurisdictional issue,
because it may be raised atany stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel.18 The fact that a person attempts to invoke unauthorized jurisdiction of a court does not
estop him from thereafter challenging its jurisdiction over the subject matter, since such jurisdiction
must arise by law and not by mere consent of the parties.19
In Regalado v. Go,20 the Court held that laches should be clearly present for the Sibonghanoy21
doctrine to apply, thus:
“Laches is defined as the “failure or neglect for an unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or should have been done earlier, it is negligence or
omission to assert a right within a reasonable length of time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it.”
The ruling in People v. Regalario that was based on the landmark doctrine enunciated in Tijam v.
Sibonghanoy on the matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by
laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should have been clearly present; that
is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party
entitled to assert it had abandoned or declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss
filed by the Surety almost 15 years after the questioned ruling had been rendered. At several stages of
the proceedings, in the court a quo as well as in the Court of Appeals, the Surety invoked the jurisdiction
of the said courts to obtain affirmative relief and submitted its case for final adjudication on the merits.
It was only when the adverse decision was rendered by the Court of Appeals that it finally woke up to
raise the question of jurisdiction.”22
The factual settings attendant in Sibonghanoy are not present in the case at bar that would justify the
application of estoppel by laches against the petitioner. Here, petitioner assailed the jurisdiction of the
COSLAP when she appealed the case to the CA and at that time, no considerable period had yet elapsed
for laches to attach. Therefore, petitioner is not estopped from assailing the jurisdiction of the COSLAP.
Additionally, no laches will even attach because the judgment is null and void for want of jurisdiction.23
Anent the issuance of OCT No. M-10991 in favor of petitioner’s husband Alfredo Herrera in 2002,
respondents alleged that there was fraud, misrepresentation and bad faith in the issuance thereof. Thus,
respondents are now questioning the legality of OCT No. M-10991, an issue which this Court cannot
pass upon in this present petition. It is a rule that the validity of a Torrens title cannot be assailed
collaterally.24 Section 48 of Presidential Decree No. 1529 provides that:
“Certificate not Subject to Collateral Attack.—A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or canceled, except in a direct proceeding in accordance with
law.”
The issue of the validity of the Title was brought only during the proceedings before this Court as said
title was issued in the name of petitioner’s husband only during the pendency of the appeal before the
CA. The issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in
an action expressly instituted for that purpose25 and the present appeal before us, is simply not the
direct proceeding contemplated by law.
WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the Court of Appeals, dated
April 28, 2005 and October 17, 2005, respectively, in CA-G.R. SP No. 73674 are REVERSED and SET ASIDE.
The Decision and Order of the Commission on the Settlement of Land Problems, dated December 6,
1999 and August 21, 2002, respectively, in COSLAP Case No. 99-221, are declared NULL and VOID for
having been issued without jurisdiction.
SO ORDERED.
Carpio (Chairperson), Nachura, Abad and Mendoza, JJ., concur.
Petition granted, judgment and resolution reversed and set aside.
Note.—View the estoppel does not apply only as against plaintiffs who sought affirmative reliefs—it
equally applies to defendants who actively participate in the proceedings. (Monotok IV vs. Heirs of
Homer L. Barque, 574 SCRA 468 [2008])
FACTS:
Emelita Bernardo, representing the heirs of Crisanto Bernardo, filed a complaint against Alfredo Herrera
for unlawful claim, interference, disturbance, harassment and trespassing before the Commission of the
Settlement of Land Problem (referred hereafter as COSLAP) over 7,993-square meter portion of land.
The land was claimed by the respondents to be owned by their predecessor Crisanto Bernardo and was
acquired later by Crisanto S. Bernardo and covered by Tax Declaration CD-006-0828 under their name.
Celia Vda de Herrera alleged that the 700-square meter portion of the disputed land was brought by
Diosdado Herrera, father of her (late) husband Alfredo, from a Domingo Villaran. Alfredo inherited the
property upon his father's death.
COSLAP ruled in its 6 December 1999 decision in favor of the Bernardos. Alfredo filed a motion of
reconsideration about the said decision and to reopen the proceedings, but COSLAP denied his motion
in its 21 August 2002 and 6 December 1999 orders. Alfredo's surviving spouse Celia, filed a petition for
certiorari with the CA. However, the CA's 12th division affirmed COSLAP's decision as stated in its 28
April 2005 decision.
The CA ruled that COSLAP has exclusive jurisdiction over the land dispute, and even if assumingly,
COSLAP does not have jurisdiction over the said case, Celia is estopped to question COSLAP's jurisdiction
on the grounds that first, her husband failed to raise the issue of jurisdiction before that body and
second, he actively participated in the proceedings. Celia filed her motion of reconsideration but the CA
denied that through its 17 October 2005 resolution.
ISSUE:
Whether or not COSLAP has jurisdiction over the ownership case of the land disputed by Herreras and
Bernardos.
HELD:
NO, as their dispute does not fall under situation mentioned in Sec. 3 of E.O. 561. Administrative
agencies, like the COSLAP, are tribunals of limited jurisdiction that can only wield powers which are
specifically granted to it by its enabling statute. Under Section 3 of E.O. No. 561, the COSLAP has two
options in acting on a land dispute or problem lodged before it, to wit: (a) refer the matter to the agency
having appropriate jurisdiction for settlement/resolution; or (b) assume jurisdiction if the matter is one
of those enumerated in paragraph 2 (a) to (e) of the law, if such case is critical and explosive in nature,
taking into account the large number of parties involved, the presence or emergence of social unrest, or
other similar critical situations requiring immediate action. In resolving whether to assume jurisdiction
over a case or to refer the same to the particular agency concerned, the COSLAP has to consider the
nature or classification of the land involved, the parties to the case, the nature of the questions raised,
and the need for immediate and urgent action thereon to prevent injuries to persons and damage or
destruction to property. The law does not vest jurisdiction on the COSLAP over any land dispute or
problem.
Since the COSLAP has no jurisdiction over the action, all the proceedings therein, including the decision
rendered, are null and void. A judgment issued by a quasi-judicial body without jurisdiction is void. It
cannot be the source of any right or create any obligation. All acts performed pursuant to it and all
claims emanating from it have no legal effect. Having no legal effect, the situation is the same as it
would be as if there was no judgment at all. It leaves the parties in the position they were before the
proceedings.
Respondents' allegation that petitioner is estopped from questioning the jurisdiction of the COSLAP by
reason of laches does not hold water. Petitioner is not estopped from raising the jurisdictional issue,
because it may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel. The fact that a person attempts to invoke unauthorized jurisdiction of a court does not estop
him from thereafter challenging its jurisdiction over the subject matter, since such jurisdiction must
arise by law and not by mere consent of the parties.
5. CORNELIO S. RUPERTO, as Assistant Fiscal to the City of Manila, petitioner and appellee, vs. HON.
LUIS P. TORRES, as Chairman, HON. MARIANO H. DE JOYA, HON. POMPEYO DIAZ and HON. PILAR
HIDALGO LIM, as members of the Integrity Board, respectively and CONRADO TEODORO SR.,
respondents and appellants. [No. L-8785. February 25, 1957]
Appeal from a judgment of the Court of First Instance of Manila holding that the supplementary report
and recommendation of the Integrity Board recommending the removal of the petitioner herein, is null
and void, and so is Administrative Order No. 171 of the President, removing petitioner herein from
office. Ordering that petitioner be reinstated to his former position as assistant city fiscal of Manila and
that all salaries due him from the date of his dismissal until his reinstatement be paid to him.
Judgment reversed, case dismissed with costs against petitionerappellee.
RUPERTO V TORRES DOCTRINE: Not every function wherein judgment and discretion are exercised is a
judicial function. The test of judicial function is not the exercise of judicial discretion, but the power and
authority to adjudicate upon the rights and obligations of the parties before it. In Ruperto v. Torres (100
Phil. 1098 [1957], unreported), the Court had occasion to rule on the functions of an investigatory body
with the sole power of investigation. It does not exercise judicial functions and its power is limited to
investigating the facts and making findings in respect thereto. The Court laid down the test of
determining whether an administrative body is exercising judicial functions or merely investigatory
functions: Adjudication signifies the exercise of power and authority to adjudicate upon the rights and
obligations of the parties before it. Hence, if the only purpose for investigation is to evaluate evidence
submitted before it based on the facts and circumstances presented to it, and if the agency is not
authorized to make a final pronouncement affecting the parties, then there is an absence of judicial
discretion and judgment.
FACTS:
A complaint was filed against Ruperto,a government official, charging him with disloyalty to service,
partiality, favoritism, violation of his oath of office, and corruption. A copy of the complaint was
submitted to the Integrity Board. The Board found, after hearing, that the charges were sufficiently
established and concluded that Ruperto made use of his public office for his personal interests. The
Board recommended that Ruperto be given a warning, and any repetition will have greater
consequences. The Integrity Board was created by EO 318 and was succeeded by the Presidential
Complaints and Action Commission, which vested said board with the power to “proceed to a thorough
and complete investigation of any specific case of graft, corruption, dereliction of duty or irregularity in
office, and to submit to the President the record of such investigation together with its finding and
recommendation.” R filed a complaint for certiorari against the Integrity Board.
ISSUE: W/N the Integrity Board or PCAC was exercising quasi-judicial functions.
RULING: NO
The Investigatory Board’s power is limited to investigating the facts and making findings in respect
thereto. The board neither adjudicates upon nor determines the rights and interests or duties of parties
After an investigation by the Integrity Board, the officer that ultimately passes upon and adjudicates the
rights of the parties is the President and not the board, or its successor Presidential Complaints and
Action Commission. While it is true that the board, in performing its duties and exercising its functions
may exercise what is known as judicial discretion since it evaluates the evidence submitted to it on the
facts and circumstances presented, such judicial discretion is only for the purpose of evaluation and for
the determination of disputed facts. Not every function wherein judgment and discretion are exercised
is a judicial function. The test of judicial functions is not the exercise of judicial discretion, but the power
and authority to adjudicate upon the rights and obligations of parties before it As the Board lacks the
power and authority to adjudicate upon the matters submitted to it for investigation and make final
pronouncement thereon, the second requisite for availability of the action of certiorari is wanting
6. IN RE CONTEMPT PROCEEDINGS AGAINST ARMANDO RAMOS, JESUS L. CARMELO, in his capacity as
Chairman of the Probe Committee, Office of the Mayor of Manila, petitioner-appellant, vs. ARMANDO
RAMOS, respondentappellee. No. L-17778. November 30, 1962.
Administrative Law; Contempt Committed Against Administrative Bodies; Contempt under Rule 64 of
the Rules of Court.—Rule 64 (Contempt) of the Rules of Court applies only to inferior and superior
courts and does not comprehend contempt committed against administrative officials or bodies, unless
said contempt is clearly considered and expressly defined as contempt of court, as is done in paragraph
2 of Section 580 of the Revised Administrative Code. (People vs. Mendoza; People vs. Dizon, 49 Off.
Gaz., No. 2, 541)
Same; Same; When Section 580 of the Revised Administrative Code may be invoked.—One who invokes
Section 580 of the Revised Administrative Code must first show that he has authority to take testimony
or evidence before he can apply to the courts for the punishment of hostile witnesses. (Francia vs.
Pecson, et al., 87 Phil. 100.)
Same; Same; Same; Delegation by Mayor of Manila of power to investigate.—The delegation by the
Mayor of Manila of the power to investigate city officials and employees appointed by him does not
imply a delegation of the power to take testimony or evidence of witnesses whose appearance may be
required by the compulsory process of subpoena.
Same; Same; Same; To what offices Section 580 of the Revised Administrative Code pertains.—It is
doubtful whether the provisions of Section 580 of the Revised Administrative Code are applicable to the
City of Manila, as these pertain to national bureaus or offices of the government.
APPEAL from a decision of the Court of First Instance of Manila. Alvendia, J.
The facts are stated in the opinion of the Court.
On February 3, 1960, the Mayor of Manila issued an executive order creating a committee “to
investigate the anomalies involving the license inspectors and other personnel of the License Inspection
Division of the Office of the City Treasurer and of the License and Permits Division of this Office (of the
Mayor).” He named Mr. Jesus L. Carmelo as chairman of said committee.
It appears that the committee issued subpoenas to Armando Ramos, a private citizen working as a
bookkeeper in the Casa de Alba, requiring him to appear before it on June 3, 8, 9, 15 and 16 and August
4 and 11, 1960, in connection with an administrative case against Crisanta Estanislao but that Ramos, on
whom the subpoenas were duly served, refused to appear.
Claiming that Ramos’ refusal tended “to impede, obstruct, or degrade the administrative proceedings,”
petitioner filed in the Court of First Instance of Manila a petition to declare Armando Ramos in
contempt. After hearing, during which petitioner was required to show a prima facie case, the trial court
dismissed the petition. The lower court held that there is no law empowering committees created by
municipal mayors to issue subpoenas and demand that witnesses testify under oath. It also held that to
compel Ramos to testify would be to violate his right against self-incrimination.
It appears that in a statement given to investigators of the Office of the Mayor, Ramos admitted having
misappropriated on several occasions, sums of money given to him by the owner of Casa de Alba for the
payment of the latter’s taxes for 1956-1959 and that this fact had not been discovered earlier because
Ramos used to entertain employees in the City Treasurer’s office at Casa de Alba where Ramos was a
bookkeeper as stated above. The trial court held that to compel Ramos to confirm this statement in the
administrative case against certain employees in the Office of the City Treasurer would be to compel
him to give testimony that could be used against him in a criminal case for estafa of which the owner of
Casa de Alba was the offended party. From that decision, petitioner appealed to this Court.
The main issue in this case is the power, if any, of a committee, like the committee of which petitioner is
the chairman, to subpoena witnesses to appear before it and to ask for their punishment in case of
refusal.
The rule is that Rule 64 (Contempt)1 of the Rules of Court applies only to inferior and superior courts
and does not comprehend contempt committed against administrative officials or bodies like the one in
this case, unless said contempt is clearly considered and expressly defined as contempt of court, as is
done in paragraph 2 of Section 580 of the Revised Administrative Code. (People v. Mendoza; People v.
Dizon, 49 O.G. No. 2, 541.)
Petitioner invokes Section 580 of the Revised Administrative Code which provides as follows:
“Powers incidental to taking of testimony.—When authority to take testimony or evidence is conferred
upon an administrative officer or upon any nonjudicial person, committee, or other body, such authority
shall be understood to comprehend the right to administer oaths and summons witnesses and shall
include authority to require the production of documents under a subpoena duces tecum or otherwise,
subject in all respects to the same restrictions and qualifications as apply in judicial proceedings of a
similar character.
“Saving the provisions of section one hundred and two of this Act, any one who, without lawful excuse,
fails to appear upon summons issued under the authority of the preceding paragraph or who, appearing
before any individual or body exercising the power therein defined, refuses to make oath, give
testimony, or produce documents for inspection, when thereunto lawfully required, shall be subject to
discipline as in case of contempt of court and upon application of the individual or body exercising the
power in question shall be dealt with by the judge of first instance having jurisdiction of the case in the
manner provided by law.”
One who invokes this provision of the law must first show that he has “authority to take testimony or
evidence” before he can apply to the courts for the punishment of hostile witnesses. (Francia v. Pecson,
et al., 87 Phil. 100.)
Now, what authority to take testimony does petitioner’s committee have from which the power to cite
witnesses may be implied, pursuant to section 580?
To be sure, there is nothing said in the executive order of the Mayor creating the committee about such
a grant of power. All that the order gives to this body is the power to investigate anomalies involving
certain city employees.
Petitioner contends that the Mayor of Manila has the implied power to investigate city officials and
employees appointed by him to the end that the power expressly vested in him to suspend and remove
such officials or employees (Sec. 22, Republic Act No. 409) may be justly and fairly exercised. We agree
with this proposition and We held so in the case of Pagkanlungan v. De la Fuente, 48 O.G. No. 10, p.
4332. But We do not agree with the petitioner that a delegation of such power to investigate implies
also a delegation of the power to take testimony or evidence of witnesses whose appearance may be
required by the compulsory process of subpoena. Thus, in denying this power to an investigating body in
the Office of the Mayor of Manila, We said in Francia v. Pecson, et al., supra: “We do not think the
mayor (of Manila) can delegate or confer the powers to administer oaths, to take testimony, and to
issue subpoenas.”
Furthermore, it is doubtful whether the provisions of section 580 of the Administrative Code are
applicable to the City of Manila as these pertain to national bureaus or offices of the government.
Citing 50 Am. Jur. 449, petitioner contends that “the power of the investigation committee to issue
compulsory process to secure the attendance of witnesses undoubtedly exists since only complimentary
to the power of the mayor to investigate, suspend and remove city officers and employees, supra, is the
recognized rule that where the statute grants a right, it also confers by implication every particular
power necessary for the exercise thereof.” There is no merit in the argument. In the first place, the
authority cited speaks of statutory grant of power to a body. Here, We have seen that whatever power
may be claimed by petitioner’s committee may only be traced to the power of the Mayor to investigate
as implied from his power to suspend or remove certain city employees. There is no statutory grant of
power to investigate to petitioner’s committee.
In the second place, even granting that the Mayor has the implied power to require the appearance of
witnesses before him, the rule, as noted earlier, is that the Mayor can not delegate this power to a body
like the committee of the petitioner. (Francia v. Pecson, et al., supra.)
Lastly, 50 Am. Jur. Sec. 428, p. 450 itself admits an exception to the rule invoked by the petitioner. Thus,
it is stated that “where the liberty and property of persons are sought to be brought within the
operation of a power claimed to be impliedly granted by an act because necessary to its due execution,
the case must be clearly seen to be within those intended to be reached.” Here, no less than the liberty
of Armando Ramos is involved in the claim of the committee to the right to cite witnesses.
We hold, therefore, that petitioner’s committee has no power to cite witnesses to appear before it and
to ask for their punishment in case of refusal. This conclusion makes it unnecessary for Us to pass upon
the other error assigned by petitioner as having been allegedly committed by the trial court.
WHEREFORE, the decision of the Court of First Instance of Manila is hereby affirmed, without
pronouncement as to costs.
______________
1 Section 4 of this rule provides in part: “Charge; where to be filed.—x x x And where a contempt
punishable by law has been committed against an administrative officer or any non-judicial person,
committee, or other body, the charge may be filed with the Court of First Instance of the province or city
in which the contempt has been committed.” This provision of Rule 64 embodies the historical notion
that the contempt power is necessarily judicial. This notion dates as far back as 1893, when the Supreme
Court of the United States, in ICC v. Brimson, 154 U.S. 447, remarked that such body as the Interstate
Commerce Commission “could not, under our system of government, and consistently with due process
of law, be invested with authority to compel obedience to its orders by a judgment of fine or
imprisonment.” But the Court went on to hold that a judicial proceeding to enforce a subpoena issued
by the Commission satisfies the “case” or “controversy” requirement of the Constitution, and that
judicial enforcement does not violate the principle of separation of powers. Accordingly, since 1893, the
Congress of the United States has consistently refused to empower any agency to commit for contempt,
customarily providing instead that agencies may apply to appropriate district court for an order
enforceable by contempt proceedings. (Davis, “The Administrative Power of Investigation.” 56 Yale L.J.
No. 7, 1111 at 1139-40.)
CARMELO V RAMOS FACTS The Mayor of Manila created a committee to investigate the anomalies
involving the license inspectors and other personnel of the License Inspection Division of the Office of
the City Treasurer and of the License and Permits Division of the said office. He named Jesus Carmelo as
chairman. The committee issued subpoenas to Armando Ramos requiring him to appear before it in
connection with an administrative case but Ramos refused to appear. Claiming that Ramos’ refusal
tended to impede or obstruct the administrative proceedings, petitioner filed with the CFI a petition to
declare Ramos in contempt. The trial court dismissed the petition. It held that there is no law
empowering committees created by municipal mayors to issue subpoenas and demand witnesses testify
under oath and that to compel Ramos to testify would be to violate his right against self-incrimination.
ISSUE: W/N the said committee is empowered to subpoena witnesses and ask for their punishment in
case of refusal
HELD: NO. The rule is that Rule 64 (Contempt) of the Rules of Court applies only to inferior and superior
courts and does not comprehend contempt committed against administrative officials or bodies like the
one in this case, unless said contempt is clearly considered and expressly defined as contempt of court,
as is done in paragraph 2 of section 580 of the Revised Administrative Code.
7. SEC. QUIRICO P. EVANGELISTA, in his capacity as Secretary of the Presidential Agency on Reforms
and Government Operations, and the PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT
OPERATIONS (PARGO), Petitioner, v. HON. HILARION U. JARENCIO, as Presiding Judge, Court of First
Instance of Manila, Branch XXIII, and FERNANDO MANALASTAS, Assistant City Public Service Officer of
Manila, and ALL OTHER CITY OFFICIALS AND EMPLOYEES SIMILARLY SITUATED, Respondents. [G.R. No.
L-29274. November 27, 1975.]
The Presidential Agency on Reforms and Government Operations (PARGO), created by the President
pursuant to his special powers duties under Section 64 of the Revised Administrative Code to forestall
nefarious activities and anomalies in the civil service and vested with the powers of an investigating
committee under Sections 71 and 580 of the same Code, issued to respondent Manalastas, then Acting
City Public Service Officer of Manila, a subpoena ad testificandum commanding him "to be and appear
as witness at the Office of the PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT
OPERATIONS . . . then and there to declare and testify in a certain investigation pending therein."
Instead of obeying the subpoena respondent Manalastas assailed its validity and filed with the Court of
First Instance of Manila a petition praying for the issuance of a writ of preliminary injunction against the
PARGO and/or other persons acting in its behalf from further issuing subpoenas to Respondent. When
the respondent court granted the petition, the matter was elevated to the Supreme Court.
The Supreme Court, set respondent court’s order aside and held that the disputed subpoena is well
within the legal competence of the Agency to issue.
SYLLABUS
1. ADMINISTRATIVE LAW; ADMINISTRATIVE AGENCIES MAY CONDUCT PURELY INVESTIGATORY
PROCEEDINGS; WITNESS MAY BE REQUIRED TO ATTEND PROCEEDING. — It has been essayed that the
lifeblood of the administrative process is the flow of fact, the gathering, the organization and the
analysis of evidence. Investigations are useful for all administrative functions, not only for rule making,
adjudication, and licensing, but also for prosecuting, for supervising and directing, for determining
general policy, for recommending, legislation, and for purposes no more specific than illuminating
obscure areas to find out what if anything should be done. An administrative agency may be authorized
to make investigations, not only in proceedings of a legislative or judicial nature, but also in proceedings
whose sole purpose is to obtain information upon which future action of a legislative or judicial nature
may be taken and may require the attendance of witnesses in proceedings of a purely investigatory
nature. It may conduct general inquiries into evils calling for correction, and to report findings to
appropriate bodies and make recommendations for actions.
2. ID.; ADMINISTRATIVE INVESTIGATIONS; PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT
OPERATIONS (PARGO); SUBPOENA POWER; POWER EXTENDS TO INVESTIGATORY FUNCTIONS. — The
Presidential Agency on Reforms and Government Operations (PARGO), created to forestall and erode
nefarious activities and anomalies in the civil service, draws its subpoena power from the Executive
Order creating it. Such subpoena power operates in extenso to all the functions of the agency and is not
bordered by nor is it merely exercisable in its quasi-judicial or adjudicatory function. To hold that the
subpoena power of the agency is confined to mere quasi-judicial or adjudicatory function would imperil
or inactive its investigatory functions. More than that, the enabling authority itself fixes no distinction
when and in what function should be subpoena power be exercised. Similarly, there is no reason to
depart from the established rule that forbids differentiation when the law itself makes none.
3. ID.; ID.; ID.; ID.; RESTRICTION ON JUDICIAL SUBPOENA NOT APPLICABLE TO ADMINISTRATIVE
SUBPOENA. — The proviso in Section 580 of the Revised Administrative Code that the subpoena power
of an administrative agency shall be "subject in all respects to the same restrictions and qualifications as
apply in judicial proceedings of a similar character" could refer to restraints against infringement of
constitutional rights or when the subpoena is unreasonable or oppressive and when the relevancy of the
books, documents or things does not appear. The strictures of a subpoena issued under the Rules of
Court, namely, that a specific case must be pending before a court for hearing or trial and that the
hearing or trial must be in connection with the exercise of the court’s judicial or adjudicatory functions,
cannot apply to a non-judicial subpoena issued by an administrative agency. An administrative subpoena
differs in essence from a judicial subpoena, one procurable from and issuable by a competent court, and
not an administrative subpoena.
4. ID.; ID.; ID.; ID.; SPECIFIC CHARGE OR COMPLAINT OR VIOLATION OF LAW NOT NECESSARY FOR
ISSUANCE OF SUBPOENA. — Administrative agencies may enforce subpoenas issued in the course of
investigations, whether or not adjudication is involved, and whether or not probable cause is shown and
even before the issuance of a complaint. It is not necessary, as in the case of a warrant, that a specific
charge or complaint of violation of law be pending or that the order be made pursuant to one. It is
enough that the investigation be for a lawfully authorized purpose.
5. ID.; ID.; ID.; ID.; PURPOSE OF ADMINISTRATIVE SUBPOENA IS TO DISCOVER EVIDENCE. — The purpose
of an administrative subpoena is to discover evidence, not to prove a pending charge, but upon which to
make one if the discovered evidence so justifies. Its obligation cannot rest on a trial of the value of
testimony sought; it is enough that the proposed investigation be for a lawfully authorized purpose, and
that the proposed witness be claimed to have information that might shed some helpful light.
6. ID.; ID.; ID.; ID.; REQUIREMENTS FOR ENFORCEMENT OF SUBPOENA. — An administrative agency has
the power of inquisition which is not dependent upon a case or controversy in order to get evidence,
but an investigate merely on suspicion that the law is being violated or even just because it wants
assurance that it is not. When investigate and accusatory duties are delegated by statute to an
administrative body, it, too may take steps to inform itself as to whether there is probable violation of
the law. In sum, it may be stated that subpoena meets the requirements for enforcement if the inquiry
is (1) within the authority of the agency; (2) the demand is not too indefinite; and (3) the information is
reasonably relevant.
7. ID.; ID.; ID.; PRIVILEGE AGAINST SELF-INCRIMINATION; EXTENSION OF PRIVILEGE TO WITNESS IN
FACT-FINDING INVESTIGATION. UNWISE. — The privilege against self-incrimination extends in
administrative investigations, generally, in scope similar to adversary proceedings. Thus, in an
administrative charge of unexplained wealth under the Anti-Graft and Corrupt Practices Act, it was held
that since the proceedings is criminal or penal in nature, the complainant cannot call the respondent to
the witness stand without encroaching upon his constitutional privilege against self-incrimination. This
same approach was later followed in an administrative proceedings against a medical practitioner that
could possibly result in the loss of his privilege to practice the medical profession. Nevertheless, where
the person cited in the subpoena is not facing any administrative charge, but is merely cited as a witness
in connection with the fact-finding investigation of anomalies and irregularities in a government office
with the object of submitting the assembled facts to the President of the Philippines or to file the
corresponding charges, any unnecessary extension of the privilege would be unwise since the only
purpose of investigation is to discover facts as a basis of future action. Anyway, by all means, the person
so cited may contest any attempt in the investigation that tends to disregard his privilege against selfdiscrimination.
8. CONSTITUTIONAL LAW, CONSTITUTIONALITY OF EXECUTIVE ORDER CANNOT BE COLLATERALLY
IMPEACHED. — For reasons of public policy, the constitutionality of executive orders, which are
commonly said to have the force and effect of statutes cannot be collaterally impeached. Much more
when the issue was not duly pleaded in the lower court as to be acceptable for adjudication in a
certiorari proceeding before the Supreme Court. The settled rule is that the Supreme Court will not
anticipate a question of constitutional law in advance of the necessity of deciding it.
FERNANDO, J., concurring:
1. CONSTITUTIONAL LAW; CONSTITUTIONAL RIGHTS OF A PERSON IN ADMINISTRATIVE INVESTIGATION.
— The constitutional rights of a person who may be involved in an administrative investigation, call for
respect. A recognition of the expanded reach of the administrative process in order to assure that the
objectives of a regulatory statute be attained cannot obscure the protection that the Constitution
affords a person who may find himself cited to appear as a witness in a fact finding investigation
conducted by a regulatory or administrative agency.
2. ID.; RIGHT AGAINST REASONABLE SEARCH AND SEIZURES; RIGHT CANNOT BE RENDERED
MEANINGLESS BY ADMINISTRATIVE POWER OF INVESTIGATION. — The right to be protected against
unreasonable search and seizure should not fall by the wayside. The board sweep of the administrative
power of investigation cannot, consistently with the Constitution, go so far as to render it meaningless.
It is with such a reading that the pronouncement in US v. Morton Salt Co. that "it is sufficient if the
inquiry is within the authority of the agency, the demand is not too indefinite and the information
sought is reasonably relevant", on which reliance is placed in the opinion of Justice Martin, should be
viewed. Such pronouncement has been given approval in an impressive number of subsequent
adjudication. The Morton Salt Co, case, however, involves a corporation and it suffices to call attention
to the words of Justice Jackson that "corporations can claim no equality with individuals in the
enjoyment of a right to privacy" to remove any doubt as to the pronouncement’s lending itself to the
construction that an inroad into the right of search and seizure is now permissible. The landmark Boyd
decision which warned against the use of the subpoena power to trench upon the guarantee against
unreasonable search and seizure still speaks authoritatively. The Supreme Court has spoken to the same
effect, Boyd having been cited in a number of cases. The opinion of Justice Martin should therefore be
read as not departing from but precisely adhering to its command. Whatever relaxation of its compelling
force may be allowable in case of corporations should not apply where an individual is concerned.
3. ID.; RIGHT AGAINST SELF-INCRIMINATION; RIGHT SHOULD EXTEND TO PROSPECTIVE RESPONDENT
BEING CITED AS "WITNESS" IN AN ADMINISTRATIVE INVESTIGATION. — The right not to incriminate
oneself is deserving of the utmost deference and respect. What is more, the present Constitution by the
adoption of the Miranda doctrine has vitalized it even further. A re-examination of the pronouncement
in the instant case involving the calling of a witness in an investigation being conducted by the PARGO,
that "Since the only purpose of investigation is to discover facts as a basis of future action, any
unnecessary extension of the privilege would thus be unwise" is, therefore, desirable. A distinction
between a witness and a respondent may be too tenous if the realities of the situation be fully
considered. The force of the Cabal and the Pascual, Jr. decisions upholding the right against selfincrimination of a respondent in an administrative complaint may be eroded if the prospective
respondent is first called as a witness and is thus compelled to testify. Concurrence with the opinion of
the Court in the instant case is not ruled out, however, in view of the caveat that "Anyway, by all means,
respondent Fernando Manalastas may contest any attempt in the investigation that tends to disregard
his privilege against self-incrimination."
TEEHANKEE, J., dissenting:
1. CONSTITUTIONAL LAW; PRIVILEGE AGAINST SELF-INCRIMINATION; RESPONDENT BEING SUBPOENAED
AS "WITNESS" IN ADMINISTRATIVE INVESTIGATION ENTITLED TO PRIVILEGE. — Where, contrary to the
finding of the main opinion that the person cited in a subpoena issued by an investigating agency "is not
facing any administrative charge" and that "he is merely cited as a witness in connection with the factfinding investigation of anomalies and irregularities in the City Government of Manila . . .", it is a fact
shown by the very petition itself and its annexed sworn statements that said person is in fact and for all
intents and purposes subpoenaed as respondent or one directly implicated with alleged bribery and
graft in the said sworn statements that concededly as per the petition itself initiated the investigating
agency’s alleged "fact-finding investigation", said person is justified in invoking the privilege against selfincrimination and in securing the respondent court’s injunction against enforcement of the agency’s
subpoena. The person cited was unquestionably a party respondent, who, under the doctrine of Cabal
and Pascual, had the right to remain silent and invoke the privilege against self-incrimination and refuse
to take the witness stand. This legal and constitutional right may not be defeated by the transparent
expedient of citing respondent as a supposed witness in what was avowed to be a general fact-finding
investigation but obviously was a fishing expedition to ensnare respondent as a prime suspect.
2. ID.; ID.; PRIVILEGE STRENGTHENED BY 1973 CONSTITUTION. — The 1973 Constitution has recognized
the necessity of strengthening (and extending) the privilege against self-incrimination by expressly
providing as a constitutional mandate in the Bill of Rights that "Any person under investigation for the
commission of an offense shall have the right to remain silent and to counsel, and to be informed of
such right" (Article IV, section 20) and outlawing the use of any confession obtained in violation of said
section by declaring its inadmissibility in evidence.
3. ID.; ID.; ID.; STATE MUST RESPECT INDIVIDUAL’S CONSTITUTIONAL RIGHTS IN INVESTIGATION OF
WRONG DOINGS. — The State with its overwhelming and vast powers and resources can and must
ferret out and investigate wrong doing, graft and corruption and at the same time respect the
constitutional guarantees of the individual’s right to privacy, silence and due process and against selfincrimination and unreasonable search and seizure. This means that leads and charges must be
investigated and followed up through the assistance of the corresponding police and law enforcement
agencies as provided in the petitioner’s executive charter and the evidence secured by proper
applications for search warrants, and as conceded in the petition itself, after the corresponding report to
the President "to file the corresponding charges against the persons who may appear responsible or
merely refer them to other appropriate offices such as the Fiscal’s office, like what was done in other
cases."
DECISION
MARTIN, J.:
This is an original action for certiorari and prohibition with preliminary injunction, under Rule 65 of the
Rules of Court, seeking to annul and set aside the order of respondent Judge, the Honorable Hilarion J.
Jarencio, Presiding Judge of the Court of First Instance of Manila, dated July 1, 1968, in Civil Case No.
73305, entitled "Fernando Manalastas v. Sec. Ramon D. Bagatsing, etc.", which reads as follows:
"IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of preliminary
injunction prayed for by the petitioner [private respondent] be issued restraining the respondents
[petitioners] their agents, representatives, attorneys and/or other persons acting in their behalf from
further issuing subpoenas in connection with the fact-finding investigations to the petitioner [private
respondent] and from instituting contempt proceedings against the petitioner [private respondent]
under Section 580 of the Revised Administrative Code." (Stress supplied).
Pursuant to his special powers and duties under Section 64 of the Revised Administrative Code, 1 the
President of the Philippines created the Presidential Agency on Reforms and Government Operations
(PARGO) under Executive Order No. 4 of January 7, 1966. 2 Purposedly, he charged the Agency with the
following functions and responsibilities: 3
"b. To investigate all activities involving or affecting immoral practices, graft and corruptions, smuggling
(physical or technical), lawlessness, subversion, and all other activities which are prejudicial to the
government and the public interests, and to submit proper recommendations to the President of the
Philippines.
"e. To investigate cases of graft and corruption and violations of Republic Acts Nos. 1379 and 3019, and
gather necessary evidence to establish prima facie, acts of graft and acquisition of unlawfully amassed
wealth . . .
"h. To receive and evaluate, and to conduct fact-finding investigations of sworn complaints against the
acts, conduct or behavior of any public official or employee and to file and prosecute the proper charges
with the appropriate agency."cralaw virtua1aw library
For a realistic performance of these functions, the President vested in the Agency all the powers of an
investigating committee under Sections 71 and 580 of the Revised Administrative Code, including the
power to summon witnesses by subpoena or subpoena duces tecum, administer oaths, take testimony
or evidence relevant to the investigation. 4
Whereupon, on June 7, 1968, petitioner Quirico Evangelista, as Undersecretary of the Agency, issued to
respondent Fernando Manalastas, then Acting City Public Service Officer of Manila, a subpoena ad
testificandum commanding him "to be and appear as witness at the Office of the PRESIDENTIAL AGENCY
ON REFORMS AND GOVERNMENT OPERATIONS . . . then and there to declare and testify in a certain
investigation pending therein."cralaw virtua1aw library
Instead of obeying the subpoena, respondent Fernando Manalastas filed on June 25, 1968 with the
Court of First Instance of Manila an Amended Petition for prohibition, certiorari and/or injunction with
preliminary injunction and/or restraining order docketed as Civil Case No. 73305 and assailed its legality.
On July 1, 1968, respondent Judge issued the aforementioned Order:jgc:chanrobles.com.ph
"IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of preliminary
injunction prayed for by the petitioner [private respondent] be issued restraining the respondents
[petitioners], their agents, representatives, attorneys and/or other persons acting in their behalf from
further issuing subpoenas in connection with the fact-finding investigations to the petitioner [private
respondent] and from instituting contempt proceedings against the petitioner [private respondent]
under Section 530 of the Revised Administrative Code." (Stress supplied)
Because of this, petitioners 5 elevated the matter direct to Us without a motion for reconsideration first
filed on the fundamental submission that the Order is a patent nullity. 6
As unfurled, the dominant issue in this case is whether the Agency, acting thru its officials, enjoys the
authority to issue subpoenas in its conduct of fact-finding investigations.
It has been essayed that the life blood of the administrative process is the flow of fact, the gathering,
the organization and the analysis of evidence. 7 Investigations are useful for all administrative functions,
not only for rule making, adjudication, and licensing, but also for prosecuting, for supervising and
directing, for determining general policy, for recommending, legislation, and for purposes no more
specific than illuminating obscure areas to find out what if anything should be done. 8 An administrative
agency may be authorized to make investigations, not only in proceedings of a legislative or judicial
nature, but also in proceedings whose sole purpose is to obtain information upon which future action of
a legislative or Judicial nature may be taken 9 and may require the attendance of witnesses in
proceedings of a purely investigatory nature. It may conduct general inquiries into evils calling for
correction and to report findings to appropriate bodies and make recommendations for actions. 10
We recognize that in the case before Us, petitioner Agency draws its subpoena power from Executive
Order No. 4, para. 5 which, in an effectuating mood, empowered it to "summon witnesses, administer
oaths, and take testimony relevant to the investigation" 11 with the authority "to require the production
of documents under a subpoena duces tecum or otherwise, subject in all respects to the same
restrictions and qualifications as apply in judicial proceedings of a similar character." 12 Such subpoena
power operates in extenso to all the functions of the Agency as laid out in the aforequoted subparagraphs (b), (e), and (h). It is not bordered by nor is it merely exercisable, as respondents would have
it, in quasi-judicial or adjudicatory function under sub-paragraph (b). The functions enumerated in all
these sub-paragraphs (b), (e), and (h) interlink or intertwine with one another with the principal aim of
meeting the very purpose of the creation of the Agency, which is to forestall and erode nefarious
activities and anomalies in the civil service. To hold that the subpoena power of the Agency is confined
to mere quasijudicial or adjudicatory functions would therefore imperil or inactiviate the Agency in its
investigatory functions under sub-paragraphs (e) and (h). More than that, the enabling authority itself
(Executive Order No. 4, para. 5) fixes no distinction when and in what function should the subpoena
power be exercised. Similarly, We see no reason to depart from the established rule that forbids
differentiation when the law itself makes none.
Nor could We impress upon this subpoena power the alleged strictures of a subpoena issued under the
Rules of Court 13 to abridge its application. The seeming proviso in Section 580 of the Revised
Administrative Code that the right to summon witnesses and the authority to require the production of
documents under a subpoena duces tecum or otherwise shall be "subject in all respects to the same
restrictions and qualifications as apply in judicial proceedings of a similar character" cannot be validly
seized upon to require, in respondents’ formulation, that, as in a subpoena under the Rules, a specific
case must be pending before a court for hearing or trial and that the hearing or trial must be in
connection with the exercise of the court’s judicial or adjudicatory functions 14 before a non-judicial
subpoena can be issued by an administrative agency like petitioner Agency. It must be emphasized,
however, that an administrative subpoena differs in essence from a judicial subpoena. Clearly, what
the Rules speaks of is a judicial subpoena, one procurable from and issuable by a competent court,
and not an administrative subpoena. To an extent, therefore, the "restrictions and qualifications"
referred to in Section 580 of the Revised Administrative Code could mean the restraints against
infringement of constitutional rights or when the subpoena is unreasonable or oppressive and when
the relevancy of the books, documents or things does not appear. 15
Rightly, administrative agencies may enforce subpoenas issued in the course of investigations, whether
or not adjudication is involved, and whether or not probable cause is shown 16 and even before the
issuance of a complaint. 17 It is not necessary, as in the case of a warrant, that a specific charge or
complaint of violation of law be pending or that the order be made pursuant to one. It is enough that
the investigation be for a lawfully authorized purpose. 18 The purpose of the subpoena is to discover
evidence, not to prove a pending charge, but upon which to make one if the discovered evidence so
justifies. 19 Its obligation cannot rest on a trial of the value of testimony sought; it is enough that the
proposed investigation be for a lawfully authorized purpose, and that the proposed witness be claimed
to have information that might shed some helpful light. 20 Because judicial power is reluctant if not
unable to summon evidence until it is shown to be relevant to issues on litigations it does not follow that
an administrative agency charged with seeing that the laws are enforced may not have and exercise
powers of original inquiry. The administrative agency has the power of inquisition which is not
dependent upon a case or controversy in order to get evidence, but can investigate merely on suspicion
that the law is being violated or even just because it wants assurance that it is not. When investigative
and accusatory duties are delegated by statute to an administrative body, it, too may take steps to
inform itself as to whether there is probable violation of the law. 21 In sum, it may be stated that a
subpoena meets the requirements for enforcement if the inquiry is (1) within the authority of the
agency; (2) the demand is not too indefinite; and (3) the information is reasonably relevant. 22
There is no doubt that the fact-finding investigations being conducted by the Agency upon sworn
statements implicating certain public officials of the City Government of Manila in anomalous
transactions 23 fall within the Agency’s sphere of authority and that the information sought to be
elicited from respondent Fernando Manalastas, of which he is claimed to be in possession, 24 is
reasonably relevant to the investigations.
We are mindful that the privilege against self-incrimination extends in administrative investigations,
generally, in scope similar to adversary proceedings. 25 In Cabal v. Kapunan, Jr., 26 the Court ruled that
since the administrative charge of unexplained wealth against the respondent therein may result in the
forfeiture of the property under the Anti-Graft and Corrupt Practices Act, a proceeding criminal or penal
in nature, the complainant cannot call the respondent to the witness stand without encroaching upon
his constitutional privilege against self-incrimination. Later, in Pascual, Jr. v. Board of Medical Examiners,
27 the same approach was followed in the administrative proceedings against a medical practitioner
that could possibly result in the loss of his privilege to practice the medical profession. Nevertheless, in
the present case, We find that respondent Fernando Manalastas is not facing any administrative charge.
28 He is merely cited as a witness in connection with the fact-finding investigation of anomalies and
irregularities in the City Government of Manila with the object of submitting the assembled facts to the
President of the Philippines or to file the corresponding charges. 29 Since the only purpose of
investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege
would thus be unwise. 30 Anyway, by all means, respondent Fernando Manalastas may contest any
attempt in the investigation that tends to disregard his privilege against self-incrimination.
A question of constitutional dimension is raised by respondents on the inherent power of the President
of the Philippines to issue subpoena. 31 More tersely stated, respondents would now challenge, in a
collateral way, the validity of the basic authority, Executive Order No. 4, as amended in part by Executive
Order No. 88. Unfortunately, for reasons of public policy, the constitutionality of executive orders, which
are commonly said to have the force and effect of statutes 32 cannot be collaterally impeached. 33
Much more when the issue was not duly pleaded in the court below as to be acceptable for adjudication
now. 34 The settled rule is that the Court will not anticipate a question of constitutional law in advance
of the necessity of deciding it. 35
Nothing then appears conclusive than that the disputed subpoena issued by petitioner Quirico
Evangelista to respondent Fernando Manalastas is well within the legal competence of the Agency to
issue.
WHEREFORE, the aforequoted order of respondent Judge, dated July 1, 1968, is hereby set aside and
declared of no force and effect.
Without pronouncement as to costs.
SO ORDERED.
Facts:
Pursuant to his special powers and duties under Section 64 of the Revised Administrative Code, the
President of the Philippines created the Presidential Agency on Reforms and Government Operations
(PARGO) under Executive Order No. 4 of January 7, 1966. For a realistic performance of these functions,
the President vested in the Agency all the powers of an investigating committee under Sections 71 and
580 of the Revised Administrative Code, including the power to summon witnesses by subpoena or
subpoena duces tecum, administer oaths, take testimony or evidence relevant to the investigation.
Petitioner Quirico Evangelista, as Undersecretary of the Agency, issued to respondent Fernando
Manalastas, then Acting City Public Service Officer of Manila, a subpoena ad testificandum commanding
him "to be and appear as witness at the Office of the PRESIDENTIAL AGENCY ON REFORMS AND
GOVERNMENT OPERATIONS then and there to declare and testify in a certain investigation pending
therein. Instead of obeying the subpoena, respondent Fernando Manalastas filed on June 25, 1968 with
the Court of First Instance of Manila an Amended Petition for prohibition, certiorari and/or injunction
with preliminary injunction and/or restraining order docketed as Civil Case No. 73305 and assailed its
legality.
Issue:
Whether the Agency, acting thru its officials, enjoys the authority to issue subpoenas in its conduct of
fact-finding investigations.
Held:
It has been essayed that the life blood of the administrative process is the flow of fact, the gathering,
the organization and the analysis of evidence. Investigations are useful for all administrative functions,
not only for rulemaking, adjudication, and licensing, but also for prosecuting, for supervising and
directing, for determining general policy, for recommending, legislation, and for purposes no more
specific than illuminating obscure areas to find out what if anything should be done. An administrative
agency may be authorized to make investigations, not only in proceedings of a legislative or judicial
nature, but also in proceedings whose sole purpose is to obtain information upon which future action of
a legislative or judicial nature may be taken and may require the attendance of witnesses in proceedings
of a purely investigatory nature. It may conduct general inquiries into evils calling for correction, and to
report findings to appropriate bodies and make recommendations for actions. We recognize that in the
case before us, petitioner Agency draws its subpoena power from Executive Order No. 4, para. 5 which,
in an effectuating mood, empowered it to "summon witness, administer oaths, and take testimony
relevant to the investigation" with the authority "to require the production of documents under a
subpoena duces tecum or otherwise, subject in all respects to the same restrictions and qualifications as
apply in judicial proceedings of a similar character.".
Administrative agencies may enforce subpoenas issued in the course of investigations, whether or not
adjudication is involved, and whether or not probable cause is shown and even before the issuance of a
complaint. It is not necessary, as in the case of a warrant, that a specific charge or complaint of violation
of law be pending or that the order be made pursuant to one. It is enough that the investigation be for a
lawfully authorized purpose. The purpose of the subpoena is to discover evidence, not to prove a
pending charge, but upon which to make one if the discovered evidence so justifies. There is no doubt
that the fact-finding investigations being conducted by the Agency upon sworn statements implicating
certain public officials of the City Government of Manila in anomalous transactions fall within the
Agency's sphere of authority and that the information sought to be elicited from respondent Fernando
Manalastas, of which he is claimed to be in possession, is reasonably relevant to the investigations.
8. PABLO CATURA and Luz SALVADOR, petitioners, vs. THE COURT OF INDUSTRIAL RELATIONS and
CELESTINO TABANIAG, et al., respondents. 37 SCRA 303, Jan. 30, 1971
Court of Industrial Relations; Power of investigation.— The controlling provisions of law concerning the
power of investigation of the Court of Industrial Relations to assure compliance with internal labor
organization procedures with the corresponding authority to investigate to substantiate alleged
violations may be found in paragraphs (b), (h), and (1) of Section 17 of the Industrial Peace Act. To
paraphrase Justice Laurel, the power to investigate, to be conscientious and rational at the very least,
requires an inquiry into existing facts and conditions. The documents required to be produced
constitutes evidence of the most solid character as to whether or not there was a failure to comply with
the mandates of the law. It is not for this Court to whittle down the authority conferred on
administrative agencies to assure the effective administration of a statute, in this case intended to
protect the rights of union members against its officers. The matter was properly within its cognizance
and the means necessary to give it force and effectiveness should be deemed implied unless the power
sought to be exercised is so arbitrary as to trench upon private rights of petitioners entitled to priority.
Same; Case calling for the exercise of the power of investigation.—The complaint before respondent
court against petitioners as President and Treasurer of the union, specifically recited an unauthorized
disbursement of union funds as well as the failure to make a full and detailed report of financial
transactions of the union and to make the book of accounts and other records of its financial activities
open to inspection by the members. Clearly, the matter was deemed serious enough by the prosecutor
of respondent Court to call for the exercise of the statutory power of investigation to substantiate the
alleged violation so as to assure that the rights and conditions of membership in a labor organization as
specifically set forth in Section 17 be respected. All that the challenged order did was to require
petitioners, as President and Treasurer of the labor organization, to “deliver and deposit” with
respondent Court all of its book of accounts, bank accounts, pass books, union funds, receipts, vouchers
and other documents related to its finances at the hearing of the petition before it on January 3, 1967.
On its face, it cannot be said that such a requirement is beyond the statutory power conferred. If it were
otherwise, the specific provisions of law allegedly violated may not be effectively complied with. The
authority to investigate might be rendered futile if respondent Court could be held as having acted
contrary to law.
Labor organization; Books of accounts open to inspection.— The validity of the order in question cannot
be impugned by the allegation that there was a denial of procedural due process. If the books and
records sought to be delivered and deposited in court for examination were the private property of
petitioners, perhaps the allegation of the absence of due process would not be entirely lacking in
plausibility. Such is not the case however. The pertinent section of the Industrial Peace Act makes clear
that such books of accounts and other records of the financial activities are open to inspection by any
member of a labor organization. For the court to require their submission at the hearing of the petition
is beyond question, and no useful purpose would be served by first hearing petitioners before an order
to that effect can be issued.
Remedial law; Procedural due process; Hearing on a motion for reconsideration meets requirement of
due process.—”As far back as 1935, it has already been a settled doctrine that a plea of denial of
procedural due process does not lie where a defect consisting of an absence of notice of hearing was
thereafter cured by the alleged aggrieved party having had the opportunity to be heard on a motion for
reconsideration. ‘What the law prohibits is not the absence of previous notice, but the absolute absence
thereof and lack of opportunity to be heard.’ There is then no occasion to impute deprivation of
property without due process where the adverse party was heard on a motion for reconsideration
constituting as it does ‘sufficient opportunity’ for him to inform the Tribunal concerned of his side of the
controversy. x x x what ‘due process contemplates is freedom from arbitrariness and what it requires is
fairness or justice, the substance rather than the form being paramount,’ the conclusion being that the
hearing on a motion for reconsideration meets the strict requirement of due process.”
PETITION for review of a resolution of the Court of Industrial Relations.
The facts are stated in the opinion of the Court.
It is a novel question that presents itself before this Court in this petition for the review of a resolution
of respondent Court of Industrial Relations. Specifically, it is whether respondent Court, in the exercise
of its power of investigation to assure compliance with the internal labor organization procedures under
Section 17 of the Industrial Peace Act,1 can require a labor organization’s “books of accounts, bank
accounts, pass books, union funds, receipts, vouchers and other documents related to [its] finances” be
delivered and deposited with it at the hearing to conduct such investigation in accordance with a
complaint duly filed without the officials of such labor organization, therein named as respondents and
petitioners before us, being heard prior to the issuance of such order. The respondent Court, first acting
through Associate Judge Joaquin M. Salvador and thereafter en banc, upheld its power to do so. The
challenge to such competence sought to be fortified by the allegation of the absence of procedural due
process was rejected. After a careful study of the matter, we cannot say that thereby respondent Court
was in error. We have no reason to reverse.
As set forth in the brief for the petitioners, Pablo Catura and Luz Salvador, the President and Treasurer,
respectively, of the Philippine Virginia Tobacco Administration Employees Association, a legitimate labor
organization duly registered, there was, on December 27, 1966, a complaint against them under Section
17 filed by the prosecution division of respondent Court, the principal complainants being now
respondent Celestino Tabaniag as well as other employees constituting more than ten percent of the
entire membership of such labor organization. In the complaint, it was charged that during the tenure of
office of petitioners before us as such President and Treasurer, they were responsible for “unauthorized
disbursement of union funds” with complainants on various occasions during the latter part of 1966
demanding from them “a full and detailed report of all financial transactions of the union and to make
the book of accounts and other records of the financial activities of the union open to inspection by the
members,” only to be met with a refusal on their part to comply. It was further asserted that the
executive board of such labor organization passed a resolution calling for a general membership
meeting so that petitioners could be confronted about the status of union funds, but then, Pablo Catura,
as President, cancelled such meeting. There was thereafter a general membership resolution reiterating
previous demands “for a full and detailed report of all financial transactions of the union,” but again
there was no response, thus compelling the members to refer the matter to the Department of Labor
which duly issued subpoenas for the presentation of such book of accounts to petitioners without any
success. After setting forth that complainants had exhausted all remedies provided in the union’s
constitution and by-laws, which were all unavailing, the complaint sought, after due hearing and
judgment, to declare present petitioners, as respondents, guilty of unfair labor practice under the above
provision of the Industrial Peace Act, for them to cease and desist from further committing such unfair
labor practice complained of, and to render a full and detailed report of all financial transactions of the
union as well as to make the book of accounts and other records of these financial activities open to
inspection by the members.2
Thereafter, on December 28, 1966, respondent Celestino Tabaniag and the other members, as
petitioners in the above complaint before respondent Court, sought an injunction to prevent now
petitioners Pablo Catura who, it turned out, was again elected as President in an election on November
15, 1966, from taking his oath of office in view of his alleged persistence in the abuse of his authority in
the disbursement of union funds as well as his refusal to make a full and detailed report of all financial
transactions of the union.3
Then came the order of December 29, 1966, by Associate Judge Joaquin M. Salvador which, instead of
granting the injunction sought, limited itself to requiring and directing “personally the respondents
Pablo Catura and Luz Salvador, president and treasurer, respectively, of the Philippine Virginia Tobacco
Administration Employees’ Association, to deliver and deposit to this Court all the said Association’s
book of accounts, bank accounts, pass books, union funds, receipts, vouchers and other documents
related to the finances of the said labor union at the hearing of this petition on January 3, 1967 at 9:00
o’clock in the morning. Said respondents are hereby required to comply strictly with this Order.”4 There
was a motion for reconsideration on January 2, 1967 by now petitioners Pablo Catura and Luz Salvador
on the ground that they were not heard before such order was issued, which moreover in their opinion
was beyond the power of respondent Court. With Associate Judge Ansberto P. Paredes dissenting, the
order was sustained in a resolution by the Court en banc on February 28, 1967. Hence the present
petition filed on April 3, 1967.
The petition was given due course by this Court in a resolution of April 13, 1967 with a preliminary
injunction issued upon petitioners’ posting a bond of P2,000.00. Respondents did not take the trouble of
filing an answer within the period expired on June 17, 1967 and petitioners were required to submit
their brief within thirty days under this Court’s resolution of July 14, 1967. Such a brief was duly filed on
September 19 of that year. There was no brief for respondents. The case was thus deemed submitted
for decision on October 4, 1968.
In the light of the interpretation to be accorded the applicable legal provisions and after a careful
consideration of the contention that such a power to issue the challenged order cannot be deemed as
possessed by respondent Court which moreover did not accord petitioners procedural due process, we
have reached the conclusion, as set forth at the opening of this opinion, that petitioners cannot prevail.
The order as issued first by Associate Judge Joaquin M. Salvador and thereafter by respondent Court en
banc must be sustained.
1. The controlling provisions of law to the specific situation before this Court concerning the power of
investigation of respondent Court to assure compliance with internal labor organization procedures with
the corresponding authority to investigate to substantiate alleged violations may be found in paragraphs
(b), (h), and (l) of the aforecited Section 17 of the Industrial Peace Act. Thus: “The members shall be
entitled to full and detailed reports from their officers and representatives of all financial transactions as
provided in the constitution and by-laws of the organization.”5* * * “The funds of the organization shall
not be applied for any purpose or object other than those expressly stated in its constitution or by-laws
or those expressly authorized by a resolution of the majority of the member.”6* * * “The books of
accounts and other records of the financial activities of a legitimate labor organization shall be open to
inspection by any officer or member thereof.”7
To repeat, the complaint before respondent Court against petitioners as President and Treasurer of the
union, specifically recited an unauthorized disbursement of union funds as well as the failure to make a
full and detailed report of financial transactions of the union and to make the book of accounts and
other records of its financial activities open to inspection by the members. Clearly, the matter was
deemed serious enough by the prosecutor of respondent Court to call for the exercise of the statutory
power of investigation to substantiate the alleged violation so as to assure that the rights and conditions
of membership in a labor organization as specifically set forth in Section 17 be respected. All that the
challenged order did was to require petitioners, as President and Treasurer of the labor organization, to
“deliver and deposit” with respondent Court all of its book of accounts, bank accounts, pass books,
union funds, receipts, vouchers and other documents related to its finances at the hearing of the
petition before it on January 3, 1967.
On its face, it cannot be said that such a requirement is beyond the statutory power conferred. If it were
otherwise, the specific provisions of law allegedly violated may not be effectively complied with. The
authority to investigate might be rendered futile if respondent Court could be held as having acted
contrary to law. To paraphrase Justice Laurel, the power to investigate, to be conscientious and rational
at the very least, requires an inquiry into existing facts and conditions. The documents required to be
produced constitutes evidence of the most solid character as to whether or not there was a failure to
comply with the mandates of the law. It is not for this Court to whittle down the authority conferred on
administrative agencies to assure the effective administration of a statute, in this case intended to
protect the rights of union members against its officers. The matter was properly within its cognizance
and the means necessary to give it force and effectiveness should be deemed implied unless the power
sought to be exercised is so arbitrary as to trench upon private rights of petitioners entitled to priority.
No such showing has been made; no such showing can be made. To repeat, there should be no question
about the correctness of the order herein challenged.
2. Nor is the validity of the order in question to be impugned by the allegation that there was a denial of
procedural due process. If the books and records sought to be delivered and deposited in court for
examination were the private property of petitioners, perhaps the allegation of the absence of due
process would not be entirely lacking in plausibility. Such is not the case however. The pertinent section
of the Industrial Peace Act makes clear that such books of accounts and other records of the financial
activities are open to inspection by any member of a labor organization. For the court to require their
submission at the hearing of the petition is, as above noted, beyond question, and no useful purpose
would be served by first hearing petitioners before an order to that effect can be issued. Moreover,
since as was shown in the very brief of petitioners, there was a motion for reconsideration, the absence
of any hearing, even if on the assumption purely for argument’s sake that there was such a requirement,
has been cured. So it was held by this Court in a recent decision. Thus: “As far back as 1935, it has
already been a settled doctrine that a plea of denial of procedural due process does not lie where a
defect consisting of an absence of notice of hearing was thereafter cured by the alleged aggrieved party
having had the opportunity to be heard on a motion for reconsideration. ‘What the law prohibits is not
the absence of previous notice, but the absolute absence thereof and lack of opportunity to be heard.’
There is then no occasion to impute deprivation of property without due process where the adverse
party was heard on a motion for reconsideration constituting as it does ‘sufficient opportunity’ for him
to inform the Tribunal concerned of his side of the controversy. As was stated in a recent decision, what
‘due process contemplates is freedom from arbitrariness and what it requires is fairness or justice, the
substance rather than the form being paramount,’ the conclusion being that the hearing on a motion for
reconsideration meets the strict requirement of due process.”8
WHEREFORE, the petition for certiorari is denied. The writ of preliminary injunction issued under the
resolution of April 13, 1967 is dissolved and declared to be without any further force or effect.
Petition denied. Catura vs. Court of Industrial Relations, 37 SCRA 303, No. L-27392 January 30, 1971
_______________
1 The first paragraph of Section 17, Republic Act No. 875, the Industrial Peace Act, reads as follows: “It is
hereby declared to be the public policy of the Philippines to encourage the following internal labor
organization procedures. A minimum of ten per cent of the makers of & labor organization may report
an alleged violation of these procedures in their labor organization to the Court. If the Court finds, upon
investigation, evidence to substantiate the alleged violation and that efforts to correct the alleged
violation through the procedure provided by the labor organization’s constitution or by-laws have been
exhausted, the Court shall dispose of the complaint as in ‘unfair labor practice’ cases.” The exclusive
competence of respondent Court of Industrial Relations under this provision of law was sustained in the
following cases: Tolentino v. Angeles, 99 Phil. 309 (1956): Kapisanan ng mga Manggagawa v. Bugay, 101
Phil. 18 (1957); Philippine Land-Sea Labor Union (PLASLU) v. Ortiz, 103 Phil. 409 (1958); Philippine
Association of Free Labor Unions (PAFLU) v. Padilla, 106 Phil. 591 (1959).
FACTS:
Pablo Catura and Luz Salvador (petitioners) are the President and Treasurer, respectively, of the
Philippine Virginia Tobacco Administration Employees Association, a duly registered labor organization.
On December 27, 1966, a complaint against them under Section 17 of the Industrial Peace Act was filed
by the CIR and the principal complainants, being Celestino Tabaniag and other employees constituting
more than 10 percent of the membership of the labor organization (respondents). Petitioners were
charged of “unauthorized disbursement of union funds.” Complainants demand a full and detailed
report of all financial transactions of the union as well as to make the book of accounts and other
records of the financial activities of the union open to inspection by the members. The demands were
refused.
The executive board of the organization also passed a resolution calling for a general membership
meeting to pass on the issue regarding the union funds. Catura cancelled the meeting. Another meeting
was called, but there was still no response. Members were forced to elevate the matter to the
Department of Labor which issued subpoenas for the presentation of the account books, but to no avail.
Having exhausted all the remedies provided in the union's constitution and by-laws, the complaint
sought to declare petitioners guilty of unfair labor practice under the Industrial Peace Act, to cease and
desist from further committing unfair labor practice, and to render a dull and detailed report of all
financial transactions of the union as well as to make the book of accounts and other records of financial
activities open to inspection by the members.
On December 28, 1966, private respondents sought an injunction to prevent Catura, who turned out to
be re-elected as President on November 15, 1966, from taking oath of his office
Then came the order of December 29, 1966 by Associate Judge Joaquin M. Salvador which, instead of
granting the injunction sought, limited itself to requiring and directing the petitioners to deliver and
deposit documents related to finances at the hearing of the petition.
A motion for reconsideration was filed by the petitioners alleging that they were not heard before such
order was issued. The order was sustained. Hence, this petition for review of the resolution of the CIR.
ISSUE: Whether the CIR, in the exercise of its power of investigation to assure compliance with the
internal labor organization procedures under the Industrial Peace Act, can require a labor organization's
“books of accounts, bank account, pass books, union funds, receipts, vouchers and other documents
related to finances” be delivered and deposited with it at the hearing to conduct such investigation.
HELD:
The controlling provisions of law concerning the power of investigation of the CIR may be found in
paragraphs (b), (h), and (l) of Section 17 of the Industrial Peace Act. To paraphrase Justice Laurel, the
power to investigate, to be conscientious and rational at the very least, requires an inquiry into existing
facts and conditions. Clearly, the matter was deemed serious enough by the prosecutor of CIR to call for
the exercise of the statutory power of investigation. All the challenged order did was to require
petitioner to “deliver and deposit” the documents. The documents required to be produced constitutes
evidence of the most solid character as to whether there was a failure to comply with the mandates of
law. The matter was properly within its cognizance and the means necessary to give it force and
effectiveness should be deemed implied unless such is arbitrary. <herefore, petition for certiorari is
denied.
RELEVA8T PR#V*S*#8S= Pars. (b), (h), and (l) of Section 17 of the *ndustrial Peace Act= .The members
shall be entitled to full and detailed reports from their officers and representatives of all financial
transactions as provided in the constitution and by5la+s of the organization.” .The funds of the
organization shall not be applied for any purpose or ob7ect other than those e1pressly stated in its
constitution or by5la+s or those e1pressly authorized by a resolution of the ma7ority of the
member.” .The boo0s of accounts and other records of the financial activities of a legitimate labor
organization shall be open to inspection by any officer or member thereof.”
Facts: The principal complainants in the complaint filed by the prosecution division of Court of Industrial
Relations (CIR) against Pablo Catura and Luz Salvador, Treasurer and President, respectively, were herein
respondents Celestino and the other members of the Philippine Virginia Tobacco Administration
Employees Asssociation, a legitimate labor organization. Catura and Salvador were alleged to have been
responsible for unauthorized disbursement of union funds. The complainants tried to settle their issue
exhausting all remedies provided for in the union’s constitution and by-laws to no avail. Celestino and
the other complainants sought before the court an injunction to prevent Catura from taking his oath of
office because of his refusal to make a full and detailed report of all financial transactions of the union.
Instead of granting an injunction, the CIR limited itself to requiring and directing Catura and Salvador to
deliver and deposit to the court all the book of accounts, bank accounts, pass books of the Association
and other related documents. Now petitioner challenges the order issued on the ground that
respondent court does not possess any power to issue the same.
Issuce: whether the order issued by the judge was proper.
Held: Yes. The Supreme Court ruled that the power of respondent court to assure compliance with
internal labor organization procedures with the authority to investigate to substantiate alleged
violations may be found in paragraphs (b), (h), and (1) Section 17 of the Industrial Peace Act.1 The
complaint before the CIR recited an unauthorized disbursement of union funds as well as failure to make
full and detailed report of financial transactions of the union. Clearly, the matter was deemed serious
enough to call for the exercise of the statutory power of investigation to substantiate the alleged
violation so as to assure that the rights and conditions of membership in a labor organization as set forth
in the said Section be respected. All the challenged order did was to require petitioners to deliver and
deposit the relevant documents. It cannot be said that such a requirement is beyond the statutory
power conferred. The authority to investigate might be rendered futile if respondent court could be held
as having acted contrary to law. The power to investigate, requires an inquiry into existing facts and
conditions. The documents required to be produced constitutes evidence of the most solid character as
to whether or not there was a failure to comply with the mandates of the law. It is not for this Court to
whittle down the authority conferred on administrative agencies to assure the effective administration
of a statute, in this case intended to protect the rights of union members against its officers. The matter
was properly within its cognizance and the means necessary to give it force and effectiveness should be
deemed implied unless the power sought to be exercised is so arbitrary as to trench upon private rights
of petitioners entitled to priority. No such showing has been made.