SECOND DIVISION

[G.R. No. 153660. June 10, 2003]

PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE LADICA,

ARMAN QUELING, ROLANDO NIETO, RICARDO BARTOLOME,
ELUVER
GARCIA,
EDUARDO
GARCIA
and
NELSON
MANALASTAS, petitioners, vs. COCA-COLA BOTTLERS PHILS.,
INC., respondent.
DECISION
BELLOSILLO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
[1]
assailing the Decision of the Court of Appeals dated 21 December 2001 which
affirmed with modification the decision of the National Labor Relations Commission
[2]
promulgated 30 March 2001.
On 15 February 1995 sixty-two (62) employees of respondent Coca-Cola
Bottlers, Inc., and its officers, Lipercon Services, Inc., Peoples Specialist Services,
Inc., and Interim Services, Inc., filed a complaint against respondents for unfair labor
practice through illegal dismissal, violation of their security of tenure and the
perpetuation of the Cabo System. They thus prayed for reinstatement with full back
wages, and the declaration of their regular employment status.
For failure to prosecute as they failed to either attend the scheduled mandatory
conferences or submit their respective affidavits, the claims of fifty-two (52)
complainant-employees were dismissed. Thereafter, Labor Arbiter Jose De Vera
conducted clarificatory hearings to elicit information from the ten (10) remaining
complainants (petitioners herein) relative to their alleged employment with respondent
firm.
In substance, the complainants averred that in the performance of their duties
as route helpers, bottle segregators, and others, they were employees of respondent
Coca-Cola Bottlers, Inc. They further maintained that when respondent company
replaced them and prevented them from entering the company premises, they were
deemed to have been illegally dismissed.
In lieu of a position paper, respondent company filed a motion to dismiss
complaint for lack of jurisdiction and cause of action, there being no employeremployee relationship between complainants and Coca-Cola Bottlers, Inc., and that
respondents Lipercon Services, Peoples Specialist Services and Interim Services
being bona fideindependent contractors, were the real employers of the
[3]
complainants. As regards the corporate officers, respondent insisted that they could
not be faulted and be held liable for damages as they only acted in their official
capacities while performing their respective duties.

On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision ordering

respondent company to reinstate complainants to their former positions with all the
rights, privileges and benefits due regular employees, and to pay their full back wages
which, with the exception of Prudencio Bantolino whose back wages must be
computed upon proof of his dismissal as of 31 May 1998, already amounted to an
[4]
aggregate of P1,810,244.00.
In finding for the complainants, the Labor Arbiter ruled that in contrast with the
negative declarations of respondent companys witnesses who, as district sales
supervisors of respondent company denied knowing the complainants personally, the
testimonies of the complainants were more credible as they sufficiently supplied every
detail of their employment, specifically identifying who their salesmen/drivers were,
their places of assignment, aside from their dates of engagement and dismissal.
On appeal, the NLRC sustained the finding of the Labor Arbiter that there was
indeed an employer-employee relationship between the complainants and respondent
company when it affirmed in toto the latters decision.
In a resolution dated 17 July 2001 the NLRC subsequently denied for lack of
merit respondents motion for consideration.
Respondent Coca-Cola Bottlers appealed to the Court of Appeals which,
although affirming the finding of the NLRC that an employer-employee relationship
existed between the contending parties, nonetheless agreed with respondent that the
affidavits of some of the complainants, namely, Prudencio Bantolino, Nestor Romero,
Nilo Espina, Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and Nelson
Manalastas, should not have been given probative value for their failure to affirm the
contents thereof and to undergo cross-examination. As a consequence, the appellate
court dismissed their complaints for lack of sufficient evidence. In the same Decision
however, complainants Eddie Ladica, Arman Queling and Rolando Nieto were
declared regular employees since they were the only ones subjected to cross[5]
examination. Thus x x x (T)he labor arbiter conducted clarificatory hearings to ferret out the truth between the
opposing claims of the parties thereto. He did not submit the case based on position papers and
their accompanying documentary evidence as a full-blown trial was imperative to establish the
parties claims. As their allegations were poles apart, it was necessary to give them ample
opportunity to rebut each others statements through cross-examination. In fact, private
respondents Ladica, Quelling and Nieto were subjected to rigid cross-examination by
petitioners counsel. However, the testimonies of private respondents Romero, Espina, and
Bantolino were not subjected to cross-examination, as should have been the case, and no
explanation was offered by them or by the labor arbiter as to why this was dispensed with.
Since they were represented by counsel, the latter should have taken steps so as not to
squander their testimonies. But nothing was done by their counsel to that effect. [6]
Petitioners now pray for relief from the adverse Decision of the Court of
Appeals; that, instead, the favorable judgment of the NLRC be reinstated.
In essence, petitioners argue that the Court of Appeals should not have given
weight to respondents claim of failure to cross-examine them. They insist that, unlike
regular courts, labor cases are decided based merely on the parties position papers
and affidavits in support of their allegations and subsequent pleadings that may be

filed thereto. As such, according to petitioners, the Rules of Court should not be
strictly applied in this case specifically by putting them on the witness stand to be
cross-examined because the NLRC has its own rules of procedure which were
applied by the Labor Arbiter in coming up with a decision in their favor.
In its disavowal of liability, respondent commented that since the other alleged
affiants were not presented in court to affirm their statements, much less to be crossexamined, their affidavits should, as the Court of Appeals rightly held, be stricken off
the records for being self-serving, hearsay and inadmissible in evidence. With respect
to Nestor Romero, respondent points out that he should not have been impleaded in
the instant petition since he already voluntarily executed a Compromise Agreement,
Waiver and Quitclaim in consideration of P450,000.00. Finally, respondent argues
[7]
that the instant petition should be dismissed in view of the failure of petitioners to
sign the petition as well as the verification and certification of non-forum shopping, in
[8]
clear violation of the principle laid down in Loquias v. Office of the Ombudsman.
The crux of the controversy revolves around the propriety of giving evidentiary
value to the affidavits despite the failure of the affiants to affirm their contents and
undergo the test of cross-examination.
The petition is impressed with merit. The issue confronting the Court is not
[9]
without precedent in jurisprudence. The oft-cited case of Rabago v. NLRC squarely
grapples a similar challenge involving the propriety of the use of affidavits without the
presentation of affiants for cross-examination. In that case, we held that the
argument that the affidavit is hearsay because the affiants were not presented for
cross-examination is not persuasive because the rules of evidence are not strictly
observed in proceedings before administrative bodies like the NLRC where decisions
may be reached on the basis of position papers only.
[10]

In Rase v. NLRC, this Court likewise sidelined a similar challenge when it

ruled that it was not necessary for the affiants to appear and testify and be crossexamined by counsel for the adverse party. To require otherwise would be to negate
the rationale and purpose of the summary nature of the proceedings mandated by the
Rules and to make mandatory the application of the technical rules of evidence.
[11]

may be decided based on verified position papers, with supporting documents and
their affidavits.
As to whether petitioner Nestor Romero should be properly impleaded in the
instant case, we only need to follow the doctrinal guidance set by Periquet
[13]
v. NLRC which outlines the parameters for valid compromise agreements, waivers
and quitclaims Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the parties and
may not later be disowned simply because of a change of mind. It is only where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so voluntarily, with
full understanding of what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding undertaking.
In closely examining the subject agreements, we find that on their face
[14]
[15]
theCompromise Agreement and Release, Waiver and Quitclaim are devoid of
any palpable inequity as the terms of settlement therein are fair and just. Neither can
we glean from the records any attempt by the parties to renege on their contractual
agreements, or to disavow or disown their due execution. Consequently, the same
must be recognized as valid and binding transactions and, accordingly, the instant
case should be dismissed and finally terminated insofar as concerns petitioner Nestor
Romero.
We cannot likewise accommodate respondents contention that the failure of all
the petitioners to sign the petition as well as the Verification and Certification of NonForum Shopping in contravention of Sec. 5, Rule 7, of the Rules of Court will cause
the dismissal of the present appeal. While the Loquias case requires the strict
observance of the Rules, it however provides an escape hatch for the transgressor to
avoid the harsh consequences of non-observance. Thus -

Southern Cotabato Dev. and Construction Co. v. NLRC succinctly states that
under Art. 221 of the Labor Code, the rules of evidence prevailing in courts of law do
not control proceedings before the Labor Arbiter and the NLRC. Further, it notes that
the Labor Arbiter and the NLRC are authorized to adopt reasonable means to
ascertain the facts in each case speedily and objectively and without regard to
technicalities of law and procedure, all in the interest of due process. We find no
compelling reason to deviate therefrom.

x x x x We find that substantial compliance will not suffice in a matter involving strict
observance of the rules. The attestation contained in the certification on non-forum shopping
requires personal knowledge by the party who executed the same. Petitioners must show
reasonable cause for failure to personally sign the certification. Utter disregard of the rules
cannot justly be rationalized by harking on the policy of liberal construction (underscoring
supplied).

To reiterate, administrative bodies like the NLRC are not bound by the technical
niceties of law and procedure and the rules obtaining in courts of law. Indeed, the
Revised Rules of Court and prevailing jurisprudence may be given only stringent
application, i.e., by analogy or in a suppletory character and effect. The submission
[12]
by respondent, citing People v. Sorrel, that an affidavit not testified to in a trial, is
mere hearsay evidence and has no real evidentiary value, cannot find relevance in
the present case considering that a criminal prosecution requires a quantum of
evidence different from that of an administrative proceeding. Under the Rules of the
Commission, the Labor Arbiter is given the discretion to determine the necessity of a
formal trial or hearing. Hence, trial-type hearings are not even required as the cases

In their Ex Parte Motion to Litigate as Pauper Litigants, petitioners made a

request for a fifteen (15)-day extension, i.e., from 24 April 2002 to 8 May 2002, within
which to file their petition for review in view of the absence of a counsel to represent
[16]
them. The records also reveal that it was only on 10 July 2002 that Atty. Arnold
Cacho, through the UST Legal Aid Clinic, made his formal entry of appearance as
counsel for herein petitioners. Clearly, at the time the instant petition was filed on 7
May 2002 petitioners were not yet represented by counsel. Surely, petitioners who
are non-lawyers could not be faulted for the procedural lapse since they could not be
expected to be conversant with the nuances of the law, much less knowledgeable
with the esoteric technicalities of procedure. For this reason alone, the procedural

infirmity in the filing of the present petition may be overlooked and should not be
taken against petitioners.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
is REVERSED and SET ASIDE and the decision of the NLRC dated 30 March 2001
which affirmed in toto the decision of the Labor Arbiter dated 29 May 1998 ordering
respondent Coca-Cola Bottlers Phils., Inc., to reinstate Prudencio Bantolino, Nilo
Espina, Eddie Ladica, Arman Queling, Rolando Nieto, Ricardo Bartolome, Eluver
Garcia, Eduardo Garcia and Nelson Manalastas to their former positions as regular
employees, and to pay them their full back wages, with the exception of Prudencio
Bantolino whose back wages are yet to be computed upon proof of his dismissal, is
REINSTATED, with the MODIFICATION that herein petition is DENIED insofar as it
concerns Nestor Romero who entered into a valid and binding Compromise
Agreement and Release, Waiver and Quitclaim with respondent company.
SO ORDERED.
Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.

Acting on the petition, respondent court required the BOI and petitioner to comment
on Mariwasa's petition and to show cause why no injunction should issue. On
February 17, 1993, respondent court temporarily restrained the BOI from
implementing its decision. This temporary restraining order lapsed by its own terms
on March 9, 1993, twenty (20) days after its issuance, without respondent court
issuing any preliminary injunction.
On February 24, 1993, petitioner filed a "Motion to Dismiss Petition and to Lift
Restraining Order" on the ground that respondent court has no appellate jurisdiction
over BOI Case No. 92-005, the same being exclusively vested with the Supreme
Court pursuant to Article 82 of the Omnibus Investments Code of 1987.
On May 25, 1993, respondent court denied petitioner's motion to dismiss, the
dispositive portion of which reads as follows:
WHEREFORE, private respondent's motion to dismiss the petition
is hereby DENIED, for lack of merit.

G.R. No. 110571 March 10, 1994

FIRST LEPANTO CERAMICS, INC., petitioner,
vs.
THE COURT OF APPEALS and MARIWASA MANUFACTURING,
INC., respondents.
Castillo, Laman, Tan & Pantaleon for petitioner.
De Borja, Medialdea, Ata, Bello, Guevarra & Serapio for private respondent.

NOCON, J.:
Brought to fore in this petition for certiorari and prohibition with application for
preliminary injunction is the novel question of where and in what manner appeals
from decisions of the Board of Investments (BOI) should be filed. A thorough scrutiny
of the conflicting provisions of Batas Pambansa Bilang 129, otherwise known as the
"Judiciary Reorganization Act of 1980," Executive Order No. 226, also known as the
Omnibus Investments Code of 1987 and Supreme Court Circular No. 1-91 is, thus,
called for.
Briefly, this question of law arose when BOI, in its decision dated December 10, 1992
in BOI Case No. 92-005 granted petitioner First Lepanto Ceramics, Inc.'s application
to amend its BOI certificate of registration by changing the scope of its registered
product from "glazed floor tiles" to "ceramic tiles." Eventually, oppositor Mariwasa filed
a motion for reconsideration of the said BOI decision while oppositor Fil-Hispano
Ceramics, Inc. did not move to reconsider the same nor appeal therefrom. Soon
rebuffed in its bid for reconsideration, Mariwasa filed a petition for review with
respondent Court of Appeals pursuant to Circular 1-91.

Private respondent is hereby given an inextendible period of ten

(10) days from receipt hereof within which to file its comment to the
1
petition.
Upon receipt of a copy of the above resolution on June 4, 1993, petitioner decided not
to file any motion for reconsideration as the question involved is essentially legal in
nature and immediately filed a petition for certiorariand prohibition before this Court.
Petitioner posits the view that respondent court acted without or in excess of its
jurisdiction in issuing the questioned resolution of May 25, 1993, for the following
reasons:
I. Respondent court has no jurisdiction to entertain Mariwasa's
appeal from the BOI's decision in BOI Case No. 92-005, which has
become final.
II. The appellate jurisdiction conferred by statute upon this
Honorable Court cannot be amended or superseded by Circular
2
No. 1-91.
Petitioner then concludes that:
III. Mariwasa has lost it right to appeal . . . in this case.

Petitioner argues that the Judiciary Reorganization Act of 1980 or Batas Pambansa
Bilang 129 and Circular 1-91, "Prescribing the Rules Governing Appeals to the Court
of Appeals from a Final Order or Decision of the Court of Tax Appeals and QuasiJudicial Agencies" cannot be the basis of Mariwasa's appeal to respondent court
because the procedure for appeal laid down therein runs contrary to Article 82 of E.O.

226, which provides that appeals from decisions or orders of the BOI shall be filed
directly with this Court, to wit:
Judicial relief. All orders or decisions of the Board
(of Investments) in cases involving the provisions of this Code shall
immediately be executory. No appeal from the order or decision of
the Board by the party adversely affected shall stay such an order
or decision; Provided, that all appeals shall be filed directly with the
Supreme Court within thirty (30) days from receipt of the order or
decision.
On the other hand, Mariwasa maintains that whatever "obvious inconsistency" or
"irreconcilable repugnancy" there may have been between B.P. 129 and Article 82 of
E.O. 226 on the question of venue for appeal has already been resolved by Circular
1-91 of the Supreme Court, which was promulgated on February 27, 1991 or four (4)
years after E.O. 226 was enacted.
Sections 1, 2 and 3 of Circular 1-91, is herein quoted below:
1. Scope. These rules shall apply to appeals from final orders or
decisions of the Court of Tax Appeals. They shall also apply to
appeals from final orders or decisions of any quasi-judicial agency
from which an appeal is now allowed by statute to the Court of
Appeals or the Supreme Court. Among these agencies are the
Securities and Exchange Commission, Land Registration Authority,
Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National
Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Secretary of Agrarian Reform
and Special Agrarian Courts under RA 6657, Government Service
Insurance System, Employees Compensation Commission,
Agricultural Inventions Board, Insurance Commission and
Philippine Atomic Energy Commission.
2. Cases not covered. These rules shall not apply to decisions
and interlocutory orders of the National Labor Relations
Commission or the Secretary of Labor and Employment under the
Labor Code of the Philippines, the Central Board of Assessment
Appeals, and other quasi-judicial agencies from which no appeal to
the courts is prescribed or allowed by statute.
3. Who may appeal and where to appeal. The appeal of a party
affected by a final order, decision, or judgment of the Court of Tax
Appeals or of a quasi-judicial agency shall be taken to the Court of
Appeals within the period and in the manner herein provided,
whether the appeal involves questions of fact or of law or mixed
questions of fact and law. From final judgments or decisions of the
Court of Appeals, the aggrieved party may appeal by certiorari to
the Supreme Court as provided in Rule 45 of the Rules of Court.

It may be called that Section 9(3) of B.P. 129 vests appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards of quasi-judicial agencies on the
Court of Appeals, to wit:
(3) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders, awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions,
except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the provisions of this Act,
and of subparagraph (1) of the third paragraph and subparagraph
(4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
The Intermediate Appellate Court shall have the power to try cases
and conduct hearings, receive evidence and perform any and all
acts necessary to resolve factual issues raised in cases falling
within its original and appellate jurisdiction, including the power to
grant and conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory
orders issued under the Labor Code of the Philippines and by the
Central Board of Assessment Appeals.
Clearly evident in the aforequoted provision of B.P. 129 is the laudable objective of
providing a uniform procedure of appeal from decisions of all quasi-judicial agencies
for the benefit of the bench and the bar. Equally laudable is the twin objective of B.P.
129 of unclogging the docket of this Court to enable it to attend to more important
tasks, which in the words of Dean Vicente G. Sinco, as quoted in our decision
4
in Conde v. Intermediate Appellate Court is "less concerned with the decisions of
cases that begin and end with the transient rights and obligations of particular
individuals but is more intertwined with the direction of national policies, momentous
economic and social problems, the delimitation of governmental authority and its
impact upon fundamental rights.
5

In Development Bank of the Philippines vs. Court of Appeals, this Court noted that
B.P. 129 did not deal only with "changes in the rules on procedures" and that not only
was the Court of Appeals reorganized, but its jurisdiction and powers were also
broadened by Section 9 thereof. Explaining the changes, this Court said:
. . . Its original jurisdiction to issue writs of mandamus,
prohibition, certiorari and habeas corpus, which theretofore could
be exercised only in aid of its appellate jurisdiction, was expanded
by (1) extending it so as to include the writ of quo warranto, and
also (2) empowering it to issue all said extraordinary writs "whether
or not in aid of its appellate jurisdiction." Its appellate jurisdiction
was also extended to cover not only final judgments of Regional
Trial Courts, but also "all final judgments, decisions, resolutions,
orders or awards of . . . quasi-judicial agencies, instrumentalities,
boards or commissions, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the

Constitution, the provisions of this Act, and of sub-paragraph (1) of

the third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948," it being noteworthy in this
connection that the text of the law is broad and comprehensive, and
the explicitly stated exceptions have no reference whatever to the
Court of Tax Appeals. Indeed, the intention to expand the original
and appellate jurisdiction of the Court of Appeals over quasi-judicial
agencies, instrumentalities, boards, or commissions, is further
stressed by the last paragraph of Section 9 which excludes from its
provisions, only the "decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board
6
of Assessment Appeals."
However, it cannot be denied that the lawmaking system of the country is far from
perfect. During the transitional period after the country emerged from the Marcos
regime, the lawmaking power was lodged on the Executive Department. The obvious
lack of deliberation in the drafting of our laws could perhaps explain the deviation of
some of our laws from the goal of uniform procedure which B.P. 129 sought to
promote.

judge who violated Circular No. 7 of this Court dated

September 23, 1974, as amended by Circular No. 3 dated April 24, 1975 and Circular
No. 20 dated October 4, 1979, requiring raffling of cases, this Court quoted the
ratiocination of the Investigating Judge, brushing aside the contention of respondent
judge that assigning cases instead of raffling is a common practice and holding that
respondent could not go against the circular of this Court until it is repealed or
otherwise modified, as "(L)aws are repealed only by subsequent ones, and their
violation or non-observance shall not be excused by disuse, or customs or practice to
10
the contrary."
The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular 1-91
because the former grants a substantive right which, under the Constitution cannot be
modified, diminished or increased by this Court in the exercise of its rule-making
powers is not entirely defensible as it seems. Respondent correctly argued that Article
82 of E.O. 226 grants the right of appeal from decisions or final orders of the BOI and
in granting such right, it also provided where and in what manner such appeal can be
brought. These latter portions simply deal with procedural aspects which this Court
has the power to regulate by virtue of its constitutional rule-making powers.
11

In exempli gratia, Executive Order No. 226 or the Omnibus Investments Code of 1987
provides that all appeals shall be filed directly with the Supreme Court within thirty
(30) days from receipt of the order or decision.
Noteworthy is the fact that presently, the Supreme Court entertains ordinary appeals
only from decisions of the Regional Trial Courts in criminal cases where the penalty
imposed is reclusion perpetua or higher. Judgments of regional trial courts may be
appealed to the Supreme Court only by petition for review on certiorari within fifteen
(15) days from notice of judgment in accordance with Rule 45 of the Rules of Court in
relation to Section 17 of the Judiciary Act of 1948, as amended, this being the clear
intendment of the provision of the Interim Rules that "(a)ppeals to the Supreme Court
shall be taken by petition for certiorari which shall be governed by Rule 45 of the
Rules of Court." Thus, the right of appeal provided in E.O. 226 within thirty (30) days
from receipt of the order or decision is clearly not in consonance with the present
procedure before this Court. Only decisions, orders or rulings of a Constitutional
Commission (Civil Service Commission, Commission on Elections or Commission on
Audit), may be brought to the Supreme Court on original petitions for certiorari under
7
Rule 65 by the aggrieved party within thirty (30) days form receipt of a copy thereof.
Under this contextual backdrop, this Court, pursuant to its Constitutional power under
Section 5(5), Article VIII of the 1987 Constitution to promulgate rules concerning
pleading, practice and procedure in all courts, and by way of implementation of B.P.
129, issued Circular 1-91 prescribing the rules governing appeals to the Court of
Appeals from final orders or decisions of the Court of Tax Appeals and quasi-judicial
agencies to eliminate unnecessary contradictions and confusing rules of procedure.
Contrary to petitioner's contention, although a circular is not strictly a statute or law, it
has, however, the force and effect of law according to settled
8
9
jurisprudence. In Inciong v. de Guia, a circular of this Court was treated as law. In
adopting the recommendation of the Investigating Judge to impose a sanction on a

The case of Bustos v. Lucero distinguished between rights created by a substantive

law and those arising from procedural law:
Substantive law creates substantive rights . . . . Substantive rights
is a term which includes those rights which one enjoys under the
legal system prior to the disturbance of normal relations (60 C.J.,
980). Substantive law is that part of the law which creates, defines
and regulates rights, or which regulates rights and duties which
give rise to a cause of action, as oppossed to adjective or remedial
law, which prescribes the method of enforcing rights or obtains a
12
redress for their invasion.
Indeed, the question of where and in what manner appeals from decisions of the BOI
should be brought pertains only to procedure or the method of enforcing the
substantive right to appeal granted by E.O. 226. In other words, the right to appeal
from decisions or final orders of the BOI under E.O. 226 remains and continues to be
respected. Circular 1-91 simply transferred the venue of appeals from decisions of
this agency to respondent Court of Appeals and provided a different period of appeal,
i.e., fifteen (15) days from notice. It did not make an incursion into the substantive
right to appeal.
The fact that BOI is not expressly included in the list of quasi-judicial agencies found
in the third sentence of Section 1 of Circular 1-91 does not mean that said circular
does not apply to appeals from final orders or decision of the BOI. The second
sentence of Section 1 thereof expressly states that "(T)hey shall also apply to appeals
from final orders or decisions of any quasi-judicial agency from which an appeal is
now allowed by statute to the Court of Appeals or the Supreme Court." E.O. 266 is
one such statute. Besides, the enumeration is preceded by the words "(A)mong these
agencies are . . . ," strongly implying that there are other quasi-judicial agencies which
are covered by the Circular but which have not been expressly listed therein. More
importantly, BOI does not fall within the purview of the exclusions listed in Section 2

of the circular. Only the following final decisions and interlocutory orders are
expressly excluded from the circular, namely, those of: (1) the National Labor
Relations Commission; (2) the Secretary of Labor and Employment; (3) the Central
Board of Assessment Appeals and (4) other quasi-judicial agencies from which no
13
appeal to the courts is prescribed or allowed by statute. Since in DBP v. CA we
upheld the appellate jurisdiction of the Court of Appeals over the Court of Tax
Appeals despite the fact that the same is not among the agencies reorganized by
B.P. 129, on the ground that B.P. 129 is broad and comprehensive, there is no
reason why BOI should be excluded from
Circular 1-91, which is but implementary of said law.
Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226
insofar as the manner and method of enforcing the right to appeal from decisions of
the BOI are concerned. Appeals from decisions of the BOI, which by statute was
previously allowed to be filed directly with the Supreme Court, should now be brought
to the Court of Appeals.
WHEREFORE, in view of the foregoing reasons, the instant petition for certiorari and
prohibition with application for temporary restraining order and preliminary injunction
is hereby DISMISSED for lack of merit. The Temporary Restraining Order issued on
July 19, 1993 is hereby LIFTED.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado and Puno, JJ. concur.
G.R. No. 69871 August 24, 1990
ANITA VILLA, petitioner,
vs.
MANUEL LAZARO, as Presidential Assistant for Legal Affairs, Office of the
President, and the HUMAN SETTLEMENTS REGULATORY
COMMISSION, respondents.
Eliseo P. Vencer II for petitioner.

NARVASA, J.:
On January 18, 1980, Anita Villa was granted a building permit to construct a funeral
1
parlor at Santiago Boulevard in Gen. Santos City. The permit was issued by the City
Engineer after the application was "processed by Engineer Dominador Solana of the
City Engineer's Office, and on the strength of the Certification of Manuel Sales, City
Planning and Development Coordinator that the "project was in consonance with the
Land Use Plan of the City and within the full provision of the Zoning
2
Ordinance". With financing obtained from the Development Bank of the Philippines,
Villa commenced construction of the building.

In October of that same year, as the funeral parlor was nearing completion, a suit for
injunction was brought against Villa by Dr. Jesus Veneracion, the owner of St.
3
Elizabeth Hospital, standing about 132.36 meters from the funeral parlor. The
complaint sought the perpetual enjoinment of the construction because allegedly
4
violative of the Zoning Ordinance of General Santos City. A status quo order was
issued.
After appropriate proceedings and trial, judgment on the merits was rendered on
November 17, 1981, dismissing Veneracion's complaint as well as the counterclaim
pleaded by Villa. The Trial Court found that there was afalsified Zoning Ordinance,
containing a provision governing funeral parlors, which had been submitted to and
ratified by the Ministry of Human Settlements, but that ordinance had never been
passed by the Sangguniang Panlungsod and that the genuine Zoning Ordinance of
General Santos City contained no prohibition whatever relative to such parlors'
5
"distance from hospitals, whether public or private". Villa then resumed construction
6
of her building and completed it.
Veneracion did not appeal from this adverse judgment which therefore became final.
Instead, he brought the matter up with the Human Settlements Regulatory
Commission. He lodged a complaint with that commission praying "that the funeral
parlor be relocated because it was near the St. Elizabeth Hospital and Villa failed to
7
secure the necessary locational clearance". The complaint, as will at once be noted,
is substantially the same as that filed by him with the Court of First Instance and
dismissed after trial. Furthermore, neither he nor the Commission, as will hereafter be
narrated, ever made known this second complaint to Villa until much, much later, after
8
the respondent Commission had rendered several adverse rulings to her.
Two months after the rendition of the judgment against Veneracion, or more precisely
on January 22, 1982, Villa received a telegram dated January 21 from Commissioner
Raymundo R. Dizon of the Human Settlements Regulatory Commission reading as
9
follows:
THE HUMAN SETTLEMENT REGULATORY COMMISSION
REQUEST TRANSMITTAL OF PROOF OF LOCATIONAL
CLEARANCE GRANTED BY THIS OFFICE IMMEDIATELY UPON
RECEIPT OF THIS . . NOT LATER THAN 21ST JANUARY 1982
REGARDING YOUR ON GOING CONSTRUCTION OF A
FUNERAL PARLOR AT SANTIAGO STREET CORNER
NATIONAL HIGHWAY GENERAL SANTOS CITY AN OFFICIAL
COMMUNICATION TO THE EFFECT FOLLOWS.
On the same day, January 22, 1982, Villa sent Dizon a reply telegram reading:
"LOCATIONAL CLEARANCE BASED ON CERTIFICATION OF CITY PLANNING
AND DEVELOPMENT COORDINATOR AND HUMAN SETTLEMENT OFFICER,
10
COPIES MAIL . . ." This she did on January 27,1982; under Registry Receipt No.
11
1227 (Gen. Santos City Post Office), Villa sent to Dizon
1) the certification dated October 24, 1980 of Josefina E. Alaba (Human Settlements
12
Officer, Gen. Santos City) to the following effect:

. . that per scrutiny of the documents presented by Mrs. Anita Villa

on her application for a Funeral Parlor and inspection of lot No.
4997 along Santiago Boulevard where the building is to be
constructed, the undersigned guarantees that the application
passed the criteria of this office for this purpose.
2) and the certification of Manuel O. Sales, City Planning and Development
13
Coordinator, dated December 27, 1979, that:
. . the proposed project (funeral Chapel) of Anita G. Villa, located at
Lot No. 4997 along Santiago Boulevard is in consonance with the
land Use Plan of the City and within the full provision of the Zoning
Ordinance.
On February 8, 1982 Villa received what was evidently the official communication"
referred to in Commissioner Dizon's telegram of January 21, 1982, supra, an "Order
to Present Proof of Locational Clearance" dated January 20, 1982. Knowing this and
"considering also that she . . (had) already sent the (required) locational clearance on
14
January 27, 1982," Villa made no response.
No doubt with no little discomfiture Villa received on June 2, 1982 a "Show Cause"
Order dated April 28,1982, signed by one Ernesto L. Mendiola in behalf of the
Commission, requiring her to show cause why a fine should not be imposed on her or
a cease-and-desist order issued against her for her failure to show proof of locational
15
clearance. The order made no reference whatever to the documents she had
already sent by registered mail as early as January 27, 1982. The following day Villa
16
sent a telegram to Commissioner Dizon reading as follows:
LOCATIONAL CLEARANCE WAS MAILED THRU REGISTERED
MAIL REGISTRY RECEIPT NUMBER 1227 DATED JANUARY 27,
1982, SENDING AGAIN THRU REGISTERED MAIL REGISTRY
RECEIPT NO. 6899 JUNE 3, 1982.
On the same day, she also sent to Commissioner Dizon by registered mail
(Reg Receipt No. 6899), as indicated in her telegram, the same certifications
earlier sent by her also by registered mail (Reg Receipt No. 1227), supra.
If she thought the affair had thus been satisfactorily ended, she was sadly in error, of
which she was very shortly made aware. On July 27, 1982, she received an Order of
Commissioner Dizon dated June 29, 1982 imposing on her a fine of P10,000.00 and
17
requiring her to cease operations until further orders from his office. The order
made no mention of the documents she had transmitted by registered mail on
January 27, 1982 and June 3, 1982, or to her telegrams on the matter. Villa forthwith
went to see the Deputized Zoning Administrator of General Santos City, Isidro M.
Olmedo. The latter issued to her a "CERTIFICATE OF ZONING COMPLIANCE" No.
0087, dated July 28,1982, inter aliaattesting that the land on which Villa's "proposed
commercial building" was located in a vicinity in which the "dominant land uses" were
"commercial/institutional/residential," and the project conformed "WITH THE LAND
18
USE PLAN OF THE CITY." This certificate Villa sent on the same day to

Commissioner Dizon by registered mail (Reg. Receipt No. 1365 [Gen. Santos City
19
P.O.]). It is noteworthy that this Certificate No. 0087 is entirely consistent with the
earlier certification dated November 27, 1979 of City Planning & Development
Coordinator Sales that Villa's funeral chapel was "in consonance with the Land Use
20
Plan of the City and within the full provision of the Zoning Ordinance," supra, and
21
that of Human Settlements Officer Alaba dated October 24, 1980, supra that Villa's
"application for a Funeral Parlor . . passed the criteria of this office for this purpose."
Villa could perhaps be understandably considered justified in believing, at this time,
that the matter had finally been laid to rest.
One can then only imagine her consternation and shock when she was served on
November 16, 1982 with a writ of execution signed by Commissioner Dizon under the
date of October 19, 1982 in implementation of his Order of June 29, 1982, above
mentioned, imposing a fine of P10,000.00 on her. Again, this Order, like the others
issuing from respondent Commission, made no advertence whatever to the
documents Villa had already sent to respondent Commission by registered mail on
January 27, June 29, and July 28, 1982, or her telegrams Be this as it may, she lost
no time in moving for reconsideration, by letter dated November 22, 1982 to which
she attached copies of the documents she had earlier sent to Commissioner
22
Dizon, viz.: her telegram of January 22, 1982, (2) the certification of the City
23
Planning & Development Coordinator (3) the certification of the Human Settlements
24
25
Officer (4) the telegram dated June 3, 1982, and (5) the Certificate of Zoning
26
Compliance dated July 28, 1982. In addition, Villa executed a special power of
attorney on December 10, 1982 authorizing Anastacio Basas to "deliver to the Human
Settlements Regulatory Commission . . all my papers or documents required by the
said Commission as requisites for the issuance to me and/or the Funeraria Villa . .
(of) the locational clearance for the construction of my funeral parlor along Santiago
27
boulevard, General Santos City. . . pursuant to which on December 15, 1982, said
Basas delivered to the Commission (Enforcement Office), thru one Betty
28
29
Jimenez copies of Villa's (1) building plan, (2) building permit, (3) occupancy
30
31
permit, and (4) "the decision of the Court case involving the funeral parlor".
By Order dated January 21, 1983, Commissioner Dizon denied the reconsideration
prayed for by Villa in her letter of November 22, 1982, opining that the plea for
32
reconsideration had been presented out of time, and the order of June 29, 1982
33
had become final and executory.
Villa then filed an appeal with "the Commission Proper, which denied it in an order
dated September 7, 1983, also on account of the finality of the order of the
Commissioner for Enforcement. Her subsequent motion for reconsideration . . (was
34
also) denied in the order of June 7, 1984 . .
Villa then sought to take an appeal to the Office of the President. The matter was
acted on by the Presidential Assistant for Legal Affairs, respondent Manuel M.
Lazaro. In a Resolution dated September 21, 1984, respondent Lazaro denied the
"appeal and (Villa's) motion for extension of time to submit an appeal
35
memorandum". It is noteworthy that Lazaro's resolution, like the orders of
Commissioner Dizon and respondent Commission, contains no reference whatsoever
to the telegrams and documents sent by Villa to the latter on various occasions
evidencing her prompt responses to the orders of Dizon and the Commission, and her

substantial compliance with the general requirement for her to present the requisite
clearances or documents of authority for the erection of her funeral parlor. The very
skimpy narration of facts set out in the resolution limits itself merely to a citation of the
orders of Commissioner Dizon and the Commission; and on that basis, the resolution
simplistically concludes that "no appeal was seasonably taken by Mrs. Anita Villa from
the order of June 29, 1982, of the HSRC . . (and) (a)ccordingly, said order became
final for which reason a writ of execution was issued . . (which) finality was confirmed
in the subsequent orders of HSRC, dated January 21, 1983, and September 7, 1983."
Villa filed a motion for reconsideration dated October 19, 1984, this time through
counsel, contending that the resolution of September 21, 1984 was "not in conformity
36
with the law and the evidence" and deprived her of due process of law. But this,
too, was denied (with finality) by respondent Lazaro, in a Resolution dated December
14, 1984 which again omitted to refer to the several attempts of Villa to comply with
the order of Commissioner Dizon to present the requisite documents of authority
anent her funeral parlor and adverted merely to the orders emanating from Dizon and
37
the respondent Commission.
These facts present a picture of official incompetence of gross negligence and
abdication of duty, if not of active bias and partiality, that is most reprehensible. The
result has been to subvert and put to naught the Judgment rendered in a suit
regularly tried and decided by a court of justice, to deprive one party of rights
confirmed and secured thereby and to accord her adversary, in a different forum, the
relief he had sought and been denied in said case.
There is no question that Dr. Jesus Veneracion had resorted to the proscribed
practice of forum-shopping when, following adverse judgment of the Court of First
Instance in his suit to enjoin the construction of Villa's funeral parlor, he had, instead
of appealing that judgment, lodged a complaint with the respondent Commission on
substantially the same ground litigated in the action. Also undisputed is that while the
respondent Commission took cognizance of the complaint and by telegram required
Villa to submit a locational clearance, said respondent did not then or at any time
before issuance of the order and writ of execution complained of bother to put her on
notice, formally or otherwise, of Veneracion's complaint. It was therefore wholly
natural for Villa to assume, as it is apparent she did, that no formal adversarial inquiry
was underway and that the telegram was what it purported to be on its face: a
routinary request, issued motu proprio, to submit proof of compliance with locational
requirements. And such assumption was doubtless fortified by petitioner's knowledge
that she already had in her favor a judgment on the subject against which her
opponent had taken no recourse by appeal or otherwise.
Neither is there any serious dispute about what transpired thereafter, as already
recounted and, in particular, about the fact that in response to that first and the
subsequent demands sent by Commissioner Dizon, Villa not once but thrice furnished
the Commission by registered mail with copies, variously, of official documents
certifying to her compliance with the pertinent locational, zoning and land use
requirements and plans. None of these documents appears to have made any
impression on Commissioner Dizon, whose show-cause order of April 28, 1982 and
order of June 29, 1982 imposing a P10,000.00 fine on petitioner made no mention of
them whatsoever. Not even Villa's submission of said documents a fourth time to

support her motion for reconsideration of a writ of execution could move

Commissioner Dizon to stop acting as if said documents did not exist at all. True, only
copies had been submitted, but ordinary prudence and fairness dictated at least some
inquiry into their authenticity, and this would not have posed any great difficulty
considering their purportedly official origins.
The mischief done by Commissioner Dizon's baffling failure (or obdurate refusal) even
to acknowledge the existence of the documents furnished by petitioner was
perpetuated by the "Commissioner proper" and respondent Lazaro (Presidential
Assistant on Legal Affairs), who threw out petitioner's appeals with no reference
whatsoever thereto and thereby kept in limbo evidence that would have been
decisive. The Solicitor General's brief Comment of September 3,
38
1985 neither admits nor denies Villa's claim of having submitted the required
documents; it avoids any reference thereto and deals mainly with the question of the
timeliness of her appeal to the respondent Commission and the propriety of the
present petition. From such silence and upon what the record otherwise clearly
shows, the Court remains in no doubt of the verity of said petitioner's claim that she
had more than once submitted those requisite documents.
There was absolutely no excuse for initiating what is held out as an administrative
proceeding against Villa without informing her of the complaint which initiated the
case; for conducting that inquiry in the most informal manner by means only of
communications requiring submission of certain documents, which left the impression
that compliance was all that was expected of her and with which directives she
promptly and religiously complied; assuming that one of the documents thus
successively submitted had been received, but given the fact that on at least two
occasions, their transmission had been preceded by telegrams announcing that they
would follow by mail, for failing to call Villa's attention to their non-receipt or to make
any other attempt to trace their whereabouts; for ruling against Villa on the spurious
premise that she had failed to submit the documents required; and for maintaining to
the very end that pretense of lack of compliance even after being presented with a
fourth set of documents and the decision in the court case upholding her right to
operate her funeral parlor in its questioned location.
Whether born of ineptitude negligence, bias or malice, such lapses are indefensible.
No excuse can be advanced for avoiding all mention or consideration of certifications
issued by respondent Commission's own officials in General Santos City, which
included the very relevant one executed by Human Settlements Officer Josefina E.
Alaba that petitioner's application for a funeral parlor at the questioned location had . .
39
passed the criteria of this office for this purpose. It was thus not even necessary for
petitioner to bring that document to the notice of the Commission which, together with
Commissioner Dizon, was chargeable with knowledge of its own workings and of all
acts done in the performance of duty by its officials and employees. Petitioner is
plainly the victim of either gross ignorance or negligence or abuse of power, or a
combination of both. All of the foregoing translate to a denial of due process against
which the defense of failure to take timely appeal will not avail. Well-esconced in our
jurisprudence is the rule:
. . that administrative proceedings are not exempt from the
operation of certain basic and fundamental procedural principles,

such as the due process requirements in investigations and trials.

And this administrative due process is recognized to include (a) the
right to notice, be it actual or constructive, of the institution of the
proceedings that may affect a person's legal right; (b) reasonable
opportunity to appear and defend his rights, introduce witnesses
and relevant evidence in his favor, (c) a tribunal so constituted as to
give him reasonable assurance of honesty and impartiality, and one
of competent jurisdiction; and (d) a finding or decision by that
tribunal supported by substantial evidence presented at the
hearing, or at least contained in the records or disclosed to the
40
parties affected.
and, it being clear that some, at least, of those essential elements did not
obtain or were not present in the proceedings complained of, any judgment
rendered, or order issued, therein was null and void, could never become
final, and could be attacked in any appropriate proceeding.
The Court finds no merit in the proposition that relief is foreclosed to Villa because her
motion for reconsideration of November 22, 1982 was filed out of time. The very
informal character of the so-called administrative proceedings, an informality for
which Commissioner Dizon himself was responsible and which he never sought to
rectify, militates against imposing strict observance of the limiting periods applicable
to proceedings otherwise properly initiated and regularly conducted. Indeed,
considering the rather "off-the-cuff" manner in which the inquiry was carried out, it is
not even certain that said petitioner is chargeable with tardiness in connection with
any incident thereof. What the record shows is that she invariably responded
promptly, at times within a day or two of receiving them, to orders of communications
sent to her. At any rate, the Court will not permit the result of an administrative
proceeding riddled with the serious defects already pointed out to negate an earlier
judgment on the merits on the same matter regularly rendered by competent court.
WHEREFORE, the petition is GRANTED. The proceedings complained of are
ANNULLED and all orders, writs and resolutions issued in the course thereof,
beginning with the show cause order of June 2, 1982 up to and including the
challenged Resolutions of September 21, 1984 and December 14, 1984 of
respondent Presidential Assistant Manuel Lazaro are VACATED and SET ASIDE, for
having been taken and/or issued in violation of petitioner's right to due process,
without pronouncement as to costs.
SO ORDERED.

Untalan, Trinidad, Razon, Santos & Associate Law Offices for petitioner-appellant.

SARMIENTO, J.:p
Before us is a special civil action for certiorari filed by Ute Paterok the petitioner
1
herein, seeking the annulment of the decision rendered by the public respondent,
the Bureau of Customs, through its Commissioner, the Hon. Salvador N. Mison,
2
approving the order of forfeiture issued by the District Collector of Customs against
the shipment of one (1) unit of Mercedes Benz of the petitioner in favor of the
government.
The antecedent facts are as follows:
In March 1986, the petitioner shipped from Germany to the Philippines two (2)
containers, one with used household goods and the other with two (2) used
automobiles (one Bourgetti and one Mercedes Benz 450 SLC). The first container
was released by the Bureau of Customs and later on, the Bourgetti car, too. The
Mercedes Benz, however, remained under the custody of the said Bureau.
In December 1987, after earnest efforts to secure the release of the said Mercedes
3
Benz, the petitioner received a notice of hearing from the legal officer of the Manila
International Container Port, Bureau of Customs informing the former that seizure
proceedings were being initiated against the said Mercedes Benz for violation of
Batas Pambansa Blg. 73 in relation to Section 2530(F) of the Tariff and Customs
Code of the Philippines (TCCP), as amended, and Central Bank Circular (CBC) 1069.
While the said case was pending, the petitioner received only on April, 1988, a
4
letter informing her that a decision ordering the forfeiture of her Mercedes Benz had
been rendered on December 16, 1986 by the District Collector of Customs. The
petitioner had not been informed that a separate seizure case was filed on the same
Mercedes Benz in question before the said District Collector, an office likewise under
the Bureau of Customs.
The petitioner later found out that on November 13, 1986, a Notice of Hearing set on
December 2, 1986, concerning the said Mercedes Benz, was posted on the bulletin
board of the Bureau of Customs at Port Area, Manila.
5

Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur

G.R. Nos. 90660-61 January 21, 1991
UTE PATEROK, petitioner-appellant,
vs.
BUREAU OF CUSTOMS and HON. SALVADOR N. MISON, respondents-appellees.

The petitioner, thereafter, filed a motion for new trial before the Collector of
6
Customs, Port of Manila, but the latter, in an order dated May 30, 1988, denied the
same, invoking the failure of the former to appear in the said hearing despite the
posting of the notice on the bulletin board.
Moreover, the Collector of Customs contended that a reopening of the case was an
exercise in futility considering that the forfeited property, a Mercedes Benz 450 SLC,
had an engine displacement of more than 2800 cubic centimeters and therefore was
under the category of prohibited importation pursuant to B.P. Blg. 73.

Subsequently, the petitioner filed a petition for review with the Department of
Finance, which petition the latter referred to the public respondent. The petitioner
8
likewise addressed a letter to the Hon. Cancio Garcia, the Assistant Executive
Secretary for Legal Affairs, Office of the President, Malacaang, requesting the
latter's assistance for a speedy resolution of the said petition.
Finally, the public respondent rendered a decision on September 22, 1989 affirming
the previous order of the Collector of Customs for the Forfeiture of the Mercedes
Benz in question in favor of the government.
Hence, this petition for certiorari alleging that:
III-1. THE RESPONDENT-APPELLEE (Bureau of Customs)
ERRED IN THE RULING THAT A NOTICE OF HEARING POSTED
IN [sic] THE BULLETIN BOARD IS SUFFICIENT NOTICE AND
FAILURE OF PETITIONER-APPELLANT TO APPEAR CAUSED
HER DECLARATION IN DEFAULT;
III-2. ERRED IN RULING THAT THEIR OFFICE WAS LEFT WITH
NO ALTERNATIVE BUT TO FORFEIT THE SHIPMENT AS
MANDATED BY BATAS PAMBANSA BLG. 73;
III-3. ERRED IN RULING THAT THE RESPONDENT OF OFFICE
FINDS THE RE-OPENING OF THE CASE AN EXERCISE IN
FUTILITY AND THAT THERE IS NO POINT IN DISTURBING THE
DECISION DECREEING THE FORFEITURE OF THE
9
SHIPMENT.
As regards the first assignment of error, we agree with the petitioner that a notice of
hearing posted on the bulletin board of the public respondent in a forfeiture
proceeding where the owner of the alleged prohibited article is known does not
constitute sufficient compliance with proper service of notice and procedural due
process.
Time and again, the Court has emphasized the imperative necessity for
10
administrative agencies to observe the elementary rules of due process. And no
rule is better established under the due process clause of the Constitution than that
which requires notice and opportunity to be heard before any person can be lawfully
11
deprived of his rights.
In the present case, although there was a notice of hearing posted on the bulletin
board, the said procedure is premised on the ground that the party or owner of the
property in question is unknown. This is clear from the provisions of the TCCP relied
upon by the public respondent, namely, Sections 2304 and 2306, captioned
"Notification of Unknown Owner and "Proceedings in Case of Property Belonging to
Unknown Parties," respectively, wherein the posting of the notice of hearing on the
bulletin board is specifically allowed.

But in the case at bar, the facts evidently show that the petitioner could not have been
unknown. The petitioner had previous transactions with the Bureau of Customs and in
fact, the latter had earlier released the first container consisting of household goods
and the Bourgetti car to the former at her address (as stated in the Bill of Lading).
12
Moreover, there was a similar seizure case that had been instituted by the Manila
International Container Port, docketed as S.I. No. 86-224, covering the same
Mercedes Benz in question and involving the same owner, the petitioner herein.
If only the public respondents had exercised some reasonable diligence to ascertain
from their own records the identity and address of the petitioner as the owner and the
consignee of the property in question, the necessary information could have been
easily obtained which would have assured the sending of the notice of hearing
properly and legally. Then, the petitioner would have been afforded the opportunity to
be heard and to present her defense which is the essence of procedural due process.
But the public respondent regrettably failed to perform such basic duty.
Notwithstanding the procedural infirmity aforementioned, for which the Court
expresses its rebuke, the petition nonetheless can not be granted.
This brings us to the second and third assignments of error raised by the petitioner.
Batas Pambansa Blg. 73, a law intended to promote energy conservation, provides
that:
Sec. 3. Towards the same end and to develop a more dynamic and
effective program for the rational use of energy, the following acts
are hereby prohibited:
(a) The importation, manufacture or assembling of gasolinepowered passenger motor cars with engine displacement of over
2,800 cubic centimeters or Kerbweight exceeding 1,500 kilograms,
13
including accessories.
The petitioner does not dispute the fact that the motor car in question, a Mercedes
Benz 450 SLC, has an engine displacement of over 2,800 cubic centimeters which
clearly falls within the prohibited importation specified in the law aforequoted and as
such, is liable for seizure and forfeiture by the public respondents.
On the other hand, the petitioner claims that the said prohibition involves only "direct"
and not 'indirect" importation as when both the shipper and the consignee are one
and the same person which is the case at bar. Be that as it may, the law is clear and
when it does not make any distinction on the term "importation", we likewise must not
distinguish. "Ubi lex non distinguit nec nos distinguiere debemus."
Finally, the petitioner invokes Sec. 2307 of the TCCP, as amended by Executive
Order No. 38, dated August 6, 1986, which provides an alternative in lieu of the
forfeiture of the property in question, that is, the payment of fine or redemption of the
forfeited property. But the last paragraph of the said section, as amended,
categorically states that:

Redemption of forfeited property shall not be allowed in any case

where the importation is absolutely prohibited or where the
surrender of the property to the person offering to redeem the same
14
would be contrary to law. (Emphasis ours)
Inasmuch as it would be contrary to law, i.e., B.P. Blg. 73, to allow the petitioner to
redeem the Mercedes Benz in question, there is therefore no alternative, as correctly
claimed by the public respondents, but to forfeit the same.
We can not agree with the proposition that the Collector of Customs is authorized to
release the motor vehicle in question to the petitioner which, in effect, would absolve
the latter from any liability.
In the matter of disposing of contrabands, Section 2609(c) of the Tariff and Customs
Code specifically provides that the prerogative of the Collector of Customs is not the
release of the contraband like the Mercedes Benz in question but its sale, which
presupposes a prior custody pursuant to forfeiture and seizure proceedings as in the
case at bar.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,

Gancayco, Bidin, Grino-Aquino, Medialdea and Regalado, JJ., concur.
[G.R. No. 117565. November 18, 1997]
ARSENIO P. LUMIQUED (deceased), Regional Director, DAR CAR,
Represented by his Heirs, Francisca A. Lumiqued, May A. Lumiqued,
Arlene A. Lumiqued and Richard A. Lumiqued, petitioners,
vs. Honorable APOLINIO G. EXEVEA, ERDOLFO V. BALAJADIA and
FELIX T. CABADING, ALL Members of Investigating Committee,
created by DOJ Order No. 145 on May 30, 1992; HON. FRANKLIN M.
DRILON, SECRETARY OF JUSTICE, HON. ANTONIO T. CARPIO, CHIEF
Presidential Legal Adviser/Counsel; and HON. LEONARDO A.
QUISIMBING, Senior Deputy Executive Secretary of the Office of the
President,
and
JEANNETTE
OBAR-ZAMUDIO,
Private
Respondent, respondents.
DECISION
ROMERO, J.:

As thus worded:
Sec. 2609. Disposition of Contraband. Article of prohibited
importation or exportation, known as contraband, shall, in the
absence of special provision, be dealt with as follows:
xxx xxx xxx
(c) Other contraband of commercial value and
capable of legitimate use may be sold under such
restrictions as will insure its use for legitimate
purposes only . . .
There is nothing in the Code that authorizes the Collector to release the contraband in
favor of an importer. The Code, on the other hand, is clear that the thing may be
disposed of by sale alone "under such restrictions as will insure its use for legitimate
purposes." To be sure, the restrictions to be prescribed by the Collector must coincide
with the purpose underlying Batas Blg. 73, that is, to conserve energy. Hence, he can
not allow its use (after sale), in this case a Mercedes Benz with an engine
displacement of more than 2,800 cubic centimeters, that would set at naught that
purpose. He must make sure that the engine is changed before it is allowed to ply
Philippine soil.

Does the due process clause encompass the right to be assisted by

counsel during an administrative inquiry?
Arsenio P. Lumiqued was the Regional Director of the Department of
Agrarian Reform Cordillera Autonomous Region (DAR-CAR) until
President Fidel V. Ramos dismissed him from that position pursuant to
Administrative Order No. 52 dated May 12, 1993. In view of Lumiqueds
death on May 19, 1994, his heirs instituted this petition
for certiorari and mandamus, questioning such order.
The dismissal was the aftermath of three complaints filed by DAR-CAR
Regional Cashier and private respondent Jeannette Obar-Zamudio with the
Board of Discipline of the DAR. The first affidavit-complaint dated November
[1]
16, 1989, charged Lumiqued with malversation through falsification of
official documents. From May to September 1989, Lumiqued allegedly
committed at least 93 counts of falsification by padding gasoline
receipts. He even submitted a vulcanizing shop receipt worth P550.00 for
gasoline bought from the shop, and another receipt for P660.00 for a single
vulcanizing job. With the use of falsified receipts, Lumiqued claimed and
was reimbursed the sum of P44,172.46. Private respondent added that
Lumiqued seldom made field trips and preferred to stay in the office, making
it impossible for him to consume the nearly 120 liters of gasoline he claimed
everyday.
[2]

In all cases, forfeiture is a must.

WHEREFORE, the petition for certiorari is DISMISSED. No costs.
SO ORDERED.

In her second affidavit-complaint dated November 22, 1989, private

respondent accused Lumiqued with violation of Commission on Audit (COA)
rules and regulations, alleging that during the months of April, May, July,
August, September and October, 1989, he made unliquidated cash
advances in the total amount of P116,000.00. Lumiqued purportedly
defrauded the government by deliberately concealing his unliquidated cash
advances through the falsification of accounting entries in order not to reflect

on `Cash advances of other officials under code 8-70-600 of accounting

rules.
[3]

The third affidavit-complaint dated December 15, 1989, charged

Lumiqued with oppression and harassment. According to private
respondent, her two previous complaints prompted Lumiqued to retaliate by
relieving her from her post as Regional Cashier without just cause.
The three affidavit-complaints were referred in due course to the
Department of Justice (DOJ) for appropriate action. On May 20, 1992, Acting
Justice Secretary Eduardo G. Montenegro issued Department Order No. 145
creating a committee to investigate the complaints against Lumiqued. The
order appointed Regional State Prosecutor Apolinario Exevea as committee
chairman with City Prosecutor Erdolfo Balajadia and Provincial Prosecutor
Felix Cabading as members. They were mandated to conduct an
investigation within thirty days from receipt of the order, and to submit their
report and recommendation within fifteen days from its conclusion.
The investigating committee accordingly issued a subpoena directing
Lumiqued to submit his counter-affidavit on or before June 17, 1992.
Lumiqued, however, filed instead an urgent motion to defer submission of
his counter-affidavit pending actual receipt of two of private respondents
complaints. The committee granted the motion and gave him a five-day
extension.
[4]

In his counter-affidavit dated June 23, 1992, Lumiqued alleged, inter

alia, that the cases were filed against him to extort money from innocent
public servants like him, and were initiated by private respondent in
connivance with a certain Benedict Ballug of Tarlac and a certain Benigno
Aquino III. He claimed that the apparent weakness of the charge was
[5]
bolstered by private respondents execution of an affidavit of desistance.
Lumiqued admitted that his average daily gasoline consumption was
108.45 liters. He submitted, however, that such consumption was warranted
as it was the aggregate consumption of the five service vehicles issued
under his name and intended for the use of the Office of the Regional
Director of the DAR. He added that the receipts which were issued beyond
his region were made in the course of his travels to Ifugao Province, the
DAR Central Office in Diliman, Quezon City, and Laguna, where he attended
a seminar. Because these receipts were merely turned over to him by
drivers for reimbursement, it was not his obligation but that of auditors and
accountants to determine whether they were falsified. He affixed his
signature on the receipts only to signify that the same were validly issued by
the establishments concerned in order that official transactions of the DARCAR could be carried out.
Explaining why a vulcanizing shop issued a gasoline receipt, Lumiqued
said that he and his companions were cruising along Santa Fe, Nueva
Vizcaya on their way to Ifugao when their service vehicle ran out of gas.
Since it was almost midnight, they sought the help of the owner of a
vulcanizing shop who readily furnished them with the gasoline they needed.
The vulcanizing shop issued its own receipt so that they could reimburse the
cost of the gasoline. Domingo Lucero, the owner of said vulcanizing shop,
[6]
corroborated this explanation in an affidavit dated June 25, 1990. With

respect to the accusation that he sought reimbursement in the amount

of P660.00 for one vulcanizing job, Lumiqued submitted that the amount was
actually only P6.60. Any error committed in posting the amount in the books
of the Regional Office was not his personal error or accountability.
To refute private respondents allegation that he violated COA rules
and regulations in incurring unliquidated cash advances in the amount
[7]
of P116,000.00, Lumiqued presented a certification of DAR-CAR
Administrative Officer Deogracias F. Almora that he had no outstanding cash
advances on record as of December 31, 1989.
In disputing the charges of oppression and harassment against him,
Lumiqued contended that private respondent was not terminated from the
service but was merely relieved of her duties due to her prolonged
absences. While admitting that private respondent filed the required
applications for leave of absence, Lumiqued claimed that the exigency of the
service necessitated disapproval of her application for leave of absence. He
allegedly rejected her second application for leave of absence in view of her
failure to file the same immediately with the head office or upon her return to
work. He also asserted that no medical certificate supported her application
for leave of absence.
In the same counter-affidavit, Lumiqued also claimed that private
respondent was corrupt and dishonest because a COA examination
revealed that her cash accountabilities from June 22 to November 23, 1989,
were short by P30,406.87. Although private respondent immediately
returned the amount on January 18, 1990, the day following the completion
of the cash examination, Lumiqued claimed that she should be relieved from
her duties and assigned to jobs that would not require handling of cash and
money matters.
Committee hearings on the complaints were conducted on July 3 and
10, 1992, but Lumiqued was not assisted by counsel. On the second
hearing date, he moved for its resetting to July 17, 1992, to enable him to
employ the services of counsel. The committee granted the motion, but
neither Lumiqued nor his counsel appeared on the date he himself had
chosen, so the committee deemed the case submitted for resolution.
On August 12, 1992, Lumiqued filed an urgent motion for additional
[8]
hearing, alleging that he suffered a stroke on July 10, 1992. The motion
was forwarded to the Office of the State Prosecutor apparently because the
investigation had already been terminated. In an order dated September 7,
[9]
1992, State Prosecutor Zoila C. Montero denied the motion, viz:
The medical certificate given show(s) that respondent was discharged from the Sacred Heart
Hospital on July 17, 1992, the date of the hearing, which date was upon the request of
respondent (Lumiqued). The records do not disclose that respondent advised the Investigating
committee of his confinement and inability to attend despite his discharge, either by himself or
thru counsel. The records likewise do not show that efforts were exerted to notify the
Committee of respondents condition on any reasonable date after July 17, 1992. It is herein
noted that as early as June 23, 1992, respondent was already being assisted by counsel.

Moreover an evaluation of the counter-affidavit submitted reveal(s) the sufficiency,

completeness and thoroughness of the counter-affidavit together with the documentary
evidence annexed thereto, such that a judicious determination of the case based on the
pleadings submitted is already possible.
Moreover, considering that the complaint-affidavit was filed as far back as November 16,
1989 yet, justice can not be delayed much longer.
Following the conclusion of the hearings, the investigating committee
[10]
rendered a report dated July 31, 1992, finding Lumiqued liable for all the
charges against him. It made the following findings:
After a thorough evaluation of the evidences (sic) submitted by the parties, this committee
finds the evidence submitted by the complainant sufficient to establish the guilt of the
respondent for Gross Dishonesty and Grave Misconduct.
That most of the gasoline receipts used by the respondent in claiming for the reimbursement of
his gasoline expenses were falsified is clearly established by the 15 Certified Xerox Copies of
the duplicate receipts (Annexes G-1 to G-15) and the certifications issued by the different
gasoline stations where the respondent purchased gasoline. Annexes `G-1 to `G-15 show that
the actual average purchase made by the respondent is about 8.46 liters only at a purchase
price of P50.00, in contrast to the receipts used by the respondent which reflects an average of
108.45 liters at a purchase price of P550.00. Here, the greed of the respondent is made
manifest by his act of claiming reimbursements of more than 10 times the value of what he
actually spends. While only 15 of the gasoline receipts were ascertained to have been falsified,
the motive, the pattern and the scheme employed by the respondent in defrauding the
government has, nevertheless, been established.
That the gasoline receipts have been falsified was not rebutted by the respondent. In fact, he
had in effect admitted that he had been claiming for the payment of an average consumption of
108.45 liters/day by justifying that this was being used by the 4 vehicles issued to his office.
Besides he also admitted having signed the receipts.
Respondents act in defrauding the government of a considerable sum of money by falsifying
receipts constitutes not only Dishonesty of a high degree but also a criminal offense for
Malversation through Falsification of Official Documents.
This committee likewise finds that the respondent have (sic) unliquidated cash advances in the
year 1989 which is in violation of established office and auditing rules. His cash advances
totalling to aboutP116,000.00 were properly documented. The requests for obligation of
allotments and the vouchers covering the amounts were all signed by him. The mere
certification issued by the Administrative Officer of the DAR-CAR cannot therefore rebut
these concrete evidences (sic).
On the third complaint, this committee likewise believes that the respondents act in relieving
the complainant of her functions as a Regional Cashier on December 1, 1989 was an act of
harassment. It is noted that this was done barely two weeks after the complainant filed charges
against her (sic). The recommendation of Jose G. Medina of the Commission on Audit came
only on May 11, 1990 or almost six months after the respondents order relieving the

complainant was issued. His act in harassing a subordinate employee in retaliation to a

complaint she filed constitute(s) Gross Misconduct on the part of the respondent who is a head
of office.
The affidavits of Joseph In-uyay and Josefina Guting are of no help to the respondent. In fact,
this only show(s) that he is capable of giving bribes if only to have the cases against him
dismissed. He could not have given a certain Benigno Aquino III the sum of P10,000.00 for
any other purpose.
Accordingly, the investigating committee recommended Lumiqueds
dismissal or removal from office, without prejudice to the filing of the
appropriate criminal charges against him.
Acting on the report and recommendation, former Justice Secretary
Franklin M. Drilon adopted the same in his Memorandum to President Fidel
V. Ramos dated October 22, 1992. He added that the filing of the affidavit of
[11]
desistance would not prevent the issuance of a resolution on the matter
considering that what was at stake was not only the violation of
complainants (herein private respondents) personal rights but also the
competence and fitness of the respondent (Lumiqued) to remain in public
office. He opined that, in fact, the evidence on record could call for a
punitive action against the respondent on the initiative of the DAR.
On December 17, 1992, Lumiqued filed a motion for reconsideration of
[12]
the findings of the Committee with the DOJ. Undersecretary Ramon S.
[13]
Esguerra indorsed the motion to the investigating committee. In a letter
dated April 1, 1993, the three-member investigating committee informed
Undersecretary Esguerra that the committee had no more authority to act
on the same (motion for reconsideration) considering that the matter has
already been forwarded to the Office of the President and that their
authority under Department Order No. 145 ceased when they transmitted
[14]
their report to the DOJ. Concurring with this view, Undersecretary
Esguerra informed Lumiqued that the investigating committee could no
longer act on his motion for reconsideration. He added that the motion was
also prematurely filed because the Office of the President (OP) had yet to
[15]
act on Secretary Drilons recommendation.
On May 12, 1993, President Fidel V. Ramos himself issued
[16]
Administrative Order No. 52 (A.O. No. 52), finding Lumiqued
administratively liable for dishonesty in the alteration of fifteen gasoline
receipts, and dismissing him from the service, with forfeiture of his retirement
and other benefits. Thus:
That the receipts were merely turned over to him by his drivers and that the auditor and
accountant of the DAR-CAR should be the ones to be held liable is untenable. The receipts in
question were signed by respondent for the purpose of attesting that those receipts were
validly issued by the commercial establishments and were properly disbursed and used in the
official business for which it was intended.
This Office is not about to shift the blame for all these to the drivers employed by the DARCAR as respondent would want us to do.

The OP, however, found that the charges of oppression and

harassment, as well as that of incurring unliquidated cash advances, were
not satisfactorily established.
[17]

In a petition for appeal addressed to President Ramos, Lumiqued

prayed that A.O. No. 52 be reconsidered and that he be reinstated to his
former position with all the benefits accorded to him by law and existing
rules and regulations. This petition was basically premised on the affidavit
dated May 27, 1993, of a certain Dwight L. Lumiqued, a former driver of the
DAR-CAR, who confessed to having authored the falsification of gasoline
receipts and attested to petitioner Lumiqueds being an honest man who
had no premonition that the receipts he (Dwight) turned over to him were
[18]
altered.
Treating the petition for appeal as a motion for the reconsideration of
A.O. No. 52, the OP, through Senior Deputy Executive Secretary Leonardo
A. Quisumbing, denied the same on August 31, 1993.
Undaunted, Lumiqued filed a second motion for reconsideration,
alleging, among other things, that he was denied the constitutional right to
[19]
[20]
counsel during the hearing. On May 19, 1994, however, before his
motion could be resolved, Lumiqued died. On September 28,
[21]
1994, Secretary Quisumbing denied the second motion for
reconsideration for lack of merit.
Hence, the instant petition for certiorari and mandamus praying for the
reversal of the Report and Recommendation of the Investigating Committee,
the October 22, 1992, Memorandum of then Justice Secretary Drilon, A.O.
No. 52 issued by President Ramos, and the orders of Secretary Quisumbing.
In a nutshell, it prays for the payment of retirement benefits and other
benefits accorded to deceased Arsenio Lumiqued by law, payable to his
heirs; and the backwages from the period he was dismissed from service up
[22]
to the time of his death on May 19, 1994.
Petitioners fault the investigating committee for its failure to inform
Lumiqued of his right to counsel during the hearing. They maintain that his
right to counsel could not be waived unless the waiver was in writing and in
the presence of counsel. They assert that the committee should have
suspended the hearing and granted Lumiqued a reasonable time within
which to secure a counsel of his own. If suspension was not possible, the
committee should have appointed a counsel de oficio to assist him.
These arguments are untenable and misplaced. The right to counsel,
which cannot be waived unless the waiver is in writing and in the presence
of counsel, is a right afforded a suspect or an accused during custodial
[23]
investigation.
It is not an absolute right and may, thus, be invoked or
rejected in a criminal proceeding and, with more reason, in an administrative
inquiry. In the case at bar, petitioners invoke the right of an accused in
criminal proceedings to have competent and independent counsel of his own
choice. Lumiqued, however, was not accused of any crime in the
proceedings below. The investigation conducted by the committee created
by Department Order No. 145 was for the purpose of determining if he could
be held administratively liable under the law for the complaints filed against

him. The order issued by Acting Secretary of Justice Montenegro states

thus:
In the interest of the public service and pursuant to the provisions of existing laws, a
Committee to conduct the formal investigation of the administrative complaint for oppression,
dishonesty, disgraceful and immoral conduct, being notoriously undesirable and conduct
prejudicial to the best interest of the service against Mr. ARSENIO P. LUMIQUED, Regional
Director, Department of Agrarian Reform, Cordillera Autonomous Region, is hereby created x
x x.[24]
As such, the hearing conducted by the investigating committee was not
part of a criminal prosecution. This was even made more pronounced when,
after finding Lumiqued administratively liable, it hinted at the filing of criminal
case for malversation through falsification of public documents in its report
and recommendation.
Petitioners
misconception
on
the
nature
of
the
[25]
investigation
conducted against Lumiqued appears to have been
engendered by the fact that the DOJ conducted it. While it is true that under
the Administrative Code of 1987, the DOJ shall administer the criminal
justice system in accordance with the accepted processes thereof consisting
in the investigation of the crimes, prosecution of offenders and
[26]
administration of the correctional system, conducting criminal
investigations is not its sole function. By its power to perform such other
[27]
functions as may be provided by law,
prosecutors may be called upon to
conduct administrative investigations. Accordingly, the investigating
committee created by Department Order No. 145 was duty-bound to conduct
the administrative investigation in accordance with the rules therefor.
While investigations conducted by an administrative body may at times
be akin to a criminal proceeding, the fact remains that under existing laws, a
party in an administrative inquiry may or may not be assisted by
counsel, irrespective of the nature of the charges and of the respondents
capacity to represent himself and no duty rests on such a body to furnish the
[28]
person being investigated with counsel. In an administrative proceeding
such as the one that transpired below, a respondent (such as Lumiqued) has
the option of engaging the services of counsel or not. This is clear from the
[29]
provisions of Section 32, Article VII of Republic Act No. 2260 (otherwise
known as the Civil Service Act) and Section 39, paragraph 2, Rule XIV (on
discipline) of the Omnibus Rules Implementing Book V of Executive Order
[30]
No. 292 (otherwise known as the Administrative Code of 1987). Excerpts
from the transcript of stenographic notes of the hearings attended by
[31]
Lumiqued clearly show that he was confident of his capacity and so opted
to represent himself. Thus, the right to counsel is not imperative in
administrative investigations because such inquiries are conducted merely to
determine whether there are facts that merit disciplinary measures against
erring public officers and employees, with the purpose of maintaining the
dignity of government service.
Furthermore, petitioners reliance on Resolution No. 94-0521 of the
Civil Service Commission on the Uniform Procedure in the Conduct of
Administrative Investigation stating that a respondent in an administrative

complaint must be informed of his right to the assistance of a counsel of his

[32]
choice, is inappropriate. In the first place, this resolution is applicable
[33]
only to cases brought before the Civil Service Commission. Secondly, said
resolution, which is dated January 25, 1994, took effect fifteen days following
[34]
its publication in a newspaper of general circulation, much later than the
July 1992 hearings of the investigating committee created by Department
Order No. 145. Thirdly, the same committee was not remiss in the matter of
reminding Lumiqued of his right to counsel. Thus at the July 3, 1992,
hearing, Lumiqued was repeatedly appraised of his option to secure services
of counsel:
RSP EXEVEA:
This is an administrative case against Director Lumiqued. Director
Lumiqued is present. The complainant is present, Janet
Obar-Zamudio. Complainant has just been furnished with a
copy of the counter-affidavit of the respondent. Do you have
a counsel, Director?
DIR. LUMIQUED:
I did not bring anybody, Sir, because when I went to see him,
he told me, Sir, that he has already set a hearing, morning
and afternoon today.
RSP EXEVEA:
So, we will proceed with the hearing even without your
counsel? You are willing to proceed with the hearing even
without your counsel?
DIR. LUMIQUED:
Yes, I am confident . . .

You are confident that you will be able to represent yourself?

[35]

(Underscoring supplied)

In the course of private respondents damaging testimony, the

investigating committee once again reminded Lumiqued of his need for a
counsel. Thus:
CP BALAJADIA:
Q. (To Director Lumiqued) You really wish to go through with
this even without your counsel?

A. I think so, Sir.

CP BALAJADIA:

CP BALAJADIA:
We will suspend in the meantime that we are waiting for the
supplemental affidavit you are going to present to us. Do you
have any request from the panel of investigators, Director
Lumiqued?
DIRECTOR LUMIQUED:
I was not able to bring a lawyer since the lawyer I requested
to assist me and was the one who prepared my counteraffidavit is already engaged for a hearing and according to
him he is engaged for the whole month of July.
RSP EXEVEA:
We cannot wait . . .
CP BALAJADIA:
Why dont you engage the services of another counsel. The
charges against you are quite serious. We are not saying you
are guilty already. We are just apprehensive that you will go
through this investigation without a counsel. We would like
you to be protected legally in the course of this investigation.
Why dont you get the services of another counsel. There are
plenty here in Baguio...

I will try to see, Sir . . .

CP BALAJADIA:

DIR. LUMIQUED:

DIRECTOR LUMIQUED:

Thereafter, the following colloquies transpired:

DIRECTOR LUMIQUED:

CP BALAJADIA:

That is my concern.

Let us make it of record that we have been warning you to

proceed with the assistance of counsel but you said that you
can take care of yourself so we have no other alternative but
[36]
to proceed. (Underscoring supplied)

Please select your date now, we are only given one month to
finish the investigation, Director Lumiqued.
RSP EXEVEA:
We will not entertain any postponement. With or without
counsel, we will proceed.
CP BALAJADIA:
Madam Witness, will you please submit the document which
we asked for and Director Lumiqued, if you have other
witnesses, please bring them but reduce their testimonies in
affidavit form so that we can expedite with the
[37]
proceedings.

At the hearing scheduled for July 10, 1992, Lumiqued still did not avail
of the services of counsel. Pertinent excerpts from said hearing follow:
FISCAL BALAJADIA:
I notice also Mr. Chairman that the respondent is not being
represented by a counsel. The last time he was asked to
invite his lawyer in this investigation. May we know if he has a
lawyer to represent him in this investigation?
DIR. LUMIQUED:
There is none Sir because when I went to my lawyer, he told
me that he had set a case also at 9:30 in the other court and
he told me if there is a possibility of having this case
postponed anytime next week, probably Wednesday so we
will have good time (sic) of presenting the affidavit.
FISCAL BALAJADIA:
Are you moving for a postponement Director? May I throw this
to the panel. The charges in this case are quite serious and
he should be given a chance to the assistance of a
counsel/lawyer.
RSP EXEVEA:
And is (sic) appearing that the supplemental-affidavit has
been furnished him only now and this has several documents
attached to it so I think we could grant him one last
postponement considering that he has already asked for an
extension.
DIR. LUMIQUED:
Furthermore Sir, I am now being bothered by my heart
[38]
ailment.
The hearing was reset to July 17, 1992, the date when Lumiqued was
released from the hospital. Prior to said date, however, Lumiqued did not
inform the committee of his confinement. Consequently, because the
hearing could not push through on said date, and Lumiqued had already
submitted his counter-affidavit, the committee decided to wind up the
proceedings. This did not mean, however, that Lumiqued was short-changed
in his right to due process.
Lumiqued, a Regional Director of a major department in the executive
branch of the government, graduated from the University of the Philippines
(Los Baos) with the degree of Bachelor of Science major in Agriculture,
was a recipient of various scholarships and grants, and underwent training
[39]
seminars both here and abroad. Hence, he could have defended himself if
need be, without the help of counsel, if truth were on his side. This,
apparently, was the thought he entertained during the hearings he was able
to attend. In his statement, That is my concern, one could detect that it
had been uttered testily, if not exasperatedly, because of the doubt or

skepticism implicit in the question, You are confident that you will be able to
represent yourself? despite his having positively asserted earlier, Yes, I am
confident. He was obviously convinced that he could ably represent
himself. Beyond repeatedly reminding him that he could avail himself of
counsel and as often receiving the reply that he is confident of his ability to
defend himself, the investigating committee could not do more. One can
lead a horse to water but cannot make him drink.
The right to counsel is not indispensable to due process unless
[40]
required by the Constitution or the law. In Nera v. Auditor General, the
Court said:
x x x. There is nothing in the Constitution that says that a party in a non-criminal proceeding
is entitled to be represented by counsel and that, without such representation, he shall not be
bound by such proceedings. The assistance of lawyers, while desirable, is not indispensable.
The legal profession was not engrafted in the due process clause such that without the
participation of its members, the safeguard is deemed ignored or violated. The ordinary citizen
is not that helpless that he cannot validly act at all except only with a lawyer at his side.
In administrative proceedings, the essence of due process is simply the
opportunity to explain ones side. One may be heard, not solely by verbal
presentation but also, and perhaps even much more creditably as it is more
[41]
practicable than oral arguments, through pleadings. An actual hearing is
[42]
not always an indispensable aspect of due process. As long as a party
was given the opportunity to defend his interests in due course, he cannot
be said to have been denied due process of law, for this opportunity to be
[43]
heard is the very essence of due process. Moreover, this constitutional
mandate is deemed satisfied if a person is granted an opportunity to seek
[44]
reconsideration of the action or ruling complained of. Lumiqueds appeal
and his subsequent filing of motions for reconsideration cured whatever
[45]
irregularity attended the proceedings conducted by the committee.
The constitutional provision on due process safeguards life, liberty and
[46]
property. In the early case of Cornejo v. Gabriel and Provincial Board of
[47]
Rizal
the Court held that a public office is not property within the sense of
the constitutional guarantee of due process of law for it is a public trust or
agency. This jurisprudential pronoucement has been enshrined in the 1987
Constitution under Article XI, Section 1 on accountability of public officers, as
follows:
Section 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives.
When the dispute concerns ones constitutional right to security of
tenure, however, public office is deemed analogous to property in a limited
sense; hence, the right to due process could rightfully be invoked.
Nonetheless, the right to security of tenure is not absolute. Of equal weight
is the countervailing mandate of the Constitution that all public officers and
employees must serve with responsibility, integrity, loyalty and

[48]

efficiency. In this case, it has been clearly shown that Lumiqued did not
live up to this constitutional precept.
The committees findings pinning culpability for the charges of
dishonesty and grave misconduct upon Lumiqued were not, as shown
above, fraught with procedural mischief. Its conclusions were founded on
the evidence presented and evaluated as facts. Well-settled in our
jurisdiction is the doctrine that findings of fact of administrative agencies
must be respected as long as they are supported by substantial evidence,
[49]
even if such evidence is not overwhelming or preponderant. The quantum
of proof necessary for a finding of guilt in administrative cases is only
substantial evidence or such relevant evidence as a reasonable mind might
[50]
accept as adequate to support a conclusion.
Consequently, the adoption by Secretary Drilon and the OP of the
committees recommendation of dismissal may not in any way be deemed
tainted with arbitrariness amounting to grave abuse of discretion.
Government officials are presumed to perform their functions with regularity.
[51]
Strong evidence is not necessary to rebut that presumption, which
petitioners have not successfully disputed in the instant case.
Dishonesty is a grave offense penalized by dismissal under Section 23
of Rule XIV of the Omnibus Rules Implementing Book V of the
Administrative Code of 1987. Under Section 9 of the same Rule, the
penalty of dismissal carries with it cancellation of eligibility, forfeiture of
leave credits and retirement benefits, and the disqualification for
reemployment in the government service. The instant petition, which is
aimed primarily at the payment of retirement benefits and other benefits
plus backwages from the time of Lumiqueds dismissal until his demise,
must, therefore, fail.
WHEREFORE, the instant petition for certiorari and mandamus is
hereby DISMISSED and Administrative Order No. 52 of the Office of the
President is AFFIRMED. Costs against petitioners.
SO ORDERED.

[G.R. No. 143964. July 26, 2004]

GLOBE

TELECOM,
INC., petitioner,
vs. THE
NATIONAL
TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A.
SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and
NESTOR
DACANAY,
and
SMART
COMMUNICATIONS,
INC.
respondents.
DECISION

TINGA, J.:

Telecommunications services are affected by a high degree of public

[1]
interest. Telephone companies have historically been regulated as common
[2]
carriers, and indeed, the 1936 Public Service Act has classified wire or wireless
[3]
communications systems as a public service, along with other common carriers.
Yet with the advent of rapid technological changes affecting the
telecommunications industry, there has been a marked reevaluation of the traditional
paradigm governing state regulation over telecommunications. For example, the
United States Federal Communications Commission has chosen not to impose strict
common regulations on incumbent cellular providers, choosing instead to let go of the
[4]
reins and rely on market forces to govern pricing and service terms.
In the Philippines, a similar paradigm shift can be discerned with the passage of
the Public Telecommunications Act of 1995 (PTA). As noted by one of the laws
principal authors, Sen. John Osmea, under prior laws, the government regulated the
entry of pricing and operation of all public telecommunications entities. The new law
proposed to dismantle gradually the barriers to entry, replace government control on
price and income with market instruments, and shift the focus of governments
intervention
towards
ensuring
service
standards
and
protection
of
[5]
customers. Towards this goal, Article II, Section 8 of the PTA sets forth the
regulatory logic, mandating that a healthy competitive environment shall be fostered,
one in which telecommunications carriers are free to make business decisions and to
interact with one another in providing telecommunications services, with the end in
[6]
view of encouraging their financial viability while maintaining affordable rates. The
statute itself defines the role of the government to promote a fair, efficient and
responsive market to stimulate growth and development of the telecommunications
[7]
facilities and services.
The present petition dramatizes to a degree the clash of philosophies between
traditional notions of regulation and the au corant trend to deregulation. Appropriately,
it involves the most ubiquitous feature of the mobile phone, Short Messaging Service
[8]
(SMS) or text messaging, which has been transformed from a mere technological
fad into a vital means of communication. And propitiously, the case allows the Court
to evaluate the role of the National Telecommunications Commission (NTC) in this
day and age.
The NTC is at the forefront of the government response to the avalanche of
inventions and innovations in the dynamic telecommunications field. Every regulatory
action it undertakes is of keen interest not only to industry analysts and players but to
the public at large. The intensive scrutiny is understandable given the high financial
stakes involved and the inexorable impact on consumers. And its rulings are
traditionally accorded respect even by the courts, owing traditional deference to
administrative agencies equipped with special knowledge, experience and capability
[9]
to hear and determine promptly disputes on technical matters.
At the same time, judicial review of actions of administrative agencies is
essential, as a check on the unique powers vested unto these
[10]
instrumentalities. Review is available to reverse the findings of the specialized
administrative agency if the record before the Court clearly precludes the agencys
decision from being justified by a fair estimate of the worth of the testimony of
witnesses or its informed judgment on matters within its special competence, or
[11]
both. Review may also be warranted to ensure that the NTC or similarly

empowered agencies act within the confines of their legal mandate and conform to
[12]
the demands of due process and equal protection.

Antecedent Facts
Globe and private respondent Smart Communications, Inc. (Smart) are both
[13]
grantees of valid and subsisting legislative franchises, authorizing them, among
others, to operate aCellular Mobile Telephone System (CMTS), utilizing the Global
[14]
System for Mobile Communication (GSM) technology. Among the inherent
services
supported
by
the
GSM
network
is
the Short
Message
[15]
Services (SMS), also known colloquially as texting, which has attained immense
popularity in the Philippines as a mode of electronic communication.
[16]

On 4 June 1999, Smart filed a Complaint with public respondent NTC, praying
that NTC order the immediate interconnection of Smarts and Globes GSM networks,
particularly their respective SMS or texting services. The Complaint arose from the
inability of the two leading CMTS providers to effect interconnection. Smart alleged
that Globe, with evident bad faith and malice, refused to grant Smarts request for the
[17]
interconnection of SMS.
On 7 June 1999, NTC issued a Show Cause Order, informing Globe of
the Complaint, specifically the allegations therein that, among othersdespite formal
request made by Smart to Globe for the interconnection of their respective SMS or
text messaging services, Globe, with evident bad faith, malice and to the prejudice of
Smart and Globe and the public in general, refused to grant Smarts request for the
interconnection of their respective SMS or text messaging services, in violation of the
mandate of Republic Act 7925, Executive Order No. 39, and their respective
[18]
implementing rules and regulations.
Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing
grounds that the Complaint was premature, Smarts failure to comply with the
conditions precedent required in Section 6 of NTC Memorandum Circular 9-7[19]
93, and its omission of the mandatory Certification of Non-Forum
[20]
Shopping. Smart responded that it had already submitted the voluminous
documents asked by Globe in connection with other interconnection agreements
between the two carriers, and that with those voluminous documents the
interconnection of the SMS systems could be expedited by merely amending the
[21]
parties existing CMTS-to-CMTS interconnection agreements.
On 19 July 1999, NTC issued the Order now subject of the present petition. In
the Order, after noting that both Smart and Globe were equally blameworthy for their
lack of cooperation in the submission of the documentation required for
interconnection and for having unduly maneuvered the situation into the present
[22]
impasse, NTC held that since SMS falls squarely within the definition of valueadded service or enhanced-service given in NTC Memorandum Circular No. 8-995 (MC No. 8-9-95) the implementation of SMS interconnection is mandatory
[23]
pursuant to Executive Order (E.O.) No. 59.
The NTC also declared that both Smart and Globe have been providing SMS
without authority from it, in violation of Section 420 (f) of MC No. 8-9-95 which

requires PTEs intending to provide value-added services (VAS) to secure prior

approval from NTC through an administrative process. Yet, in view of what it noted
as the peculiar circumstances of the case, NTC refrained from issuing a Show
Cause Order with a Cease and Desist Order, and instead directed the parties to
secure the requisite authority to provide SMS within thirty (30) days, subject to the
payment of fine in the amount of two hundred pesos (P200.00) from the date of
[24]
violation and for every day during which such violation continues.
Globe filed with the Court of Appeals a Petition for Certiorari and
[25]
Prohibition to nullify and set aside the Order and to prohibit NTC from taking any
further action in the case. It reiterated its previous arguments that the complaint
should have been dismissed for failure to comply with conditions precedent and the
non-forum shopping rule. It also claimed that NTC acted without jurisdiction in
declaring that it had no authority to render SMS, pointing out that the matter was not
raised as an issue before it at all. Finally, Globe alleged that the Order is a patent
nullity as it imposed an administrative penalty for an offense for which neither it nor
Smart was sufficiently charged nor heard on in violation of their right to due
[26]
process.
The Court of Appeals issued a Temporary Restraining Order on 31 August
1999.
In its Memorandum, Globe also called the attention of the appellate court to the
earlier decision of NTC pertaining to the application of Isla Communications Co., Inc.
(Islacom) to provide SMS, allegedly holding that SMS is a deregulated special
feature of the telephone network and therefore does not require the prior approval of
[27]
NTC. Globe alleged that its departure from its ruling in the Islacom case constitutes
a denial of equal protection of the law.
[28]

On 22 November 1999, a Decision was promulgated by the Former Special

[29]
Fifth Division of the Court of Appeals affirming in toto the NTC Order. Interestingly,
on the same day Globe and Smart voluntarily agreed to interconnect their respective
[30]
SMS systems, and the interconnection was effected at midnight of that day.
Yet, on 21 December 1999, Globe filed a Motion for Partial
[31]
Reconsideration, seeking to reconsider only the portion of the Decision that upheld
NTCs finding that Globe lacked the authority to provide SMS and its imposition of a
fine. Both Smart and NTC filed their respective comments, stressing therein that
[32]
Globe indeed lacked the authority to provide SMS. In reply, Globe asserted that the
more salient issue was whether NTC complied with its own Rules of Practice and
Procedure before making the finding of want of authority and imposing the
fine. Globe also reiterated that it has been legally operating its SMS system since
1994 and that SMS being a deregulated special feature of the telephone network it
may operate SMS without prior approval of NTC.
After
the
Court
of
Appeals
denied
the Motion
[33]
Reconsideration, Globe elevated the controversy to this Court.

for

Partial

Globe contends that the Court of Appeals erred in holding that the NTC has the
[34]
power under Section 17 of the Public Service Law to subject Globe to an
administrative sanction and a fine without prior notice and hearing in violation of the
due process requirements; that specifically due process was denied Globe because
the hearings actually conducted dwelt on different issues; and, the appellate court
erred in holding that any possible violation of due process committed by NTC was

cured by the fact that NTC refrained from issuing a Show Cause Order with a Cease
and Desist Order, directing instead the parties to secure the requisite authority within
thirty days. Globe also contends that in treating it differently from other carriers
providing SMS the Court of Appeals denied it equal protection of the law.
The case was called for oral argument on 22 March 2004. Significantly, Smart
has deviated from its original position. It no longer prays that the Court affirm the
assailed Decision andOrder, and the twin rulings therein that SMS is VAS and that
Globe was required to secure prior authority before offering SMS. Instead, Smart now
argues that SMS is not VAS and that NTC may not legally require either Smart or
Globe to secure prior approval before providing SMS. Smart has also chosen not to
[35]
make any submission on Globes claim of due process violations.
As presented during the oral arguments, the central issues are: (1) whether NTC
may legally require Globe to secure NTC approval before it continues providing SMS;
(2) whether SMS is a VAS under the PTA, or special feature under NTC MC No. 1411-97; and (3) whether NTC acted with due process in levying the fine against
[36]
Globe. Another issue is also raised whether Globe should have first filed a motion
for reconsideration before the NTC, but this relatively minor question can be resolved
in brief.

Necessity of Filing Motion for Reconsideration

Globe deliberately did not file a motion for reconsideration with the NTC before
elevating the matter to the Court of Appeals via a petition for certiorari. Generally, a
[37]
motion for reconsideration is a prerequisite for the filing of a petition for certiorari. In
opting not to file the motion for reconsideration, Globe asserted before the Court of
[38]
Appeals that the case fell within the exceptions to the general rule. The appellate
[39]
court in the questioned Decision cited the purported procedural defect, yet chose
anyway to rule on the merits as well.
Globes election to elevate the case directly to the Court of Appeals, skipping
the standard motion for reconsideration, is not a mortal mistake. According to Globe,
the Order is a patent nullity, it being violative of due process; the motion for
reconsideration was a useless or idle ceremony; and, the issue raised purely one of
[40]
law. Indeed, the circumstances adverted to are among the recognized exceptions
[41]
to the general rule. Besides, the issues presented are of relative importance and
[42]
novelty so much so that it is judicious for the Court to resolve them on the merits
instead of hiding behind procedural fineries.

The Merits

Now, on to the merits of the petition.

Deregulation is the mantra in this age of globalization. Globe invokes it in
support of its claim that it need not secure prior authority from NTC in order to operate
SMS. The claim has to be evaluated carefully. After all, deregulation is not a magic

incantation that wards off the spectre of intrusive government with the mere
invocation of its name. The principles, guidelines, rules and regulations that govern a
deregulated system must be firmly rooted in the law and regulations that institute or
[43]
implement the deregulation regime. The implementation must likewise be fair and
evenhanded.
Globe hinges its claim of exemption from obtaining prior approval from the NTC
on NTC Memorandum Circular No. 14-11-97 (MC No. 14-11-97). Globe notes that in
a 7 October 1998 ruling on the application of Islacom for the operation of SMS, NTC
[44]
declared that the applicable circular for SMS is MC No. 14-11-97. Under this ruling,
it is alleged, NTC effectively denominated SMS as a special feature which under MC
No. 14-11-97 is a deregulated service that needs no prior authorization from NTC.
Globe further contends that NTCs requiring it to secure prior authorization violates
the due process and equal protection clauses, since earlier it had exempted the
[45]
similarly situated Islacom from securing NTC approval prior to its operation of SMS.
On the other hand, the assailed NTC Decision invokes the NTC Implementing
Rules of the PTA (MC No. 8-9-95) to justify its claim that Globe and Smart need to
secure prior authority from the NTC before offering SMS.
The statutory basis for the NTCs determination must be thoroughly examined.
Our first level of inquiry should be into the PTA. It is the authority behind MC No. 8-995. It is also the law that governs all public telecommunications entities (PTEs) in
[46]
the Philippines.

Public Telecommunications Act

The PTA has not strictly adopted laissez-faire as its underlying philosophy to
promote the telecommunications industry. In fact, the law imposes strictures that
restrain within reason how PTEs conduct their business. For example, it requires that
any access charge/revenue sharing arrangements between all interconnecting
[47]
carriers that are entered into have to be submitted for approval to NTC. Each
[48]
telecommunication category established in the PTA is governed by detailed
regulations. Also, international carriers and operators of mobile radio services are
[49]
required to provide local exchange service in unserved or underserved areas.
At the same time, the general thrust of the PTA is towards modernizing the legal
framework for the telecommunications services sector. The transmutation has
become necessary due to the rapid changes as well within the telecommunications
industry. As noted by Senator Osmea in his sponsorship speech:
[D]ramatic developments during the last 15 years in the field of semiconductors have
drastically changed the telecommunications sector worldwide as well as in the Philippines.
New technologies have fundamentally altered the structure, the economics and the nature of
competition in the telecommunications business. Voice telephony is perhaps the most popular
face of telecommunications, but it is no longer the only one. There are other faces such as
data communications, electronic mail, voice mail, facsimile transmission, video conferencing,
mobile radio services like trunked radio, cellular radio, and personal communications services,
radio paging, and so on. Because of the mind-boggling developments in semiconductors, the

traditional boundaries between computers, telecommunications, and broadcasting are

[50]
increasingly becoming blurred.

policy maintains that the offer of VAS by PTEs cannot interfere with the fundamental
provision by PTEs of their other public service requirements.

One of the novel introductions of the PTA is the concept of a value-added

service (VAS). Section 11 of the PTA governs the operations of a value-added
service provider, which the law defines as an entity which relying on the
transmission, switching and local distribution facilities of the local exchange and interexchange operators, and overseas carriers, offers enhanced services beyond those
[51]
ordinarily provided for by such carriers. Section 11 recognizes that VAS providers
need not secure a franchise, provided that they do not put up their own
[52]
network. However, a different rule is laid down for telecommunications entities such
as Globe and PLDT. The section unequivocally requires NTC approval for the
operation of a value-added service. It reads, viz:

More pertinently to the case at bar, the qualification highlights the fact that the
legal rationale for regulation of VAS is severely limited. There is an implicit recognition
that VAS is not strictly a public service offering in the way that voice-to-voice lines
are, for example, but merely supplementary to the basic service. Ultimately, the
regulatory attitude of the State towards VAS offerings by PTEs is to treat its
provisioning as a business decision subject to the discretion of the offeror,
so long as such services do not interfere with mandatory public service requirements
imposed on PTEs such as those under E.O. No. 109. Thus, non-PTEs are not
similarly required to secure prior approval before offering VAS, as they are not
[61]
burdened by the public service requirements prescribed on PTEs. Due regard
must be accorded to this attitude, which is in consonance with the general philosophy
of deregulation expressed in the PTA.

Telecommunications entities may provide VAS, subject to the additional requirements that:
a)

prior approval of the Commission is secured to ensure that such

VAS offerings are not cross-subsidized from the proceeds of their
utility operations;

The Pertinent NTC Memorandum Circulars

b)

other providers of VAS are not discriminated against in rates nor denied
equitable access to their facilities; and

VAS.

Next, we examine the regulatory framework devised by NTC in dealing with

c)

separate books of accounts are maintained for the VAS. (Emphasis

[53]
supplied)

Oddly enough, neither the NTC nor the Court of Appeals cited the above-quoted
provision in their respective decisions, which after all, is the statutory premise for the
assailed regulatory action. This failure is but a mere indicia of the pattern of ignorance
or incompetence that sadly attends the actions assailed in this petition.
It is clear that the PTA has left open-ended what services are classified as
value-added, prescribing instead a general standard, set forth as a matter of
[54]
principle and fundamental policy by the legislature. The validity of this standard set
by Section 11 is not put into question by the present petition, and there is no need to
[55]
inquire into its propriety. The power to enforce the provisions of the PTA, including
[56]
the implementation of the standards set therein, is clearly reposed with the NTC.
It can also be gleaned from Section 11 that the requirement that PTEs secure
prior approval before offering VAS is tied to a definite purpose, i.e., to ensure that
such VAS offerings are not cross-subsidized from the proceeds of their utility
operations. The reason is related to the fact that PTEs are considered as public
[57]
services, and mandated to perform certain public service functions. Section 11
should be seen in relation to E.O. 109, which mandates that international gateway
[58]
operators shall be required to provide local exchange service, for the purpose of
ensuring availability of reliable and affordable telecommunications service in both
[59]
urban and rural areas of the country. Under E.O. No. 109, local exchange services
are to be cross-subsidized by other telecommunications services within the same
[60]
company until universal access is achieved. Section 10 of the PTA specifically
affirms the requirements set by E.O. No. 109. The relevance to VAS is clear: public

NTC relied on Section 420(f) of the Implementing Rules of the PTA

(Implementing Rules) as basis for its claim that prior approval must be secured from
it before Globe can operate SMS. Section 420 of the Implementing Rules, contained
in MC No. 8-9-95, states in full:
VALUE ADDED SERVICES (VAS)
(a) A non-PTE VAS provider shall not be required to secure a franchise from
Congress.
(b) A non-PTE VAS provider can utilize its own equipment capable only of
routing, storing and forwarding messages in whatever format for the purpose
of providing enhanced or augmented telecommunications services. It shall
not put up its own network. It shall use the transmission network, toll or local
distribution, of the authorized PTES.
(c) The provision of VAS shall not in any way affect the cross subsidy to the local
exchange network by the international and national toll services and CMTS
service.
(d) Entities intending to provide value added services only shall submit to the
commission application for registration for approval. The application form
shall include documents showing, among others, system configuration, mode
of operation, method of charging rates, lease agreement with the PTE, etc.

(e) The application for registration shall be acted upon by the Commission
through an administrative process within thirty (30) days from date of
application.
(f) PTEs intending to provide value added services are required to secure
prior approval by the Commission through an administrative process.
(g) VAS providers shall comply strictly with the service performance and other
standards prescribed commission. (Emphasis supplied.)
Instead of expressly defining what VAS is, the Implementing Rules defines what
enhanced services are, namely: a service which adds a feature or value not
ordinarily provided by a public telecommunications entity such as format, media
conversion, encryption, enhanced security features, computer processing, and the
[62]
like. Given that the PTA defines VAS as enhanced services, the definition
provided in the Implementing Rules may likewise be applied to VAS. Still, the
language of the Implementing Rules is unnecessarily confusing. Much trouble would
have been spared had the NTC consistently used the term VAS as it is used in the
PTA.
The definition of enhanced services in the Implementing Rules, while more
distinct than that under the PTA, is still too sweeping. Rather than enumerating what
possible features could be classified as VAS or enhanced services, the Implementing
Rules instead focuses on the characteristics of these features. The use of the phrase
[63]
the like, and its implications of analogy, presumes that a whole myriad of
technologies can eventually be subsumed under the definition of enhanced
services. The NTC should not be necessarily faulted for such indistinct formulation
[64]
since it could not have known in 1995 what possible VAS would be available in the
future. The definition laid down in the Implementing Rules may validly serve as a
guide for the NTC to determine what emergent offerings would fall under VAS.
Still, owing to the general nature of the definition laid down in the Implementing
Rules, the expectation arises that the NTC would promulgate further issuances
defining whether or not a specific feature newly available in the market is a VAS.
Such expectation is especially demanded if the NTC is to penalize PTEs who fail to
obtain prior approval in accordance with Section 11 of the PTA. To our knowledge,
the NTC has yet to come out with an administrative rule or regulation listing which of
the offerings in the market today fall under VAS or enhanced services.
Still, there is MC No. 14-11-97, entitled Deregulating the Provision of Special
Features in the Telephone Network. Globe invokes this circular as it had been
previously cited by the NTC as applicable to SMS.
On 2 October 1998, Islacom wrote a letter to the NTC, informing the agency
that it will be offering the special feature of SMS for its CMTS, and citing therein that
the notice was being given pursuant to NTC Memorandum Circular No. 14-11[65]
97. In response, the NTC acknowledged receipt of the letter informing it of
Islacoms offering the special feature of SMS for its CMTS, and instructed Islacom to
[66]
adhere to the provisions of MC No. 14-11-97. The clear implication of the letter is
that NTC considers the Circular as applicable to SMS.

An examination of MC No. 14-11-97 further highlights the state of regulatory

confusion befalling the NTC. The relevant portions thereof are reproduced below:
SUBJECT: DEREGULATING THE PROVISION OF SPECIAL FEATURES IN THE
TELEPHONE NETWORK.
For the purpose of exempting specific telecommunications service from rate or tariff
regulations if the service has sufficient competition to ensure fair and reasonable rates or
tariffs, the Commission hereby deregulates the provision of special features inherent to
the Telephone Network.
Section 1.
For the purpose of this Circular, Special Feature shall refer to a feature
inherent to the telephone network which may not be ordinarily provided by a Telephone
Service Provider such as call waiting, call forwarding, conference calling, speed dialing,
caller ID, malicious call ID, call transfer, charging information, call pick-up, call barring,
recorded announcement, no double connect, warm line, wake-up call, hotline, voicemail, and
special features offered to customers with PABXs such as direct inward dialing and number
hunting, and the like; provided that in the provision of the feature, no law, rule, regulation or
international convention on telecommunications is circumvented or violated. The
Commission shall periodically update the list of special features in the Telephone
Network which, including the charging of rates therefor, shall be deregulated.
Section 2. A duly authorized Telephone Service Provider shall inform the Commission in
writing of the special features it can offer and the corresponding rates thirty (30) days prior to
launch date.
xxx
Section 4. Authorized Telephone Service Providers shall continue to charge their duly
approved rates for special services for 3 months from the effectivity of this circular, after
which they may set their own rates.
xxx (Emphasis supplied)
Just like VAS as defined under the PTA, special features are also not
ordinarily provided by the telephone company. Considering that MC No. 14-11-97
was promulgated after the passage of the PTA, it can be assumed that the authors of
the Circular were well aware of the regulatory scheme formed under the PTA.
Moreover, MC No. 14-11-97 repeatedly invokes the word deregulation, and it cannot
be denied that the liberalization ethos was introduced by the PTA. Yet, the net effect
of MC No. 14-11-97 is to add to the haze beclouding the NTCs rationale for
regulation. The introduction of a new concept, special feature, which is not provided
for in the PTA just adds to the confusion, especially in light of the similarities between
special features and VAS. Moreover, there is no requirement that a PTE seeking to
offer special features must secure prior approval from the NTC.
Is SMS a VAS, enhanced service, or a special feature? Apparently, even the
NTC is unsure. It had told Islacom that SMS was a special feature, then
subsequently held that it was a VAS. However, the pertinent laws and regulations

had not changed from the time of the Islacom letter up to the day the Order was
issued. Only the thinking of NTC did.
More significantly, NTC never required ISLACOM to apply for prior approval in
order to provide SMS, even after the Order to that effect was promulgated against
[67]
Globe and Smart. This fact was admitted by NTC during oral arguments. NTCs
treatment of Islacom, apart from being obviously discriminatory, puts into question
whether or not NTC truly believes that SMS is VAS. NTC is unable to point out any
subsequent rule or regulation, enacted after it promulgated the adverse order against
Globe and Smart, affirming the newly-arrived determination that SMS is VAS.
In fact, as Smart admitted during the oral arguments, while it did comply with the
NTC Order requiring it to secure prior approval, it was never informed by the NTC of
[68]
any action on its request. While NTC counters that it did issue a Certificate of
Registration to Smart, authorizing the latter as a provider of SMS, such Certificate of
Registration was issued only on 13 March 2003, or nearly four (4) years after Smart
[69]
had made its request. This inaction indicates a lack of seriousness on the part of
the NTC to implement its own rulings. Also, it tends to indicate the lack of belief or
confusion on NTCs part as to how SMS should be treated. Given the abstract set of
rules the NTC has chosen to implement, this should come as no surprise. Yet no
matter how content the NTC may be with its attitude of sloth towards regulation, the
effect may prove ruinous to the sector it regulates.
Every party subject to administrative regulation deserves an opportunity
to know, through reasonable regulations promulgated by the agency, of the
objective standards that have to be met. Such rule is integral to due process, as it
protects substantive rights. Such rule also promotes harmony within the service or
industry subject to regulation. It provides indubitable opportunities to weed out the
most frivolous conflicts with minimum hassle, and certain footing in deciding more
substantive claims. If this results in a tenfold in administrative rules and regulations,
such price is worth paying if it also results in clarity and consistency in the operative
rules of the game. The administrative process will best be vindicated by clarity in its
[70]
exercise.
In short, the legal basis invoked by NTC in claiming that SMS is VAS has not
been duly established. The fault falls squarely on NTC. With the dual classification of
SMS as a special feature and a VAS and the varying rules pertinent to each
classification, NTC has unnecessarily complicated the regulatory framework to the
detriment of the industry and the consumers. But does that translate to a finding that
the NTC Order subjecting Globe to prior approval is void? There is a fine line between
professional mediocrity and illegality. NTCs byzantine approach to SMS regulation is
certainly inefficient. Unfortunately for NTC, its actions have also transgressed due
process in many ways, as shown in the ensuing elucidation.

Penalized Via a Quasi-Judicial Process,

Globe and Smart are Entitled to
Corresponding Protections

It is essential to understand that the assailed Order was promulgated by NTC in

the exercise of its quasi-judicial functions. The case arose when Smart had filed the

[71]

initial complaint against Globe before NTC for interconnection of SMS. NTC issued
a Show Cause Order requiring Globe to answer Smarts charges. Hearings were
conducted, and a decision made on the merits, signed by the three Commissioners of
[72]
the NTC, sitting as a collegial body.
The initial controversy may have involved a different subject matter,
interconnection, which is no longer contested. It cannot be denied though that the
findings and penalty now assailed before us was premised on the same exercise of
jurisdiction. Thus, it is not relevant to this case that the process for obtaining prior
approval under the PTA and its Implementing Rules is administrative in nature. While
this may be so, the assailed NTCs determination and corresponding penalty were
rendered in the exercise of quasi-judicial functions. Therefore, all the requirements of
due process attendant to the exercise of quasi-judicial power apply to the present
case. Among them are the seven cardinal primary rights in justiciable cases before
[73]
administrative tribunals, as enumerated in Ang Tibay v. CIR. They are synthesized
in a subsequent case, as follows:
There are cardinal primary rights which must be respected even in proceedings of this
character. The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof. Not only
must the party be given an opportunity to present his case and to adduce evidence tending to
establish the rights which he asserts but the tribunal must consider the evidence presented.
While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support its
decision. Not only must there be some evidence to support a finding or conclusion, but the
evidence must be substantial. The decision must be rendered on the evidence presented at the
[74]
hearing, or at least contained in the record and disclosed to the parties affected.
NTC violated several of these cardinal rights due Globe in the promulgation of
the assailed Order.
First. The NTC Order is not supported by substantial evidence. Neither does it
sufficiently explain the reasons for the decision rendered.
Our earlier discussion pertained to the lack of clear legal basis for classifying
SMS as VAS, owing to the failure of the NTC to adopt clear rules and regulations to
that effect. Muddled as the legal milieu governing SMS already is, NTCs attempt to
apply its confusing standards in the case of Globe and Smart is even more
disconcerting. The very rationale adopted by the NTC in its Order holding that SMS
is VAS is short and shoddy. Astoundingly, the Court of Appeals affirmed the rationale
bereft of intelligent inquiry, much less comment. Stated in full, the relevant portion of
the NTC Order reads:
xxx Getting down [to] the nitty-gritty, Globes SMS involves the transmission of data over its
CMTS which is Globes basic service. SMS is not ordinarily provided by a CMTS operator
like Globe, and since SMS enhances Globes CMTS, SMS fits in to a nicety [sic] with the
definition of value-added-service or enhanced-service under NTC Memorandum Circular
[75]
[8]-9-95 (Rule 001, Item [15]).
The Court usually accords great respect to the technical findings of
administrative agencies in the fields of their expertise, even if they are infelicitously

worded. However, the above-quoted finding is nothing more than bare assertions,
[76]
unsupported by substantial evidence. The Order reveals that no deep inquiry was
made as to the nature of SMS or what its provisioning entails. In fact, the Court is
unable to find how exactly does SMS fits into a nicety with NTC M.C. No. 8-9-95,
which defines enhanced services as analogous to format, media conversion,
[77]
encryption, enhanced security features, computer processing, and the like. The
NTC merely notes that SMS involves the transmission of data over [the] CMTS, a
phraseology that evinces no causal relation to the definition in M.C. No. 8-995. Neither did the NTC endeavor to explain why the transmission of data
necessarily classifies SMS as a VAS.
In fact, if the transmission of data over [the] CMTS is to be reckoned as the
determinative characteristic of SMS, it would seem that this is already sufficiently
[78]
covered by Globe and Smarts respective legislative franchises. Smart is
authorized under its legislative franchise to establish and operate integrated
telecommunications/computer/ electronic services for public domestic and
[79]
international communications, while Globe is empowered to establish and operate
domestic telecommunications, and stations for transmission and reception of
messages by means of electricity, electromagnetic waves or any kind of energy,
force, variations or impulses, whether conveyed by wires, radiated through space or
transmitted through other media and for the handling of any and all types of
[80]
telecommunications services.
The question of the proper legal classification of VAS is uniquely technical, tied
as at is to the scientific and technological application of the service or feature. Owing
to the dearth of substantive technical findings and data from the NTC on which a
judicial review may reasonably be premised, it is not opportunely proper for the Court
to make its own technical evaluation of VAS, especially in relation to SMS. Judicial
fact-finding of the de novo kind is generally abhorred and the shift of decisional
responsibility to the judiciary is not favored as against the substantiated and
[81]
specialized determination of administrative agencies.
With greater reason should
this be the standard for the exercise of judicial review when the administrative agency
concerned has not in the first place come out with a technical finding based on
evidence, as in this case.
Yet at the same time, this absence of substantial evidence in support of the
finding that SMS is VAS already renders reversible that portion of the NTC Order.
Moreover, the Order does not explain why the NTC was according the VAS
offerings of Globe and Smart a different regulatory treatment from that of Islacom.
Indeed, to this day, NTC has not offered any sensible explanation why Islacom was
accorded to a less onerous regulatory requirement, nor have they compelled Islacom
to suffer the same burdens as Globe and Smart.
While stability in the law, particularly in the business field, is desirable, there is
[82]
no demand that the NTC slavishly follow precedent. However, we think it
essential, for the sake of clarity and intellectual honesty, that if an
administrative agency decides inconsistently with previous action, that it
explain thoroughly why a different result is warranted, or if need be, why the
[83]
previous standards should no longer apply or should be overturned. Such
explanation is warranted in order to sufficiently establish a decision as having
[84]
rational basis. Any inconsistent decision lacking thorough, ratiocination in

support may be struck down as being arbitrary. And any decision with
[85]
absolutely nothing to support it is a nullity.
Second. Globe and Smart were denied opportunity to present evidence on the
issues relating to the nature of VAS and the prior approval.
Another disturbing circumstance attending this petition is that until the
promulgation of the assailed Order Globe and Smart were never informed of the fact
that their operation of SMS without prior authority was at all an issue for
consideration. As a result, neither Globe or Smart was afforded an opportunity to
present evidence in their behalf on that point.
NTC asserts that since Globe and Smart were required to submit their
respective Certificates of Public Convenience and Necessity and franchises, the
parties were sufficiently notified that the authority to operate such service was a
matter which NTC could look into. This is wrong-headed considering the governing
law and regulations. It is clear that before NTC could penalize Globe and Smart for
unauthorized provision of SMS, it must first establish that SMS is VAS. Since there
was no express rule or regulation on that question, Globe and Smart would be well
within reason if they submitted evidence to establish that SMS was not VAS.
Unfortunately, no such opportunity arose and no such arguments were raised simply
because Globe and Smart were not aware that the question of their authority to
provide SMS was an issue at all. Neither could it be said that the requisite of prior
authority was indubitable under the existing rules and regulations. Considering the
prior treatment towards Islacom, Globe (and Smart, had it chosen to do so) had every
right to rely on NTCs disposal of Islacoms initiative and to believe that prior approval
was not necessary.
Neither was the matter ever raised during the hearings conducted by NTC on
Smarts petition. This claim has been repeatedly invoked by Globe. It is borne out by
the records or the absence thereof. NTC could have easily rebuffed this claim by
pointing to a definitive record. Yet strikingly, NTC has not asserted that the matter of
Globes authority was raised in any pleading or proceeding. In fact, Globe in
its Consolidated Reply before this Court challenged NTC to produce the transcripts of
the hearings it conducted to prove that the issue of Globes authority to provide SMS
was put in issue. The Court similarly ordered the NTC to produce such
[86]
[87]
transcripts. NTC failed to produce any.
The opportunity to adduce evidence is essential in the administrative process,
as decisions must be rendered on the evidence presented, either in the hearing, or at
[88]
least contained in the record and disclosed to the parties affected. The requirement
that agencies hold hearings in which parties affected by the agencys action can be
represented by counsel may be viewed as an effort to regularize this struggle for
[89]
advantage within a legislative adversary framework. It necessarily follows that if no
evidence is procured pertinent to a particular issue, any eventual resolution of that
issue on substantive grounds despite the absence of evidence is flawed. Moreover, if
the parties did have evidence to counter the ruling but were wrongfully denied the
opportunity to offer the evidence, the result would be embarrassing on the
adjudicator.
Thus, the comical, though expected, result of a definitive order which is totally
unsupported by evidence. To this blatant violation of due process, this Court stands
athwart.

Third. The imposition of fine is void for violation of due process

The matter of whether NTC could have imposed the fine on Globe in the
assailed Order is necessarily related to due process considerations. Since this
question would also call to fore the relevant provisions of the Public Service Act, it
deserves its own extensive discussion.
Globe claims that the issue of its authority to operate SMS services was never
raised as an issue in the Complaint filed against it by Smart. Nor did NTC ever require
Globe to justify its authority to operate SMS services before the issuance of
the Order imposing the fine.
The Court of Appeals, in its assailed decision, upheld the power of NTC to
impose a fine and to make a pronouncement on Globes alleged lack of operational
authority without need of hearing, simply by citing the provision of the Public Service
[90]
Act which enumerates the instances when NTC may act motu proprio. That is
Section 17, paragraph (a), which reads thus:
Sec. 17. Proceedings of [the National Telecommunications Commission] without previous
hearing. The Commission shall have power, without previous hearing, subject to established
limitations and exceptions and saving provisions to the contrary:
(a) To investigate, upon its own initiative, or upon complaint in writing, any matter
concerning any public service as regards matters under its jurisdiction; to require any public
service to furnish safe, adequate, and proper service as the public interest may require and
warrant; to enforce compliance with any standard, rule, regulation, order or other requirement
of this Act or of the Commission, and to prohibit or prevent any public service as herein
defined from operating without having first secured a certificate of public convenience or
public necessity and convenience, as the case may be, and require existing public services to
pay the fees provided for in this Act for the issuance of the proper certificate of public
convenience or certificate of public necessity and convenience, as the case may be, under the
penalty, in the discretion of the Commission, of the revocation and cancellation of any
acquired rights.
On the other hand, NTC itself, in the Order, cites Section 21 as the basis for its
imposition of fine on Globe. The provision states:
Sec. 21. Every public service violating or failing to comply with the terms and conditions of
any certificate or any orders, decisions or regulations of the Commission shall be subject to a
fine of not exceeding two hundred pesos per day for every day during which such default or
violation continues; and the Commission is hereby authorized and empowered to impose such
fine, after due notice and hearing. [Emphasis supplied.]
Sections 17 and 21 of the Public Service Act confer two distinct powers on
NTC. Under Section 17, NTC has the power to investigate a PTE compliance with a
standard, rule, regulation, order, or other requirement imposed by law or the
regulations promulgated by NTC, as well as require compliance if necessary. By the
explicit language of the provision, NTC may exercise the power without need of prior
hearing. However, Section 17 does not include the power to impose fine in its
enumeration. It is Section 21 which adverts to the power to impose fine and in the
same breath requires that the power may be exercised only after notice and hearing.

Section 21 requires notice and hearing because fine is a sanction, regulatory

and even punitive in character. Indeed, the requirement is the essence of due
process. Notice and hearing are the bulwark of administrative due process, the right
to which is among the primary rights that must be respected even in administrative
[91]
proceedings. The right is guaranteed by the Constitution itself and does not need
legislative enactment. The statutory affirmation of the requirement serves merely to
enhance the fundamental precept. The right to notice and hearing is essential to due
process and its non-observance will, as a rule, invalidate the administrative
[92]
proceedings.
In citing Section 21 as the basis of the fine, NTC effectively concedes the
necessity of prior notice and hearing. Yet the agency contends that the sanction was
justified by arguing that when it took cognizance of Smarts complaint for
interconnection, it may very well look into the issue of whether the parties had the
[93]
requisite authority to operate such services. As a result, both parties were
sufficiently notified that this was a matter that NTC could look into in the course of the
proceedings. The parties subsequently attended at least five hearings presided by
[94]
NTC.
That particular argument of the NTC has been previously disposed of. But it is
essential to emphasize the need for a hearing before a fine may be imposed, as it is
clearly a punitive measure undertaken by an administrative agency in the exercise of
its quasi-judicial functions. Inherently, notice and hearing are indispensable for the
valid exercise by an administrative agency of its quasi-judicial functions. As the Court
[95]
held in Central Bank of the Phil. v. Hon. Cloribel:
[T]he necessity of notice and hearing in an administrative proceeding depends on the character
of the proceeding and the circumstances involved. In so far as generalization is possible in
view of the great variety of administrative proceedings, it may be stated as a general rule that
notice and hearing are not essential to the validity of administrative action where the
administrative body acts in the exercise of executive, administrative, or legislative functions;
but where a public administrative body acts in a judicial or quasi-judicial matter, and its acts
are particular and immediate rather than general and prospective, the person whose rights or
[96]
property may be affected by the action is entitled to notice and hearing.
The requirement of notice and hearing becomes even more imperative if the statute
itself demands it, as in the case of Section 21 of the Public Service Act.
As earlier stated, the Court is convinced that prior to the promulgation of the
assailed Order Globe was never notified that its authority to operate SMS was put in
issue. There is an established procedure within NTC that provides for the steps that
should be undertaken before an entity such as Globe could be subjected to a
disciplinary measure. Section 1, Rule 10 of the NTC Rules of Procedure provides
that any action, the object of which is to subject a holder of a certificate of public
convenience or authorization, or any person operating without authority from NTC, to
any penalty or a disciplinary or other measure shall be commenced by the filing of a
complaint. Further, the complaint should state, whenever practicable, the provisions
of law or regulation violated, and the acts or omissions complained of as constituting
[97]
the offense. While a complaint was indeed filed against Globe by Smart, the lack of
Globes authority to operate SMS was not raised in the Complaint, solely predicated
[98]
as it was on Globes refusal to interconnect with Smart.

Under the NTC Rules of Procedure, NTC is to serve a Show Cause Order on
the respondent to the complaint, containing therein a statement of the particulars and
matters concerning which the Commission is inquiring and the reasons for such
[99]
actions. The Show Cause Order served on Globe in this case gave notice of
Smarts charge that Globe, acting in bad faith and contrary to law, refused to allow
[100]
the interconnection of their respective SMS systems.
Again, the lack of authority to
operate SMS was not adverted to in NTCs Show Cause Order.
The records also indicate that the issue of Globes authority was never raised in
the subsequent hearings on Smarts complaint. Quite noticeably, the respondents
themselves have never asserted that the matter of Globes authority was raised in
any pleading or proceeding. In fact, Globe in its Consolidated Reply before this Court
challenged NTC to produce the transcripts of the hearings it conducted to prove that
the issue of Globes authority to provide SMS was put in issue. It did not produce any
transcript.
Being an agency of the government, NTC should, at all times, maintain a due
[101]
regard for the constitutional rights of party litigants.
In this case, NTC blindsided
Globe with a punitive measure for a reason Globe was not made aware of, and in a
manner that contravened express provisions of law. Consequently, the fine imposed
by NTC on Globe is also invalid. Otherwise put, since the very basis for the fine was
invalidly laid, the fine is necessarily void.

By no means should this Decision be interpreted as removing SMS from the

ambit of jurisdiction and review by the NTC. The issue before the Court is only the
prior approval requirement as imposed on Globe and Smart. The NTC will continue to
exercise, by way of its broad grant, jurisdiction over Globe and Smarts SMS
offerings, including questions of rates and customer complaints. Yet caution must be
had. Much complication could have been avoided had the NTC adopted a proactive
position, promulgating the necessary rules and regulations to cope up with the advent
of the technologies it superintends. With the persistent advent of new offerings in the
telecommunications industry, the NTCs role will become more crucial than at any
time before. If NTCs behavior in the present case is but indicative of a malaise
pervading this crucial regulatory arm of the State, the Court fears the resultant
confusion within the industry and the consuming public. The credibility of an
administrative agency entrusted with specialized fields subsists not on judicial
doctrine alone, but more so on its intellectual strength, adherence to law, and basic
fairness.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
dated 22 November 1999, as well as its Resolution dated 29 July 2000, and the
assailed Order of the NTC dated 19 July 1999 are hereby SET ASIDE. No cost.
SO ORDERED.
Puno,
JJ., concur.

(Chairman),

Austria-Martinez,

Callejo,

Sr., and Chico-Nazario,

Conclusion

In summary: (i) there is no legal basis under the PTA or the memorandum
circulars promulgated by the NTC to denominate SMS as VAS, and any subsequent
determination by the NTC on whether SMS is VAS should be made with proper
regard for due process and in conformity with the PTA; (ii) the assailed Order violates
due process for failure to sufficiently explain the reason for the decision rendered, for
being unsupported by substantial evidence, and for imputing violation to, and issuing
a corresponding fine on, Globe despite the absence of due notice and hearing which
would have afforded Globe the right to present evidence on its behalf.
Thus, the Order effectively discriminatory and arbitrary as it is, was issued with
grave abuse of discretion and it must be set aside. NTC may not legally require
Globe to secure its approval for Globe to continue providing SMS. This does not imply
though that NTC lacks authority to regulate SMS or to classify it as VAS. However,
the move should be implemented properly, through unequivocal regulations
applicable to all entities that are similarly situated, and in an even-handed manner.
Concurrently, the Court realizes that the PTA is not intended to constrain the
[102]
industry within a cumbersome regulatory regime.
The policy as pre-ordained by
legislative fiat renders the traditionally regimented business in an elementary free
state to make business decisions, avowing that it is under this atmosphere that the
[103]
industry would prosper.
It is disappointing at least if the deregulation thrust of the
law is skirted deliberately. But it is ignominious if the spirit is defeated through a
crazy quilt of vague, overlapping rules that are implemented haphazardly.

[G.R. No. 146137. June 08, 2005]

HAYDEE C. CASIMIRO, in her capacity as Municipal Assessor of San Jose,

Romblon, Province of Romblon, petitioner, vs. FILIPINO T. TANDOG, in
his
capacity
as
the
Municipal
Mayor
of
San
Jose,
Romblon, respondent.
DECISION
CHICO-NAZARIO, J.:
[1]

This is a petition for review on certiorari of the Decision dated 31 May 2000 of
the Court of Appeals and its Resolution dated 21 November 2000 in CA-G.R. SP No.
46952, which affirmed in toto Civil Service Commission (CSC) Resolution No. 973602
dated 12 August 1997. The said CSC Resolution affirmed the Decision of Municipal
Mayor Filipino Tandog of San Jose, Romblon, finding petitioner Haydee Casimiro
guilty of dishonesty and ordering her dismissal 3from the service.
The relevant antecedents of the instant petition are as follows:
Petitioner Haydee Casimiro began her service in the government as
assessment clerk in the Office of the Treasurer of San Jose, Romblon. In August
1983, she was appointed Municipal Assessor.

On 04 September 1996, Administrative Officer II Nelson M. Andres, submitted a

[2]
report based on an investigation he conducted into alleged irregularities in the office
of petitioner Casimero. The report spoke of an anomalous cancellation of Tax
Declarations No. 0236 in the name of Teodulo Matillano and the issuance of a new
one in the name of petitioners brother Ulysses Cawaling and Tax Declarations No.
0380 and No. 0376 in the name of Antipas San Sebastian and the issuance of new
ones in favor of petitioners brother-in-law Marcelo Molina.
Immediately thereafter, respondent Mayor Tandog issued Memorandum Order
[3]
No. 13 dated 06 September 1996, placing the petitioner under preventive
suspension for thirty (30) days. Three (3) days later, Mayor Tandog issued
Memorandum Order No. 15, directing petitioner to answer the charge of irregularities
[4]
in her office. In her answer, petitioner denied the alleged irregularities claiming, in
essence, that the cancellation of the tax declaration in favor of her brother Ulysses
Cawaling was done prior to her assumption to office as municipal assessor, and that
she issued new tax declarations in favor of her brother-in-law Marcelo Molina by
virtue of a deed of sale executed by Antipas San Sebastian in Molinas favor.
[5]

On 23 October 1996, thru Memorandum Order No. 17, respondent Mayor

extended petitioners preventive suspension for another thirty (30) days effective 24
October 1996 to give him more time to verify and collate evidence relative to the
alleged irregularities.
[6]

On 28 October 1996, Memorandum Order No. 18 was issued by respondent

Mayor directing petitioner to answer in writing the affidavit-complaint of Noraida San
[7]
Sebastian Cesar and Teodulo Matillano. Noraida San Sebastian Cesar alleged that
Tax Declarations No. 0380 and No. 0376 covering parcels of land owned by her
parents were transferred in the name of a certain Marcelo Molina, petitioners brotherin-law, without the necessary documents. Noraida Cesar further claimed that Marcelo
Molina had not yet paid the full purchase price of the land covered by the said Tax
[8]
Declarations. For his part, Teodulo Matillano claimed that he never executed a
deed of absolute sale over the parcel of land covered by Tax Declaration No. 0236 in
favor of Ulysses Cawaling, petitioners brother.

Based on the above recommendation, respondent Mayor issued Administrative

[11]
Order No. 1 dated 25 November 1996 dismissing petitioner, thus:
Upon unanimous recommendations of the fact finding committee Chairmained (sic) by
Municipal Administrator Nelson M. Andres, finding you (Haydee C. Casimero) guilty of
Dishonesty and Malperformance of duty as Municipal Assessor of San Jose, Romblon, copy
of which is hereto attached as Annex A and made as integral part hereof, you are hereby
ordered separated from service as Municipal Assessor of San Jose, Romblon, effective upon
request hereof.
Undeterred by that setback, petitioner appealed to the CSC, which
[12]
affirmed respondent
Mayors
order
of
dismissal.
A
motion
for
[13]
[14]
reconsideration was filed, but the same was denied.
Dissatisfied, petitioner elevated her case to the Court of Appeals, which
[15]
subsequently affirmed the CSC decision. Her motion for reconsideration was
likewise denied.
[16]

Petitioner now comes to us raising the lone issue of whether or not petitioner
was afforded procedural and substantive due process when she was terminated from
her employment as Municipal Assessor of San Jose, Romblon. An underpinning
query is: Was petitioner afforded an impartial and fair treatment? She specifically
points to bias and partiality on the members of the fact-finding committee. She avers
that Lorna Tandog Vilasenor, a member of the fact-finding committee, is the sister of
respondent Mayor. She further alludes that while the committee chairman, Nelson M.
Andres, was appointed by the respondent Mayor to the position of Administrative
Officer II only on 01 August 1996, no sooner was he given the chairmanship of the
Committee. Further the affiants-complainants were not presented for cross
examination.
We find the present petition bereft of merit.
The first clause of Section 1 of Article III of the Bill of Rights states that:

[9]

In response to Memorandum Order No. 18, petitioner submitted a letter dated

29 October 1996, stating that with respect to the complaint of Noraida San Sebastian
Cesar, she had already explained her side in the letter dated 26 September 1996. As
to the complaint of Teodulo Matillano, she alleged that it was a certain Lilia Barrientos
who executed a deed of absolute sale over the parcel of land subject of the complaint
in favor of her brother, Ulysses Cawaling.
Not satisfied, respondent Mayor created a fact-finding committee to investigate
the matter. After a series of hearings, the committee, on 22 November 1996,
[10]
submitted its report recommending petitioners separation from service, the
dispositive portion of which reads:
Evaluating the facts above portrayed, it is clearly shown that Municipal Assessor Haydee
Casimero is guilty of malperformance of duty and gross dishonesty to the prejudice of the
taxpayers of San Jose, Romblon who are making possible the payments of her salary and other
allowances. Consequently, we are unanimously recommending her separation from service.

SECTION 1. No person shall be deprived of life, liberty, or property without due process of
law, . . . .
In order to fall within the aegis of this provision, two conditions must concur,
namely, that there is deprivation of life, liberty and property and such deprivation is
done without proper observance of due process. When one speaks of due process,
however, a distinction must be made between matters of procedure and matters of
substance.
In essence, procedural due process refers to the method or manner by which
[17]
the law is enforced.
The essence of procedural due process is embodied in the basic requirement of
[18]
notice and a real opportunity to be heard. In administrative proceedings, such as in
the case at bar, procedural due process simply means the opportunity to explain
ones side or the opportunity to seek a reconsideration of the action or ruling
[19]
complained of. To be heard does not mean only verbal arguments in court; one

may be heard also thru pleadings. Where opportunity to be heard, either through oral
[20]
arguments or pleadings, is accorded, there is no denial of procedural due process.
In administrative proceedings, procedural due process has been recognized to
include the following: (1) the right to actual or constructive notice of the institution of
proceedings which may affect a respondents legal rights; (2) a real opportunity to be
heard personally or with the assistance of counsel, to present witnesses and
evidence in ones favor, and to defend ones rights; (3) a tribunal vested with
competent jurisdiction and so constituted as to afford a person charged
administratively a reasonable guarantee of honesty as well as impartiality; and (4) a
finding by said tribunal which is supported by substantial evidence submitted for
consideration during the hearing or contained in the records or made known to the
[21]
parties affected.
In the case at bar, what appears in the record is that a hearing was conducted
on 01 October 1996, which petitioner attended and where she answered questions
propounded by the members of the fact-finding committee. Records further show that
the petitioner was accorded every opportunity to present her side. She filed her
answer to the formal charge against her. After a careful evaluation of evidence
adduced, the committee rendered a decision, which was affirmed by the CSC and the
Court of Appeals, upon a move to review the same by the petitioner. Indeed, she has
even brought the matter to this Court for final adjudication.

The Court finds far little basis to petitioners protestations that she was deprived
of due process of law and that the investigation conducted was far from impartial and
fair.
As to the substantive due process, it is obvious to us that what petitioner means
is that the assailed decision was not supported by competent and credible
[30]
evidence.
The law requires that the quantum of proof necessary for a finding of guilt in
administrative cases is substantial evidence or such relevant evidence as a
[31]
reasonable mind may accept as adequate to support a conclusion.
Well-entrenched is the rule that substantial proof, and not clear and convincing
evidence or proof beyond reasonable doubt, is sufficient basis for the imposition of
any disciplinary action upon an employee. The standard of substantial evidence is
satisfied where the employer has reasonable ground to believe that the employee is
responsible for the misconduct and his participation therein renders him unworthy of
[32]
trust and confidence demanded by his position.
In the case at bar, there is substantial evidence to prove petitioners dismissal.
Two alleged irregularities provided the dismissal from service of herein
petitioner:

[22]

Kinship alone does not establish bias and partiality. Bias and partiality cannot
be presumed. In administrative proceedings, no less than substantial proof is
[23]
[24]
required. Mere allegation is not equivalent to proof. Mere suspicion of partiality is
not enough. There should be hard evidence to prove it, as well as manifest showing
of bias and partiality stemming from an extrajudicial source or some other
[25]
basis. Thus, in the case at bar, there must be convincing proof to show that the
members of the fact-finding committee unjustifiably leaned in favor of one party over
the other. In addition to palpable error that may be inferred from the decision itself,
[26]
extrinsic evidence is required to establish bias. The petitioner miserably failed to
substantiate her allegations. In effect, the presumption of regularity in the
[27]
performance of duty prevails.
Neither are we persuaded by petitioners argument that the affidavit is hearsay
because the complainants were never presented for cross examination. In
administrative proceedings, technical rules of procedure and evidence are not strictly
applied; administrative due process cannot be fully equated to due process in its strict
[28]
judicial sense.
Nothing on record shows that she asked for cross examination. In our view,
petitioner cannot argue that she has been deprived of due process merely because
no cross examination took place. Again, it is well to note that due process is satisfied
when the parties are afforded fair and reasonable opportunity to explain their side of
the controversy or given opportunity to move for a reconsideration of the action or
ruling complained of. In the present case, the record clearly shows that petitioner not
only filed her letter-answer, she also filed a motion for reconsideration of the
recommendation of the committee dated 22 November 1996. The essence of due
process in the administrative proceedings is an opportunity to explain one side or an
[29]
opportunity to seek reconsideration of the action or ruling complained of.

1. The cancellation of complainant Teodulo Matillanos tax declaration and the

issuance of a new one in favor of petitioners brother Ulysses Cawaling; and
2. The cancellation of the tax declaration in the name of complainant Noraida San
Sebastian Cesars parent in favor of petitioners brother-in-law, Marcelo Molina.
On these points, we quote, with approval, the findings of the Court of Appeals
for being supported by evidence on record.
Going first to the alleged irregularity accompanying the issuance of tax declarations in favor
of petitioners brother Ulysses Cawaling, the formers asseverations that she had nothing to do
with the processing of the subject tax declarations is simply unacceptable. As municipal
assessor, one of petitioners duties was to keep a correct record of all transfers, leases and
mortgages of real property (par. [4] f, Sec. 159, Article VI, Chapter 3, Title II, Book II of the
Local Government Code) within her jurisdiction. Thus, even if petitioner had no hand in the
processing of her brothers tax declaration, she should have seen to it that the records
pertaining thereto are in order. Furthermore, the annotation on her brothers tax declaration
that the same property is also declared in the name of another person and that all of them are
paying the realty taxes thereon should have cautioned petitioner to take the necessary steps to
set records right. Under par. [4] h, (ibid.) the municipal assessors, in such a situation, are
suppose to cancel assessments, in case several assessments have been made for the same
property, except the one properly made, but if any assessee or his representative shall object to
the cancellation of the assessment made in his name, such assessment shall not be cancelled
but the fact shall be noted on the tax declaration and assessment rolls and other property books
of records. Preference, however, shall be given to the assessment of the person who has the
best title to the property, or in default thereof, of the person who has possession of the
property (id.). On this score alone, petitioner is already liable for gross neglect of duty, which

is also penalized by dismissal at the first offense (Sec. 22 [b], Rule XIV of the Omnibus Rule
[supra]).
Secondly, petitioners vacillation on whether it was Teodulo Matillano or Leticia Barrientos
Berbano who executed a deed of absolute sale in favor of her brother Ulysses Cawaling
further weakens her defense. Petitioner, in her written answer, claimed that both Teodulo
Matillano and Ulysses Cawaling have deeds of absolute sale over the same parcel of land
(vide par. [4], Annex G, supra). In the course of investigation, however, petitioner claimed
before the investigating body that Teodulo Matillano executed a deed of absolute sale in favor
of her brother (vide, p. 8, Annex N, supra). Thereafter petitioner claimed that it was a
certain Leticia Barrientos Berbano who executed the deed of absolute sale in favor of her
brother (vide, Annex J, supra). . . .
With respect to the irregularity involving the tax declarations of petitioners brother-in-law,
Marcelo Molina, no better evidence can be presented to support petitioners dismissal for
dishonesty than the questioned tax declarations themselves (vide, pp. 87 & 88, ibid.). Both tax
declarations indicated that the declarations therein where subscribed to under oath by the
declarant before herein petitioner on August 15, 1996, in effect canceling Antipaz San
Sebastians tax declaration on even date. However, the same tax declarations indicate that the
taxes due thereon (i.e., land tax, transfer tax & capital gain tax) were paid only in October of
the same year or two months after the tax declarations have already been issued in favor of
petitioners brother-in-law. Under Article 224 [b] of the Rules and Regulations Implementing
the Local Government Code, no tax declaration shall be cancelled and a new one issued in lieu
thereof unless the transfer tax has first been paid.
The issuance of new tax declarations in favor of petitioners brother and brother-in-law
effectively cancels the tax declarations of the complainants. Article 299[c] of the Rules of
Regulations Implementing the Local Government Code, provides that:
In addition to the notice of transfer, the previous property owner shall likewise surrendered
to the provincial, city, or municipal assessor concerned, the tax declaration covering the
subject property in order that the same maybe cancelled from the assessment records of the
LGU. x x x.
Thus, the tax declaration of complainants Noraida San Sebastian and Teodulo Matillano must
first be surrendered before herein petitioner could effectively cancel their respective tax
declarations and issue new ones in favor of her brother and brother-in-law. Unfortunately,
herein petitioner failed to present the complainants cancelled tax declarations. She did not
[33]
even allege that the same had been surrendered to her for cancellation.
In addition, petitioner admitted using the deed of sale allegedly executed by Lilia
Barrientos in favor of Cawaling in transferring the Tax Declaration in the name of her
brother Ulysses Cawaling. However, glaring in the record is the admission by the
[34]
[35]
petitioner in her petition and memorandum that the property was still under
litigation, as both Matillano and Barrientos continue to take their claims over
it. Clearly, therefore, she had no right, or reason, to pre-empt judgment on who is the
lots rightful owner who can legally dispose the same. Prudence dictates that, under
the situation, she should have refrained from taking any course of action pending the
courts final determination of this matter.

[36]

In Philippine Amusement and Gaming Corporation v. Rilloza, dishonesty was

understood to imply a disposition to lie, cheat, deceive, or defraud; unworthiness;
lack of integrity. Dishonesty is considered as a grave offense punishable by
dismissal for the first offense under Section 23, Rule XIV of the Omnibus Rules
Implementing Book V of Executive Order No. 292 and Other Pertinent Civil Service
Laws. It is beyond cavil that petitioners acts displayed want of honesty.
IN ALL, we affirm the finding of the Court of Appeals that petitioner is guilty of
acts of dishonesty. Her acts of cancelling the tax declarations of Antipas San
Sebastian and Teodulo Matillano in favor of her close relatives without complying with
the requirements set under the law constitute grave acts of dishonesty.
WHEREFORE, the instant petition is hereby DENIED. The Court of Appeals
Decision dated 31 May 2000 and its subsequent Resolution dated 21 November
2000, dismissing petitioner from service, are hereby AFFIRMED. With costs.
SO ORDERED.
Austria-Martinez, (Acting Chairman), Callejo, Sr., and Tinga, JJ., concur.
Puno, (Chairman), on official leave.