CHAPTER 7 (CASE DIGEST ADMIN LAW)

6) Casimiro v. Tandog, G.R. No. 146137, June 8, 2005

FACTS:

On 04 September 1996, Administrative Officer II Nelson M. Andres, submitted a report[2] 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 No. 13[3] 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 in her office. In her answer,[4] 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.

On 23 October 1996, thru Memorandum Order No. 17,[5] 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.

On 28 October 1996, Memorandum Order No. 18[6] was issued by respondent Mayor directing petitioner
to answer in writing the affidavit-complaint of Noraida San Sebastian Cesar and Teodulo Matillano.

Noraida San Sebastian Cesar[7] 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
brother-in-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 Declarations.

In response to Memorandum Order No. 18, petitioner submitted a letter[9] 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.

Not satisfied, respondent Mayor created a fact-finding committee to investigate the matter. After a series
of hearings, the committee, on 22 November 1996, submitted its report[10] 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.

Based on the above recommendation, respondent Mayor issued Administrative Order No. 1[11] dated 25
November 1996 dismissing petitioner.

ISSUE: 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.

HELD:

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.

The essence of procedural due process is embodied in the basic requirement of notice and a real
opportunity to be heard.[18] 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 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 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 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.

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 trust
and confidence demanded by his position

Two alleged irregularities provided the dismissal from service of herein petitioner:

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.

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.

7) LOZANO vs. DE LOS SANTOS

G.R. No. 125221 June 19, 1997

FACTS OF THE CASE:

On December 19, 1995, petitioner Reynaldo M. Lozano filed Civil Case No. 1214 for damages against
respondent Antonio Anda before MCTC Pampanga. Petitioner alleged that he was the president of the
Kapatirang Mabalacat-Angeles Jeepney Drivers Association, Inc. (KAMAJDA) while respondent Anda
was the president of the Samahang Angeles-Mabalacat Jeepney Operators and Drivers Association, Inc.
(SAMAJODA); in August 1995, upon the request of the Sangguniang Bayan of Mabalacat, Pampanga,
petitioner and private respondent agreed to consolidate their respective associations and form the
Unified Mabalacat-Angeles Jeepney Operators and Drivers Association, Inc. (UMAJODA);
petitioner and private respondent also agreed to elect one set of officers who shall be given the sole
authority to collect the daily dues from the members of the consolidated association; elections were held
on October 29, 1995 and both petitioner and private respondent ran for president; petitioner won;
private respondent protested and, alleging fraud, refused to recognize the results of the election;
private respondent also refused to abide by their agreement and continued collecting the dues
from the members of his association despite several demands to desist. Petitioner was thus
constrained to file the complaint to restrain private respondent from collecting the dues and to order him
to pay damages in the amount of P25,000.00 and attorneys fees of P500.00. 1
Private respondent moved to dismiss the complaint for lack of jurisdiction, claiming that jurisdiction was
lodged with the Securities and Exchange Commission (SEC). The MCTC denied the motion on
February 9, 1996. 2 It denied reconsideration on March 8, 1996. 3
Private respondent filed a petition for certiorari before the Regional Trial Court, Branch 58, Angeles
City. 4 The trial court found the dispute to be intracorporate, hence, subject to the jurisdiction of
the SEC, and ordered the MCTC to dismiss Civil Case No. 1214 accordingly. 5 It denied
reconsideration on May 31, 1996. 6

ISSUE OF THE CASE:

Whether or not the RTC Judge is correct

RULING OF THE COURT:

No. The regular courts have jurisdiction over the case. The case between Lozano and Anda is not an
intra-corporate dispute. UMAJODA is not yet incorporated. It is yet to submit its articles of incorporation to
the SEC. It is not even a dispute between KAMAJDA or SAMAJODA. The controversy between Lozano
and Anda does not arise from intra-corporate relations but rather from a mere conflict from their plan to
merge the two associations.

Sec. 5. . . . [T]he Securities and Exchange Commission [has] original and exclusive jurisdiction to hear
and decide cases involving:
(a) Devices or schemes employed by or any acts of the board of directors, business associates, its
officers or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of
the public and/or of the stockholders, partners, members of associations or organizations registered with
the Commission.
(b) Controversies arising out of intracorporate or partnership relations, between and among stockholders,
members or associates; between any or all of them and the corporation, partnership or association of
which they are stockholders, members, or associates, respectively; and between such corporation,
partnership or association and the state insofar as it concerns their individual franchise or right to exist as
such entity.
(c) Controversies in the election or appointment of directors, trustees, officers or managers of such
corporations, partnerships or associations.
(d) Petitions of corporations, partnerships or associations to be declared in the state of suspension of
payments in cases where the corporation, partnership or association possesses sufficient property to
cover all its debts but foresees the impossibility of meeting them when they respectively fall due or in
cases where the corporation, partnership or association has no sufficient assets to over its liabilities, but
is under the management of a Rehabilitation Receiver or Management Committee created pursuant to
this Decree.
The grant of jurisdiction to the SEC must be viewed in the light of its nature and function under the
law. 8This jurisdiction is determined by a concurrence of two elements: (1) the status or relationship of the
parties; and (2) the nature of the question that is the subject of their controversy. 9
The first element requires that the controversy must arise out of intracorporate or partnership relations
between and among stockholders, members, or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or associates,
respectively; and between such corporation, partnership or association and the State in so far as it
concerns their individual franchises. 10 The second element requires that the dispute among the parties
be intrinsically connected with the regulation of the corporation, partnership or association or deal with the
internal affairs of the corporation, partnership or association.
The KAMAJDA and SAMAJODA to which petitioner and private respondent belong are duly registered
with the SEC, but these associations are two separate entities. The dispute between petitioner and
private respondent is not within the KAMAJDA nor the SAMAJODA. It is between members of separate
and distinct associations. Petitioner and private respondent have no intracorporate relation much less do
they have an intracorporate dispute. The SEC therefore has no jurisdiction over the complaint.
The doctrine of corporation by estoppel 16 advanced by private respondent cannot override jurisdictional
requirements. Jurisdiction is fixed by law and is not subject to the agreement of the parties. 17 It cannot be
acquired through or waived, enlarged or diminished by, any act or omission of the parties, neither can it
be conferred by the acquiescence of the court. 18
Corporation by estoppel is founded on principles of equity and is designed to prevent injustice and
unfairness. 19It applies when persons assume to form a corporation and exercise corporate functions and
enter into business relations with third person. Where there is no third person involved and the conflict
arises only among those assuming the form of a corporation, who therefore know that it has not been
registered, there is no corporation by estoppel. 20

8) Globe Telecoms v NTC

G.R. No. 143964

July 26, 2004

FACTS:

1. 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. Smart alleged that Globe, with
evident bad faith and malice, refused to grant Smarts request for the interconnection of SMS.

2. 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 9-7-93,19 and its omission of the mandatory Certification
of Non-Forum Shopping.

3. On 19 July 1999, NTC issued the Order now subject of the present petition.

a. 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 impasse

b. NTC held that since SMS falls squarely within the definition of value-added service or
enhanced-service given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95)
the implementation of SMS interconnection is mandatory

c. The NTC also declared that both Smart and Globe have been providing SMS without
authority from it
 4. Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition25 to nullify and set
aside the Order and to prohibit NTC from taking any further action in the case. Globe

a. reiterated its previous arguments that the complaint should have been dismissed for
failure to comply with conditions precedent and the non-forum shopping rule.

b. 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.

c. 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 process

5. The CA issued a TRO on 31 Aug 1999.

6. In its Memorandum, Globe called the attention of the CA in an earlier NTC decision regarding
Islacom, holding that SMS is a deregulated special feature and does not require the prior
approval of the NTC. Globe that its departure from its ruling in the Islacom case constitutes a
denial of equal protection of the law.

7. On 22 Nov 1999, the CA affirmed in toto the NTC Order.

8. On 21 December 1999, Globe filed a Motion for Partial 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. After the Court of Appeals denied the Motion , Globe
elevated the controversy to this Court

ISSUES:

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. 14-11-97; and

3. Whether NTC acted with due process in levying the fine against Globe

RULING:

1. 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.

2. 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.

a. The statutory basis for the NTCs determination must be thoroughly examined.
 b. Next, the regulatory framework devised by NTC in dealing with VAS should be examined.
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.

4. NTC violated several of these cardinal rights due Globe in the promulgation of the assailed Order.

a. The NTC Order is not supported by substantial evidence. Neither does it sufficiently
explain the reasons for the decision rendered.

b. 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.

c. 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

5. In summary:

a. 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;

b. 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

CHAPTER 8 CASE DIGEST

1) Vicente Villaflor vs. Court of Appeals

G.R. No. 95694, October 9, 1997

FACTS

In 1940, Cirilo Piencenaves, in a Deed of Absolute Sale, sold to Vicente Villafor, a parcel of agricultural
land (planted with Abaca) containing an area of 50 hectares. The deed states that the land was sold to
Villaflor in 1937, but no formal document was then executed, and since then until the present time,
Villaflor has been in possession and occupation of the same. Before the sale of said property,
Piencenaves inherited said property from his parents and was in adverse possession of such without
interruption for more than 50 years. On the same day, Claudio Otero, in a Deed of Absolute Sale sold to
Villaflor a parcel of agricultural land (planted with corn), containing an area of 24 hectares. Hermogenes
Patete, in a Deed of Absolute Sale sold to Villaflor, a parcel of agricultural land (planted with abaca and
corn), containing an area of 20 has., more or less. Both deed state the same details or circumstances as
that of Piencenaves.
 In 1940, Fermin Bocobo, in a Deed of Absolute Sale sold to Villaflor, a parcel of agricultural land (planted
with abaca), containing an area of 18 hectares, more or less. In 1946, Villaflor leased to Nasipit Lumber
Co., Inc. a parcel of land, containing an area of 2 has, together with all the improvements existing
thereon, for a period of 5 years at a rental of P200.00 per annum to cover the annual rental of house and
building sites for 33 houses or buildings.In 1948, in an Agreement to Sell Villaflor conveyed to Nasipit
Lumber, 2 parcels of land.From said day, the parties agreed that Nasipit Lumber shall continue to occupy
the property not anymore in concept of lessee but as prospective owners. On 7 December 1948, Villaflor
and Nasipit Lumber executed an Agreement, confirming an Agreement to Sell, but with reference to the
Sales Application filed with the Bureau of Land.

Sales Application of Villaflor were rejected for having leased the property to another even before he had
acquired transmissible rights thereto. In August 1950, Villaflor executed a document, denominated as a
Deed of Relinquishment of Rights, in favor on Nasipit Lumber, in consideration of the amount of P5,000
that was to be reimbursed to the former representing part of the purchase price of the land, the value of
the improvements Villaflor introduced thereon, and the expenses incurred in the publication of the Notice
of Sale; in light of his difficulty to develop the same as Villaflor has moved to Manila. Pursuant thereto
Nasipit Lumber filed a Sales Application over the 2 parcels of land. Order of Award was then issued in
favor of Nasipit Lumber. In 1973, Villafor wrote a letter to Nasipit Lumber, reminding the latter of their
verbal agreement in 1955; but the new set of corporate officers refused to recognize Villaflors claim. In a
formal protest dated 31 January 1974 which Villaflor filed with the Bureau of Lands, he protested the
Sales Application of Nasipit Lumber, claiming that the company has not paid him P5,000.00 as provided
in the Deed of Relinquishment of Rights dated 16 August 1950. The Director of Lands found that the
payment P5,000.00 in the Deed and the consideration in the Agreement to Sell were duly proven, and
ordered the dismissal of Villaflors protest. In 1978, Villaflor filed a complaint in the trial court for
Declaration of Nullity of Contract (Deed of Relinquishment of Rights), Recovery of Possession (of two
parcels of land subject of the contract), and Damages. In 1983, he died. The trial court ordered his
widow, Lourdes D. Villaflor, to be substituted as petitioner. CFI dismissed the complaint. The heirs of
petitioner appealed to the Court of Appeals which, however, rendered judgment against them. Hence this
petition.

ISSUE:

Whether or not the Deed of Relinquishment of Rights is fictitious

RULING OF THE COURT:

The Supreme Court dismissed the petition. Simulation not existing in the present case Simulation occurs
when an apparent contract is a declaration of a fictitious will, deliberately made by agreement of the
parties, in order to produce, for the purpose of deception, the appearance of a juridical act which does not
exist or is different from that which was really executed. Such an intention is not apparent in the
agreements. The intent to sell, on the other hand, is as clear as daylight. The fact, that the agreement to
sell (7 December 1948) did not absolutely transfer ownership of the land to private respondent, does not
show that the agreement was simulated. Petitioners delivery of the Certificate of Ownership and
execution of the deed of absolute sale were suspensive conditions, which gave rise to a corresponding
obligation on the part of the private respondent, i.e., the payment of the last installment of the
consideration mentioned in the Agreement. Such conditions did not affect the perfection of the contract or
prove simulation. Nonpayment of the consideration does not prove simulation Nonpayment, at most,
gives the vendor only the right to sue for collection. Generally, in a contract of sale, payment of the price
is a resolutory condition and the remedy of the seller is to exact fulfillment or, in case of a substantial
breach, to rescind the contract under Article 1191 of the Civil Code. However, failure to pay is not even a
breach, but merely an event which prevents the vendors obligation to convey title from acquiring binding
force.

2) THE COMMISSIONER OF CUSTOMS, and THE COLLECTOR OF CUSTOMS vs.

HON. PEDRO C. NAVARRO

[G.R. No. L-33146. May 31, 1977.]

FACTS:

The stress, and rightly so, by the Commissioner of Customs and the Collector of Customs in their
exhaustive and scholarly petition for certiorari was on the jurisdictional issue. It sought to nullify and set
aside in order of respondent Judge Pedro C. Navarro issuing a writ of preliminary injunction as prayed for
by private respondents Juanito S. Flores and Asiatic Incorporated the importers of 1,350 cartons of fresh
fruits, restraining petitioners from proceeding with the auction sale of such perishable goods. Classified as
non-essential consumer commodities, they were banned by Central Bank Circulars Nos. 289, 294 and
295 as prohibited importation or importation contrary to law and thus made subject to forfeiture
proceedings by petitioner Collector of Customs pursuant to the relevant sections of the Tariff and
Customs Code.

Petitioners pointed out that seizure and forfeiture proceedings, which, as held in a number of decisions,
was a matter falling within the exclusive competence of the customs authorities.
SC required respondents to file an answer and at the same time issuing a writ of preliminary injunction as
prayed for by petitioners to prevent the challenged order of respondent Judge from being implemented.
Instead of preparing an answer, they just submitted a manifestation stating that after an intensive and
serious study of the merit of the case, the respondents have decided to abandon its interest in the case.
The rationale behind such a move was ostensibly the desire to avoid additional expenses, in view of the
fact that the shipments, being perishable, have already deteriorated.

ISSUE: Who has jurisdiction over the confiscated goods?

RULING OF THE COURT:

Customs. That such jurisdiction of the customs authorities is exclusive was made clear in Pacis v. Averia.
This Court, speaking through Justice J. P. Bengzon, realistically observed: This original jurisdiction of the
Court of First Instance, when exercised in an action for recovery of personal property which is a subject of
a forfeiture proceeding in the Bureau of Customs, tends to encroach upon, and to render futile, the
jurisdiction of the Collector of Customs in seizure and forfeiture proceedings. The court should yield to
the jurisdiction of the Collector of Customs. Such a ruling, as pointed out by Justice Zaldivar in Auyong
Hian v. Court of Tax Appeals, promulgated less than a year later, could be traced to Government v. Gale,
26 a 1913 decision, where there was a recognition in the opinion of Justice Carson that a Collector of
Customs when sitting in forfeiture proceedings constitutes a tribunal upon which the law expressly
confers jurisdiction to hear and determine all questions touching the forfeiture and further disposition of
the subject matter of such proceedings.

The controlling principle was set forth anew in Ponce Enrile v. Vinuya, 28 decided in 1971. Thus: The
prevailing doctrine is that the exclusive jurisdiction in seizure and forfeiture cases vested in the Collector
of Customs precludes a court of first instance from assuming cognizance over such a matter.
It is the settled rule, therefore, that the Bureau of Customs acquires exclusive jurisdiction over imported
goods, for the purposes of enforcement of the customs laws, from the moment the goods are actually in
its possession or control, even if no warrant of seizure or detention had previously been issued by the
Collector of Customs in connection with seizure and forfeiture proceedings.
In the present case, the Bureau of Customs actually seized the goods in question on November 4, 1966,
and so from that date the Bureau of Customs acquired jurisdiction over the goods for the purposes of the
enforcement of the tariff and customs laws, to the exclusion of the regular courts. Much less then would
the CFI of Manila have jurisdiction over the goods in question after the Collector of Customs had issued
the warrant of seizure and detention on January 12, 1967. And so, it cannot be said, as respondents
contend, that the issuance of said warrant was only an attempt to divest the respondent Judge of
jurisdiction over the subject matter of the case. The court presided by respondent Judge did not acquire
jurisdiction over the goods in question when the petition for mandamus was filed before it, and so there
was no need of divesting it of jurisdiction. Not having acquired jurisdiction over the goods, it follows that
the Court of First Instance of Manila had no jurisdiction to issue the questioned order of March 7, 1967
releasing said goods.