Republic of the Philippines

COURT OF APPEALS
Manila

FOURTH DIVISION
MERIT FREIGHT CA-G.R. SP No. 119658
INTERNATIONAL, INC.,
Petitioner,

- versus -

FEDERAL EXPRESS
PACIFIC, INC.
Respondent.
x--------------------------------------x CA-G.R. SP. No. 121661
ACE LOGISTICS INC.,
Petitioner, Members:

- versus - TOLENTINO, Chairperson

GARCIA, and
FEDERAL EXPRESS BUESER, JJ.
PACIFIC, INC.,
Respondent. Promulgated:
January 23, 2013

x-----------------------------------------------------------------------------------------x

DECISION
BUESER, J.:

One can but remember the words of a great Filipino

leader who in part said he would not mind having a government
run like hell by Filipinos than one subservient to foreign
dictation. In this case, it is not even a foreign government but
an ordinary investor whom [is allowed] to dictate what shall we
do with our heritage. (Garcia vs. The Board of Investments, G.R. No.
92024, November 9, 1990)
CA-G.R. SP NO. 119658 and SP NO. 121661
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Before this Court are the consolidated petitions for review filed
by Merit Freight International, Inc. and Ace Logistics, Inc., challenging
the validity of Resolution No. 26 (BM3-2011) adopted by the Civil
Aeronautics Board on May 2, 2011. The dispositive portion of the
said resolution reads:

NOW, THEREFORE, the Board RESOLVED to APPROVE

as it hereby APPROVES the petition of FEDERAL EXPRESS
PACIFIC, INC. for the issuance of a REGULAR PERMIT to operate
international airfreight forwarding service valid for a period of FIVE
(5) years effective from 02 May 2011 until 01 May 2016.

Adopted 02 May 2011. (Rollo, p. 55, Vol. II.)

On the one hand, petitioner Merit Freight International, Inc.

presented the following arguments:

THE CIVIL AERONAUTICS BOARD SERIOUSLY ERRED IN

GRANTING RESPONDENT, A FOREIGN CORPORATION,
PROVISIONAL AND REGULAR PERMIT TO OPERATE AS AN
INTERNATIONAL AIRFREIGHT FORWARDER SINCE:

(A) AIRFREIGHT FORWARDING IS A PUBLIC UTILITY

RESERVED FOR QUALIFIED FILIPINO INDIVIDUALS
AND CORPORATIONS;

(B) THE GRANT OF AUTHORITY TO RESPONDENT

VIOLATES THE CONSTITUTION'S FILIPINO FIRST
POLICY, SECTION 16 OF ECONOMIC REGULATION
NUMBER 4, AND THE LEGISLATIVE POLICY UNDER
REPUBLIC ACT NO. 776;

(C) THE ECONOMIC GROUNDS RELIED UPON BY

RESPONDENT AS JUSTIFICATIONS FOR THE GRANT
OF A REGULAR LICENSE ARE UNTENABLE. (Rollo, p.
19.)

Petitioner Ace Logistics, Inc., on the other hand, raised this lone
issue:

THE CIVIL AERONAUTICS BOARD [SERIOUSLY] ERRED IN

GRANTING RESPONDENT AUTHORITY OR PERMIT TO
ENGAGE AND/OR OPERATE INTERNATIONAL AIR FREIGHT
FORWARDING DESPITE THE FACT THAT IT IS A ONE
HUNDRED (100%) PERCENT FOREIGN OWNED AND FOREIGN
CA-G.R. SP NO. 119658 and SP NO. 121661
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BASED CORPORATION IN CLEAR VIOLATION OF THE

REQUIREMENT OF THE CONSTITUTION THAT PUBLIC UTILITY
MUST BE RESERVED TO QUALIFIED FILIPINO INDIVIDUALS
AND CORPORATIONS. (Rollo, p. 46, Vol. II.)

In an order dated December 7, 2011, this Court granted the

motion for consolidation filed by petitioner Ace Logistics, Inc. and
directed that CA G.R. SP No. 121661 be consolidated with CA G.R.
SP No. 119658.

Simple as it is and finding no error in it, We hereby quote with

approval herein respondents limited presentation of facts:

a. On 18 March 2009, respondent [Federal Express Pacific,

Inc.] filed with the Civil Aeronautics Board (CAB) an Application
for Authority to Operate as an International Airfreight Forwarder
(Application).

xxx xxx xxx

b. On 14 March 2011, after all parties to the case were heard

and evidence received, the CAB issued respondent a provisional
authority to operate as an International Airfreight Forwarder. The
license was valid for a period of one (1) year effective 10 March
2011 until 9 March 2012. xxx

c. On 12 April 2011, respondent filed a Motion to Issue

Regular License, valid for a period of at least five (5) years. xxx

d. On 25 April 2011, petitioner [Merit Freight International,

Inc.] filed a Motion for Reconsideration and Opposition/Comment to
Applicant's Motion for Issuance of Regular License. xxx

e. On 2 May 2011, the CAB granted the motion and issued

respondent a regular license, allowing it to operate as an
international airfreight forwarder for a period of five years, i.e., from
2 May 2011 until 1 May 2016. xxx (Rollo, pp. 501-502.)

Petitioners felt aggrieved by the above resolution of the Civil

Aeronautics Board, thus, they filed the present petitions.

Nationalism it is a sense of national consciousness exalting

one nation above all others and placing primary emphasis on
CA-G.R. SP NO. 119658 and SP NO. 121661
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promotion of its interests as opposed to those of other nations.

(Nationalism Definition and More from the Free Merriam-Webster
Dictionary, http://www.merriam-webster.com/dictionary/nationalism,
last accessed on December 2, 2012) Nationalism is inherent in the
very concept of the Philippines being a democratic and republican
state, with sovereignty residing in the Filipino people and from whom
all government authority emanates. In nationalism, the happiness
and welfare of the people must be the goal. The nation-state can
have no higher purpose. Any interpretation of any constitutional
provision must adhere to such basic concept. (Manila Prince
Hotel vs. Government Service Insurance System, G.R. No. 122156,
February 3, 1997)

A leading member of the 1986 Constitutional Commission,

Father Joaquin G. Bernas, S.J., reminds us that
the Filipinization provision in the 1987 Constitution is one of the
products of the spirit of nationalism. The 1987 Constitution
provides for the Filipinization of public utilities by requiring that any
form of authorization for the operation of public utilities should
be granted only to citizens of the Philippines or to corporations
or associations organized under the laws of the Philippines at
least sixty per centum of whose capital is owned by such
citizens. The provision is [an express] recognition of the sensitive
and vital position of public utilities both in the national economy and
for national security. The evident purpose of the citizenship
requirement is to prevent aliens from assuming control of public
utilities, which may be inimical to the national interest. Clearly,
this specific provision explicitly reserves to Filipino citizens control of
public utilities, pursuant to an overriding economic goal of the 1987
Constitution: to conserve and develop our patrimony and ensure a
self-reliant and independent national economy effectively
controlled by Filipinos. (Wilson P. Gamboa vs. Finance Secretary
Margarito B. Teves, G.R. No. 176579, June 28, 2011) Protection of
foreign investments, while laudible, is merely a policy. The same
cannot override the demands of nationalism. (Manila Prince Hotel vs.
Government Service Insurance System, supra) It is in this light that
we decided to favor the cause of the petitioners.

However, the Department of Justice, through its Secretary,

opined that:
CA-G.R. SP NO. 119658 and SP NO. 121661
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At the outset, it bears stressing that Opinion No. 08, [S.]

2004 was issued to address the need to have a definitive opinion,
consistent with the Constitution, to ensure uniformity in the
application of laws and regulations to all stakeholders particularly in
the field of international airfreight forwarding in line with the plan at
that time to develop the Diosdado Macapagal International Airport
as an international hub in the region. In adopting the view
espoused in the provision requiring 60-40 Filipino equity for public
utilities is identically provided for under Section 8, Article XIV of the
1935 Constitution and Section 11, Article XII of the 1987
Constitution. Considering that the provision remains the same,
there appears no cogent reason to depart from our view expressed
in the aforesaid 1946 Opinion. Hence, we stated that the
nationality requirement applies only to those engaged in domestic
air commerce and/or air transportation, and does not apply to
international airfreight forwarders. Perforce, Opinion No. 49, [S.]
2004 and No. 20, [S.] 1999, which provide contrary views, were
reconsidered and modified accordingly to ensure uniformity in
interpretation. As it now stands, we are of the considered view that
international airfreight forwarders are not subject to the nationality
requirement imposed by the Constitution on public utilities.

x x x

In sum, international airfreight forwarders are not covered by

the nationality requirement under the 1987 Constitution, hence,
may be issued a permit or certificate of public convenience subject
to CAB's pertinent rules, regulations set forth under RA No. 776
and other existing laws. (Rollo, pp. 511-512.)

What is obvious is that respondent relied greatly on the

aforesaid opinion and is expecting Us to accept the same as
conclusive. On this matter, We have this to say: A court is not bound
by the resolution of the Justice Secretary. While the ruling [and, in
this case, the opinion] of the Justice Secretary is persuasive, it is not
binding on courts. (Artemio T. Torres Jr. vs. Sps. Drs. Edgardo
Aguinaldo, G.R. No. 164268, June 28, 2005)

And considering that by tradition and in our judicial system the

Supreme Court has the last word on what the law is, and that its
decisions applying or interpreting the laws or the Constitution form
part of the legal system of the country, all other courts should take
their bearings from the decisions of the said High Court. (Caram
Resources Corp. vs. Judge Maximo C. Contreras, A.M. No. MTJ-93-
CA-G.R. SP NO. 119658 and SP NO. 121661
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849, October 26, 1994) What then is the Supreme Courts stance
regarding the main issue at hand? On this question, We find the
answer in the case of Royal Cargo Corporation vs. Civil Aeronautics
Board (G.R. Nos. 103055-56, January 26, 2004):

The petitioner Royal Cargo Corporation filed the instant

petition for review on certiorari seeking to reverse and set aside the
Decision, and the Resolution of the Court of Appeals in CA-G.R. SP
No. 22673-74. The appellate court affirmed the resolutions of the
Civil Aeronautics Board (respondent Board) directing the petitioner
to transfer the top position of its corporation to a Filipino national.

x x x

The petitioner Royal Cargo Corporation is a stock

corporation duly organized and existing under and by virtue of
Philippine laws, seventy percent (70%) of which is owned by
Filipino citizens and thirty percent (30%) by foreigners. The
President of the petitioner company is a foreigner who is married to
a Filipina, while the company officers, including the Chairman of the
Board, the Executive Vice-President and all the Vice- Presidents
are all Filipinos.

On February 25, 1977, the petitioner, then operating under

the name Royal Air Cargo, Inc., was initially granted by the
respondent Board an indefinite authority to engage in
international air freight forwarding. xxx

On the day that its permit to operate was to expire, xxx, the
petitioner applied for a renewal thereof for another five years. In its
petition, it alleged, inter alia, that its president, Michael K. Raeuber,
was a German national. Acting thereon, the Air Carrier Accounts
System and Field Audit Division of the respondent Board
recommended the granting of the petition, provided that the position
of president was transferred within thirty days from notice thereof,
otherwise the permit would be cancelled, xxx

x x x

Based on the foregoing recommendation and after due

hearing conducted thereon, the respondent Board promulgated
Resolution No. 209(90), dated June 1, 1990, which reads:

x x x

The Board Resolved further to direct Royal Cargo

Corporation to transfer its top position to a Filipino
CA-G.R. SP NO. 119658 and SP NO. 121661
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national within thirty (30) days from receipt of a copy

of this Resolution, otherwise its authority will be
revoked.

The petitioner accordingly sought reconsideration of the

above resolution, xxx. The respondent Board, in Resolution No.
298(90) dated August 3, 1990, denied the motion, stating the
following reasons:

1. That it is the policy of the Board to grant a

permit to engage in international airfreight
forwarding only to citizens of the Philippines as
defined in RA 776, as amended;

2. That there is no law which precludes the Board

from adopting such a policy; and

3. That the Board find[s] no valid reason to abandon

such policy because foreign capital is not very
necessary in the business of airfreight forwarding.

Aggrieved, the petitioner elevated the case to the Court of

Appeals. In the assailed Decision of September 30, 1991, the
appellate court ruled that as a public utility, the petitioner is
covered by the restriction embodied in Section 11, Article XII
of the Constitution which provides in part that:

Section 11. ... The participation of foreign investors in

the governing body of any public utility enterprise
shall be limited to their proportionate share in its
capital, and all the executive and managing officers of
such corporation or association must be citizens of
the Philippines.5

The CA, thus, held that the respondent Board did not err in
ordering the petitioner to transfer its top position to a Filipino
national. The CA also declared that the promulgation of Resolution
Nos. 209(90) and 298(90) was well within the prerogatives
conferred upon the respondent Board by Sections 10(a) and (b) of
Republic Act No. 776:
CA-G.R. SP NO. 119658 and SP NO. 121661
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x x x

Consequently, the CA dismissed the petitioners appeal for

lack of merit. xxx

In the meantime, pending the resolution of the instant

petition, the petitioners authority to operate as an international
airfreight forwarder as applied for under the permit in question
expired in 1995. xxx

Clearly, the instant petition has become moot and academic.

This is evident from the fact that the permit to operate as an
international airfreight forwarder the respondent Board sought to
withhold from the petitioner for failing to meet the constitutional
Filipinization requirement had already lapsed in 1995. Also, with
the current renewal of the petitioners authority to operate, it is
to be assumed that it has finally decided to comply with the
citizenship requirement mandated by the constitution for its
line of business. Under the circumstances, the dismissal of the
case is clearly warranted as the petitioner no longer has any legal
interest in the present case.

x x x

(All emphasis and underscoring supplied)

Certainly, the abovementioned case was dismissed for being

moot and academic. Yet, it can be deduced therein that (a) the policy
of the Civil Aeronautics Board as early as 1990 is that only citizens of
the Philippines can be granted a permit to engage in international
airfreight forwarding, and; (b) the Court of Appeals ruled that the
petitioner in that case a company engaged in international airfreight
forwarding is a public utility and is covered by the restriction
embodied in Section 11, Article XII of the Constitution. More
importantly, the Supreme Court itself mentioned in passing that xxx,
with the current renewal of the petitioners authority to operate, it is to
be assumed that it has finally decided to comply with the
citizenship requirement mandated by the constitution for its line
of business. xxx. (Emphasis and underscoring Ours) Evidently, the
High Court recognizes the importance of complying with the
citizenship requirement even in the business of airfreight forwarding.
CA-G.R. SP NO. 119658 and SP NO. 121661
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And if this is not the case, then, We believe that,

notwithstanding the mootness of the petition, the Supreme Court
would not hesitate to rule and declare in the afore-quoted Royal
Cargo case (supra) that the following are NOT VALID policy and
ruling, thus, must not be adhered to: (1) Civil Aeronautics Boards
policy of limiting the issuance of permits to Filipino citizens with
regard to the business of international airfreight forwarding, and (2)
appellate courts ruling that international airfreight forwarding, as a
public utility enterprise, is covered by the restriction provided under
Section 11, Article XII of the 1987 Constitution. Indeed, it will not be
the first time that the Supreme Court, despite mootness of the case,
still conducted judicial review:

The moot and academic principle is not a magical formula

that can automatically dissuade the courts in resolving a case.
Courts will decide cases, otherwise moot and academic, if: first,
there is a grave violation of the Constitution, second, the
exceptional character of the situation and the paramount public
interest is involved, third, when constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and
the public, and fourth, the case is capable of repetition yet evading
review. (Emphasis and underscoring supplied) (Dennis A. B. Funa
vs. The Chairman, Commission on Audit, G.R. No. 192791, April
24, 2012)

In fact, We have come across some notable decisions where

the Supreme Court, although recognizing the mootness of the case,
still took time to address the issues raised therein. To name a few
are:

[I]n Constantino v. Sandiganbayan (First Division), (G.R.

Nos. 140655 & 154482, September 13, 2007) Constantino, a public
officer, and his co-accused, Lindong, a private citizen, filed
separate appeals from their conviction by the Sandiganbayan for
violation of Section 3(e) of Republic Act No. 3019 or the Anti-Graft
and Corrupt Practices Act. While Constantino died during
the pendency of his appeal, the Court still ruled on the merits
thereof, considering the exceptional character of the appeals
of Constantino and Lindong in relation to each other; that is, the two
petitions were so intertwined that the absolution of the
deceased Constantino was determinative of the absolution of his
co-accused Lindong.

In Public Interest Center, Inc. v. Elma, (G.R. No.

CA-G.R. SP NO. 119658 and SP NO. 121661
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138965, June 30, 2006) the petition sought to declare as null and
void the concurrent appointments of Magdangal B. Elma as
Chairman of the Presidential Commission on Good Government
(PCGG) and as Chief Presidential Legal Counsel (CPLC) for being
contrary to Section 13, Article VII and Section 7, par. 2, Article IX-B
of the 1987 Constitution. While Elma ceased to hold the two offices
during the pendency of the case, the Court still ruled on the merits
thereof, considering that the question of whether the PCGG
Chairman could concurrently hold the position of CPLC was
one capable of repetition.

In David v. Arroyo, (G.R. Nos. 171396, 171409, 171485,

171483, 171400, 171489 & 171424, May 3, 2006) seven petitions
for certiorari and prohibition were filed assailing the constitutionality
of the declaration of a state of national emergency by President
Gloria Macapagal-Arroyo. While the declaration of a state of
national emergency was already lifted during the pendency of the
suits, this Court still resolved the merits of the petitions, considering
that the issues involved a grave violation of the Constitution and
affected the public interest. The Court also affirmed its duty to
formulate guiding and controlling constitutional precepts, doctrines
or rules, and recognized that the contested actions were capable of
repetition.

In Pimentel, Jr. v. Ermita, (G.R. No. 164978, October 13,

2005) the petition questioned the constitutionality of President
Gloria Macapagal-Arroyos appointment of acting secretaries
without the consent of the Commission on Appointments while
Congress was in session. While the President extended ad
interim appointments to her appointees immediately after the
recess of Congress, the Court still resolved the petition, noting that
the question of the constitutionality of the Presidents appointment
of department secretaries in acting capacities while Congress was
in session was one capable of repetition.

In Atienza v. Villarosa, (G.R. No. 161081, May 10, 2005) the

petitioners, as Governor and Vice-Governor, sought for clarification
of the scope of the powers of the Governor and Vice-Governor
under the pertinent provisions of the Local Government Code of
1991. While the terms of office of the petitioners expired during
the pendency of the petition, the Court still resolved the issues
presented to formulate controlling principles to guide the bench, bar
and the public.

In Gayo v. Verceles, (G.R. No. 150477, February 28,

2005) the petition assailing the dismissal of the petition
for quo warranto filed by Gayo to declare void the proclamation
of Verceles as Mayor of the Municipality of Tubao, La Union during
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the May 14, 2001 elections, became moot upon the expiration
on June 30, 2004 of the contested term of office
of Verceles. Nonetheless, the Court resolved the petition since the
question involving the one-year residency requirement for those
running for public office was one capable of repetition.

In Albaa v. Commission on Elections, (G.R. No.

163302, July 23, 2004) the petitioners therein assailed the
annulment by the Commission on Elections of their proclamation as
municipal officers in the May 14, 2001 elections. When a new set
of municipal officers was elected and proclaimed after the May 10,
2004 elections, the petition was mooted but the Court resolved the
issues raised in the petition in order to prevent a repetition thereof
and to enhance free, orderly, and peaceful elections.

(Please See Mattel, Inc. vs. Emma Francisco, G.R. No. 166886,
July 30, 2008)

Furthermore, if the case is not really what we think it is, then,

the High Court itself: (i) would have mentioned, even in passing, that
the airfreight forwarding business is open to all without regard to
citizenship, and (ii) would not so explicitly presumed that the
petitioner Royal Cargo has finally decided to comply with the
citizenship requirement mandated by the constitution for its line of
business. Hence, there can never be a better way of bringing the
main issue to a close other than by finally concluding that only
Filipinos can be granted a permit to engage in international airfreight
forwarding.

Taking the foregoing into account, We hereby declare

respondent Federal Express Pacific, Inc., a foreign corporation,
disqualified in our country from operating as an International
Airfreight Forwarder which is clearly a public utility. It is thus only
proper for Us to consider the May 2, 2011 Resolution of the Civil
Aeronautics Board null, void and of no further force and effect.

Before We end, it must be clarified that the other issues raised

by the respondent against herein petitioners are without merit.

No Locus Standi
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We find incorrect the argument of the respondent that petitioner

Merit Freight International, Inc. possessed no legal standing to
question its application for a regular permit. In particular, it was
argued that since the said petitioner has no permit to operate as
renewal of the same is just being undertaken it has no personal
stake in the outcome of the case.

In order to address the above issue, attention must be called

first on the following:

(a) It is significant to note that what is being assailed

here is the absence of petitioners permit to operate and
not the existence of the latters juridical personality as a
domestic corporation. And one must not lose sight of the
fact that the petitioner corporation, as an association of
individuals and with legal personality of its own, has the
right to sue in general. (Phil. Stock Exchange Inc. vs.
Court of Appeals, G.R. No. 125469, October 27, 1997)

(b) Since the nationality of a private corporation is

determined by the citizenship of its controlling
stockholders, petitioner Merit Freight International, Inc. is
definitely a Filipino. (Filipinas Compaia de Seguros vs.
Christern, Huenefeld & Co., Inc., G.R. No. L-2294, May
25, 1951)

And now, the resolution of the issue. There is no question that

the instant petition raises matters of transcendental importance to the
public. The fundamental and threshold legal issue in this case,
involving the national economy and the economic welfare of the
Filipino people, far outweighs any perceived impediment in the
legal personality of the petitioner to bring this action. The right of
a citizen to bring a suit on matters of transcendental importance to
the public must always be upheld. When the issue concerns a public
right, the people are regarded as the real parties in interest; and
because it is sufficient that petitioner is a citizen and as such is
interested in the execution of the laws, he need not show that he
has any legal or special interest in the result of the action. We
repeat, it is enough that the petitioner is a citizen. Undoubtedly,
since the instant petition, brought by a citizen, involves matters of
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transcendental public importance, the latter has the

requisite locus standi (Please See Wilson P. Gamboa vs. Finance
Secretary Margarito B. Teves, supra)

Granting for the sake of argument that petitioner Merit Freight

International, Inc. has no legal standing to bring the present case, the
other petitioner Ace Logistics, Inc. possessed such kind of standing to
sue. The respondent itself admitted that Ace Logistic, Inc. is a
licensed freight forwarder. Therefore, We cannot just dismissed the
case outright.

Late Filing of the Petition

Unfortunately for the respondent, We find untenable its claim

that petitioner Ace Logistics, Inc. was guilty of late filing.

Section 4, Rule 43 of the Revised Rules of Civil Procedure, as

amended, provides:

SEC. 4. Period of appeal. - The appeal shall be taken within fifteen

(15) days from notice of the award, judgment, final order or
resolution, or from the date of its last publication, if publication is
required by law for its effectivity, or of the denial of petitioners
motion for new trial or reconsideration duly filed in accordance with
the governing law of the court or agency a quo. Only one (1) motion
for reconsideration shall be allowed. Upon proper motion and the
payment of the full amount of the docket fee before the expiration of
the reglementary period, the Court of Appeals may grant an
additional period of fifteen (15) days only within which to file the
petition for review. No further extension shall be granted except for
the most compelling reason and in no case to exceed fifteen (15)
days.

Hence, upon receipt of the challenged final order or resolution,

one must file a petition for review within the fifteen (15)-day
reglementary period. (Samahan ng mga Manggagawa sa Hyatt vs.
Hon. Voluntary Arbitrator Magsalin, G.R. No. 164939, June 6, 2011)
And how should one receive judgments, final orders or resolutions?
Judgments, final orders or resolutions shall be served either
personally or by registered mail. Personal service is complete
upon actual delivery. Service by ordinary mail is complete upon the
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expiration of ten (10) days after mailing. (Sections 9 & 10, Rule 13 of
the Revised Rules of Court) Evidently, service by facsimile is not one
of the proper ways of receiving judgments, final orders or resolutions.
Thus, in determining whether the petition was filed on time, the
counting of the period cannot be reckoned on September 14, 2011
which is the date when the assailed resolution was received through
facsimile. And so, when petitioner Ace Logistics, Inc. officially
received on September 30, 2011 a copy of the assailed resolution, it
had until October 15, 2011 within which to file a petition for review.
Given that subsequent motions to extend the filing of the subject
petition were granted by Us in the interest of justice, the actual filing
of the case by the said petitioner on November 14, 2011 cannot be
considered as late filing. (See Rollo, Volume 2, pp. 15 & 154 and the
case of Republic vs. Sandiganbayan, G.R. No. 148154, December
17, 2007)

Non-Exhaustion of Administrative Remedies

The general rule is that before a party may seek the

intervention of the court, he should first avail of all the means afforded
him by administrative processes. The issues which administrative
agencies are authorized to decide should not be summarily taken
from them and submitted to a court without first giving such
administrative agency the opportunity to dispose of the same after
due deliberation. (Republic vs. Carlito Lacap, G.R. No. 158253,
March 2, 2007)

Nonetheless, the doctrine of exhaustion of administrative

remedies, which is based on sound public policy and practical
considerations, is not an inflexible rule. There are many accepted
exceptions, such as: (a) where there is estoppel on the part of the
party invoking the doctrine; (b) where the challenged administrative
act is patently illegal, amounting to lack of jurisdiction; (c) where there
is unreasonable delay or official inaction that will irretrievably
prejudice the complainant; (d) where the amount involved is relatively
small so as to make the rule impractical and oppressive; (e) where
the question involved is purely legal and will ultimately have to be
decided by the courts of justice; (f) where judicial intervention is
urgent; (g) when its application may cause great and irreparable
damage; (h) where the controverted acts violate due process; (i)
when the issue of non-exhaustion of administrative remedies has
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been rendered moot; (j) when there is no other plain, speedy and
adequate remedy; (k) when strong public interest is involved; and,
(l) in quo warranto proceedings. The second to the last exception is
applicable to the present case. (Republic vs. Carlito Lacap, supra)

Again, We reiterate that the instant petition raises matters of

transcendental importance to the public as it involves the national
economy and the economic welfare of the Filipino people. (Gamboa
vs. Finance Secretary Margarito B. Teves, supra) Hence,
assuming arguendo that both petitioners made mistakes in
procedure, the state policy would still weigh heavily against
respondent. Application of the doctrine of exhaustion of
administrative remedies is relaxed when a strong public interest is
involved. (Godofredo Sison vs. Court of Appeals, G.R. No. 124086,
June 26, 2006)

WHEREFORE, premises considered, the prayers of the

petitioners Merit Freight International, Inc. and Ace Logistics, Inc. are
hereby GRANTED. For being null and void, Resolution No. 26 (BM3-
2011) adopted by the Civil Aeronautics Board on May 2, 2011, is
hereby REVERSED and SET ASIDE.

SO ORDERED.

DANTON Q. BUESER
Associate Justice

WE CONCUR:

AMELITA G. TOLENTINO RAMON R. GARCIA

Associate Justice Associate Justice

CERTIFICATION
CA-G.R. SP NO. 119658 and SP NO. 121661
DECISION Page - 16 -
_____________________________________________________________________________

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the
writer of the opinion of the Court.

AMELITA G. TOLENTINO
Associate Justice
Chairperson, Fourth Division