Smart Communications, Inc. et. al. vs. National Telecommunications Commission

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION (PILTEL) vs. NATIONAL TELECOMMUNICATIONS COMMISSION 

 G.R. No. 151908                                                           August 12, 2003

FACTS: Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission issued a Memorandum Circulars on the billing of telecommunications services and on measures in minimizing, if not eliminating, the incidence of stealing of cellular phone unit.  Isla Communications Co., Inc. (IslaCom) and Pilipino Telephone Corporation (PilTel) filed an action for the declaration of nullity of the memorandum circulars, alleging that NTC has no jurisdiction to regulate the sale of consumer goods as stated in the subject memorandum circulars.  Such jurisdiction belongs to the DTI under the Consumer Acts of the Philippines.  Soon thereafter, Globe Telecom, Inc. and Smart Communications, Inc. filed a joint motion for leave to intervene and to admit complaint-in-intervention.  This was granted by the trial court.

The trial court issued a TRO enjoining NTC from implementing the MCs. NTC filed a Motion to Dismiss, on the ground that petitioners failed to exhaust administrative remedies.  The defendant's MD is denied for lack of merit.  NTC filed a MR but was later on denied by the trial court.  The CA, upon NTC's filing of a special action for certiorari and prohibition, reversed the decision of the lower court.  Hence this petition.

ISSUE: W/N the CA erred in holding that the private respondents failed to exhaust administrative remedies?

RULING: Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.

The rules and regulations that administrative agencies promulgate, which are the product of a delegated legislative power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law. They must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by an administrative body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an administrative order, the former must prevail.

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.

The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence pursuant to the doctrine of primary jurisdiction. The courts will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. It applies where the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of such issues to the administrative body for its view.

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts. This is within the scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

United Resident of Dominican Hills vs. Commission on the Settlement of Land Problems

THE UNITED RESIDENTS OF DOMINICAN HILL, INC., vs. COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS

G.R. No. 135945                                                                                              March 7, 2001

TOPIC: AN EXECUTIVE AGENCY IS NOT A COURT.

FACTS: Dominican Hills, formerly registered as Diplomat Hills in Baguio City, was mortgaged to the United Coconut Planters Bank (UCPB).  It was eventually foreclosed and acquired later on by the said bank as the highest bidder.  On 11 April 1983, through its President Eduardo Cojuangco Jr., the subject property was donated to the Republic of the Philippines.  The deed of donation stipulated that Dominican Hills would be utilized for the "priority programs, projects, activities in human settlements and economic development and governmental purposes" of the Ministry of Human Settlements.

On December 12, 1986, then President Corazon Aquino issued EO 85 abolishing the Ministry of Human Settlements. All agencies under the its supervision as well as all its assets, programs and projects, were transferred to the Presidential Management Staff (PMS).

On 18 October 1988, United (Dominican Hills) submitted its application before the PMS to acquire a portion of the Dominican Hills property.  In a MOA, PMS and United agreed that the latter may purchase a portion of the said property from HOME INSURANCE GUARANTY CORPORATIO, acting as originator,  on a selling price of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of conditional sale provided that ten (10) per cent of the purchase price would be paid upon signing, with the balance to be amortized within one year from its date of execution. After UNITED made its final payment on January 31, 1992, HIGC executed a Deed of Absolute Sale dated July 1, 1992.

Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills property allocated to UNITED and constructed houses thereon. Petitioner was able to secure a demolition order from the city mayor.  Unable to stop the razing of their houses, private respondents, under the name DOMINICAN HILL BAGUIO RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action for injunction before RTC Baguio City.  Private respondents were able to obtain a temporary restraining order but their prayer for a writ of preliminary injunction was later denied. 

The ASSOCIATION filed a separate civil case for damages, injunction and annulment of the said MOA.  It was later on dismissed upon motion of United. The said Order of dismissal is currently on appeal with the Court of Appeals.

The demolition order was subsequently implemented by the Office of the City Mayor and the City Engineer's Office of Baguio City. However, petitioner avers that private respondents returned and reconstructed the demolished structures.

To forestall the re-implementation of the demolition order, private respondents filed a petition for annulment of contracts with prayer for a temporary restraining order before the Commission on the Settlement of Land Problems (COSLAP) against petitioner, HIGC, PMS, the City Engineer's Office, the City Mayor, as well as the Register of Deeds of Baguio City. On the very same day, public respondent COSLAP issued the contested order requiring the parties to maintain the status quo.  Without filing a motion for reconsideration from the aforesaid status quo order, petitioner filed the instant petition questioning the jurisdiction of the COSLAP.

ISSUE: W/O COSLAP is empowered to hear and try a petition for annulment of contracts with prayer for a TRO and to issue a status quo order and conduct a hearing thereof?

RULING:  COSLAP is not justified in assuming jurisdiction over the controversy. It discharges quasi-judicial functions: 

"Quasi-judicial function" is a term which applies to the actions, discretion, etc. of public administrative officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature."

However, it does not depart from its basic nature as an administrative agency, albeit one that exercises quasi-judicial functions. Still, administrative agencies are not considered courts; they are neither part of the judicial system nor are they deemed judicial tribunals. The doctrine of separation of powers observed in our system of government reposes the three (3) great powers into its three (3) branches — the legislative, the executive, and the judiciary — each department being co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its own agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered "to determine whether or not there has been grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of any branch or instrumentality of the Government."

De La Llana vs. Alba

GUALBERTO J. DE LA LLANA, et.al. vs. MANUEL ALBA, et.al.

GR No. L-57883                                                          12 March 1982 

FACTS: De La Llana, et. al. filed a Petition for Declaratory Relief and/or for Prohibition, seeking ti enjoin the Minister of the Budget, the Chairman of the Commission on Audit, and the Minister of Justice from taking any action implementing BP 129 which mandates that Justices and judges of inferior courts from the CA to MTCs, except the occupants of the Sandiganbayan and the CTA, unless appointed to the inferior courts established by such act, would be considered separated from the judiciary.  It is the termination of their incumbency that for petitioners justify a suit of this character, it being alleged that thereby the security of tenure provision of the Constitution has been ignored and disregarded. 

ISSUES: W/N BP 129 is unconstitutional for impairing the security of tenure of the justices and judges in this case?

RULING: It is a well-known rule that valid abolition of offices is neither removal nor separation of the incumbents.  Of course, if the abolition is void, the incumbent is deemed never to have ceased to hold office.  The rule that the abolition of an office does not amount to an illegal removal of its incumbent is the principle that, in order to be valid, the abolition must be made in good faith. 

Removal is to be distinguished from termination by virtue of valid abolition of the office.  There can be no tenure to a non-existent office.  After the abolition, there is in law no occupant.  In case of removal, there is an office with an occupant who would thereby lose his position.  It is in that sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise.

Malaga vs. Penachos (Digest)

Ma. Elena Malaga, et. al. vs. Manuel R. Penachos, Jr., et.al.

GR No. 86995                                             03 September 1992

Chartered Institution and GOCC, defined.

FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids and Awards Committee (PBAC) caused the publication in the November 25, 26 and 28, 1988 issues of the Western Visayas Daily an Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF.  The notice announced that the last day for the submission of pre-qualification requirements was on December 2, 1988, and that the bids would be received and opened on December 12, 1988 at 3 o'clock in the afternoon.

Petitioners Malaga and Najarro, doing business under the name of BE Construction and Best Built Construction, respectively, submitted their pre-qualification documents at two o'clock in the afternoon of December 2, 1988.  Petitioner Occeana submitted his own PRE-C1 on December 5, 1988.  All three of them were not allowed to participate in the bidding as their documents were considered late.

On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the officers of PBAC for their refusal without just cause to accept them resulting to their non-inclusion in the list of pre-qualified bidders.  They sought to the resetting of the December 12, 1988 bidding and the acceptance of their documents.  They also asked that if the bidding had already been conducted, the defendants be directed not to award the project pending resolution of their complaint.

On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding and award the project. The defendants filed a motion to lift the restraining order on the ground that the court is prohibited from issuing such order, preliminary injunction and preliminary mandatory injunction in government infrastructure project under Sec. 1 of P.D. 1818.  They also contended that the preliminary injunction had become moot and academic as it was served after the bidding had been awarded and closed. 

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction.  It declared that the building sought to be constructed at the ISCOF was an infrastructure project of the government falling within the coverage of the subject law.  

ISSUE: Whether or not ISCOF is a government instrumentality subject to the provisions of PD 1818?

RULING: The 1987 Administrative Code defines a government instrumentality as follows:
Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5) Introductory Provisions).

The same Code describes a chartered institution thus:
Chartered institution - refers to any agency organized or operating under a special charter, and vested by law with functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance of the integrated fisheries development policy of the State, a priority program of the government to effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines shall also be the ex-officio Treasurer of the state college with its accounts and expenses to be audited by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of the president of the state college, such apparatus, equipment, or supplies and even the services of such employees as can be spared without serious detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of the National Treasury and it was also decreed in its charter that the funds and maintenance of the state college would henceforth be included in the General Appropriations Law.  

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree as there are irregularities present surrounding the transaction that justified the injunction issued as regards to the bidding and the award of the project (citing the case of Datiles vs. Sucaldito).

Leonardo Montes v. The Civil Service Board of Appeals (Digest)

Leonardo Montes vs. The Civil Service Board of Appeals, et.al.
G.R. No. L-10759                                                     20 May 1957


TOPIC: Principle of Exhaustion of Admin Remedies

FACTS: In Administratice Case No. R-8182 instituted against Montes for negligence in the performance of duty as a watchman of the Floating Equipment Section, Ports and Harbours Division of Bureau of Public Works, the Commissioner of Civil Service exonerated him on the basis of findings made by a committee.  On appeal, the Civil Service Board of Appeals modified the decision, finding petitioner guilty of contributory negligence in not pumping the water from the bilge which sunk the dredge under his watch, and ordered that he be considered resigned effective his last day of duty with pay, without prejudice to reinstatement at the discretion of the appointing officer. 

Petitioner files an action before the Court of First Instance of Manila to review the decision.  On a Motion to Dismiss, the said court dismissed the action on the ground that petitioner had not exhausted all his administrative remedies before he instituted the action as provided in Section 2 of Commonwealth Act 598.  Montes argued that there is no duty imposed upon him to appeal to the President.  Hence, this petition.

ISSUE: Whether or not Montes erred in filing the action immediately before the Court of First Instance of Manila instead of filing an appeal before the President of the Philippines?

HELD: The doctrine of exhaustion of administrative remedies requires where an administrative remedy is provided by statute, as in this case, relief must be sought by exhausting this remedy before the courts will act.  The doctrine is a device based on considerations of comity and convenience.  If a remedy is still available within the administrative machinery, this should be resorted to before resort can be made to the courts, not only to give the administrative agency opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to the courts.

Section 2 of Commonwealth Act 598 provides that:

The Civil Service Board of Appeals shall have the power and authority to hear and decide all administrative cases brought before it on appeal, and its decisions in such cases shall be final, unless revised or modified by the President of the Philippines.

The above-mentioned provision is a clear expression of the policy or principle of exhaustion of administrative remedies.  If the President, under whom the Civil Service directly falls in our administrative system as head of the executive department, may be able to grant the remedy that petitioner pursues, reasons of comity and orderly procedure demand that resort be made to him before recourse can be had to the courts.