Administrative Law Case Digests: Nature and Organization of Administrative Agencies

Administrative Law Case Digests Arellano University School of Law aiza ebina/2015

CEBU UNITED ENTERPRISES vs GALLOFIN 106 Phil 491 Status and Characteristics Creation, Reorganization, and Abolition of Administrative Agencies FACTS: This suit for mandatory injunction was instituted in the Court of First Instance of Cebu United Enterprise to compel Jose Gallofin, as collector of Customs, Cebu Port, to release and deliver to the plaintif two imported shipments of 7,834 bales of over issue newspapers purchased by the latter from the United States. As ancillary relief during the pendency of the action, the plaintif prayed for the issuance of a writ of preliminary mandatory injunction, which was granted by the court after the plaintif posted a bond in the amount of P60,000.00 in favor of the defendant. Thereafter, the goods were released to the plaintif, it appearing further that the advance sales tax due on the same had been duly paid upon arrival of the merchandise at port. The importation of the aforesaid shipments was made under and by virtue of an Import Control Commission License No. 1225, issued by the defunct Import Control Commission. Under the terms of the license, the plaintif could import, on a no-dollar remittance basis, over issue newspapers up to the amount or value of $118,000.00. The refusal of the defendant to deliver the imported items is premised on his contention that while the five bills of lading covering the two shipments of the over issue newspapers were all dated at Los Angeles, U.S.A. December 17, 1953, or one day before the expiration of the import license in question, the vessels M/S VENTURA and M/S BATAAN, carrying on board the said merchandise, actually left the ports of embarkation, Los Angeles, and San Francisco, on January 12 and January 16, 1954 respectively. Hence, according to the defendant, the importation must be considered as having been made without a valid import license, because under the regulations issued by the Central Bank and the Monetary Board, "all shipments that left the port of origin after June 30, 1953, and are covered by ICC licenses, may be released by the Bureau of Customs without the need of a Central Bank release certificate; provided they left the port of origin within the period of validity of the licenses". No Central Bank certificate for the release of the goods having been shown or presented to the defendant, the latter refused to make the delivery. ISSUE: Whether or not the valid period of the license in question should be counted up to the time when the vessels carrying the imported items left the ports of origin on January 12 and January 16, 1954, or when the corresponding bills of lading were dated, or December 17, 1953 RULING: No. The authority of the appellee to import was contained in the Import Control Commission License No. 17225, validated on June 18, 1953, and under Resolution 70 of the Commission (adopted March 27, 1952), the same had a six-month period of validity counted from the said date June 18, 1953. This license states, among other conditions, that — Commodities covered by this license must be shipped from the country of origin before the expiry date of the license, and are subject to Sec. 13 of Republic Act. No. 650. Although Republic Act No. 650, creating the Import Control Commission, expired on July 31, 1953, it is to be conceded that its duly executed acts can have valid efects even beyond the life span of said governmental agency. What is important to consider only is the legal connotation of the word "shipped" as the term was used in the license. Defendant maintains that it is when the vessel leaves the port of embarkation, while plaintif holds that it is the dates of the bills of lading, which are usually issued after the cargo is placed on board the vessel. The date of the shipment is the date when the goods for dispatch are loaded on board the vessel, and not necessarily when the ship puts to sea. Defendant's reliance upon Central Bank regulations that the shipment licensed must have "left the port of origin within the period of validity of the "license" is not maintainable in the present case, because the regulations came onto efect only on July 1, 1953 already after issuance of the appellee' license and cannot be read into the same. RATIO: Duly executed acts can have valid effects even beyond the life span of said governmental agency. --CRISOSTOMO vs COURT OF APPEALS 258 SCRA 134 Status and Characteristics Creation, Reorganization, and Abolition of Administrative Agencies

FACTS: Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC), having been appointed to that position by the President of the Philippines on July 17, 1974. During his incumbency as president of the PCC, two administrative cases were filed against petitioner, which were filed with the Office of the President, and were subsequently referred to the Office of the Solicitor General for investigation. On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A. No. 3019, as amended. In his place Dr. Pablo T. Mateo, Jr. was designated as officer-in-charge on November 10, 1976, and then as Acting President on May 13, 1977. On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos, CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS. Mateo continued as the head of the new University. On April 3, 1979, he was appointed Acting President and on March 28, 1980, as President for a term of six (6)years. On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting petitioner of the charges against him. Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise known as The Anti-Graft and Corrupt Practices Act, and under which the accused has been suspended by this Court in an Order dated October 22, 1976, said accused was ordered reinstated to the position of President of the Philippine College of Commerce, now known as the Polytechnic University of the Philippines, from which he has been suspended. By virtue of said reinstatement, he is entitled to receive the salaries and other benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him. The bail bonds filed by the accused for his provisional liberty in these cases are hereby cancelled and released. On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution of the judgment, particularly the part ordering his reinstatement to the position of president of the PUP and the payment of his salaries and other benefits during the period of suspension. The motion was granted and a partial writ of execution was issued by the trial court on March 6, 1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor as acting president of the PUP, following the expiration of the term of office of Dr. Nemesio Prudente, who had succeeded Dr. Mateo. Petitioner was one of the five nominees considered by the President of the Philippines for the position. The sherif stated that he had executed the writ by installing petitioner as President of the PUP, although Dr. Gellor did not vacate the office as he wanted to consult with the President of the Philippines first. This led to a contempt citation against Dr. Gellor. Petitioner assumed the office of president of the PUP. On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and prohibition, assailing the orders and the writs of execution issued by the trial court. It also asked for a temporary restraining order. On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining petitioner to cease and desist from acting as president of the PUP pursuant to the reinstatement orders of the trial court. On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision to set aside the orders and writ of reinstatement issued by the trial court. The payment of salaries and benefits to petitioner accruing after the conversion of the PCC to the PUP was disallowed. Recovery of salaries and benefits was limited to those accruing from the time of petitioner’s suspension until the conversion of the PCC to the PUP. The case was remanded to the trial court for a determination of the amounts due and payable to petitioner. Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its existence, it would have specified that the PCC was being "abolished" rather than "converted" and that if the PUP was intended to be a new institution, the law would have said it was being "created." Petitioner claims that the PUP is merely a continuation of the existence of the PCC, and, hence, he could be reinstated to his former position as president. ISSUE: Whether or not the conversion of the PCC into PUP abolished the PCC RULING: No. In part the contention is well taken, but, as will presently be explained, reinstatement is no longer possible because of the promulgation of P.D. No. 1437 by the President of the Philippines on June 10, 1978. P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce into what is

now the Polytechnic University of the Philippines, in the same way that earlier in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into the Philippine College of Commerce. What took place was a change in academic status of the educational institution, not in its corporate life. Hence the change in its name, the expansion of its curricular oferings, and the changes in its structure and organization. As petitioner correctly points out, when the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so. But the reinstatement of petitioner to the position of president of the PUP could not be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the term of office of presidents of state universities and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the President of the Philippines to terminate the terms of incumbents who were not reappointed. RATIO: When the purpose is to abolish a department or an office or an organization and to replace it with another one, the lawmaking authority says so. What took place was a change in academic status of the educational institution, not in its corporate life. Hence the change in its name, the expansion of its curricular offerings, and the changes in its structure and organization. --VIOLA vs ALUNAN III 277 SCRA 409 Status and Characteristics Creation, Reorganization, and Abolition of Administrative Agencies FACTS: This is a petition for prohibition challenging the validity of Art. III, 1-2 of the Revised Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay Officers so far as they provide for the election of first, second and third vice presidents and for auditors for the National Liga ng mga Barangay and its chapters. Petitioner Cesar G. Viola brought this action as barangay chairman of Bgy. 167, Zone 15, District II, Manila against then Secretary of Interior and Local Government Rafael M. Alunan III, Alex L. David, president/secretary general of the National Liga ng mga Barangay, and Leonardo L. Angat, president of the City of Manila Liga ng mga Barangay, to restrain them from carrying out the elections for the questioned positions on July 3, 1994. Petitioners contention is that the positions in question are in excess of those provided in the Local Government Code (R.A. No. 7160), 493 of which mentions as elective positions only those of president, vice president, and five members of the board of directors in each chapter at the municipal, city, provincial, metropolitan political subdivision, and national levels. Petitioner argues that, in providing for the positions of first, second and third vice presidents and auditor for each chapter, 1-2 of the Implementing Rules expand the number of positions authorized in 493 of the Local Government Code in violation of the principle that implementing rules and regulations cannot add or detract from the provisions of the law they are designed to implement. ISSUE: Whether or not the additional positions in question have been created without authority of law RULING: No. Petitioners contention that the additional positions in question have been created without authority of law is untenable. To begin with, the creation of these positions was actually made in the Constitution and By-laws of the Liga ng Mga Barangay, which was adopted by the First Barangay National Assembly on January 11, 1994. The post of executive vice president is in reality that of the vice president in 493 of the LGC, so that the only additional positions created for each chapter in the Constitution and By-laws are those of first, second and third vice presidents and auditor. Contrary to petitioners contention, the creation of the additional positions is authorized by the LGC which provides as follows: 493. Organization. The liga at the municipal, city, provincial, metropolitan political subdivision, and national levels directly elect a president, a vice-president, and five (5) members of the board of directors. The board shall appoint its secretary and treasurer and create such other positions as it may deem necessary for the management of the chapter. A secretary-general shall be elected from among the members of the national liga and shall be charged with the overall operation of the liga on the national level. The board shall coordinate the activities of the chapters of the liga. This provision in fact requires and not merely authorizes the board of directors to create such other positions as it may deem necessary for the management of the chapter and belies petitioners claim that said provision (493) limits the officers of a chapter to the president, vice president, five members of the board of directors, secretary, and treasurer. That Congress can delegate the power to create positions such as these has been settled by our decisions upholding the validity of reorganization statutes authorizing the

President of the Philippines to create, abolish or merge offices in the executive department. The question is whether, in making a delegation of this power to the board of directors of each chapter of the Liga ng Mga Barangay, Congress provided a sufficient standard so that, in the phrase of Justice Cardozo, administrative discretion may be canalized within proper banks that keep it from overflowing. We hold that 493 of the Local Government Code, in directing the board of directors of the liga to create such other positions as may be deemed necessary for the management of the chapters, embodies a fairly intelligible standard. There is no undue delegation of power by Congress. RATIO: Congress can delegate the power to create positions such as these has been settled by decisions upholding the validity of reorganization statutes authorizing the President of the Philippines to create, abolish or merge offices in the executive department. --LARIN vs EXECUTIVE SECRETARY 280 SCRA 713 Status and Characteristics Creation, Reorganization, and Abolition of Administrative Agencies FACTS: Challenged in this petition is the validity of petitioner’s removal from service as Assistant Commissioner of the Excise Tax Service of the Bureau of Internal Revenue. Incidentally, he questions Memorandum Order No. 164 issued by the Office of the President, which provides for the creation of "A Committee to Investigate the Administrative Complaint Against Aquilino T. Larin, Assistant Commissioner, Bureau of Internal Revenue" as well as the investigation made in pursuance thereto, and Administrative Order No. 101 dated December 2, 1993 which found him guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal from office. Likewise, petitioner seeks to assail the legality of Executive Order No. 132, issued by President Ramos on October 26, 1993, which provides for the "Streamlining of the Bureau of Internal Revenue," and of its implementing rules issued by the Bureau of Internal Revenue, namely: a) Administrative Order No. 4-93, which provides for the "Organizational Structure and Statement of General Functions of Offices in the National Office" and b) Administrative Order No. 5-93, which provides for "Redefining the Areas of Jurisdiction and Renumbering of Regional And District Offices. Under said order, some positions and functions are either abolished, renamed, decentralized or transferred to other offices, while other offices are also created. The Excise Tax Service or the Specific Tax Service, of which petitioner was the Assistant Commissioner, was one of those offices that was abolished by said executive order. Consequently, the President, in the assailed Administrative Order No. 101 dated December 2, 1993, found petitioner guilty of grave misconduct in the administrative charge and imposed upon him the penalty of dismissal with forfeiture of his leave credits and retirement benefits including disqualification for reappointment in the government service. Aggrieved, petitioner filed directly with this Court the instant petition on December 13, 1993 to question basically his alleged unlawful removal from office. In his petition, petitioner challenged the authority of the President to dismiss him from office. He argued that in so far as presidential appointees who are Career Executive Service Officers are concerned, the President exercises only the power of control not the power to remove. Petitioner likewise claimed that he was removed as a result of the reorganization made by the Executive Department in the BIR pursuant to Executive Order No. 132. Thus, he assailed said Executive Order No. 132 and its implementing rules, namely, Revenue Administrative Orders 4-93 and 5-93 for being ultra vires. He claimed that there is yet no law enacted by Congress which authorizes the reorganization by the Executive Department of executive agencies, particularly the Bureau of Internal Revenue. On the other hand, respondents contended that since petitioner is a presidential appointee, he falls under the disciplining authority of the President. They also contended that E.O. No. 132 and its implementing rules were validly issued pursuant to Sections 48 and 62 of Republic Act No. 7645. Apart from this, the other legal bases of E.O. No. 132 as stated in its preamble are Section 63 of E.O. No. 127 (Reorganizing the Ministry of Finance), and Section 20, Book III of E.O. No. 292, otherwise known as the Administrative Code of 1987. Significantly, respondents clarified that petitioner was not dismissed by virtue of EO 132. Respondents claimed that he was removed from office because he was found guilty of grave misconduct in the administrative cases filed against him. ISSUE: Whether or not the President has the power to reorganize the BIR or to issue the questioned E.O. NO. 132 RULING: Yes. As stated earlier, with the issuance of Executive Order No. 132, some of the positions and offices, including the office of Excise Tax Services of which petitioner was the Assistant Commissioner, were abolished or otherwise decentralized. Consequently, the President released the list of appointed

Assistant Commissioners of the BIR. Apparently, petitioner was not included. Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR. We do not agree. Under its preamble, E.O. No. 132 lays down the legal bases of its issuance, namely: a) Section 48 and 62 of R.A. No. 7645, b) Section 63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292. Said provision clearly mentions the acts of "scaling down, phasing out and abolition" of offices only and does not cover the creation of offices or transfer of functions. Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62. The foregoing provision evidently shows that the President is authorized to efect organizational changes including the creation of offices in the department or agency concerned. The contention of petitioner that the two provisions are riders deserves scant consideration. Well settled is the rule that every law has in its favor the presumption of constitutionality. Unless and until a specific provision of the law is declared invalid and unconstitutional, the same is valid and binding for all intents and purposes. Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292. This provision speaks of such other powers vested in the President under the law. What law then which gives him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. The validity of these two decrees are unquestionable. The 1987 Constitution clearly provides that "all laws, decrees, executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked." So far, there is yet no law amending or repealing said decrees. Significantly, the Constitution itself recognizes future reorganizations in the government as what is revealed in Section 16 of Article XVIII. RATIO: The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished, subject to civil service rules and regulations. Actual scaling down, phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. (Section 48 of R.A. 7645) Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act. (Section 62 of R.A. 7645) Residual Powers. — Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law. (Section 20, Book III of E.O. No. 292) --DARIO vs MISON 176 SCRA 84 Status and Characteristics Creation, Reorganization, and Abolition of Administrative Agencies FACTS: On March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3, "DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE, PROTECTING THEIR BASIC RIGHTS, ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING FOR AN ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW CONSTITUTION. Among other things, Proclamation No. 3 provided: SECTION 1. The President shall give priority to measures to achieve the mandate of the people to: (a) Completely reorganize the government, eradicate unjust and oppressive structures, and all iniquitous vestiges of the previous regime. Actually, the reorganization process started as early as February 25, 1986, when the President, in her first act in office, called upon "all appointive public officials to submit their courtesy resignations beginning with the members of the Supreme Court." Later on, she abolished the Batasang Pambansa and the positions of Prime Minister and Cabinet under the 1973 Constitution. On May 28, 1986, the President enacted Executive Order No. 17, "PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE FREEDOM CONSTITUTION." Executive Order

No. 17 recognized the "unnecessary anxiety and demoralization among the deserving officials and employees" the ongoing government reorganization had generated, and prescribed several grounds for the separation/replacement of personnel. Specifically, she said on May 28, 1986: WHEREAS, in order to obviate unnecessary anxiety and demoralization among the deserving officials and employees, particularly in the career civil service, it is necessary to prescribe the rules and regulations for implementing the said constitutional provision to protect career civil servants whose qualifications and performance meet the standards of service demanded by the New Government, and to ensure that only those found corrupt, inefficient and undeserving are separated from the government service. Noteworthy is the injunction embodied in the Executive Order that dismissals should be made on the basis of findings of inefficiency, graft, and unfitness to render public service. The President’s Memorandum of October 14, 1987 should furthermore be considered. We quote, in part: Further to the Memorandum dated October 2, 1987 on the same subject, I have ordered that there will be no further lay-ofs this year of personnel as a result of the government reorganization. On January 30, 1987, the President promulgated Executive Order No. 127, "REORGANIZING THE MINISTRY OF FINANCE." Among other offices, Executive Order No. 127 provided for the reorganization of the Bureau of Customs and prescribed a new staffing pattern therefor. Three days later, on February 2, 1987, the Filipino people adopted the new Constitution. On January 6, 1988, incumbent Commissioner of Customs Salvador Mison issued a Memorandum, in the nature of "Guidelines on the Implementation of Reorganization Executive Orders," prescribing the procedure in personnel placement. On the same date, Commissioner Mison constituted a Reorganization Appeals Board charged with adjudicating appeals from removals under the above Memorandum. On January 26, 1988, Commissioner Mison addressed several notices to various Customs officials. As far as the records will likewise reveal, a total of 394 officials and employees of the Bureau of Customs were given individual notices of separation. A number supposedly sought reinstatement with the Reorganization Appeals Board while others went to the Civil Service Commission. The first thirty one mentioned above came directly to this Court. The records indeed show that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as of August 18, 1988. On June 30, 1988, the Civil Service Commission promulgated its ruling ordering the reinstatement of the 279 employees. On July 15, 1988, Commissioner Mison, represented by the Solicitor General, filed a motion for reconsideration. Acting on the motion, the Civil Service Commission, on September 20, 1988, denied reconsideration. On October 20, 1988, Commissioner Mison instituted certiorari proceedings with this Court. On November 16, 1988, the Civil Service Commission further disposed the appeal (from the resolution of the Reorganization Appeals Board) of five more employees. On January 6, 1989, Commissioner Mison challenged the Civil Service Commission’s Resolution in this Court. ISSUE: Whether or not Executive Order No. 127, which provided for the reorganization of the Bureau of Customs is valid RULING: Yes. There is no question that the administration may validly carry out a government reorganization — insofar as these cases are concerned, the reorganization of the Bureau of Customs — by mandate not only of the Provisional Constitution, supra, but also of the various Executive Orders decreed by the Chief Executive in her capacity as sole lawmaking authority under the 1986-1987 revolutionary government. It should also be noted that under the present Constitution, there is a recognition, albeit implied, that a government reorganization may be legitimately undertaken, subject to certain conditions. The core provision of law involved is Section 16 Article XVIII, of the 1987 Constitution. Sec. 16. Career civil service employees separated from the service not for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries. This provision also applies to career officers whose resignation, tendered in line with the existing policy, had been accepted. It is also to be observed that unlike the grants of power to efect reorganizations under the past Constitutions, the above provision comes as a mere recognition of the right of the Government to reorganize its offices, bureaus, and instrumentalities.

Other than references to "reorganization following the ratification of this Constitution," there is no provision for "automatic" vacancies under the 1987 Constitution. Invariably, transition periods are characterized by provisions for "automatic" vacancies. They are dictated by the need to hasten the passage from the old to the new Constitution free from the "fetters" of due process and security of tenure. At this point, we must distinguish removals from separations arising from abolition of office (not by virtue of the Constitution) as a result of reorganization carried out by reason of economy or to remove redundancy of functions. In the latter case, the Government is obliged to prove good faith. In case of removals undertaken to comply with clear and explicit constitutional mandates, the Government is not hard put to prove anything, plainly and simply because the Constitution allows it. Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal (in case of a dismissal) or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, or otherwise not in good faith, no valid "abolition" takes place and whatever "abolition" is done, is void ab initio. There is an invalid "abolition" as where there is merely a change of nomenclature of positions, or where claims of economy are belied by the existence of ample funds. It is to be stressed that by predisposing a reorganization to the yardstick of good faith, we are not, as a consequence, imposing a "cause" for restructuring. Retrenchment in the course of a reorganization in good faith is still removal "not for cause," if by "cause" we refer to "grounds" or conditions that call for disciplinary action. Good faith, as a component of a reorganization under a constitutional regime, is judged from the facts of each case. The records indeed show that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as of August 18, 1988. This betrays a clear intent to "pack" the Bureau of Customs. He did so, furthermore, in defiance of the President’s directive to halt further lay-ofs as a consequence of reorganization. Finally, he was aware that lay-ofs should observe the procedure laid down by Executive Order No. 17. We are not, of course, striking down Executive Order No. 127 for repugnancy to the Constitution. While the act is valid, still and all, the means with which it was implemented is not. It can be seen that the Act, insofar as it provides for reinstatement of employees separated without "a valid cause and after due notice and hearing" is not contrary to the transitory provisions of the new Constitution. The Court reiterates that although the Charter’s transitory provisions mention separations "not for cause," separations thereunder must nevertheless be on account of a valid reorganization and which do not come about automatically. Otherwise, security of tenure may be invoked. Moreover, it can be seen that the statute itself recognizes removals without cause. However, it also acknowledges the possibility of the leadership using the artifice of reorganization to frustrate security of tenure. For this reason, it has installed safeguards. There is nothing unconstitutional about the Act. RATIO: Reorganizations have been regarded as valid provided they are pursued in good faith. --THE PRESIDENTIAL ANTI-DOLLAR SALTING TASK FORCE vs COURT OF APPEALS 171 SCRA 348 Status and Characteristics Meaning of Administrative Agency FACTS: On March 12, 1985, State Prosecutor Jose B. Rosales, who is assigned with the Presidential AntiDollar Salting Task Force, issued search warrants Nos. 156, 157, 158, 159, 160 and 161 against the petitioners Karamfil Import-Export Co., Inc., P & B Enterprises Co., Inc., Philippine Veterans Corporation, Philippine Veterans Development Corporation, Philippine Construction Development Corporation, Philippine Lauan Industries Corporation, Inter-trade Development (Alvin Aquino), Amelili U. Malaquiok Enterprises and Jaime P. Lucman Enterprises. The application for the issuance of said search warrants was filed by Atty. Napoleon Gatmaytan of the Bureau of Customs who is a deputized member of the PADS Task Force. Attached to the said application is the affidavit of Josefin M. Castro who is an operative and investigator of the PADS Task Force. Said Josefin M. Castro is likewise the sole deponent in the purported deposition to support the application for the issuance of the six (6) search warrants involved in this case. The application filed by Atty. Gatmaytan, the affidavit and deposition of Josefin M. Castro are all dated March 12, 1985.

Shortly thereafter, the private respondent (the petitioner) went to the Regional Trial Court on a petition to enjoin the implementation of the search warrants in question. On April 16, 1985, the lower court issued the first of its challenged Orders, and held: WHEREFORE, in view of all the foregoing, the Court hereby declares Search Warrant Nos. 156, 157, 158, 159, 160, and 161 to be null and void. Accordingly, the respondents are hereby ordered to return and surrender immediately all the personal properties and documents seized by them from the petitioners by virtue of the aforementioned search warrants. On August 21, 1985, the trial court denied reconsideration. On April 4, 1986, the Presidential Anti-Dollar Salting Task Force went to the respondent Court of Appeals to contest, on certiorari, the twin Orders of the lower court. In ruling initially for the Task Force, the Appellate Court held: Herein petitioner is a special quasi-judicial body with express powers enumerated under PD 1936 to prosecute foreign exchange violations defined and punished under P.D. No. 1883. The petitioner, in exercising its quasi-judicial powers, ranks with the Regional Trial Courts, and the latter in the case at bar had no jurisdiction to declare the search warrants in question null and void. Besides as correctly pointed out by the Assistant Solicitor General the decision of the Presidential Anti-Dollar Salting Task Force is appealable to the Office of the President. On November 12, 1986, Karamfil Import-Export Co., Inc. sought a reconsideration, on the question primarily of whether or not the Presidential Anti-Dollar Salting Task Force is "such other responsible officer' countenanced by the 1973 Constitution to issue warrants of search and seizure. The Court of Appeals, on Karamfil's motion, reversed itself and issued its Resolution, dated September 1987, and subsequently, its Resolution, dated May 20, 1988, denying the petitioner's motion for reconsideration. In submitting that it is a quasi-judicial entity, the petitioner states that it is endowed with "express powers and functions under PD No. 1936, to prosecute foreign exchange violations as defined and punished under PD No. 1883." "By the very nature of its express powers as conferred by the laws," so it is contended, "which are decidedly quasi-judicial or discretionary function, such as to conduct preliminary investigation on the charges of foreign exchange violations, issue search warrants or warrants of arrest, hold departure orders, among others, and depending upon the evidence presented, to dismiss the charges or to file the corresponding information in court of Executive Order No. 934, PD No. 1936 and its Implementing Rules and Regulations efective August 26, 1984, petitioner exercises quasi-judicial power or the power of adjudication ." The Court of Appeals, in its Resolution now assailed, was of the opinion that "the grant of quasi-judicial powers to petitioner did not diminish the regular courts' judicial power of interpretation. The right to interpret a law and, if necessary to declare one unconstitutional, exclusively pertains to the judiciary. In assuming this function, courts do not proceed on the theory that the judiciary is superior to the two other coordinate branches of the government, but solely on the theory that they are required to declare the law in every case which come before them." In its petition to this Court, the petitioner alleges that in so issuing the Resolutions above-mentioned, the respondent Court of Appeals "committed grave abuse of discretion and/or acted in excess of its appellate jurisdiction," ISSUE: Whether or not The Presidential Anti-Dollar Salting Task Force is a quasi-judicial body, and one coequal in rank and standing with the Regional Trial Court, and accordingly, beyond the latter's jurisdiction RULING: No. This Court finds the Appellate Court to be in error, since what the petitioner puts to question is the Regional Trial Court's act of assuming jurisdiction over the private respondent's petition below and its subsequent countermand of the Presidential Anti-Dollar Salting Task Force's orders of search and seizure, for the reason that the presidential body, as an entity (allegedly) coordinate and co-equal with the Regional Trial Court, was (is) not vested with such a jurisdiction. An examination of the Presidential AntiDollar Salting Task Force's petition shows indeed its recognition of judicial review (of the acts of Government) as a basic privilege of the courts. Its objection, precisely, is whether it is the Regional Trial Court, or the superior courts, that may undertake such a review. As we have observed, the question is whether or not the Presidential Anti-Dollar Salting Task Force is, in the first place, a quasi-judicial body, and one whose decisions may not be challenged before the regular courts, other than the higher tribunals, the Court of Appeals and this Court. A quasi-judicial body has been defined as "an organ of government other than a court of law and other than a legislature, which afects the rights of private parties through either adjudication or rule making." As may be seen, it is the basic function of these bodies to adjudicate claims and/or to determine rights, and unless its decision are seasonably appealed to the proper reviewing authorities, the same attain finality and become executory. A perusal of the Presidential Anti-Dollar Salting Task Force's organic act,

Presidential Decree No. 1936, as amended by Presidential Decree No. 2002, convinces the Court that the Task Force was not meant to exercise quasi-judicial functions, that is, to try and decide claims and execute its judgments. As the President's arm called upon to combat the vice of "dollar salting" or the blackmarketing and salting of foreign exchange, it is tasked alone by the Decree to handle the prosecution of such activities, but nothing more. The Court sees nothing in the provisions of Presidential Decree No. 1936 (except with respect to the Task Force's powers to issue search warrants) that will reveal a legislative intendment to confer it with quasijudicial responsibilities relative to ofenses punished by Presidential Decree No. 1883. Its undertaking, as we said, is simply, to determine whether or not probable cause exists to warrant the filing of charges with the proper court, meaning to say, to conduct an inquiry preliminary to a judicial recourse, and to recommend action "of appropriate authorities". It is not unlike a fiscal's office that conducts a preliminary investigation to determine whether or not prima facie evidence exists to justify haling the respondent to court, and yet, while it makes that determination, it cannot be said to be acting as a quasi-court. For it is the courts, ultimately, that pass judgment on the accused, not the fiscal. If the Presidential Anti-Dollar Salting Task Force is not, hence, a quasi-judicial body, it cannot be said to be co-equal or coordinate with the Regional Trial Court. There is nothing in its enabling statutes that would demonstrate its standing at par with the said court. In that respect, we do not find error in the respondent Court of Appeal's resolution sustaining the assumption of jurisdiction by the court a quo. RATIO: A quasi-judicial body has been defined as "an organ of government other than a court of law and other than a legislature, which affects the rights of private parties through either adjudication or rule making." --BALANGAUAN vs COURT OF APPEALS 562 SCRA 184 Status and Characteristics Meaning of Administrative Agency FACTS: Petitioner Katherene was a Premier Customer Services Representative (PCSR) of respondent bank, HSBC. As a PCSR, she managed the accounts of HSBC depositors with Premier Status. One such client and/or depositor handled by her was Roger Dwayne York (York). York maintained several accounts with respondent HSBC. Sometime in April 2002, he went to respondent HSBC's Cebu Branch to transact with petitioner Katherene respecting his Dollar and Peso Accounts. Petitioner Katherene being on vacation at the time, York was attended to by another PCSR. While at the bank, York inquired about the status of his time deposit in the amount of P2,500,000.00. The PCSR representative who attended to him, however, could not find any record of said placement in the bank's data base. York adamantly insisted, though, that through petitioner Katherene, he made a placement of the aforementioned amount in a higher-earning time deposit. York further elaborated that petitioner Katherene explained to him that the alleged higher-earning time deposit scheme was supposedly being ofered to Premier clients only. Upon further scrutiny and examination, respondent HSBC's bank personnel discovered that: (1) on 18 January 2002, York pre-terminated a P1,000,000.00 time deposit; (2) there were cash movement tickets and withdrawal slips all signed by York for the amount of P1,000,000.00; and (3) there were regular movements in York's accounts, i.e., beginning in the month of January 2002, monthly deposits in the amount of P12,500.00 and P8,333.33 were made, which York denied ever making, but surmised were the regular interest earnings from the placement of the P2,500,000.00. It was likewise discovered that the above-mentioned deposits were transacted using petitioner Katherene's computer and work station using the code or personal password "CEO8." The significance of code "CEO8," according to the bank personnel of respondent HSBC, is that, "it is only Ms. Balangauan who can transact from the computer in the work station CEO-8, as she is provided with a swipe card which she keeps sole custody of and only she can use, and which she utilizes for purposes of performing bank transactions from that computer." Bank personnel of respondent HSBC likewise recounted in their affidavits that prior to the filing of the complaint for estafa and/or qualified estafa, they were in contact with petitioners Bernyl and Katherene. Petitioner Bernyl supposedly met with them on two occasions. At first he disavowed any knowledge regarding the whereabouts of York's money but later on admitted that he knew that his wife invested the funds with Shell Company. He likewise admitted that he made the phone banking deposit to credit York's account with the P12,500.00 and the P8,333.33 using their landline telephone. With respect to petitioner Katherene, she allegedly spoke to the bank personnel and York on several occasions and admitted that the funds were indeed invested with Shell Company but that York knew about this. So as not to ruin its name and goodwill among its clients, respondent HSBC reimbursed York the P2,500,000.00.

Based on the foregoing factual circumstances, respondent HSBC, through its personnel, filed a criminal complaint for Estafa and/or Qualified Estafa before the Office of the City Prosecutor, Cebu City. Petitioners Bernyl and Katherene submitted their joint counter-affidavit basically denying the allegations contained in the affidavits of the aforenamed employees of respondent HSBC as well as that made by York. They argued that the allegations in the Complaint-Affidavits were pure fabrications. Following the requisite preliminary investigation, Assistant City Prosecutor (ACP) Victor C. Laborte, Prosecutor II of the OCP, Cebu City, in a Resolution dated 21 February 2003, found no probable cause to hold petitioners Bernyl and Katherene liable to stand trial for the criminal complaint of estafa and/or qualified estafa, particularly Article 315 of the Revised Penal Code. Accordingly, the ACP recommended the dismissal of respondent HSBC's complaint. On 1 July 2003, respondent HSBC appealed the above-quoted resolution and foregoing comment to the Secretary of the DOJ by means of a Petition for Review. In a Resolution dated 6 April 2004, the Chief State Prosecutor, Jovencito R. Zuato, for the Secretary of the DOJ, dismissed the petition. Respondent HSBC's Motion for Reconsideration was likewise denied with finality by the DOJ in a lengthier Resolution dated 30 August 2004. Respondent HSBC then went to the Court of Appeals by means of a Petition for Certiorari. On 28 April 2006, the Court of Appeals promulgated its Decision granting respondent HSBC's petition, thereby annulling and setting aside the twin resolutions of the DOJ and ordered the City Prosecutor of Cebu City to file the appropriate Information against the private respondents. Petitioners Bernyl and Katherene's motion for reconsideration proved futile, as it was denied by the appellate court in a Resolution dated 29 June 2006. Hence, this Petition for Certiorari. Petitioners Bernyl and Katherene filed the present petition on the argument that the Court of Appeals committed grave abuse of discretion in reversing and setting aside the resolutions of the DOJ. The Court of Appeals found fault in the DOJ's failure to identify and discuss the issues raised by the respondent HSBC in its Petition for Review filed therewith. And, in support thereof, respondent HSBC maintains that it is incorrect to argue that "it was not necessary for the Secretary of Justice to have his resolution recite the facts and the law on which it was based," because courts and quasi-judicial bodies should faithfully comply with Section 14, Article VIII of the Constitution requiring that decisions rendered by them should state clearly and distinctly the facts of the case and the law on which the decision is based. Petitioners Bernyl and Katherene, joined by the Office of the Solicitor General, on the other hand, defends the DOJ and assert that the questioned resolution was complete in that it stated the legal basis for denying respondent HSBC's Petition for Review - "that after an examination of the petition and its attachment [it] found no reversible error that would justify a reversal of the assailed resolution which is in accord with the law and evidence on the matter." ISSUE: Whether or not the public prosecutor, in conducting the preliminary investigation; and the DOJ, in reviewing the findings of the public prosecutor, both perform adjudicatory functions, in such a way that their finding of no probable cause to hold petitioners liable to stand for trial, have the same efect as judgements of a court RULING: No. It must be remembered that a preliminary investigation is not a quasi-judicial proceeding, and that the DOJ is not a quasi-judicial agency exercising a quasi-judicial function when it reviews the findings of a public prosecutor regarding the presence of probable cause. The prosecutor in a preliminary investigation does not determine the guilt or innocence of the accused. He does not exercise adjudication nor rule-making functions. Preliminary investigation is merely inquisitorial, and is often the only means of discovering the persons who may be reasonably charged with a crime and to enable the fiscal to prepare his complaint or information. It is not a trial of the case on the merits and has no purpose except that of determining whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof. While the fiscal makes that determination, he cannot be said to be acting as a quasi-court, for it is the courts, ultimately, that pass judgment on the accused, not the fiscal. Though some cases describe the public prosecutor's power to conduct a preliminary investigation as quasijudicial in nature, this is true only to the extent that, like quasi-judicial bodies, the prosecutor is an officer of the executive department exercising powers akin to those of a court, and the similarity ends at this point. A quasi-judicial body is an organ of government other than a court and other than a legislature which afects the rights of private parties through either adjudication or rule-making. A quasi-judicial agency performs adjudicatory functions such that its awards, determine the rights of parties, and their decisions have the same efect as judgments of a court. Such is not the case when a public prosecutor conducts a preliminary investigation to determine probable cause to file an Information against a person charged with a criminal ofense, or when the Secretary of Justice is reviewing the former's order or

resolutions. In this case, since the DOJ is not a quasi-judicial body, Section 14, Article VIII of the Constitution finds no application. Be that as it may, the DOJ rectified the shortness of its first resolution by issuing a lengthier one when it resolved respondent HSBC's motion for reconsideration. Anent the substantial merit of the case, whether or not the Court of Appeals' decision and resolution are tainted with grave abuse of discretion in finding probable cause, this Court finds the petition dismissible. RATIO: A quasi-judicial body is an organ of government other than a court and other than a legislature which affects the rights of private parties through either adjudication or rule-making. A quasi-judicial agency performs adjudicatory functions such that its awards, determine the rights of parties, and their decisions have the same effect as judgments of a court. --OLAGUER vs REGIONAL TRIAL COURT 170 SCRA 478 Status and Characteristics As Corporate Bodies or Legal Entities FACTS: The parameters of the jurisdiction of the ordinary courts in relation to the Securities and Exchange Commission (SEC) and the Sandiganbayan are put into issue in this petition. private respondents are the only stockholders with the right to vote of the Philippine Journalists, Inc. (PJI) Publisher of several daily periodicals such as Manila Journal, People's Journal, etc. Sometime in 1977, PJI obtained from the Development Bank of the Philippines (DBP) certain financing accommodations and as security thereof executed a first mortgage in favor of DBP on its acts enumerated in a list attached to the mortgage. The PJI stockholders assigned to DBP the voting rights over 67% of the total subscribed and outstanding voting shares of stock of the company held by them. The DBP appointed said PJI stockholders as proxies to exercise its right to vote. Due to some financial difficulty on its part, PJI requested for a restructuring of its loan obligation with certain conditions. The request was granted by the DBP in a letter dated August 4, 1986. Due to the default on the part of the PJI the DBP cancelled the proxies in favor of the assigning stockholders on September 30, 1986 and designated as its proxies petitioner Eduardo Olaguer, Jose Mari Velez and Manuel de Leon. Petitioner Olaguer asked private respondent Rosario M. Barreto Olivares to assign qualifying shares not only to the three proxies of DBP but also to two others to be chosen by him so as to enable the five of them to sit in the PJI board of directors, and that, accordingly, they may be able to coordinate more efectively with DBP as regards the early evaluation and approval of the request for another restructuring of the PJI loan. Although Olaguer was elected chairman of the board and chief executive officer of PJI he failed to comply with his commitment and that this gave private respondents a reason to cancel the assignment. Olaguer also committed certain illegal acts which gave rise to the filing of several complaints against him. However, before these cases could be resolved, Olaguer's appointment as member of the board of directors of DBP was terminated by President Corazon C. Aquino efective September 9, 1987. It is likewise alleged that, the termination notwithstanding, Olaguer continued to exercise and retain full management and control of PJI. The DBP chief legal counsel wrote to petitioner Reyes informing him of Olaguer's removal from office and enjoining him from implementing or complying with any instructions from Olaguer and from disposing of the properties of PJI and disbursing any funds without prior approval of the board of directors of PJI which will soon be elected, except such amounts needed in the ordinary course of business. Accordingly, the DBP, acting through its Chairman, Jesus Estanislao and its Director-in-Charge, Jose Mari Velez, entered into an Interim Agreement with private respondents. The said agreement called for a special stockholders meeting for the purpose of electing a new board of directors which shall hold office until the next regular stockholders meeting to be held on February 2, 1988. In a letter dated December 14, 1987, the DBP chief legal counsel informed the private respondents that the said Interim Agreement cannot be implemented because Olaguer claims that he has just been designated the fiscal and team leader of the Presidential Commission on Good Government (PCGG) assigned to the PJI and that all his actions are sanctioned and reported to PCGG Chairman Ramon A. Diaz, and that it is the PCGG which exercises the voting rights of all PJI common stocks sequestered since 1986, including those assigned to DBP and that the PJI qualifying share now held by PJI Directors came from shares sequestered by the PCGG. On January 4, 1988, a motion to dismiss was filed by the petitioners on the ground that the court has no jurisdiction over the persons of petitioners; that they were not served summons and that the subject matter of the action involves controversies arising out of intra-corporate relations between and among stockholders which are covered by the provisions of Section 5 of Presidential Decree No. 902-A so that the

matter is within the original and exclusive jurisdiction of the Securities and Exchange Commission (SEC); that the venue for a petition seeking injunctive relief should be the Sandiganbayan. On January 14, 1988, an order was issued by the trial court denying the motion to dismiss. Hence, the herein petition for certiorari and prohibition with a prayer for the issuance of a temporary restraining order and/ or a writ of preliminary injunction. ISSUE: Whether or not the trial court has jurisdiction over the subject matter of the action RULING: No. The petition is impressed with merit. There is no dispute that the PJI is now under sequestration by the PCGG and that Civil Case No. 0035 was filed in the Sandiganbayan wherein the PJI is listed as among the corporations involved in the unexplained wealth case against former President Marcos, Romualdez and many others. The records likewise show that petitioner Olaguer, among others, is a fiscal agent of the PCGG and that as Chairman of the Board of Directors of the PJI he was acting for and in behalf of the PCGG. Under Section 2 of Executive Order No. 14, the Sandiganbayan has exclusive and original jurisdiction over all cases regarding "the funds, moneys, assets and properties illegally acquired by Former President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business associates, dummies, agents, or nominees," civil or criminal, including incidents arising from such cases. The Decision of the Sandiganbayan is subject to review on certiorari exclusively by the Supreme Court. In the exercise of its functions, the PCGG is a co-equal body with the regional trial courts and co-equal bodies have no power to control the other. The regional trial courts and the Court of Appeals have no jurisdiction over the PCGG in the exercise of its powers under the applicable Executive Orders and Section 26, Article XVIII of the 1987 Constitution and, therefore, may not interfere with and restrain or set aside the orders and actions of the PCGG. By the same token, the regional trial courts have no jurisdiction over the acts of fiscal agents of the PCGG acting for and in behalf of said commission. The Commission should not be embroiled in and swamped by legal suits before inferior courts all over the land. Otherwise, the Commission will be forced to spend valuable time defending all its actuations in such courts. This will defeat the very purpose behind the creation of the Commission. Accordingly, Section 4(a) of Executive Order No. 1 expressly accorded the Commission and its members immunity from suit for damages in that: "No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task contemplated by this order." Petitioners Olaguer and Reyes appear to be fiscal agents of the PCGG. There can be no doubt, therefore, that the subject matter of the action (the PJI its properties and assets) falls within the exclusive jurisdiction of the Sandiganbayan. Petitioners, as fiscal agents of the PCGG, cannot be sued in such capacity before the ordinary courts. The tribunal for such purpose is the Sandiganbayan. It necessarily follows that the issues raised by the private respondents before the respondent judge to the efect that petitioners are usurpers and have no right to sit in the board of directors or act as corporate officers of the PJI are issues which should be addressed to the Sandiganbayan. RATIO: Some administrative agencies are bodies corporate with legal capacity to sie and be sued in the courts. The PCGG is a co-equal body with the regional trial courts and co-equal bodies have no power to control the other. --PADUA vs RANADA 390 SCRA 663 Status and Characteristics Consequence of Characteristics of Administrative Agencies FACTS: On November 9, 2001, the TRB issued Resolution No. 2001-89 authorizing provisional toll rate adjustments at the Metro Manila Skyway, efective January 1, 2002. For implementation starting January 1, 2002 after its publication once a week for three (3) consecutive weeks in a newspaper of general circulation and that said Provisional Toll Rate Increase shall remain in efect until such time that the TRB Board has determined otherwise. On December 17, 24 and 31, 2001, the above Resolution approving provisional toll rate adjustments was published in the newspapers of general circulation. Tracing back the events that led to the issuance of the said Resolution, it appears that on February 27, 2001 the Citra Metro Manila Tollways Corporation (CITRA) filed with the TRB an application for an interim adjustment of the toll rates at the Metro Manila Skyway Project Stage 1. CITRA moored its petition on the provisions of the Supplemental Toll Operation Agreement (STOA), authorizing it, as the investor, to apply for and if warranted, to be granted an interim adjustment of toll rates in the event of a significant currency devaluation.

Claiming that the peso exchange rate to a U.S. dollar had devaluated from P26.1671 in 1995 to P48.00 in 2000, CITRA alleged that there was a compelling need for the increase of the toll rates to meet the loan obligations of the Project and the substantial increase in debt-service burden. Due to heavy opposition, CITRAs petition remained unresolved. This prompted CITRA to file on October 9, 2001 an Urgent Motion for Provisional Approval, this time, invoking Section 3, Rule 10 of the Rules of Practice and Procedure Governing Hearing Before the Toll Regulatory Board (TRB Rules of Procedure). On October 30, 2001, CITRA moved to withdraw its Urgent Motion for Provisional Approval without prejudice to its right to seek or be granted provisional relief under the above-quoted provisions of the TRB Rules of Procedure, obviously, referring to the power of the Board to act on its own initiative. On November 7, 2001, CITRA wrote a letter to TRB expressing its concern over the undue delay in the proceeding, stressing that any further setback would bring the Projects financial condition, as well as the Philippine banking system, to a total collapse. CITRA recounted that out of the US$354 million funding from creditors, two-thirds (2/3) thereof came from the Philippine banks and financial institutions, such as the Landbank of the Philippines and the Government Service Insurance Services. Thus, CITRA requested TRB to find a timely solution to its predicament. On November 9, 2001, TRB granted CITRAs motion to withdraw the Urgent Motion for Provisional Approval and, at the same time, issued Resolution No. 2001-89, earlier quoted. Hence, petitioners Ceferino Padua and Eduardo Zialcita assail before this Court the validity and legality of TRB Resolution No. 2001-89. Petitioner Ceferino Padua, as a toll payer, filed an Urgent Motion for a Temporary Restraining Order to Stop Arbitrary Toll Fee Increases in a petition for mandamus earlier filed by him. In his urgent motion, petitioner Padua claims that alone, TRB Executive Director Jaime S. Dumlao, Jr., could not authorize the provisional toll rate adjustments because the TRB is a collegial body. On January 4, 2002, petitioner Padua filed a Supplemental Urgent Motion for a TRO against Toll Fee Increases, arguing further that Resolution No. 200189 was issued without basis considering that while it was signed by three (3) of the five members of the TRB, none of them actually attended the hearing. Petitioner Eduardo Zialcita, as a taxpayer and as Congressman of Paranaque City, filed the present petition for prohibition with prayer for a temporary restraining order and/or writ of preliminary injunction against TRB and CITRA, impugning the same Resolution No. 2001-89. He asserts that the provisional toll rate adjustments are exorbitant and that the TRB violated its own Charter, Presidential Decree No. 1112, when it promulgated Resolution No. 2001-89 without the benefit of any public hearing. He also maintains that the TRB violated the Constitution when it did not express clearly and distinctly the facts and the law on which Resolution No. 2001-89 was based. And lastly, he claims that Section 3, Rule 10 of the TRB Rules of Procedure is not sanctioned by P.D. No. 1112. ISSUE: Whether or not Resolution No. 2001-89 issued by the Toll Regulatory Board (TRB) is valid RULING: Yes. The remedy of prohibition initiated by petitioner Zialcita sufers several infirmities. Initially, it violates the twin doctrine of primary administrative jurisdiction and non-exhaustion of administrative remedies. P.D. No. 1112 explicitly provides that the decisions of the TRB on petitions for the increase of toll rate shall be appealable to the Office of the President within ten (10) days from the promulgation thereof. Obviously, the laws and the TRB Rules of Procedure have provided the remedies of an interested Expressways user. The initial proper recourse is to file a petition for review of the adjusted toll rates with the TRB. The need for a prior resort to this body is with reason. The TRB, as the agency assigned to supervise the collection of toll fees and the operation of toll facilities, has the necessary expertise, training and skills to judiciously decide matters of this kind. As may be gleaned from the petition, the main thrust of petitioner Zialcitas argument is that the provisional toll rate adjustments are exorbitant, oppressive, onerous and unconscionable. This is obviously a question of fact requiring knowledge of the formula used and the factors considered in determining the assailed rates. Definitely, this task is within the province of the TRB. We take cognizance of the wealth of jurisprudence on the doctrine of primary administrative jurisdiction and exhaustion of administrative remedies. In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or intricate questions of facts, subject to judicial review in case of grave abuse of discretion, is indispensable. Between the power lodged in an administrative body and a court, the unmistakable trend is to refer it to the former." If the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then

relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court. For another, it is not true that it was TRB Executive Director Dumlao, Jr. alone who issued Resolution No. 2001-89. The Resolution itself contains the signature of the four TRB Directors, namely, Simeon A. Datumanong, Emmanuel P. Bonoan, Ruben S. Reinoso, Jr. and Mario K. Espinosa. Petitioner Padua would argue that while these Directors signed the Resolution, none of them personally attended the hearing. This argument is misplaced. Under our jurisprudence, an administrative agency may employ other persons, such as a hearing officer, examiner or investigator, to receive evidence, conduct hearing and make reports, on the basis of which the agency shall render its decision. Such a procedure is a practical necessity. At any rate, it cannot be gainsaid that the term administrative body or agency includes the subordinate officials upon whose hand the body or agency delegates a portion of its authority. Included therein are the hearing officers through whose eyes and ears the administrative body or agency observes the demeanor, conduct and attitude of the witnesses and listens to their testimonies. It must be emphasized that the appointment of competent officers to hear and receive evidence is commonly resorted to by administrative bodies or agencies in the interest of an orderly and efficient disposition of administrative cases. Corollarily, in a catena of cases, this Court laid down the cardinal requirements of due process in administrative proceedings, one of which is that the tribunal or body or any of its judges must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate. Thus, it is logical to say that this mandate was rendered precisely to ensure that in cases where the hearing or reception of evidence is assigned to a subordinate, the body or agency shall not merely rely on his recommendation but instead shall personally weigh and assess the evidence which the said subordinate has gathered. Be that as it may, we must stress that the TRB's authority to grant provisional toll rate adjustments does not require the conduct of a hearing. Pertinent laws and jurisprudence support this conclusion. RATIO: The very characteristics of administrative agencies necessitate that delegation of function and authority be a predominant feature of their organization and procedure. At any rate, it cannot be gainsaid that the term administrative body or agency includes the subordinate officials (hearing officers, examiners, investigators) upon whose hand the body or agency delegates a portion of its authority. --JOSON vs EXECUTIVE SECRETARY 290 SCRA 279 Distribution of Powers of Government Traditional Branches FACTS: The case at bar involves the validity of the suspension from office of petitioner Eduardo Nonato Joson as Governor of the province of Nueva Ecija. Private respondent Oscar C. Tinio is the Vice-Governor of said province while private respondents Loreto P. Pangilinan, Crispulo S. Esguerra, Solita C. Santos, Vicente C. Palilio and Napoleon Interior are members of the Sangguniang Panlalawigan. On September 17, 1996, private respondents filed with the Office of the President a letter-complaint dated September 13, 1997 charging petitioner with grave misconduct and abuse of authority. Private respondents alleged that in the morning of September 12, 1996, they were at the session hall of the provincial capitol for a scheduled session of the Sangguniang Panlalawigan when petitioner belligerently barged into the Hall; petitioner angrily kicked the door and chairs in the Hall and uttered threatening words at them; close behind petitioner were several men with long and short firearms who encircled the area. Private respondents claim that this incident was an ofshoot of their resistance to a pending legislative measure supported by petitioner that the province of Nueva Ecija obtain a loan of P150 million from the Philippine National Bank; that petitioner's acts were intended to harass them into approving this loan; that fortunately, no session of the Sangguniang Panlalawigan was held that day for lack of quorum and the proposed legislative measure was not considered; that private respondents opposed the loan because the province of Nueva Ecija had an unliquidated obligation of more than P70 million incurred without prior authorization from the Sangguniang Panlalawigan; that the provincial budget officer and treasurer had earlier disclosed that the province could not aford to contract another obligation; that petitioner's act of barging in and intimidating private respondents was a serious insult to the integrity and independence of the Sangguniang Panlalawigan; and that the presence of his private army posed grave danger to private respondents' lives and safety. Private respondents prayed for the suspension or removal of petitioner; for an emergency audit of the provincial treasury of Nueva Ecija; and for the review of the proposed loan in light of the financial condition of the province.

President Ramos noted that the situation of "12 Sep at the Session Hall," i.e., the refusal of the members of the Sangguniang Panlalawigan to approve the proposed loan, did not appear to justify "the use of force, intimidation or armed followers." He thus instructed the then Secretary of the Interior and Local Governments (SILG) Robert Barbers to "take appropriate preemptive and investigative actions," but to "break not the peace." Acting upon the instructions of the President, Secretary Barbers notified petitioner of the case against him and attached to the notice a copy of the complaint and its annexes. In the same notice, Secretary Barbers directed petitioner "to submit his verified/sworn answer thereto, not a motion to dismiss, together with such documentary evidence that he has in support thereof, within fifteen (15) days from receipt. Immediately thereafter, Secretary Barbers proceeded to Nueva Ecija and summoned petitioner and private respondents to a conference to settle the controversy. The parties entered into an agreement whereby petitioner promised to maintain peace and order in the province while private respondents promised to refrain from filing cases that would adversely afect their peaceful co-existence. The peace agreement was not respected by the parties and the private respondents reiterated their lettercomplaint. Petitioner was again ordered to file his answer to the letter-complaint within fifteen days from receipt. Petitioner submitted requests for extension to submit his answer and was each request was granted each time. The DILG however, informed him that his "failure to submit answer will be considered a waiver and that the plaintif shall be allowed to present his evidence ex parte." Three months later, on April 22, 1997, Undersecretary Manuel Sanchez, then Acting Secretary of the DILG, issued an order declaring petitioner in default and to have waived his right to present evidence. Private respondents were ordered to present their evidence ex-parte. Respondent was hereby declared in default. On June 24, 1997, petitioner, through counsel, filed a "Motion to Dismiss." Petitioner alleged that the lettercomplaint was not verified on the day it was filed with the Office of the President; and that the DILG had no jurisdiction over the case and no authority to require him, to answer the complaint. On July 4, 1997, petitioner filed an "Urgent Ex-Parte Motion for Reconsideration" of the order of June 23, 1997 reinstating the order of default. Petitioner also prayed that the hearing on the merits of the case be held in abeyance until after the "Motion to Dismiss" shall have been resolved. On July 11, 1997, on recommendation of Secretary Barbers, Executive Secretary Ruben Torres issued an order, by authority of the President, placing petitioner under preventive suspension for sixty (60) days pending investigation of the charges against him. Secretary Barbers directed the Philippine National Police to assist in the implementation of the order of preventive suspension. In petitioner's stead, Secretary Barbers designated Vice-Governor Oscar Tinio as Acting Governor until such time as petitioner's temporary legal incapacity shall have ceased to exist. Forthwith, petitioner filed a petition for certiorari and prohibition with the Court of Appeals challenging the order of preventive suspension and the order of default. In the meantime, on October 24, 1997, the Court of Appeals dismissed petitioner's petition. A few days after filing the petition before this Court, petitioner filed a "Motion for Leave to File Herein Incorporated Urgent Motion for the Issuance of a Temporary Restraining Order and/or a Writ of Preliminary Injunction." Petitioner alleged that subsequent to the institution of this petition, the Secretary of the Interior and Local Governments rendered a resolution on the case finding him guilty of the ofenses charged. His finding was based on the position papers and affidavits of witnesses submitted by the parties. The DILG Secretary found the affidavits of complainants' witnesses to be "more natural, reasonable and probable" than those of herein petitioner Joson's. On January 8, 1998, the Executive Secretary, by authority of the President, adopted the findings and recommendation of the DILG Secretary. He imposed on petitioner the penalty of suspension from office for six (6) months without pay. ISSUE: Whether or not the DILG Secretary, in his resolution, was exercising the powers of the President which are clearly vested by law only upon the President or the Executive Secretary, and thus his action is contrary to law RULING: In his second assigned error, petitioner questions the jurisdiction and authority of the DILG Secretary over the case. He contends that under the law, it is the Office of the President that has jurisdiction over the letter-complaint and that the Court of Appeals erred in applying the alter-ego principle because the power to discipline elective local officials lies with the President, not with the DILG Secretary. Jurisdiction over administrative disciplinary actions against elective local officials is lodged in two authorities: the Disciplining Authority and the Investigating Authority. Pursuant to these provisions, the Disciplining Authority is the President of the Philippines, whether acting by himself or through the Executive Secretary. The Secretary of the Interior and Local Government is the Investigating Authority, who may act by himself or constitute an Investigating Committee. The Secretary of the DILG, however, is not the exclusive Investigating Authority. In lieu of the DILG Secretary, the Disciplinary Authority may designate a Special Investigating Committee.

The power of the President over administrative disciplinary cases against elective local officials is derived from his power of general supervision over local governments. The power to discipline evidently includes the power to investigate. As the Disciplining Authority, the President has the power derived from the Constitution itself to investigate complaints against local government officials. A.O. No. 23, however, delegates the power to investigate to the DILG or a Special Investigating Committee, as may be constituted by the Disciplining Authority. This is not undue delegation, contrary to petitioner Joson's claim. The President remains the Disciplining Authority. What is delegated is the power to investigate, not the power to discipline. Moreover, the power of the DILG to investigate administrative complaints is based on the alter-ego principle or the doctrine of qualified political agency. Under this doctrine, which recognizes the establishment of a single executive, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the Secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive presumptively the acts of the Chief Executive. RATIO: Under the Constitution and as provided in the Administrative Code of 1987, the powers of the National Government are distributed among three (3) branches. The executive power shall be vested in the President. --EUGENIO vs CIVIL SERVICE COMMISSION 242 SCRA 196 Definition of Administrative Relationships Attachment FACTS: Petitioner is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a Career Executive Service (CES) Eligibility and a CESO rank on August 2, 1993, she was given a CES eligibility. On September 15, 1993, she was recommended to the President for a CESO rank by the Career Executive Service Board. On October 1, 1993, respondent Civil Service Commission passed Resolution No. 93-4359 which resolves to streamline reorganize and efect changes in its organizational structure. Pursuant thereto, the Career Executive Service Board, shall now be known as the Office for Career Executive Service of the Civil Service Commission. Accordingly, the existing personnel, budget, properties and equipment of the Career Executive Service Board shall now form part of the Office for Career Executive Service. The above resolution became an impediment to the appointment of petitioner as Civil Service Officer, Rank IV. Finding herself bereft of further administrative relief as the Career Executive Service Board which recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul, among others, resolution No. 93-4359. ISSUE: Whether or not the CSC usurped the legislative functions of Congress when it abolished CESB, an office created by law, through the issuance of CSC Resolution No. 93-4359 RULING: Yes. The controlling fact is that the Career Executive Service Board (CESB) was created in the Presidential Decree (P.D.) No. 1 on September 1, 1974 which adopted the Integrated Plan. It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the legislature. This follows an unbroken stream of rulings that the creation and abolition of public offices is primarily a legislative function. Except for such offices as are created by the Constitution, the creation of public offices is primarily a legislative function. In so far as the legislative power in this respect is not restricted by constitutional provisions, it supreme, and the legislature may decide for itself what offices are suitable, necessary, or convenient. When in the exigencies of government it is necessary to create and define duties, the legislative department has the discretion to determine whether additional offices shall be created, or whether these duties shall be attached to and become ex-officio duties of existing offices. An office created by the legislature is wholly within the power of that body, and it may prescribe the mode of filling the office and the powers and duties of the incumbent, and if it sees fit, abolish the office. In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On

the contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the operation of CESB. Respondent Commission's power to reorganize is limited to offices under its control. From its inception, the CESB was intended to be an autonomous entity, albeit administratively attached to respondent Commission. As conceptualized by the Reorganization Committee "the CESB shall be autonomous. It is expected to view the problem of building up executive manpower in the government with a broad and positive outlook." The essential autonomous character of the CESB is not negated by its attachment to respondent Commission. By said attachment, CESB was not made to fall within the control of respondent Commission. Under the Administrative Code of 1987, the purpose of attaching one functionally inter-related government agency to another is to attain "policy and program coordination." RATIO: Attachment. — (a) This refers to the lateral relationship between the department or its equivalent and attached agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by having the department represented in the governing board of the attached agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency. --BLAQUERA vs ALCALA 295 SCRA 411 Relationship of Government Owned or Controlled Corporations to the Department FACTS: Petitioners are officials and employees of several government departments and agencies who were paid incentive benefits for the year 1992, pursuant to Executive Order No. 292, otherwise known as the Administrative Code of 1987, and the Omnibus Rules Implementing Book V of EO 292. On January 19, 1993, then President Fidel V. Ramos issued Administrative Order No. 29 authorizing the grant of productivity incentive benefits for the year 1992 in the maximum amount of P1,000.00 and reiterating the prohibition under Section 7 of Administrative Order No. 268, enjoining the grant of productivity incentive benefits without prior approval of the President. Section 4 of AO 29 directed “all departments, offices and agencies which authorized payment of CY 1992 Productivity Incentive Bonus in excess of the amount authorized under Section 1 hereof are hereby directed to immediately cause the return/refund of the excess within a period of six months to commence fifteen (15) days after the issuance of this Order.” In compliance therewith, the heads of the departments or agencies of the government concerned, who are the herein respondents, caused the deduction from petitioners’ salaries or allowances of the amounts needed to cover the alleged overpayments. To prevent the respondents from making further deductions from their salaries or allowances, the petitioners have come before this Court to seek relief. The petitioner, Association of Dedicated Employees of the Philippine Tourism Authority, is an association of employees of the Philippine Tourism Authority who were granted productivity incentive bonus for calendar year 1992 pursuant to Republic Act No. 6971, otherwise known as the Productivity Incentives Act of 1990. Subject bonus was, however, disallowed by the Corporate Auditor on the ground that it was “prohibited under Administrative Order No. 29 dated January 19, 1993.” The disallowance of the bonus in question was finally brought on appeal to the Commission on Audit which denied the appeal in its Decision of March 6, 1995 on the grounds that provisions of RA 6971 insofar as the coverage is concerned, refer to business enterprises including government owned and/or controlled corporations performing proprietary functions. Section 1a of the Supplemental Rules Implementing RA 6971 classified such coverage as: “All business enterprises, with or without existing duly certified labor organizations, including government owned and/or controlled corporations performing proprietary functions which are established solely for business or profit and accordingly excluding those created, maintained or acquired in pursuance of a policy of the State enunciated in the Constitution, or by law and those whose officers and employees are covered by the Civil Service." Pursuant to Section 10 of RA 6971, the Secretary of Labor and Secretary of Finance issued Supplemental Rules to Implement the said law. With the denial of its appeal, petitioner found its way here via the petition in G.R. No. 119597, to seek relief from the aforesaid decision of COA. ISSUE: Whether or not the PTA is within the ambit of RA 6971 RULING: Government-owned and controlled corporations may perform governmental or proprietary functions or both, depending on the purpose for which they have been created. If the purpose is to obtain special corporate benefits or earn pecuniary profit, the function is proprietary. If it is in the interest of

health, safety and for the advancement of public good and welfare, afecting the public in general, the function is governmental. Powers classified as “proprietary” are those intended for private advantage and benefit. The aforecited powers and functions of PTA are predominantly governmental, principally geared towards the development and promotion of tourism in the scenic Philippine archipelago. But it is irrefutable that PTA also performs proprietary functions, as envisaged by its charter. To ascertain whether PTA is within the ambit of RA 6971, there is need to find out the legislative intent, and to refer to other provisions of RA 6971 and other pertinent laws, that may aid the Court in ruling on the right of officials and employees of PTA to receive bonuses under RA 6971. Government corporations may be created by special charters or by incorporation under the general corporation law. Those created by special charters are governed by the Civil Service Law while those incorporated under the general corporation law are governed by the Labor Code. It is thus evident that PTA, being a government-owned and controlled corporation with original charter subject to Civil Service Law, Rules and Regulations, is already within the scope of an incentives award system under Section 1, Rule X of the Omnibus Rules Implementing EO 292 issued by the Civil Service Commission (“Commission”). Since government-owned and controlled corporations with original charters do have an incentive award system, Congress enacted a law that would address the same concern of officials and employees of government-owned and controlled corporations incorporated under the general corporation law. All things studiedly considered in proper perspective, the Court finds no reversible error in the finding by respondent Commission that PTA is not within the purview of RA 6971. As regards the promulgation of implementing rules and regulations, it bears stressing that the “power of administrative officials to promulgate rules in the implementation of the statute is necessarily limited to what is provided for in the legislative enactment.” In the case under scrutiny, the Supplementary Rules Implementing RA 6971 issued by the Secretary of Labor and Employment and the Secretary of Finance accord with the intendment and provisions of RA 6971. Consequently, not being covered by RA 6971, AO 29 applies to the petitioner. RATIO: Government-owned or controlled corporations refer to any agency organized as a stock or nonstock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the government directly ot through its instrumentalities either wholly, or, where applicable, as in the case of stock corporations, to the extent of at least 50% of its capital stock. --LUMIQUED vs EXEVEA 282 SCRA 125 Mandates of the Different Departments Department of Justice FACTS: Arsenio P. Lumiqued was the Regional Director of the Department of Agrarian Reform – Cordillera Autonomous Region until President Fidel V. Ramos dismissed him from that position pursuant to Administrative Order No. 52 dated May 12, 1993. In view of Lumiqued’s 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 ObarZamudio with the Board of Discipline of the DAR. The first affidavit-complaint dated November 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. 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.” 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. 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. Following the conclusion of the hearings, the investigating committee rendered a report dated July 31, 1992, finding Lumiqued liable for all the charges against him. Accordingly, the investigating committee recommended Lumiqued’s dismissal or removal from office, without prejudice to the filing of the appropriate criminal charges against him. On May 12, 1993, President Fidel V. Ramos himself issued Administrative Order 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. 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.” Treating the “petition for appeal” as a motion for the reconsideration of A.O. No. 52, the Office of the President, 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 counsel during the hearing. On May 19, 1994, however, before his motion could be resolved, Lumiqued died. On September 28, 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 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. ISSUE: Whether or not the DOJ investigating committee denied Lumiqued of his contitutional right to counsel during the hearing RULING: No. 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 aforded a suspect or an accused during custodial 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." 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 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 ofenders and administration of the correctional system,” conducting criminal investigations is not its sole function. By its power to “perform such other 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 respondent’s capacity to represent himself and no duty rests on such a body to furnish the person being investigated with counsel. In an administrative proceeding such as the one that transpired, a respondent (such as Lumiqued) has the option of engaging the services of counsel or not. RATIO: The Department of Justice shall carry out the declared policy to provide the government with a principal law agency which sahll be both its legal counsel and prosecution arm. By its power to “perform such other functions as may be provided by law,” prosecutors may be called upon to conduct administrative investigations. ---