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G.R. No. 161113. June 15, 2004.

FREEDOM FROM DEBT COALITION, ANA MARIA NEMENZO, as President of FREEDOM


FROM DEBT COALITION, MA. TERESA I. DIOKNO-PASCUAL, REP. LORETTA ANN
ROSALES (Party-List Akbayan), REP. JOSE VIRGILIO BAUTISTA (PartyList Sanlakas),
REP. RENATO MAGTUBO (Party-List Partido Manggagawa), petitioners, vs. ENERGY
REGULATORY COMMISSION, MANILA ELECTRIC COMPANY (MERALCO), respondents.

Facts: Section 34 of RA 9136 (EPIRA), imposes Universal Charge upon end-users of


electricity, a charge imposed for the recovery of stranded cost. ERC issued its
Implementing Rules and Regulations defining Universal Charge refers to the charge,
if any, imposed for the recovery of Stranded Debts, Stranded Contract Costs of NPC
and Stranded Contract Costs of Eligible Contracts of Distribution Utilities and other
purposes pursuant to Section 34 of the EPIRA. National Power Corporation-Strategic
Power Utilities Group (NPC-SPUG) filed with Energy Regulatory Commission (ERC) a
petition for the availment from the Universal Charge of its share for Missionary
Electrification. The ERC decided the NPCs petition authorizing it to draw up to P70,
000, 000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the
availability of funds for the Environmental Fund component of the Universal Charge.
On the basis of the said ERC decisions, Panay Electric Company, Inc. (PECO) charged
Romeo P. Gerochi and all other end-users with the Universal Charge as reflected in
their respective electric bills starting from the month of July 2003.

Petitioners submit that the assailed provision of law and its IRR which sought to
implement the same are unconstitutional on the following grounds: 1. The universal
charge provided for under Section 34 of the EPIRA and sought to be implemented
under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be collected from
all electric end-users and self-generating entities. The power to tax is strictly a
legislative function and as such, the delegation of said power to any executive or
administrative agency like the ERC is unconstitutional, giving the same unlimited
authority. The assailed provision clearly provides that the Universal Charge is to be
determined, fixed and approved by the ERC, hence leaving to the latter complete
discretionary legislative authority;2. The ERC is also empowered to approve and
determine where the funds collected should be used; 3. The imposition of the
Universal Charge on all end-users is oppressive and confiscatory and amounts to
taxation without representation as the consumers were not given a chance to be
heard and represented.

Issue: Whether or not there is undue delegation of legislative power to tax on the
part of the ERC.

Held: No, there is no undue delegation of powers to the ERC. The EPIRA is complete
in all its essential terms and conditions, and it contains sufficient standards.
Although Sec. 34 of the EPIRA merely provides that within one (1) year from the
effectivity thereof, a Universal Charge to be determined, fixed and approved by the
ERC, shall be imposed on all electricity end-users, and therefore, does not state the
specific amount to be paid as Universal Charge, the amount nevertheless is made
certain by the legislative parameters provided by the law itself when it provided for
the promulgation and enforcement of a National Grid Code, and a Distribution Code.
In making his recommendation to the President on the existence of either of the two
conditions, the Secretary of Finance is not acting as the alter ego of the President or
even her subordinate. In such instance, he is not subject to the power of control and
direction of the President. He is acting as the agent of the legislative department, to
determine and declare the event upon which its expressed will is to take effect. The
Secretary becomes the means or tool by which legislative policy is determined and
implemented, considering that he possesses all the facilities to gather data and
information and has a much broader perspective to properly evaluate them. His
personality in such instance is in reality but a projection of that of Congress. Thus,
being the agent of Congress and not of the President, the President cannot alter or
modify or nullify, or set aside the findings of the Secretary and to substitute the
judgment of the former for that of the latter. Congress simply granted the Secretary
the authority to ascertain the existence of a fact. If it is exists, the Secretary, by
legislative mandate, must submit such information to the President who must
impose the 12% VAT rate. There is no undue delegation of legislation power but only
of the discretion as to the execution of a law.

SCRA RULING

Administrative Law; Public Utilities; Energy Regulatory Commission; Principal powers


of the ERB transferred to the ERC relative to electric public utilities; The conferment
upon the ERC of the power to grant provisional rate adjustments is not inconsistent
with any provision of the EPIRA.The principal powers of the ERB relative to electric
public utilities transferred to the ERC are the following: 1. To regulate and fix the
power rates to be charged by elective companies; 2. To issue certificates of public
convenience for the operation of electric power utilities; 3. To grant or approve
provisional electric rates. It bears stressing that the conferment upon the ERC of the
power to grant provisional rate adjustments is not inconsistent with any provision of
the EPIRA. The powers of the ERB transferred to the ERC under Section 44 are in
addition to the new powers conferred upon the ERC under Section 43.

Same; Same; Same; The power to approve provisional rate increases is included
among the powers transferred to the ERC by virtue of Section 44 since the grant of
that authority is not inconsistent with the EPIRA.The above-quoted applicability
clause is quite clear. It cannot be argued that the clause could not have referred to
the provisions of the prior laws empowering the Public Service Commission (PSC)
and the ERB to grant provisional rate adjustments on the premise that the
lawmakers deliberately deleted the provisions in the crafting of the EPIRA. Such an
argument begs the question. What is clear from Sections 80 and 44 is that the
legislators saw the superfluity or needlessness of carrying over in the EPIRA the
same provision found in the previous laws. The power to approve provisional rate
increases is included among the powers transferred to the ERC by virtue of Section
44 since the grant of that authority is not inconsistent with the EPIRA; rather, it is in
full harmony with the thrust of the law which is to strengthen the ERC as the new
regulatory body. Same; Same; Same; The notion of provisional rate adjustment is
not incompatible with the policy to protect public interest, as enunciated in Section
2(f) of the law.Neither is the notion of provisional rate adjustment incompatible
with the policy to protect public interest, as enunciated in Section 2(f) of the law.
The common weal is not relegated to the back-burner simply by upholding the grant
to the ERC of the authority to approve provisional rate adjustments. Again for one,
even if there is a ground to grant the provisional rate increase, the ERC may do so
only after the publication requirement is met and the consumers affected are given
the opportunity to present their side. For another, the rate increase is provisional in
character and therefore may be modified or even recalled anytime. Still for another,
the ERC is mandated to prescribe a rate-setting methodology in the public interest
and to promote efficiency.

Same; Same; Same; The ERC, under Sections 43(u), 44 and 80 of the EPIRA, in
relation to Section 16(c) of the Public Service Act and Section 8 of E.O. No. 172,
possesses the power to grant provisional rate adjustments subject to the procedure
laid down in these laws as well as in the IRR.All the foregoing undeniably lead to
the conclusion that the ERC, under Sections 43(u), 44 and 80 of the EPIRA, in
relation to Section 16(c) of the Public Service Act and Section 8 of E.O. No. 172,
possesses the power to grant provisional rate adjustments subject to the procedure
laid down in these laws as well as in the IRR.

Same; Same; Same; ERC is required to conduct a hearing on the propriety of the
grant of provisional rate adjustments within 30 days from the issuance of the
provisional order.Under Section 16(c), C.A. No. 146 and Section 8, E.O. No. 172 in
relation to Sections 43 and 80 of the EPIRA, the ERC may grant provisional rate
adjustments without first conducting a hearing prior to such grant. However, it is
required to conduct a hearing on the propriety of the grant of provisional rate
adjustments within 30 days from the issuance of the provisional order. Section 4(e),
Rule 3 of the IRR requires the ERC to resolve the motion for issuance of a provisional
order within seventy five (75) calendar days from the filing of the application or
petition. If, within 30 days from the publication of the application or receipt of a
copy thereof, an affected consumer or the Local Government Unit (LGU) concerned
files with the ERC a comment on the prayed for provisional rate adjustment and/or
the application itself, the ERC is mandated to consider such comment in its action
on the prayer for provisional rate adjustment.

Same; Same; Same; ERC may grant provisional rate adjustments on the basis of the
public utilitys application and supporting documents, and the pleadings submitted
by other parties may have filed at that time; Thereafter, it is mandated to hold a
full-blown hearing to resolve the case on the merits.It is suggested that the IRR
provision in point should be construed as granting the ERC the power to issue
provisional rate adjustments ex parte. Such power, partaking as it does the nature
of the police power of the State, is conferred on administrative agencies like the
ERC to enable them to pursue temporary measures to address problems that cannot
wait until the completion of formal proceedings. Thus, the ERC may grant
provisional rate adjustments on the basis of the public utilitys application and
supporting documents, and the pleadings submitted by other parties may have filed
at that time. Thereafter, it is mandated to hold a full-blown hearing to resolve the
case on the merits.

Same; Same; Same; ERC must wait for thirty (30) days from service of copies of the
application for rate adjustments on interested parties or from the publication of
such application before it can issue a provisional order.In other words, the ERC
must wait for thirty (30) days from service of copies of the application for rate
adjustments on interested parties or from the publication of such application before
it can issue a provisional order. If after the 30th day, no comments are filed by
concerned parties, then and only then may the ERC, if it deems proper under the
circumstances, issue a provisional order on the basis of the application and its
supporting documents.

G.R. No. 165993.September 30, 2008.*

MERIDA WATER DISTRICT, ITS BOARD OF DIRECTORS, NAMELY: SUSANO TOREJAS,


JR., LOURDES QUINTE, ROMULO PALES, CARMELITA DE LOS ANGELES, VILLAFRANCA
ROSAL, AND MWD GENERAL MANAGER NILO C. LUCERO, petitioners, vs. FRANCISCO
BACARRO, VICTORINO DOMANILLO, PATRICK BACOL, CARLITO BARRERA, RUSTICA
MENDOLA, JOSE DELIO HERMOSO, CHARITO TOLORIO, MA. VICTORIA MAINGQUE,
ELMER GO, and GERARDO BIOCO, respondents. Merida Water District vs. Bacarro,
567 SCRA 203, G.R. No. 165993 September 30, 2008

Facts: On March 7, 2002, Merida Water District received a letter from the Local
Water Utilities Administration (LWUA).6 The letter stated that on March 5, 2002, the
LWUA Board of Trustees, per Board Resolution No. 63, series of 2002, confirmed
Merida Water Districts proposed water rates.7 Attached to the letter was the Rate
Schedule of Approved Water Rates containing a progressive increase of water rates
over a certain period.8

On September 3, 2002, Merida Water District approved Resolution No. 006-02,


implementing a water rate increase of P90 for the first ten cubic meters of water
consumption.9 Thereafter, petitioners issued notices of disconnection to
concessionaires who refused to pay the water rate increase and did not render
service to those who opted to pay the increased rate on installment basis.10

On February 13, 2003, respondents, consumers of Merida Water District, filed a


Petition for Injunction, etc.11 against petitioners before the RTC. Respondents
sought to enjoin the petitioners from collecting payment of P90 for the first ten
cubic meters of water consumption. Respondents alleged that this imposed rate was
contrary to the rate increase agreed upon during the public hearing. Respondents
claimed that petitioners violated Letter of Instructions (LOI) No. 700 by: (1)
implementing a water rate increase exceeding 60% of the previous rate; and (2)
failing to conduct a public hearing for the imposed rate of P90.12

On February 26, 2003, petitioners filed a Motion to Dismiss, alleging that


respondents petition lacked a cause of action as they failed to exhaust
administrative remedies under Presidential Decree (P.D.) No. 198, the Provincial
Water Utilities Act of 1973, as amended by P.D. Nos. 768 and 1479.13 On the same
date, respondents questioned the legality of the water rate increase before the
National Water Resources Board (NWRB).14

In its Order15 dated March 3, 2003, the RTC denied petitioners motion to dismiss.
The RTC held that there was no need to exhaust administrative remedies, because
petitioners: (1) failed to comply with the legal requisites of hearing and notice; and
(2) violated LOI No. 700 for prescribing a water rate increase of almost 100% from
the previous rate. Petitioners Motion for Reconsideration,16 was denied on March
31, 2003.17

On April 15, 2003, petitioners filed a Petition for Certiorari18 with the CA, assailing
the trial court orders for lack of jurisdiction. The CA affirmed the orders, upholding
the RTCs jurisdiction and the propriety of respondents recourse to the trial court
notwithstanding the rule on the exhaustion of administrative remedies. Petitioners
filed a Motion for Reconsideration,19 which the CA denied.

Petitioners reiterate their arguments before this Court, alleging the impropriety of
the respondents recourse to the trial court considering their failure to exhaust
administrative remedies. Thus, the sole issue for resolution is whether respondents
recourse to the trial court is proper despite their failure to exhaust administrative
remedies.

At the outset, it must be clarified that the case at bar concerns a local water
districts establishment of a rate increase. As can be gleaned from the material
averments in the complaint below, respondents allegations, that petitioners
committed a patently illegal act by implementing a water rate increase beyond that
prescribed by LOI No. 700 and that petitioners violated due process in implementing
a rate not agreed upon during the public hearing, point to the conclusion that this
controversy arose from the determination of the rate itself.
P.D. No. 198 as amended by P.D. No. 1479 provides for the administrative remedies
regarding a review of water rates, to determine whether a local water district had
complied with the legal requirements in establishing such rates

Issues: WON (1) that petitioners increase of the water rate is patently illegal; and
(2) a denial of due process.

Held: NO, the SC ruled in negative.

the assailed act did not require the consideration of the existence and relevancy of
specific surrounding circumstances and their relation to each other for the Court to
conclude that the act was indeed patently illegal. In the case at bar, certain facts
need to be resolved first, to determine whether petitioners increase of the water
rate is patently illegal act.

The determination of the current rate from which to compute the allowable increase
of 60% is a question of fact that cannot be properly threshed out before this Court.
The NWRB must be given an opportunity to make a factual finding with respect to
this question. This Court accords the factual findings of administrative agencies with
utmost consideration because of the special knowledge and expertise gained by
these quasi-judicial tribunals from handling specific matters falling under their
jurisdiction.25 Considering that the LWUA confirmed the Rate Schedule of Approved
Water Rates for Merida Water District, a schedule that contains different rates
gradually increase, the determination of whether the computation of the percentage
increase complies with the 60% limitation is a factual matter best left to the
competence of the NWRB.

The argument of denial of due process deserves scant consideration. The non-
observance of the doctrine of exhaustion has been recognized in cases where the
party seeking outright judicial intervention was denied the opportunity to be heard
in administrative proceedings.26 In the case at bar, respondents were not denied
the opportunity to be heard, as Merida Water District conducted a public hearing on
October 10, 2001 regarding the increase of water rates.

SCRA RULING

Public Utilities; Water Districts; Water Rates; P.D. No. 198 as amended by P.D. No.
1479 provides for the administrative remedies regarding a review of water rates, to
determine whether a local water district had complied with the legal requirements
in establishing such rates.P.D. No. 198 as amended by P.D. No. 1479 provides for
the administrative remedies regarding a review of water rates, to determine
whether a local water district had complied with the legal requirements in
establishing such rates: SEC. 11. The last paragraph of Section 63 of the same
decree is hereby amended to read as follows: The rates or charges established by
such local district, after hearing shall have been conducted for the purpose, shall be
subject to review by the Administration to establish compliance with the
abovestated provisions. Said review of rates or charges shall be executory and
enforceable after the lapse of seven calendar days from posting thereof in a public
place in the locality of the water district, without prejudice to an appeal being taken
therefrom by a water concessionaire to the [NWRB] whose decision thereon shall be
appealable to the Office of the President. An appeal to the [NWRB] shall be
perfected within thirty days after the expiration of the seven-day period of posting.
The [NWRB] shall decide on appeal within thirty days from perfection. After LWUA
reviews the rate established by a local water district, a water concessionaire may
appeal the same to the NWRB. The NWRBs decision may then be appealed to the
Office of the President.

Same; Same; Same; Administrative Law; Doctrine of Exhaustion of Administrative


Remedies; One of the reasons for the doctrine of exhaustion is the separation of
powers, which enjoins upon the Judiciary a becoming policy of non-interference with
matters coming primarily (albeit not exclusively) within the competence of the other
departments.Respondents failed to exhaust administrative remedies by their
failure to appeal to the NWRB. Non-exhaustion of administrative remedies renders
the action premature. The Court has consistently reiterated the rationale behind the
doctrine of exhaustion of administrative remedies: One of the reasons for the
doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary
a becoming policy of non-interference with matters coming primarily (albeit not
exclusively) within the competence of the other departments. The theory is that the
administrative authorities are in a better position to resolve questions addressed to
their particular expertise and that errors committed by subordinates in their
resolution may be rectified by their superiors if given a chance to do so It may be
added that strict enforcement of the rule could also relieve the courts of a
considerable number of avoidable cases which otherwise would burden their heavily
loaded dockets.

Same; Same; Same; Same; The non-observance of the doctrine of exhaustion has
been upheld in cases when the patent illegality of the assailed act is clear,
undisputed, and more importantly, evident outright.The non-observance of the
doctrine of exhaustion has been upheld in cases when the patent illegality of the
assailed act is clear, undisputed, and more importantly, evident outright. In these
cases, the assailed act did not require the consideration of the existence and
relevancy of specific surrounding circumstances and their relation to each other for
the Court to conclude that the act was indeed patently illegal. In the case at bar,
certain facts need to be resolved first, to determine whether petitioners increase of
the water rate is patently illegal act.

Same; Same; Same; When a local water district increases water rates, the law
requires the district concerned to conduct a public hearing regarding these rates.
When a local water district increases water rates, the law requires the district
concerned to conduct a public hearing regarding these rates. The same rates are
subject to review by the LWUA, which is tasked to determine whether the
establishment of the rates complies with the law. Thus, compliance with the public
hearing requirement means that the rates presented in the hearing should be the
same rates submitted to the LWUA for review and approval. Considering that there
was no finding with regard to this question of fact, whether the rates presented in
the hearing were the same rates approved by the LWUA, the NWRB must be given
the opportunity to resolve this matter.

G.R. No. 164026.December 23, 2008.*

SECURITIES AND EXCHANGE COMMISSION, petitioner, vs. GMA NETWORK, INC.,


respondent.

Facts: On August 19, 1995, the petitioner, GMA NETWORK, INC., (GMA, for brevity),
a domestic corporation, filed an application for collective approval of various
amendments to its Articles of Incorporation and By-Laws with the respondent
Securities and Exchange Commission, (SEC, for brevity). The amendments applied
for include, among others, the change in the corporate name of petitioner from
Republic Broadcasting System, Inc. to GMA Network, Inc. as well as the
extension of the corporate term for another fifty (50) years from and after June 16,
2000.

Upon such filing, the petitioner had been assessed by the SECs Corporate and
Legal Department a separate filing fee for the application for extension of corporate
term equivalent to 1/10 of 1% of its authorized capital stock plus 20% thereof or an
amount of P1,212,200.00.

On September 26, 1995, the petitioner informed the SEC of its intention to contest
the legality and propriety of the said assessment. However, the petitioner requested
the SEC to approve the other amendments being requested by the petitioner
without being deemed to have withdrawn its application for extension of corporate
term.

On October 20, 1995, the petitioner formally protested the assessment amounting
to P1,212,200.00 for its application for extension of corporate term. On February 20,
1996, the SEC approved the other amendments to the petitioners Articles of
Incorporation, specifically Article 1 thereof referring to the corporate name of the
petitioner as well as Article 2 thereof referring to the principal purpose for which the
petitioner was formed.

On March 19, 1996, the petitioner requested for an official opinion/ruling from the
SEC on the validity and propriety of the assessment for application for extension of
its corporate term.
Consequently, the respondent SEC, through Associate Commissioner Fe Eloisa C.
Gloria, on April 18, 1996, issued its ruling upholding the validity of the questioned
assessment, the dispositive portion of which states:

In light of the foregoing, we believe that the questioned assessment is in


accordance with law. Accordingly, you are hereby required to comply with the
required filing fee.

Issue: WON the SEC had delegated power to determine reasonable filing fees

Held: Yes, the SEC had a delegated power to determine reasonable filing fees,
however, is the clear directive of R.A. No. 3531 to impose the same fees for the
filing of articles of incorporation and the filing of amended articles of incorporation
to reflect an extension of corporate term. R.A. No. 3531 provides an unmistakable
standard which should guide the SEC in fixing and imposing its rates and fees. If
such mandate were the only consideration, the Court would have been inclined to
rule that the SEC was correct in imposing the filing fees as outlined in the
questioned memorandum circular, GMAs argument notwithstanding.

However, we agree with the Court of Appeals that the questioned memorandum
circular is invalid as it does not appear from the records that it has been published
in the Official Gazette or in a newspaper of general circulation. Executive Order No.
200, which repealed Art. 2 of the Civil Code, provides that laws shall take effect
after fifteen days following the completion of their publication either in the Official
Gazette or in a newspaper of general circulation in the Philippines, unless it is
otherwise provided.

SCRA RULING

Administrative Law; Securities and Exchange Commission (SEC); Filing Fees; The
Securities and Exchange Commission (SEC) is entitled to collect and receive the
same fees it assesses and collects both for the filing of articles of incorporation and
the filing of an amended articles of incorporation for purposes of extending the term
of corporate existence. Republic Act No. 3531 (R.A. No. 3531) provides that where
the amendment consists in extending the term of corporate existence, the SEC
shall be entitled to collect and receive for the filing of the amended articles of
incorporation the same fees collectible under existing law as the filing of articles of
incorporation. As is clearly the import of this law, the SEC shall be entitled to
collect and receive the same fees it assesses and collects both for the filing of
articles of incorporation and the filing of an amended articles of incorporation for
purposes of extending the term of corporate existence.

Same; Same; Same; Republic Act (R.A.) No. 3531 provides an unmistakable
standard which should guide the Securities and Exchange Commission (SEC) in
fixing and imposing its rates and fees.What this proposition fails to consider,
however, is the clear directive of R.A. No. 3531 to impose the same fees for the
filing of articles of incorporation and the filing of amended articles of incorporation
to reflect an extension of corporate term. R.A. No. 3531 provides an unmistakable
standard which should guide the SEC in fixing and imposing its rates and fees. If
such mandate were the only consideration, the Court would have been inclined to
rule that the SEC was correct in imposing the filing fees as outlined in the
questioned memorandum circular, GMAs argument notwithstanding.

Same; Same; Publication Requirement; The questioned memorandum circular of the


Securities and Exchange Commission (SEC) is invalid as it does not appear from the
records that it has been published in the Official Gazette or in a newspaper of
general circulation.We agree with the Court of Appeals that the questioned
memorandum circular is invalid as it does not appear from the records that it has
been published in the Official Gazette or in a newspaper of general circulation.
Executive Order No. 200, which repealed Art. 2 of the Civil Code, provides that laws
shall take effect after fifteen days following the completion of their publication
either in the Official Gazette or in a newspaper of general circulation in the
Philippines, unless it is otherwise provided.

Same; Same; Office of the National Administrative Register (ONAR); The questioned
Securities and Exchange Commission (SEC) memorandum circular is likewise
ineffective for not having been filed with the Office of the National Administrative
Register of the University of the Philippines Law Center as required in the
Administrative Code of 1987.The questioned memorandum circular, furthermore,
has not been filed with the Office of the National Administrative Register of the
University of the Philippines Law Center as required in the Administrative Code of
1987. In Philsa International Placement and Services Corp. v. Secretary of Labor and
Employment, 356 SCRA 174 (2001), Memorandum Circular No. 2, Series of 1983 of
the Philippine Overseas Employment Administration, which provided for the
schedule of placement and documentation fees for private employment agencies or
authority holders, was struck down as it was not published or filed with the National
Administrative Register.

Same; Same; Same; The questioned Securities and Exchange Commission (SEC)
memorandum circular cannot be construed as simply interpretative of Republic Act
(R.A.) No. 3531 since it is an implementation of the mandate of Republic Act (R.A.)
No. 3531 and indubitably regulates and affects the public at large.The questioned
memorandum circular, it should be emphasized, cannot be construed as simply
interpretative of R.A. No. 3531. This administrative issuance is an implementation of
the mandate of R.A. No. 3531 and indubitably regulates and affects the public at
large. It cannot, therefore, be considered a mere internal rule or regulation, nor an
interpretation of the law, but a rule which must be declared ineffective as it was
neither published nor filed with the Office of the National Administrative Register.

Same; Same; Due Process; Securities and Exchange Commissions (SECs)


assessment amounting to P1,212,200.00 for the filing of an application for
amendment of its articles of incorporation extending its corporate term is
exceedingly unreasonable and amounts to an impositiona filing fee, by legal
definition, is that charged by a public official to accept a document for processing,
and must be just, fair, and proportionate to the service for which the fee is being
collected; The due process clause, however, permits the courts to determine
whether the regulation issued by the Securities and Exchange Commission (SEC) is
reasonable and within the bounds of its rate-fixing authority and to strike it down
when it arbitrarily infringes on a persons right to property.A related factor which
precludes consideration of the questioned issuance as interpretative in nature
merely is the fact the SECs assessment amounting to P1,212,200.00 is exceedingly
unreasonable and amounts to an imposition. A filing fee, by legal definition, is that
charged by a public official to accept a document for processing. The fee should be
just, fair, and proportionate to the service for which the fee is being collected, in this
case, the examination and verification of the documents submitted by GMA to
warrant an extension of its corporate term. Rate-fixing is a legislative function which
concededly has been delegated to the SEC by R.A. No. 3531 and other pertinent
laws. The due process clause, however, permits the courts to determine whether
the regulation issued by the SEC is reasonable and within the bounds of its rate-
fixing authority and to strike it down when it arbitrarily infringes on a persons right
to property.

No. L-78385. August 31, 1987.*

PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner, vs. THE SECRETARY OF


EDUCATION, CULTURE AND SPORTS, respondent. Philippine Consumers Foundation,
Inc. vs. Secretary of Education, Culture and Sports, 153 SCRA 622, No. L-78385
August 31, 1987
FACTS: On 21 February 1987, the Task Force on Private Education under the
Department of Education Culture and Sports had recommended to the DECS several
measures or courses of actions congruent to the governments policy regulating
private colleges in the country. On the said proposal it stipulates that Private schools
may increase school fees from 15-20% without a prior approval from DECS provided
that the school shall not exceed the total amount of school fees of One Thousand
Pesos. Petitioner herein, questioned AO 37 and sought for reconsideration on the
basis that the increase was too high or exorbitant. On 10 April 1987, on the basis
that education is a matter of right and considering the public clamor, DECS
secretary issued a modified administrative order authorizing back all Private Higher
Educational Institutions (PHEI) to implement an increase of 10-15% rate in the
payment of school fees. Discontented with the reconsideration prayed for,
complainant-petitioner seeks for presidential intervention to suspend the
implementation of the modified AO 37 however; no response was made by the
President of the Philippines. On 20 May 1987, petitioner herein, elevates the matter
to the Supreme Court seeking to prevent the implementation of the said order.
Thus, the filing of petition for prohibition on the ground of public interest, seeking to
resolve the following questions before the Supreme Court.

ISSUES: (1) Whether or not Administrative Order 37 issued by DECS Secretary has
legal basis? (2)Whether or not Administrative Order 37 issued by DECS Secretary
curtailed the due process clause enshrined in the constitution?

HELD: On the first issue, the court resolves that under section 57 Batas Pambansa
Bilang. 232 or the Education Act of 1982 empowers the Department of Education
Culture and Sports to regulate the educational systems in the country such as the
power to promulgate, administer, supervise educational systems. Furthermore,
under Sec. 70 of the same act, contemplates on the Rule-Making power of the
Minister of Education Culture and Sports. Ultimately the court holds that the power
to prescribe school fees is implied with the regulatory power exercised by the
Secretary of Education. To resolve the second issue, the court is in affirmative that
in the exercise of the rule-making (quasi-legislative) power of the secretary of
education (formerly Minister of Education) prior notice and hearing are not essential
for the validity of the issuance. Accordingly, the petition for prohibition was
DISMISSED for lack of merit. However, the court reiterates that the rule-making
power of the Secretary of Education to prescribe school fees for private school shall
not be exercise unreasonably, further stressed that any issuances will be subjected
by the Supreme Court power of review

SCRA RULING

Administrative Law; Schools; Tuition Fees; Power granted to the education


department to regulate the educational system of the country includes the power to
prescribe school fees; Authority to fix school fees considered lodged with the
Department of Education.ln the absence of a statute stating otherwise, this power
includes the power to prescribe schools fees. No other government agency has been
vested with the authority to fix school fees and as such, the power should be
considered lodged with the DECS if it is to properly and effectively discharge its
functions and duties under the law.

Same; Same; Same; Constitutional Law; Due process, denial of, not a case of;
Function of prescribing rates by an administrative agency may be either a
legislative or an adjudicative function; DECS Department Order prescribing the
maximum school fees that may charged by all private schools is in the exercise of
DECS legislative function, and prior notice and hearing not essential to the validity
of its issuance.The function of prescribing rates by an administrative agency may
be either a legislative or an adjudicative function. If it were a legislative function,
the grant of prior notice and hearing to the affected parties is not a requirement of
due process. As regards rates prescribed by an administrative agency in the
exercise of its quasi-judicial function, prior notice and hearing are essential to the
validity of such rates. When the rules and/or rates laid down by an administrative
agency are meant to apply to all enterprises of a given kind throughout the country,
they may partake of a legislative character. Where the rules and the rates imposed
apply exclusively to a particular party, based upon a finding of fact, then its function
is quasi-judicial in character. Is Department Order No. 37 issued by the DECS in the
exercise of its legislative function? We believe so. The assailed Department Order
prescribes the maximum school fees that may be charged by all private schools in
the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are
not essential to the validity of its issuance.

Same; Same; Same; Absence of showing of clear and convincing evidence of


arbitrariness by DECS in issuing the department order; The Task Force report
created by the DECS as the basis for its decision to allow an increase in tuition fees
was made judiciously.This observation notwithstanding, there is a failure on the
part of the petitioner to show clear and convincing evidence of such arbitrariness.
As the record of the case discloses, the DECS is not without any justification for the
issuance of the questioned Department Order. It would be reasonable to assume
that the report of the Task Force created by the DECS, on which it based its decision
to allow an increase in school fees, was made judiciously. Moreover, upon the
instance of the petitioner, as it so admits in its Petition, the DECS had actually
reduced the original rates of 15% to 20% down to 10% to 15%, accordingly. Under
the circumstances peculiar to this case, We cannot consider the assailed
Department Order arbitrary.

Same; Same; Same; Same; Same; Presumption that official duty has been regularly
performed; Burden of proof is on the party assailing the regularity of official
proceedings which was not successfully disputed.Under the Rules of Court, it is
presumed that official duty has been regularly performed. In the absence of proof to
the contrary, that presumption prevails. This being so, the burden of proof is on the
party assailing the regularity of official proceedings. In the case at bar, the
petitioner has not successfully disputed the presumption.

Same; Same; Same; Supreme Court does not give its judicial imprimature to future
increases in school fees, which must not be unreasonable and arbitrary.This Court,
however, does not go to the extent of saying that it gives its judicial imprimatur to
future increases in school fees. The increases must not be unreasonable and
arbitrary so as to amount to an outrageous exercise of government authority and
power. In such an eventuality, this Court will not hesitate to exercise the power of
judicial review in its capacity as the ultimate guardian of the Constitution.

CIR vs. CA

261 SCRA 236

FACTS: On 22 August 1986, Executive Order No. 41 was promulgated declaring a


one-time tax

amnesty on unpaid income taxes, later amended to include estate and donor's
taxes and taxes

on business, for the taxable years 1981 to 1985. Availing itself of the amnesty,
respondent

R.O.H. Auto Products Philippines, Inc., filed, in October 1986 and November 1986, its
Tax

Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty Return No. 34-F-
00146-

64-B, respectively, and paid the corresponding amnesty taxes due. Prior to this
availment,

petitioner Commissioner of Internal Revenue, in a communication received by


private

respondent on 13 August 1986, assessed the latter deficiency income and business
taxes for its

fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate


amount of

P1,410,157.71. However, the request to cancel the deficiency taxes was denied.

ISSUES: WON private respondent can avail of the tax amnesty


RULING: YES. Executive Order No. 41 is quite explicit and requires hardly anything
beyond a

simple application of its provisions. If, as the Commissioner argues, Executive Order
No. 41 had

not been intended to include 1981-1985 tax liabilities already assessed


(administratively) prior

to 22 August 1986, the law could have simply so provided in its exclusionary
clauses. It did not.

The conclusion is unavoidable, and it is that the executive order has been designed
to be in the

nature of a general grant of tax amnesty subject only to the cases specifically
excepted by it. It

might not be amiss to recall that the taxable periods covered by the amnesty
include the years

immediately preceding the 1986 revolution during which time there had been
persistent calls, all

too vivid to be easily forgotten, for civil Disobedience , most particularly in the
payment of taxes, to the martial law regime. It should be understandable then that
those who ultimately took over the reign of government following the successful
revolution would promptly provide for a broad, and not a confined, tax amnesty.

SCRA RULING

Taxation; The CIR may not disregard legal requirements or applicable principles in
the exercise of its quasi-legislative powers.Petitioner stresses on the wide and
ample authority of the BIR in the issuance of rulings for the effective
implementation of the provisions of the National Internal Revenue Code. Let it be
made clear that such authority of the Commissioner is not here doubted. Like any
other government agency, however, the CIR may not disregard legal requirements
or applicable principles in the exercise of its quasi-legislative powers.

Same; RMC 3793 cannot be viewed simply as a corrective measure or merely as


construing Section 142(c)(1) of the NIRC.A reading of RMC 3793, particularly
considering the circumstances under which it has been issued, convinces us that
the circular cannot be viewed simply as a corrective measure (revoking in the
process the previous holdings of past Commissioners) or merely as construing
Section 142(c)(1) of the NIRC, as amended, but has, in fact and most importantly,
been made in order to place Hope Luxury, Premium More and Champion
within the classification of locally manufactured cigarettes bearing foreign brands
and to thereby have them covered by RA 7654. Specifically, the new law would have
its amendatory provisions applied to locally manufactured cigarettes which at the
time of its effectivity were not so classified as bearing foreign brands. Prior to the
issuance of the questioned circular, Hope Luxury, Premium More, and
Champion cigarettes were in the category of locally manufactured cigarettes not
bearing foreign brand subject to 45% ad valorem tax. Hence, without RMC 3793,
the enactment of RA 7654, would have had no new tax rate consequence on private
respondents products.

Same; RMC 3793 might have infringed on uniformity of taxation.Not


insignificantly, RMC 3793 might have likewise infringed on uniformity of taxation.

Same; Uniformity requires that all subjects or objects of taxation, similarly situated,
are to be treated alike or put on equal footing both in privileges and liabilities.
Article VI, Section 28, paragraph 1, of the 1987 Constitution mandates taxation to
be uniform and equitable. Uniformity requires that all subjects or objects of taxation,
similarly situated, are to be treated alike or put on equal footing both in privileges
and liabilities. Thus, all taxable articles or kinds of property of the same class must
be taxed at the same rate and the tax must operate with the same force and effect
in every place where the subject may be found.

Same; Court is convinced that the hastily promulgated RMC 3793 has fallen short
of a valid and effective administrative issuance.All taken, the Court is convinced
that the hastily promulgated RMC 3793 has fallen short of a valid and effective
administrative issuance.

Taxation; In issuing RMC 3793 petitioner Commissioner of lnternal Revenue was


exercising her quasi-judicial or administrative adjudicatory power, consequently
prior notice and hearing are required.It is evident from the foregoing that in
issuing RMC 3793 petitioner Commissioner of Internal Revenue was exercising her
quasi-judicial or administrative adjudicatory power. She cited and interpreted the
law, made a factual finding, applied the law to her given set of facts, arrived at a
conclusion, and issued a ruling aimed at a specific individual. Consequently prior
notice and hearing are required. It must be emphasized that even the text alone of
RMC 3793 implies that reception of evidence during a hearing is appropriate if not
necessary since it invokes BIR Ruling No. 41088, dated August 24, 1988, which
provides that in cases where it cannot be established or there is dearth of evidence
as to whether a brand is foreign or not.

Taxation; Petitioner was acting well within her prerogatives when she issued the
questioned Circular.Statutorily empowered to issue rulings or opinions embodying
the proper determination in respect to classifying articles, including cigarettes, for
purposes of tax assessment and collection, petitioner was acting well within her
prerogatives when she issued the questioned Circular. And in the exercise of such
prerogatives under the law, she has in her favor the presumption of regular
performance of official duty which must be overcome by clearly persuasive
evidence of stark error and grave abuse of discretion in order to be overturned and
disregarded.

Same; Petitioner was well within her prerogatives in the exercise of her rule-making
power to classify articles for taxation purposes, to interpret the laws which she is
mandated to administer.The petitioner was well within her prerogatives, in the
exercise of her rule-making power, to classify articles for taxation purposes, to
interpret the laws which she is mandated to administer. In interpreting the same,
petitioner must, in general, be guided by the principles underlying taxation, i.e.,
taxes are the lifeblood of Government, and revenue laws ought to be interpreted in
favor of the Government, for Government can not survive without the funds to
underwrite its varied operational expenses in pursuit of the welfare of the society
which it serves and protects.

Same; Private respondent will not be shielded by any vested rights for there are no
vested rights to speak of respecting a wrong construction of the law by
administrative officials and such wrong interpretation does not place the
Government in estoppel to correct or overrule the same.Private respondent claims
that its business will be destroyed by the imposition of additional ad valorem taxes
as a result of the effectivity of the questioned Circular. It claims that under the
vested rights theory, it cannot now be made to pay higher taxes after having been
assessed for less in the past. Of course private respondent will trumpet its losses, its
interests, after all, being its sole concern. What private respondent fails to see is the
loss of revenue by the Government which, because of erroneous determinations
made by its past revenue commissioners, collected lesser taxes than what it was
entitled to in the first place. It is every citizens duty to pay the correct amount of
taxes. Private respondent will not be shielded by any vested rights, for there are no
vested rights to speak of respecting a wrong construction of the law by
administrative officials, and such wrong interpretation does not place the
Government in estoppel to correct or overrule the same.

Same; It is now settled that only legislative regulations and not interpretative
rulings must have the benefit of public hearing.Private respondent concedes that
under general rules of administrative law, a ruling which is merely interpretative
in character may not require prior notice to affected parties before its issuance as
well as a hearing and for this reason, in most instances, interpretative regulations
are not given the force of law. Indeed, interpretative regulations and those merely
internal in nature x x x need not be published. And it is now settled that only
legislative regulations and not interpretative rulings must have the benefit of public
hearing. Commissioner of lnternal Revenue vs. Court of Appeals, 261 SCRA 236,
G.R. No. 119761 August 29, 1996
G.R. No. 115942. May 31, 1995.*

RUBLE RUBENECIA, petitioner, vs. CIVIL SERVICE COMMISSION, respondent.

FACTS: Teachers of Catarman National HS filed before MSPB administrative


complaint against petitioner Rubenecia, the School Principal: dishonesty, nepotism,
oppression, and violation of Civil Service Rules. MPSB investigation: charged
Rubenecia, required him to answer. Rubenecia did not file answer, requested
instead to be furnished with copies of the documents submitted by complainants.
CSC Regional Director invited him to visit their office to identify and pick up the
document that he might need but he deferred, saying he still had enrollment
problems. Later, CSC Regional Office reiterated that he answer but he reiterated
request that he be provided with copies of supporting documents. Hearing
scheduled but complainants did not appear, nor did he file his answer though he
was there. On the same day, Regional director issued order that the case was
deemed submitted for resolution on the basis of the documents filed. Rubenecia
wrote to Chairman of CSC for his dismissal. Regional Director submitted to MSPB the
investigation report but before MSPB could render a decision, CSC issued
RESOLUTION 93-2387 which provided, among other things, that cases then pending
before the MSPB were to be elevated to the Commission for decision. In accordance
with the Resolution, Rubenecias case was elevated to CSC. CSC: GUILTY, dismissed
from service. MR (lack of jurisdiction), denied "I. VIOLATION OF CIVIL SERVICE RULES
AND REGULATIONS: The records show that Rubenecia committed the said offense.
He himself admitted that he did not accomplish his DTR but this was upon the
suggestion of the Administrative Officer. Rubenecia cannot use as an excuse the
alleged suggestion of an Administrative Officer. As the principal of a national high
School, he is expected to know the basic civil service law, rules and regulations. II.
DISHONESTY: The Commission finds Rubenecia liable. He was charged for
misrepresenting that he was on 'Official Travel' to Baguio City to attend a three-
week seminar and making it appear in his CSC Form No. 7 for the month of October
1988 that he has a perfect attendance for that month. Rubenecia in order to rebut
the same simply reiterated previous allegation that he attended the SEDP Training
in Baguio City during the questioned months without even an attempt on his part to
adduce evidence documentary or testimonial that would attest to the truth of his
allegation that he was indeed in Baguio during those weeks for training purposes. A
mere allegation cannot obviously prevail over a more direct and positive statement
of Celedonio Layon, School Division Superintendent, Division of Northern Samar,
when the latter certified that he had no official knowledge of the alleged 'official
travel' of Rubenecia. Moreover, verification with the Bureau of Secondary Schools
reveals that no training seminar for school principal was conducted by DECS during
that time. It was also proven by records that he caused one Mrs. Cecilia Vestra to
render service as Secondary School Teacher from January 19, 1990 to august 30,
1991 without any duly issued appointment by the appointing authority. III.
NEPOTISM: With respect to the charge of Nepotism, Rubenecia alleged that he is not
the appointing authority with regard to the appointment of his brother-in-law as
Utilityman but merely a recommending authority. With this statement, the
commission finds Rubenecia guilty. it should be noted that under the provision of
Sec. 59, of the 1987 Administrative Code, the recommending authority is also
prohibited from recommending the appointment to non-teaching position of his
relatives within the prohibited degree. IV. OPPRESSION: Rubenecia is also guilty of
Oppression. He did not give on time the money benefits due to Ms. Leah Rebadulla
and Mr. Rolando Tafalla, both Secondary Teachers of CNHS, specifically their salary
differentials for July to December 1987, their salaries for the month of May and half
of June 1988, their proportional vacation salaries for the semester of 1987-1988,
and the salary of Mr. Tafalla, for the month of June, 1987. Rubenecia did not even
attempt to present countervailing evidence. Without being specifically denied, they
are deemed admitted by Rubenecia. V. INSUBORDINATION: He is not liable for
Insubordination arising from his alleged refusal to obey the 'Detail Order' by filing a
sick leave and vacation leave successively. The records show that the two
applications for leave filed by Rubenecia were duly approved by proper official,
hence it cannot be considered an act of Insubordination on the part of Rubenecia
when he incurred absences based on an approved application for leave of absence.
Rubenecia is therefore found guilty of Dishonesty, Nepotism, Oppression and
Violations of Civil Service Rules and Regulations. WHEREFORE, foregoing premises
considered, the Commission hereby resolves to find Ruble Rubenecia guilty of
Dishonesty, Nepotism, Oppression and Violation of Civil Service Rules and
Regulations. Accordingly, he is meted out the penalty of dismissal from the service."

ISSUES: (1) Whether or not the CSC had authority to issue its Resolution No. 93-
2387 and assume jurisdiction over the administrative case against petitioner; and
(2) Whether or not petitioner had been accorded due process in connection with
rendition of CSC Resolution No. 94-0533 finding him guilty and ordering his
dismissal from the service.

HELD: (1) Yes it has authority to issue the said resolution and YES it has jurisdiction
over the administrative case. RUBENECIA: Since MSPB was a creation of law, it could
only be abolished by law and not by CSC. The questioned resolution in sum does the
following: 1. Decision in administrative cases appealable to the Commission
pursuant to Section 47 of the present Civil Service Law may now be appealed
directly to the Commission itself and not to the MSPB. 2. Administrative cases
already pending on appeal before the MSPB or previously brought directly to the
MSPB, at the time of the issuance of Resolution No. 93-2387, were required to be
elevated to the Commission for final resolution. The functions of the MSPB relating
to the determination of administrative disciplinary cases were, in other words, re-
allocated to the Commission itself. WHY RELOCATE: to "streamline the operation of
the CSC" which in turn required the "simplification of systems, cutting of red tape
and elimination of [an] unnecessary bureaucratic layer." The previous procedure
made it difficult for cases to be finally resolved within a reasonable period of time.
The change, theretofore, was moved by the quite legitimate objective of simplifying
the course that administrative disciplinary cases, like those involving petitioner
Rubenecia, must take. We consider that petitioner Rubenecia had no vested right to
a two-step administrative appeal procedure within the Commission, that is, appeal
to an office of the Commission, the MSPB, and thereafter a second appeal to the
Civil Service Commission itself (i.e., the Chairman and the two (2) Commissioners of
the Civil Service Commission), a procedure which most frequently consumed a
prolonged period of time. It did not abolish the Merit System Protection Board, and if
it did, he is not an employee of MSPB to be a real-party-in interest. He cannot argue
that he was not notified that his case was elevated to CSC because (a) CSC
Resolution 93-2387 did not require individual written notice sent by mail to parties
in administrative cases pending before the MSPB; (b) CSC Resolution 93-2387 was
published in the Manila Standard so it would be deemed substantially complied; and
(c) it was Rubenecia himself who insisted on pleading before the Commissioner (he
filed MTD before commissioner and not before MSPB). History of the Merit System
Protection Board: PD 1409 created in the CSC the Merit Systems Board and gave it
power to hear and decide administrative cases. If the Board orders the removal of
the public officer, it would be subject to automatic review of the CSC. All other
decisions of the Board are subject to appeal to the CSC. 1987 Admin Code recreated
the Merit System Board as Merit System Protection Board (MSPB) which was
intended to be an office of the Commission like any other 13 offices in the CSC.
MSPB was made a part of the internal structure and organization of the CSC and
thus a proper subject of organizational change which CSC is authorized to undertake
under SECTION 17 of the CIVIL SERVICE LAW. (2)YES. Due Process = Notice +
Opportunity to be heard. NOTICE: Formal charge which contained the essence of the
complaint and the documents in support thereof that had been furnished to
Rubenecia + testimony of the principal witnesses against him given during the
preliminary hearing. ON THE NONFURNISH OF SUPPORTING DOCUMENTS: he was
given the opportunity to obtain those documents but he did not avail of it + he sent
a formal letteranswer to CSC Chair controverting the charges against him and
submitted voluminous documents in support of his claim of innocence. MR CURED
WHATEVER PROCEDURAL DUE PROCESS DEFECT: MR gave him opportunity to be
heard. ON FINDINGS OF THE CSC: The settled rule in our jurisdiction is that the
finding of fact of an administrative agency must be respected, so long as such
findings of fact are supported by substantial evidence, even if such evidence might
not be overwhelming or even preponderant. It is not the task of an appellate court,
like this Court, to weigh once more the evidence submitted before the
administrative body and to substitute its own judgment for that of the
administrative agency in respect of sufficiency of evidence. In the present case, in
any event, after examination of the record of this case, we conclude that the
decision of the Civil Service Commission finding Rubenecia guilty of the
administrative charges prepared against him is supported by substantial evidence.

SCRA RULING

Civil Service Commission; Administrative Law; Reorganizations; Merit System


Protection Board; The MSPB was intended to be an office of the CSC, a part of the
internal structure and organization of the CSC, and thus a proper subject of
organizational change which the CSC is authorized to undertake under Sec. 17 of
the present Civil Service Law.The 1987 Administrative Code thus made clear that
the MSPB was intended to be an office of the Commission like any of the other
thirteen (13) offices in the Commission: e.g., the Office of Legal Affairs; the Office of
Planning and Management; the Central Administrative Office, and so forth. The
MSPB was, in other words, a part of the internal structure and organization of the
Commission and thus a proper subject of organizational change which the
Commission is authorized to undertake under Section 17 of the present Civil Service
Law.

Same; Same; Due Process; The fact that Resolution No. 93-2387 of the CSC was
published in a newspaper of general circulation is deemed as substantial
compliance with the requirement of written notice to affected individuals.
Petitioner Rubenecia also claims that the Civil Service Commission itself (as
distinguished from the MSPB) did not acquire jurisdiction over his case because he
had not been notified by individual written notice sent by mail that his case had
been elevated to the Civil Service Commission as required by Resolution No. 93-
2387. We consider this objection unmeritorious. CSC Resolution No. 93-2387, quoted
earlier, did not require individual written notice sent by mail to parties in
administrative cases pending before the MSPB. Assuming that Rubenecia had not in
fact been sent an individual notice, the fact remains that Resolution No. 93-2387
was published in a newspaper of general circulation (The Manila Standard, issue of
16 July 1993); the Commission may accordingly be deemed to have complied
substantially with the requirement of written notice in its own Resolution. Moreover,
petitioner himself had insisted on pleading before the Commission, rather than
before the MSPB; he filed before the Commission itself his letter-cum-annexes which
effectively was his answer to the Formal Charge instituted before the MSPB. He
cannot now be heard to question the jurisdiction of the Commission.

Same; Same; Same; The fundamental rule of due process requires that a person be
accorded notice and an opportunity to be heard.The fundamental rule of due
process requires that a person be accorded notice and an opportunity to be heard.
These requisites were respected in the case of petitioner Rubenecia. The Formal
Charge prepared by the MSPB and given to petitioner Rubenecia constituted
sufficient notice which, in fact, had enabled him to prepare his defense. The Formal
Charge contained the essence of the complaint and the documents in support
thereof and the conclusion of the MSPB finding a prima facie case against
Rubenecia. Rubenecia himself admitted that he had been furnished with copies of
an affidavit and testimonies of the principal witnesses against him that were given
during the preliminary hearing of the case against Rubenecia.

Same; Same; Same; Denial of due process cannot be successfully invoked by a


party who has had the opportunity to be heard on his motion for reconsideration.
Finally, the motion for reconsideration filed by Rubenecia before the Commission
cured whatever defect might have existed in respect of alleged denial of procedural
due process. Denial of due process cannot be successfully invoked by a party who
has had the opportunity to be heard on his motion for reconsideration. In the instant
case, petitioner was heard not only in respect of his motion for reconsideration; he
was also in fact afforded reasonable opportunity to present his case before decision
was rendered by the Commission finding him guilty.

Same; Same; Evidence; Findings of fact of an administrative agency must be


respected, so long as such findings of fact are supported by substantial evidence,
even if such evidence might not be overwhelming or even preponderant.
Rubenecia also claims that the Commission had erred in disregarding the
overwhelming evidence in his favor. The settled rule in our jurisdiction is that the
findings of fact of an administrative agency must be respected, so long as such
findings of fact are supported by substantial evidence, even if such evidence might
not be overwhelming or even preponderant. It is not the task of an appellate court,
like this Court, to weigh once more the evidence submitted before the
administrative body and to substitute its own judgment for that of the
administrative agency in respect of sufficiency of evidence. In the present case, in
any event, after examination of the record of this case, we conclude that the
decision of the Civil Service Commission finding Rubenecia guilty of the
administrative charges prepared against him, is supported by substantial evidence.
PHILIPPINE INTERNATIONAL TRADING CORPORATION vs. COA 302 SCRA 241

FACTS: This is a petition for certiorari under Rule 64 of the 1997 Rules of Civil
Procedure to annul Decision No. 2447 dated July 27, 1992 of the Commission on
Audit (COA) denying Philippine International Trading Corporation's (PITC) appeal
from the disallowances made by 34 the resident COA auditor on PITC's car plan
benefits; and Decision No. 98-048 dated January 27, 1998 of the COA denying PITC's
motion for reconsideration. The PITC is a governmentowned and controlled
corporation created under Presidential Decree (PD) No. 252 on July 21, 1973,
primarily for the purpose of promoting and developing Philippine trade in pursuance
of national economic development. On October 19, 1988, the PITC Board of
Directors approved a Car Plan Program for qualified PITC officers. Under such car
plan program, an eligible officer is entitled to purchase a vehicle, fifty percent (50%)
of the value of which shall be shouldered by PITC while the remaining fifty percent
(50%) will be shouldered by the officer through salary deduction over a period of
five (5) years. Maximum value of the vehicle to be purchased ranges from Two
Hundred Thousand Pesos (P200,000.00) to Three Hundred and Fifty Thousand Pesos
(P350,000.00), depending on the position of the officer in the corporation. In
addition, PITC will reimburse the officer concerned fifty percent (50%) of the annual
car registration, insurance premiums and costs of registration of the chattel
mortgage over the car for a period of five (5) years from the date the vehicle was
purchased. The terms and conditions of the car plan are embodied in a "Car Loan
Agreement". Per PITC's car plan guidelines, the purpose of the plan is to provide
financial assistance to qualified employees in purchasing their own transportation
facilities in the performance of their work, for representation, and personal use. The
plan is envisioned to facilitate greater mobility during official trips especially within
Metro Manila or the employee's principal place of assignment, without having to rely
on PITC vehicles, taxis or cars for hire. On July 1, 1989, Republic Act No. 6758 (RA
6758), entitled "An Act Prescribing a Revised Compensation and Position
Classification System in the Government and For Other Purposes", took effect.
Section 12 of said law provides for the consolidation of allowances and additional
compensation into standardized salary rates save for certain additional
compensation such as representation and transportation allowances which were
exempted from consolidation into the standardized rate. Said section likewise
provides that other additional compensation being received by incumbents as by of
July 1, 1989 not integrated into the standardized salary rates shall continue to be
authorized. The legislature has similarly adhered to this policy of non-diminution of
pay when it provided for the transition allowance under Section 17 of RA 6758 which
reads: Sec. 17. Salaries of Incumbents. Incumbents of position presently receiving
salaries and additional compensation/fringe benefits including those absorbed from
local government units and other emoluments the aggregate of which exceeds the
standardized salary rate as herein prescribed, shall continue to receive such excess
compensation, which shall be referred to as transition allowance. The transition
allowance shall be reduced by the amount of salary adjustment that the incumbent
shall receive in the future. Based on the foregoing pronouncement, petitioner
correctly pointed out that there was no intention on the part of the legislature to
revoke existing benefits being enjoyed by incumbents of government positions at
the time of the virtue of Sections 12 and 17 thereof. There is no dispute that the
PITC officials who availed of the subject car plan benefits were incumbents of their
positions as of July 1, 1989. Thus, it was legal and proper for them to continue
enjoying said benefits within the five year period from date of purchase of the
vehicle allowed by their Car Loan Agreements with PITC.

ISSUE: Whether or not the contention of COA is not valid.

HELD: The repeal by Section 16 of RA 6758 of "all corporate charters that exempt
agencies from the coverage of the System" was clear and expressed necessarily to
achieve the purposes for which the law was enacted, that is, the standardization of
salaries of all employees in government owned and/or controlled corporations to
achieve "equal pay for substantially equal work". Henceforth, PITC should now be
considered as covered by laws prescribing a compensation and position
classification system in the government including RA 6758. This is without
prejudice, however, as discussed above, to the non-diminution of pay of incumbents
as of July 1, 1989 as provided in Sections 12 and 17 of said law. Wherefore, the
Petition is hereby GRANTED, the assailed Decisions of the Commission of Audit are
set aside. RA 6758 which is a law of general application cannot repeal provisions of
the Revised Charter of PITC and its a mandatory laws expressly exempting PITC from
OCPC coverage being special laws. Our rules on statutory construction provide that
a special law cannot be repealed, amended or altered by a subsequent general law
by mere implication; that a statute, general in character as to its terms and
application, is not to be construed as repealing a special or specific enactment,
unless the legislative purpose to do so is manifested; that if repeal of particular or
specific law or laws is intended, the proper step is to so express it.

SCRA RULING

Administrative Law; Public Officers; Salaries and Wages; Statutes; Republic Act
6758; Statutory Construction; The legislative intent is to protect incumbents who
are receiving salaries and/or allowances over and above those authorized by
Republic Act 6758 by allowing them to continue to receive the same even after
Republic Act 6758 took effect.We must mention that this Court has confirmed in
Philippine Ports Authority vs. Commission on Audit the legislative intent to protect
incumbents who are receiving salaries and/or allowances over and above those
authorized by RA 6758 to continue to receive the same even after RA 6758 took
effect. In reserving the benefit to incumbents, the legislature has manifested its
intent to gradually phase out this privilege without upsetting the policy of non-
diminution of pay and consistent with the rule that laws should only be applied
prospectively in the spirit of fairness and justice.
Same; Same; Same; Same; Same; There was no intention on the part of the
legislature to revoke existing benefits being enjoyed by incumbents of government
positions at the time of the passage of Republic Act 6758 by virtue of Sections 12
and 17 thereof.Based on the foregoing pronouncement, petitioner correctly
pointed out that there was no intention on the part of the legislature to revoke
existing benefits being enjoyed by incumbents of government positions at the time
of the passage of RA 6758 by virtue of Sections 12 and 17 thereof. There is no
dispute that the PITC officials who availed of the subject car plan benefits were
incumbents of their positions as of July 1, 1989. Thus, it was legal and proper for
them to continue enjoying said benefits within the five year period from date of
purchase of the vehicle allowed by their Car Loan Agreements with PITC.

Same; Same; Same; Same; Right to Information; DBM-CCC No. 10 which was issued
by the DBM pursuant to Section 23 of Republic Act 6758 is of no force and effect
due to the absence of publication thereof in the Official Gazette or in a newspaper
of general circulation.COA relied on DBM-CCC No. 10 as basis for the disallowance
of the subject car plan benefits. DBM-CCC No. 10 which was issued by the DBM
pursuant to Section 23 of RA 6758 mandating the said agency to issue the
necessary guidelines to implement RA 6758 has been declared by this Court in De
Jesus, et al. vs. Commission on Audit, et al. as of no force and effect due to the
absence of publication thereof in the Official Gazette or in a newspaper of general
circulation.

Same; Same; Same; Same; Same; Due Process; Publication is required as a


condition precedent to the effectivity of a law to inform the public of the contents of
the law or rules and regulations before their rights and interests are affected by the
same.It has come to our knowledge that DBM-CCC No. 10 has been re-issued in its
entirety and submitted for publication in the Official Gazette per letter to the
National Printing Office dated March 9, 1999. Would the subsequent publication
thereof cure the defect and retroact to the time that the above-mentioned items
were disallowed in audit? The answer is in the negative, precisely, for the reason
that publication is required as a condition precedent to the effectivity of a law to
inform the public of the contents of the law or rules and regulations before their
rights and interests are affected by the same. From the time the COA disallowed the
expenses in audit up to the filing of herein petition the subject circular remained in
legal limbo due to its non-publication. As was stated in Tanada vs. Tuvera, prior
publication of laws before they become effective cannot be dispensed with, for the
reason that such omission would offend due process insofar as it would deny the
public knowledge of the laws that are supposed to govern it.

Same; Same; Same; Same; A special law cannot be repealed, amended or altered
by a subsequent general law by mere implication.Petitioner argues that RA 6758
which is a law of general application cannot repeal provisions of the Revised Charter
of PITC and its amendatory laws expressly exempting PITC from OCPC coverage
being special laws. Our rules on statutory construction provide that a special law
cannot be repealed, amended or altered by a subsequent general law by mere
implication; that a statute, general in character as to its terms and application, is
not to be construed as repealing a special or specific enactment, unless the
legislative purpose to do so is manifested; that if repeal of particular or specific law
or laws is intended, the proper step is to so express it.

Same; Same; Same; Same; Henceforth, PITC should now be considered as covered
by laws prescribing a compensation and position classification system in the
government including Republic Act 6758, without prejudice to the non-diminution of
pay of incumbents as of July 1, 1989 as provided in Sections 12 and 17 of said law.
In the case at bar, the repeal by Section 16 of RA 6758 of all corporate charters
that exempt agencies from the coverage of the System was clear and expressed
necessarily to achieve the purposes for which the law was enacted, that is, the
standardization of salaries of all employees in government owned and/or controlled
corporations to achieve equal pay for substantially equal work. Henceforth, PITC
should now be considered as covered by laws prescribing a compensation and
position classification system in the government including RA 6758. This is without
prejudice, however, as discussed above, to the non-diminution of pay of incumbents
as of July 1, 1989 as provided in Sections 12 and 17 of said law.

Balbuna vs. Hon. Secretary of Education GR No. L-14280, November 29, 1960

FACTS: The action was brought to enjoin enforce of Department Order No. 8, s.
1955 issued by the Secretary of Education, promulgating rules and regulations for
the conduct of compulsory flag ceremony in all schools, as provided in Republic Act
No. 1265. Petitioners, who are members of the Jehova's Witnesses, contend that the
said Department Order denied them freedom of worship and speech, among others.
They also contend that the order is not valid for it was not published in the Official
Gazette as required by law.

ISSUE: 1. Whether or not the Department Order is invalid. 2. Whether or not RA


1265 constitutes undue delegation of legislative power.

HELD: (1) No, the contention that assailed Department Order has no binding effect;
not having been published in the official gazette is without merit. The assailed order
being addressed only to the directors of Public and private schools and educational
institutions under their supervision, cannot be said to be of general application,
requiring previous publication in the Official Gazette before it could have binding
force and effect. (2) No, the requirements constitute an adequate standard.
SCRA RULING

1.CONSTITUTIONAL LAW; DEPARTMENT ORDER No. 8, SERIES OF 1955, VALID;


SECRETARY OF EDUCATION AUTHORIZED TO PROMULGATE IT; FLAG CEREMONY OR
SALUTE PROVIDED THEREIN NOT VIOLATIVE OF CONSTITUTIONAL PROVISIONS ON
FREEDOM OF RELIGION.Department Order No. 8, series of 1955, is valid. The
Secretary of Education was duly authorized by the Legislature thru Republic Act
1265 to promulgate said Department Order, and its provisions requiring the
observance of the flag salute, not being a religious ceremony but an act and
profession of love and allegiance and pledge of loyalty to the fatherland which the
flag stands for, does not violate the constitutional provision on freedom of religion
(Gerona, et al. vs. Secretary of Education, et al., 106 Phil., 2; 57 Off. Gaz., [5] 820).

2.ID.; DEPARTMENT ORDER No. 8 NOT OF GENERAL APPLICATION; PUBLICATION


THEREOF IN OFFICIAL GAZETTE NOT NECESSARY TO HAVE BINDING FORCE AND
EFFECT.The contention that Department Order No. 8 has no binding force and
effect, not having been published in the Official Gazette, is without merit. The
assailed Department Order, being addressed only to the Directors of Public and
Private Schools, and educational institutions under their supervision, cannot be said
to be of general application, requiring previous publication in the Official Gazette
before it could have binding force and effect. Com. Act 638 and Act 2930 do not
require the publication of the circulars, regulations or notices therein mentioned in
order to become binding and effective; said two Arts merely enumerate and made a
list of what should be published in the Official Gazette presumably, for the guidance
of the different branches of the government issuing the same, and of the Bureau of
Printing.

3.ID.; REPUBLIC ACT 1265 DOES NOT CONSTITUTE UNDUE DELEGATION OF


LEGISLATIVE POWER; REQUIREMENTS IN SECTIONS 1 AND 2 THEREOF TO OBSERVE
DAILY FLAG CEREMONY WITH SIMPLICITY AND DlGNITY AND THE PLAYING OR
SlNGING OF NATIONAL ANTHEM CONSTITUTE ADEQUATE STANDARD.The
requirements set in Sections 1 and 2 of the Act constitute an adequate standard, to
wit, simplicity and dignity of the flag ceremony and the singing of the National
Anthem. That the Legislature did not specify the details of the flag ceremony is no
objection to the validity of the statute, for all that is required of it is the laying' down
of standards and policy that will limit the discretion of the regulatory agency. To
require the statute to establish in detail the manner of exercise of the delegated
power would be to destroy the administrative flexibility that the delegation is
intended to achieve.