THE UNITED RESIDENTS OF DOMINICAN
HILL, INC., vs. COMMISSION ON THE
SETTLEMENT OF LAND PROBLEMS
G.R. No.
135945
March 7, 2001
TOPIC: AN EXECUTIVE AGENCY IS NOT A
COURT.
FACTS: Dominican Hills, formerly registered
as Diplomat Hills in Baguio City, was
mortgaged to the United Coconut Planters
Bank (UCPB). It was eventually foreclosed and
acquired later on by the said bank as the
highest bidder. On 11 April 1983, through its
President Eduardo Cojuangco Jr., the subject
property was donated to the Republic of the
Philippines. The deed of donation stipulated
that Dominican Hills would be utilized for the
"priority programs, projects, activities in
human settlements and economic development
and governmental purposes" of the Ministry of
Human Settlements.
On December 12, 1986, then President
Corazon Aquino issued EO 85 abolishing the
Ministry of Human Settlements. All agencies
under the its supervision as well as all its
assets, programs and projects, were
transferred to the Presidential Management
Staff (PMS).
On 18 October 1988, United (Dominican Hills)
submitted its application before the PMS to
acquire a portion of the Dominican Hills
property. In a MOA, PMS and United agreed
that the latter may purchase a portion of the
said property from HOME INSURANCE
GUARANTY CORPORATIO, acting as
originator, on a selling price of P75.00 per
square meter.
Thus, on June 12, 1991, HIGC sold 2.48
hectares of the property to UNITED. The deed
of conditional sale provided that ten (10) per
cent of the purchase price would be paid upon
signing, with the balance to be amortized
within one year from its date of execution. After
UNITED made its final payment on January 31,
1992, HIGC executed a Deed of Absolute Sale
dated July 1, 1992.
Petitioner alleges that sometime in 1993,
private respondents entered the Dominican
Hills property allocated to UNITED and
constructed houses thereon. Petitioner was
able to secure a demolition order from the city
mayor. Unable to stop the razing of their
houses, private respondents, under the name
DOMINICAN HILL BAGUIO RESIDENTS
HOMELESS ASSOCIATION (ASSOCIATION, for
brevity) filed an action for injunction before
RTC Baguio City. Private respondents were
able to obtain a temporary restraining order
but their prayer for a writ of preliminary
injunction was later denied.
The ASSOCIATION filed a separate civil case for
damages, injunction and annulment of the said
MOA. It was later on dismissed upon motion of
United. The said Order of dismissal is currently
on appeal with the Court of Appeals.
The demolition order was subsequently
implemented by the Office of the City Mayor
and the City Engineer's Office of Baguio City.
However, petitioner avers that private
respondents returned and reconstructed the
demolished structures.
To forestall the re-implementation of the
demolition order, private respondents filed a
petition for annulment of contracts with prayer
for a temporary restraining order before the
Commission on the Settlement of Land
Problems (COSLAP) against petitioner, HIGC,
PMS, the City Engineer's Office, the City Mayor,
as well as the Register of Deeds of Baguio City.
On the very same day, public respondent
COSLAP issued the contested order requiring
the parties to maintain the status quo. Without
filing a motion for reconsideration from the
aforesaid status quo order, petitioner filed the
instant petition questioning the jurisdiction of
the COSLAP.
ISSUE: W/O COSLAP is empowered to hear
and try a petition for annulment of contracts
with prayer for a TRO and to issue a status quo
order and conduct a hearing thereof?
RULING: COSLAP is not justified in assuming
jurisdiction over the controversy.
The reason is simple. Section 3(2) of Executive
Order 561 speaks of any resolution, order or
decision of the COSLAP as having the force and
effect of a regular administrative resolution,
order or decision. The qualification places an
unmistakable emphasis on
the administrative character of the COSLAPs
determinations, amplified by the statement
that such resolutions, orders or decisions shall
be binding upon the parties therein and upon
the agency having jurisdiction over the same.
An agency is defined by statute as any
of the various units of the Government,
including a department, bureau, office,
instrumentality, or government-owned or
controlled corporation, or a local government or
a distinct unit therein.
A department, on the other hand, refers
to an executive department created by law.
Whereas, a bureau is understood to refer
to any principal subdivision of any department.
In turn, an office refers, within the
framework of governmental organization, to
any major functional unit of a department or
bureau including regional offices. It may also
refer to any position held or occupied by
individual persons, whose functions are
defined by law or regulation.
An instrumentality is deemed to refer
to any agency of the National Government, not
integrated within the department framework,
vested with special functions or jurisdiction by
law, endowed with some if not all corporate
powers, administering special funds and
enjoying operational autonomy, usually
through a charter. This term includes
regulatory agencies, chartered institutions and
government-owned or controlled corporations.
Applying the principle in statutory
construction of ejusdem generis, i.e., where
general words follow an enumeration or
persons or things, by words of a particular and
specific meaning, such general words are not to
be construed in their widest extent, but are to
be held as applying only to persons or things of
the same kind or class as those specifically
mentioned,section 3(2) of Executive Order
561 patently indicates that the COSLAPs
dispositions are binding
on administrative or executive agencies. T
he history of the COSLAP itself bolsters this
view.Prior enactments enumerated its
member agencies among which it was to
exercise a coordinating function.
The COSLAP discharges quasi-judicial
functions
"Quasi-judicial function" is a term which
applies to the actions, discretion, etc. of public
administrative officers or bodies, who are
required to investigate facts, or ascertain the
existence of facts, hold hearings, and draw
conclusions from them, as a basis for their
official action and to exercise discretion of a
judicial nature."
However, it does not depart from its basic
nature as an administrative agency, albeit one
that exercises quasi-judicial functions. Still,
administrative agencies are not considered
courts; they are neither part of the judicial
system nor are they deemed judicial
tribunals. The doctrine of separation of powers
observed in our system of government reposes
the three (3) great powers into its three (3)
branches — the legislative, the executive, and
the judiciary — each department being co-
equal and coordinate, and supreme in its own
sphere. Accordingly, the executive department
may not, by its own fiat, impose the judgment
of one of its own agencies, upon the judiciary.
Indeed, under the expanded jurisdiction of the
Supreme Court, it is empowered "to determine
whether or not there has been grave abuse of
discretion amounting to lack of or excess of
jurisdiction on the part of any branch or
instrumentality of the Government."
Leyson vs. Office of the Ombudsman
Facts: On 7 February 1996 International
Towage and Transport Corporation (ITTC), a
domestic corporation engaged in the lighterage
or shipping business, entered into a one (1)-
year contract with Legaspi Oil Company, Inc.
(LEGASPI OIL), Granexport Manufacturing
Corporation (GRANEXPORT) and United
Coconut Chemicals, Inc. (UNITED COCONUT),
comprising the Coconut Industry Investment
Fund (CIIF) companies, for the transport of
coconut oil in bulk through MT Transasia.
The majority shareholdings of these CIIF
companies are owned by the United Coconut
Planters Bank (UCPB) as administrator of the
CIIF. Under the terms of the contract, either
party could terminate the agreement provided
a three (3)-month advance notice was given to
the other party. However, in August 1996, or
prior to the expiration of the contract, the CIIF
companies with their new President,
respondent Oscar A. Torralba, terminated the
contract without the requisite advance notice.
The CIIF companies engaged the services of
another vessel, MT Marilag, operated by
Southwest Maritime Corporation. miso
 Manuel M. Leyson Jr., Executive Vice
President of ITTC, filed with public respondent
Office of the Ombudsman a grievance case
against respondent Oscar A. Torralba. The due
to irregulairties and corrupt practices.
Leyson charged respondent Tirso
Antiporda, Chairman of UCPB and CIIF Oil
Mills, and respondent Oscar A. Torralba with
violation of The Anti-Graft and Corrupt Practices
Actalso before the Ombudsman.
The case was dismissed because it was just
according to the ombudsman a simple case of
breach of contract with damages which should
have been filed in the regular court. This Office
has no jurisdiction to determine the legality or
validity of the termination of the contract
entered into by CIIF and ITTC. Besides the
entities involved are private corporations (over)
which this Office has no jurisdiction.
ISSUE(S):
Whether or not the Office of the Ombudsman
has jurisdiction to further act on the complaint.
HELD:
None. In the present case, all three (3)
corporations comprising the CIIF companies
were organized as stock corporations. The
UCPB-CIIF owns 44.10% of the shares of
LEGASPI OIL, 91.24% of the shares of
GRANEXPORT, and 92.85% of the shares of
UNITED COCONUT.Obviously, the below 51%
shares of stock in LEGASPI OIL removes this
firm from the definition of a government owned
or controlled corporation. Our concern has
thus been limited to
GRANEXPORT and UNITED COCONUT as we
go back to the second requisite. Unfortunately,
it is in this regard that petitioner failed to
substantiate his contentions. There is no
showing that GRANEXPORT and/ or UNITED
COCONUT was vested with functions relating
to public needs whether governmental or
proprietary in nature unlike PETROPHIL
in Quimpo. The Court thus concludes that the
CIIF companies are, as found by public
respondent, private corporations not within the
scope of its jurisdiction.
Ma. Elena Malaga, et. al. vs. Manuel R.
Penachos, Jr., et.al.
GR No. 86995 03
September 1992
Chartered Institution and GOCC, defined.
FACTS: The Iloilo State College of Fisheries
(ISCOF) through its Pre-qualifications, Bids
and Awards Committee (PBAC) caused the
publication in the November 25, 26 and 28,
1988 issues of the Western Visayas Daily an
Invitation to Bid for the construction of a Micro
Laboratory Building at ISCOF. The notice
announced that the last day for the submission
of pre-qualification requirements was on
December 2, 1988, and that the bids would be
received and opened on December 12, 1988 at
3 o'clock in the afternoon.
Petitioners Malaga and Najarro, doing business
under the name of BE Construction and Best
Built Construction, respectively, submitted
their pre-qualification documents at two o'clock
in the afternoon of December 2,
1988. Petitioner Occeana submitted his own
PRE-C1 on December 5, 1988. All three of
them were not allowed to participate in the
bidding as their documents were considered
late.
On December 12, 1988, the petitioners filed a
complaint with the Iloilo RTC against the
officers of PBAC for their refusal without just
cause to accept them resulting to their non-
inclusion in the list of pre-qualified
bidders. They sought to the resetting of the
December 12, 1988 bidding and the acceptance
of their documents. They also asked that if the
bidding had already been conducted, the
defendants be directed not to award the project
pending resolution of their complaint.
On the same date, Judge Lebaquin issued a
restraining order prohibiting PBAC from
conducting the bidding and award the project.
The defendants filed a motion to lift the
restraining order on the ground that the court
is prohibited from issuing such order,
preliminary injunction and preliminary
mandatory injunction in government
infrastructure project under Sec. 1 of P.D.
1818. They also contended that the
preliminary injunction had become moot and
academic as it was served after the bidding had
been awarded and closed.
On January 2, 1989, the trial court lifted the
restraining order and denied the petition for
preliminary injunction. It declared that the
building sought to be constructed at the ISCOF
was an infrastructure project of the
government falling within the coverage of the
subject law.
ISSUE: Whether or not ISCOF is a government
instrumentality subject to the provisions of PD
1818?
RULING: The 1987 Administrative Code defines
a government instrumentality as follows:
Instrumentality refers to any agency of the
National Government, not integrated within the
department framework, vested with special
functions or jurisdiction by law, endowed with
some if not all corporate powers, administering
special funds, and enjoying operational
autonomy, usually through a charter. This
term includes regulatory agencies, chartered
institutions, and government-owned or
controlled corporations. (Sec. 2 (5) Introductory
Provisions).
The same Code describes a chartered
institution thus:
Chartered institution - refers to any agency
organized or operating under a special charter,
and vested by law with functions relating to
specific constitutional policies or objectives.
This term includes the state universities and
colleges, and the monetary authority of the
state. (Sec. 2 (12) Introductory Provisions).
It is clear from the above definitions that ISCOF
is a chartered institution and is therefore
covered by P.D. 1818.
There are also indications in its charter that
ISCOF is a government instrumentality. First,
it was created in pursuance of the integrated
fisheries development policy of the State, a
priority program of the government to effect the
socio-economic life of the nation. Second, the
Treasurer of the Republic of the Philippines
shall also be the ex-officio Treasurer of the state
college with its accounts and expenses to be
audited by the Commission on Audit or its duly
authorized representative. Third, heads of
bureaus and offices of the National
Government are authorized to loan or transfer
to it, upon request of the president of the state
college, such apparatus, equipment, or
supplies and even the services of such
employees as can be spared without serious
detriment to public service. Lastly, an
additional amount of P1.5M had been
appropriated out of the funds of the National
Treasury and it was also decreed in its charter
that the funds and maintenance of the state
college would henceforth be included in the
General Appropriations Law.
Nevertheless, it does not automatically follow
that ISCOF is covered by the prohibition in the
said decree as there are irregularities present
surrounding the transaction that justified the
injunction issued as regards to the bidding and
the award of the project (citing the case of
Datiles vs. Sucaldito).
Blaquera vs. Alcala G.R. No. 109406,
September 11, 1998
Facts: On Feb. 21, 1992, then Pres. Aquino
issued AO 268 which granted each official and
employee of the government the productivity
incentive benefits in a maximum amount
equivalent to 30% of the employee’s one month
basic salary but which amount not be less than
P2, 000.00. Said AO provided that the
productivity incentive benefits shall be granted
only for the year 1991. Accordingly, all heads of
agencies, including government boards of
government-owned or controlled corporations
and financial institutions, are strictly
prohibited from granting productivity incentive
benefits for the year 1992 and future years
pending the result of a comprehensive study
being undertaken by the Office of the Pres.
The petitioners, who are officials and employees
of several government departments and
agencies, were paid incentive benefits for the
year 1992. Then, on Jan. 19, 1993, then Pres.
Ramos issued AO 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 Sec. 7 of
AO 268, enjoining the grant of productivity
incentive benefits without prior approval of the
President. Sec. 4 of AO 29 directed all
departments, offices and agencies which
authorized payment of productivity incentive
bonus for the year 1992 in excess of P1, 000.00
to immediately cause the refund of the excess.
In compliance therewith, the heads of the
departments or agencies of the government
concerned caused the deduction from
petitioners’ salaries or allowances of the
amounts needed to cover the alleged
overpayments.
Issue: Whether or not AO 29 and AO 268 were
issued in the valid exercise of presidential
control over the executive departments
Held: The Pres. is the head of the government.
Governmental power and authority are
exercised and implemented through him. His
power includes the control of executive
departments as provided under Sec. 17, Art. VII
of the Constitution.
Control means the power of an officer to alter
or modify or set aside what a subordinate
officer had done in the performance of his
duties and to substitute the judgment of the
former for that of the latter. The Pres. can, by
virtue of his power of control, review, modify,
alter or nullify any action or decision of his
subordinate in the executive departments,
bureau or offices under him.
When the Pres. issued AO 29 limiting the
amount of incentive benefits, enjoining heads
of government agencies from granting incentive
benefits without approval from him and
directing the refund of the excess over the
prescribed amount, the Pres. was just
exercising his power of control over executive
departments.
The Pres. issued subject AOs to regulate the
grant of productivity incentive benefits and to
prevent discontent, dissatisfaction and
demoralization among government personnel
by committing limited resources of government
for the equal payment of incentives and
awards. The Pres. was only exercising his
power of control by modifying the acts of the
heads of the government agencies who granted
incentive benefits to their employees without
appropriate clearance from the Office of the
Pres., thereby resulting in the uneven
distribution of government resources.
The President’s duty to execute the law is of
constitutional origin. So, too, is his control of
executive departments.
Dela Llana vs Alba
112 SCRA 294 – Political law – Constitutional
Law – Political Question – if there is no question
of law involved – BP 129
In 1981, Batas Pambansa Blg. 129, entitled “An
Act Reorganizing the Judiciary, Appropriating
Funds Therefor and for Other Purposes”, was
passed. Gualberto De la Llana, a judge in
Olongapo, was assailing its validity because,
first of all, he would be one of the judges that
would be removed because of the
reorganization and second, he said such law
would contravene the constitutional provision
which provides the security of tenure of judges
of the courts. He averred that only the Supreme
Court can remove judges NOT the Congress.
ISSUE: Whether or not a judge like Judge De
La Llana can be validly removed by the
legislature by such statute (BP 129).
HELD: Yes. The SC ruled the following
way: “Moreover, this Court is empowered “to
discipline judges of inferior courts and, by a vote
of at least eight members, order their dismissal.”
Thus it possesses the competence to remove
judges. Under the Judiciary Act, it was the
President who was vested with such
power. Removal is, of course, to be
distinguished from termination by virtue of
the abolition of the office. There can be no
tenure to a non-existent office. After the
abolition, there is in law no occupant. In
case of removal, there is an office with an
occupant who would thereby lose his
position. It is in that sense that from the
standpoint of strict law, the question of any
impairment of security of tenure does not
arise. Nonetheless, for the incumbents of
inferior courts abolished, the effect is one of
separation. As to its effect, no distinction exists
between removal and the abolition of the office.
Realistically, it is devoid of significance. He
ceases to be a member of the judiciary. In the
implementation of the assailed legislation,
therefore, it would be in accordance with
accepted principles of constitutional construction
that as far as incumbent justices and judges are
concerned, this Court be consulted and that its
view be accorded the fullest consideration. No
fear need be entertained that there is a failure to
accord respect to the basic principle that this
Court does not render advisory opinions. No
question of law is involved. If such were the
case, certainly this Court could not have its say
prior to the action taken by either of the two
departments. Even then, it could do so but only
by way of deciding a case where the matter has
been put in issue. Neither is there any intrusion
into who shall be appointed to the vacant
positions created by the reorganization. That
remains in the hands of the Executive to whom
it properly belongs. There is no departure
therefore from the tried and tested ways of
judicial power. Rather what is sought to be
achieved by this liberal interpretation is to
preclude any plausibility to the charge that in
the exercise of the conceded power of
reorganizing the inferior courts, the power of
removal of the present incumbents vested in this
Tribunal is ignored or disregarded. The
challenged Act would thus be free from any
unconstitutional taint, even one not readily
discernible except to those predisposed to view
it with distrust. Moreover, such a construction
would be in accordance with the basic principle
that in the choice of alternatives between one
which would save and another which would
invalidate a statute, the former is to be
preferred.”
Facts: Petitioners are officials of the Local
Water Utilities Administration (LWUA) and
designated members of the Interim Board of
Directors of the San Fernando Water District
(SFWD).
On December 4, 1995 and February 12 1996,
the LWUA Board of Trustees issued 2 Board
resolutions. These Board Resolutions
authorized the Board of Directors of SFWD to
receive reimbursable allowances in the form of
Representation and Transportation Allowance
(RATA), Travel Allowance, and Extraordinary &
Miscellaneous Expense (EME); Christmas
Bonus; Uniform Allowance; Rice Allowance;
Medical and Dental Benefits; and Productivity
Incentive Bonus.
Pursuant to the said Board Resolutions,
petitioners received EME, Rice Allowance,
Christmas Bonus, and Productivity Bonus from
SFWD during the calendar years starting 1994
until 1996.
On June 30, 1997, a Special Audit Team
of COA Regional Office No. III at San Fernando,
Pampanga audited the financial accounts of
SFWD for the period covering January 1,
1994 to July 15, 1996. The COA Special Audit
Team disallowed the payment of the above-
mentioned benefits and allowances received by
petitioners after the same were found to be
excessive and contrary to Sections 228, 162
and 163 of the Government Accounting and
Auditing Manual (GAAM) and to Civil Service
Commission (CSC) Resolution No. 954073 in
relation to Section 13 of Presidential Decree
(PD) No. 198 (Provincial Water Utilities Act of
1973) as amended. Thus, petitioners were
directed to refund the benefits and allowances
subject of the disallowance.
Petitioners appealed to the COA Regional
Director raising the following arguments:
The Regional Director, in his First Indorsement,
affirmed the Special Audit Teams Notice of
Disallowance. The Regional Director declared
that the COA Special Audit Team was correct
in citing CSC Resolution No. 954073, which
resolved the case of LWUA Employees
Association for Progress (LEAP) v. Cabili and de
Vera because the said resolution applied on all
fours to petitioners case. In the said resolution,
the CSC held that it is illegal for any LWUA
officer or employee who sits as member of the
Board of Directors of a water district to receive
and collect any additional, double, or indirect
compensation from said water district,
except per diems, pursuant to Section 13 of PD
No. 198, as amended.
From the denial of their appeal by
the COA Regional Director, petitioners elevated
the matter to the COA via a petition for review.
The COA stressed that the Directors of local
water districts (LWDs) were prohibited from
receiving compensation other than per
diems and that LWUA Board Resolution Nos.
313 and 39 were contrary to the law which it
intended to implement, specifically, Section 13
of PD No. 198, as amended.
Thus, petitioners now come to this Court,
imputing grave abuse of discretion amounting
to lack of jurisdiction on the part of the COA in
issuing COA Decision No. 2000-133 and
February 27, 2003 Resolution. Specifically,
petitioners raise the following issues:
I. WHETHER OR
NOT RESPONDENT HAS THE JURISDICTION
TO MOTU PROPRIO DECLARE LWUA BOARD
RESOLUTION NO. 313, SERIES OF 1995, AS
AMENDED BY RESOLUTION NO. 39, SERIES
OF 1996, TO BE TOTALLY IN CONFLICT WITH
SEC. 13 OF PD NO. 198, AS AMENDED.
The petition is partly meritorious.

Petitioners contend that the COA lacks

jurisdiction to declare whether or not LWUA
Board Resolution Nos. 313 and 39 are
consistent with Section 13 of PD No. 198, as
amended, on matters pertaining to the
compensation and other benefits of the
Directors of the LWD. This is allegedly the
function of the courts.

The Court has already settled this issue in a

myriad of cases. Particularly, in Rodolfo S. de
Jesus [Catbalogan Water District] v. COA,the
Court upheld the authority and jurisdiction of
the COA to rule on the legality of the
disbursement of government funds by a water
district and declared that such power does not
conflict with the jurisdiction of the courts, the
DBM, and the LWUA. Citing Section 2,
Subdivision D, Article IX of the 1987
Constitution the Court declared that it is the
mandate of the COA to audit all government
agencies, including government-owned and
controlled corporations with original
charters. Indeed, the Constitution specifically
vests in the COA the authority to determine
whether government entities comply with laws
and regulations in disbursing government
funds, and to disallow illegal or irregular
disbursements of government funds.This
independent constitutional body is tasked to be
vigilant and conscientious in safeguarding the
proper use of the governments, and ultimately
the peoples, property.