No. L-45839. June 1, 1988.
*
RUFINO MATIENZO, GODOFREDO ESPIRITU, DIOSCORRO
FRANCO, AND LA SUERTE TRANSPORTATION CORPORATION,
petitioners, vs.HON. LEOPOLDO M. ABELLERA, ACTING
CHAIRMAN OF THE BOARD OF TRANSPORTATION, HON.
GODOFREDO Q. ASUNCION, MEMBER OF THE BOARD OF
TRANSPORTATION, ARTURO DELA CRUZ, MS
TRANSPORTATION CO., INC., NEW FAMILIA TRANSPORTATION
CO., ROBERTO MOJARES, ET AL., respondents.
FACTS:
The petitioners and private respondents are all authorized taxicab
operators in Metro Manila. The respondents, however, admittedly operate
“colorum” or “kabit” taxicab units. On or about the second week of
February, 1977, private respondents filed their petitions with the
respondent Board for the legalization of their unauthorized “excess” taxicab
units citing Presidential Decree No. 101, promulgated on January 17, 1973,
“to eradicate the harmful and unlawful trade of clandestine operators, by
replacing or allowing them to become legitimate and responsible operators.”
Within a matter of days, the respondent Board promulgated its orders
setting the applications for hearing and granting applicants provisional
authority to operate their “excess taxicab units” for which legalization was
sought. The petitioners allege that the BOT acted without jurisdiction in
taking cognizance of the petitions for legalization and awarding special
permits to the private respondents.
ISSUE:
Whether or not the Board of Transportation has the power to legalize clandestine
and unlawful tax operation.
RULING:
YES.
Under PD 101, it is the fixed policy of the State “to eradicate the harmful and
unlawful trade of clandestine operators by replacing or allowing them to become
legitimate and responsible ones” (Whereas clause, PD 101). In view thereof, it is
maintained that respondent Board may continue to grant to “colorum” operators
the benefits of legalization under PD 101, despite the lapse of its power, after six
(6) months, to do so, without taking punitive measures against the said operators.
G.R. No. 79684. February 19, 1991. *
DIRECTOR OF LANDS and SECRETARY OF ENVIRONMENT AND
NATURAL RESOURCES (formerly Ministry of Natural Resources),
petitioners, vs. THE COURT OF APPEALS (Third Division) and B.A.
GONZALES SURVEYING CO., INC., respondents.
FACTS:
The petitioners Director of Lands and the Secretary of Environment and
Natural Resources entered into a contract on June 30, 1973 with the private
respondent B.A. Gonzalez Surveying Company for which the latter was
bound to execute a public land subdivision mapping (Plsm) of the alienable
and disposable lands in the Municipality of Valderama, Antique, Blk. I-III,
L.C. No. 819, for and in consideration of the amount of P183,818.00.
ISSUE:
Whether or not the respondent court erred in holding that the Director of
Lands acted without or in excess of his jurisdiction or with grave abuse of
discretion in allowing the award of the cadastral survey projects to new
contractors involving lands subject to prior mapping projects with another
contractor (the private respondent) whose contracts are involved in a
pending appeal to the Secretary of Environment and Natural Resources.
RULING:
YES.
In keeping with the doctrine of primary administrative jurisdiction and
exhaustion of administrative remedies, the Court has consistently held that “acts
of an administrative agency must not casually be overturned by a court, and a
court should as a rule not substitute its judgment for that of the administrative
agency acting within the parameters of its own compe-tence,” unless “there be a
clear showing of arbitrary action or palpable and serious error.” In similar vein,
the Court reiterated recently the rule that the findings of fact of quasi-judicial
agencies which have acquired expertise because their jurisdiction is confined to
specific matters, in the present case cadastral surveys and mappings and land
registration, are accorded not only respect but more often than not even finality.

G.R. Nos. 95122-23. May 31, 1991.
*
BOARD OF COMMISSIONERS (COMMISSION ON IMMIGRATION
AND DEPORTATION), BOARD OF SPECIAL INQUIRY,
COMMISSIONER ANDREA D. DOMINGO, ASSOCIATE
COMMISSIONER JORGE V. SARMIENTO, ACTING ASSOCIATE
COMMISSIONER REGINO R. SANTIAGO, MEMBERS OF THE
BOARD OF SPECIAL INQUIRY, ESTANISLAO CANTA, LEO
MAGAHOM AND BENJAMIN KALAW, petitioners, vs.HON.
JOSELITO DELA ROSA, Presiding Judge, RTC Manila, Branch 29,
WILLIAM T. GATCHALIAN, respondents.
FACTS:
On July 12, 1960, Santiago Gatchalian, grandfather of William
Gatchalian, was recognized by the Bureau of Immigration as a native born
Filipino citizen following the citizenship of his natural mother, Marciana
Gatchalian. Before the Citizenship Evaluation Board, Santiago Gatchalian
testified that he has five (5) children with his wife Chu Gim Tee, namely:
Jose Gatchalian, Gloria Gatchalian, Francisco Gatchalian, Elena Gatchalian
and Benjamin Gatchalian.
On June 27, 1961, William Gatchalian, then a twelve-year old minor,
arrived in Manila from Hongkong together with Gloria, Francisco, and
Johnson, all surnamed Gatchalian. They had with them Certificates of
Registration and Identity issued by the Philippine Consulate in Hongkong
based on a cablegram bearing the signature of the then Secretary of Foreign
Affairs, Felixberto Serrano, and sought admission as Filipino citizens. Gloria
and Francisco are the daughter and son, respectively, of Santiago
Gatchalian; while William and Johnson are the sons of Francisco.
After investigation, the Board of Special Inquiry No. 1 rendered a decision
dated July 6, 1961, admitting William Gatchalian and his companions as
Filipino citizens (Annex “C”, petition). As a consequence thereof, William
Gatchalian was issued Identification Certificate No. 16135 by the
immigration authorities on August 16, 1961 (Annex “D”, petition).
On January 24, 1962, the then Secretary of Justice issued Memorandum
No. 9 setting aside all decisions purporting to have been rendered by the
Board of Commissioners on appeal or on review motu proprio of decisions of
the Board of Special Inquiry. The same memorandum directed the Board of
Commissioners to review all cases where entry was allowed on the ground
that the entrant was a Philippine citizen. Among those cases was that of
William and others.
On July 6, 1962, the new Board of Commissioners, after a review motu
proprio of the proceedings had in the Board of Special Inquiry, reversed the
decision of the latter and ordered the exclusion of, among others, respondent
Gatchalian (Annex “E”, petition). A warrant of exclusion also dated July 6,
1962 was issued alleging that “the decision of the Board of Commissioners
dated July 6, 1962 xxx has now become final and executory (Annex “F”,
petition).
The actual date of rendition of said decision by the Board of
Commissioners (whether on July 6, 1962 or July 20, 1962) became the subject
of controversy in the 1967 case of Arocha vs. Vivo (21 SCRA 532) wherein
this Court sustained the validity of the decision of the new Board of
Commissioners having been promulgated on July 6, 1962, or within the
reglementary period for review.
Sometime in 1973, respondent Gatchalian, as well as the others covered
by the July 6, 1962 warrant of exclusion, filed a motion for re-hearing with
the Board of Special Inquiry where the deportion case against them was
assigned.
On March 14, 1973, the Board of Special Inquiry recommended to the then
Acting Commissioner Victor Nituda the reversal of the July 6, 1962 decision
of the then Board of Commissioners and the recall of the warrants of arrest
issued therein.
On March 15, 1973, Acting Commissioner Nituda issued an order
reaffirming the July 6, 1961 decision of the Board of Special Inquiry thereby
admitting respondent Gatchalian as a Filipino citizen and recalled the
warrant of arrest issued against him.
On June 7, 1990, the acting director of the National Bureau of
Investigation wrote the Secretary of Justice recommending that respondent
Gatchalian along with the other applicants covered by the warrant of
exclusion dated July 6, 1962 be charged with violation of Sec. 37 (a), pars. 1
and 2, in relation to Secs. 45 (c), and (d) and (e) of Commonwealth Act No.
613, as amended, also known as the Immigration Act of 1940.
 On August 1, 1990, the Secretary of Justice indorsed the recommendation
of the NBI to the Commissioner of Immigration for investigation and
immediate action.
On August 15, 1990, petitioner Commissioner Domingo of the Commission
of Immigration and Deportation issued a mission order commanding the
**
arrest of respondent William Gatchalian.
ISSUE:
Whether or not the Bureau of Immigration has the exclusive authority and
jurisdiction to try and hear cases against an alleged alien.
RULING:
YES.
The Supreme Court held that it is beyond cavil that the Bureau of Immigration has the
exclusive authority and jurisdiction to try and hear cases against an alleged alien, and in
the process, determine also their citizenship (Lao Gi vs. Court of Appeals, 180 SCRA
756 [1989]. And a mere claim of citizenship cannot operate to divest the Board of
Commissioners of its jurisdiction in deportation proceedings (Miranda vs. Deportation
Board, 94 Phil. 531 [1954]).
G.R. No. 84811. August 29, 1989. *
SOLID HOMES, INC., petitioner, vs. TERESITA PAYAWAL and
COURT OF APPEALS, respondents.
FACTS:
The plaintiff alleged that the defendant contracted to sell to her a subdivision lot in
Marikina on June 9, 1975, for the agreed price of P28,080.00, and that by September
10, 1981, she had already paid the defendant the total amount of P38,949.87 in
monthly installments and interests. Solid Homes subsequently executed a deed of
sale over the land but failed to deliver the corresponding certificate of title despite
her repeated demands because, as it appeared later, the defendant had mortgaged
the property in bad faith to a financing company. The plaintiff asked for delivery of
the title to the lot or, alternatively, the return of all the amounts paid by her plus
interest. She also claimed moral and exemplary damages, attorney’s fees and the
costs of the suit.
Solid Homes moved to dismiss the complaint on the ground that the court
had no jurisdiction, this being vested in the National Housing Authority
under PD No. 957.
ISSUE:
Whether or not the National Housing Authority has jurisdiction over the case.
RULING:
YES.
The Supreme Court held that The applicable law is PD No. 957, as amended by
PD No. 1344, entitled “Empowering the National Housing Authority to Issue Writs
of Execution in the Enforcement of Its Decisions Under Presidential Decree No.
957.” Section 1 of the latter decree provides as follows: SECTION 1. In the exercise
of its function to regulate the real estate trade and business and in addition to its
powers provided for in Presidential Decree No. 957, the National Housing Authority
shall have exclusive jurisdiction to hear and decide cases of the following nature: A.
Unsound real estate business practices;B. Claims involving refund and any other
claims filed by subdivision lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and C. Cases involving specific performance
of contractual and statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker or salesman. (Italics
supplied.) The language of this section, especially the italicized portions, leaves no
room for doubt that “exclusive jurisdiction” over the case between the petitioner and
the private respondent is vested not in the Regional Trial Court but in the National
Housing Authority.
G.R. No. 156164. September 4, 2009.*
SPS. LEONARDO AND MILAGROS CHUA, petitioners, vs. HON.
JACINTO G. ANG, DENNIS R. PASTRANA, IN THEIR CAPACITIES
AS CITY AND ASSISTANT PROSECUTOR OF PASIG,
RESPECTIVELY, FERDINAND T. SANTOS, ROBERT JOHN L.
SOBREPEÑA, NOEL M. CARIÑO, ROBERTO S. ROCO, ALICE
ODCHIQUE-BONDOC,** ROMULO T. SANTOS AND ENRIQUE A.
SOBREPEÑA, JR., respondents.
FACTS:
On February 11, 1999, the petitioners (as buyers) and Fil-Estate
Properties, Inc. (FEPI, as developers) executed a Contract To Sell2 a
condominium unit. Despite the lapse of three (3) years, FEPI failed to
construct and deliver the contracted condominium unit to the petitioners.
As a result, the petitioners filed on September 3, 2002 a Complaint-
Affidavit3 before the Office of the City Prosecutor of Pasig City accusing the
private respondents, as officers and directors of FEPI, of violating P.D. No.
957, specifically its Sections 17 and 20, in relation with Section 39. The
petitioners argue that jurisdiction to entertain criminal complaints is
lodged with the city prosecutor and that the jurisdiction of the HLURB
under P.D. No. 957 is limited to the enforcement of contractual rights, not
the investigation of criminal complaints.
ISSUE:
Whether or not the HLURB has the jurisdiction over the case.
RULING:
YES.
The provisions of P.D. No. 957 were intended to encompass all questions regarding
subdivisions and condominiums. The intention was to provide for an appropriate
government agency, the HLURB, to which all parties—buyers and sellers of
subdivision and condominium units—may seek remedial recourse. The law
recognized, too, that subdivision and condominium development involves public
interest and welfare and should be brought to a body, like the HLURB, that has
technical expertise. In the exercise of its powers, the HLURB, on the other hand, is
empowered to interpret and apply contracts, and determine the rights of private
parties under these contracts. This ancillary power, generally judicial, is now no
longer with the regular courts to the extent that the pertinent HLURB laws
provide.
Exhaustion of Administrative Remedies; Exceptions.—Prior exhaustion of
administrative remedies may be dispensed with and judicial action may be validly
resorted to immediately: (a) when there is a violation of due process; (b) when the
issue involved is purely a legal question; (c) when the administrative action is
patently illegal amounting to lack or excess of jurisdiction; (d) when there is estoppel
on the part of the administrative agency concerned; (e) when there is irreparable
injury; (f) when the respondent is a department secretary whose acts as an alter ego
of the President bear the implied and assumed approval of the latter; (g) when to
require exhaustion of administrative remedies would be unreasonable; (h)
when it would amount to a nullification of a claim; (i) when the subject matter is a
private land in land case proceedings; (j) when the rule does not provide a plain,
speedy and adequate remedy; or (k) when there are circumstances indicating
the urgency of judicial intervention.
G.R. No. 128354. April 26, 2005. *
HOME BANKERS SAVINGS & TRUST CO., petitioner, vs.THE
HONORABLE COURT OF APPEALS, PABLO N. AREVALO,
FRANCISCO A. UY, SPOUSES LEANDRO A. SORIANO, JR. and
LILIAN SORIANO, ALFREDO LIM and FELISA CHI LIM/ALFREDO
LIM, respondents.
FACTS: Victor Tancuan, one of the defendants in Civil Case No. 92-145,
issued Home Bankers Savings and Trust Company (HBSTC) check No.
193498 for P25,250,000.00 while Eugene Arriesgado issued Far East Bank
and Trust Company (FEBTC) check Nos. 464264, 464272 and 464271 for
P8,600,000.00, P8,500,000.00 and P8,100,000.00, respectively, the three
checks amounting to P25,200,000.00. Tancuan and Arriesgado exchanged
each other’s checks and deposited them with their respective banks for
collection. When FEBTC presented Tancuan’s HBSTC check for clearing,
HBSTC dishonored it for being “Drawn Against Insufficient Funds.” On
October 15, 1991, HBSTC sent Arriesgado’s three (3) FEBTC checks through
the Philippine Clearing House Corporation (PCHC) to FEBTC but was
returned on October 18, 1991 as “Drawn Against Insufficient Funds.”
HBSTC received the notice of dishonor on October 21, 1991 but refused to
accept the checks and on October 22, 1991, returned them to FEBTC through
the PCHC for the reason “Beyond Reglementary Period,” implying that
HBSTC already treated the three (3) FEBTC checks as cleared and allowed
the proceeds thereof to be withdrawn. FEBTC demanded reimbursement for
4
the returned checks and inquired from HBSTC whether it had permitted any
withdrawal of funds against the unfunded checks and if so, on what date.
HBSTC, however, refused to make any reimbursement and to provide
FEBTC with the needed information.
Thus, on December 12, 1991, FEBTC submitted the dispute for arbitration
before the PCHC Arbitration Committee, under the PCHC’s Supplementary
5 P330,000.00 to be paid in installments. According to petitioner, Carrion had
Rules on Regional Clearing to which FEBTC and HBSTC are bound as
participants in the regional clearing operations administered by the PCHC.
On January 17, 1992, while the arbitration proceeding was still pending,
FEBTC filed an action for sum of money and damages with preliminary
attachment against HBSTC, Robert Young, Victor Tancuan and Eugene
7 Carrion in writing to explain the alleged violation but the latter ignored
Arriesgado with the Regional Trial Court of Makati
ISSUE:
Whether or not private respondent which commenced an arbitration proceeding
under the auspices of the Philippine Clearing House Corporation (PCHC) may
subsequently file a separate case in court over the same subject matter of
arbitration despite the pendency of that arbitration, simply to obtain the
provisional remedy of attachment against the bank, the adverse party in the
arbitration proceedings.
RULING:
YES.
The Supreme Court held that the Arbitration Law (R.A. 876); Section 14 of
Republic Act 876, otherwise known as the Arbitration Law, allows any party to the
arbitration proceeding to petition the court to take measures to safeguard and/or
conserve any matter which is the subject of the dispute in arbitration.
G.R. No. 180394. September 29, 2008.*
MARJORIE B. CADIMAS, by her Attorney-In-Fact, VENANCIO Z.
ROSALES, petitioner, vs. MARITES CARRION and GEMMA HUGO,
respondents.
FACTS:
The instant petition stemmed from the complaint5 for accion
reivindicatoria and damages filed by petitioner Marjorie B. Cadimas,
against respondents Marites Carrion and Gemma Hugo. In the complaint,
petitioner averred that she and respondent Carrion were parties to a
Contract To Sell dated 4 August 2003, wherein petitioner sold to
respondent Carrion a town house located at Lot 4-F-1-12 No. 23 Aster
Street, West Fairview Park Subdivision, Quezon City for the sum of
violated paragraph 8 of said contract when she transferred ownership of the
6 property to respondent Hugo under the guise of a special power of attorney,
which authorized the latter to manage and administer the property for and
in behalf of respondent Carrion. Allegedly, petitioner asked respondent
petitioner’s letter, prompting petitioner to demand in writing that Carrion
and Hugo vacate the property and to cancel the contract. Respondent Hugo
averred that the RTC had not acquired jurisdiction over the person of
respondent Carrion for not complying with Section 16, Rule 14 of the Rules
of Court on the proper service of summons on a non-resident defendant.
ISSUE:
Whether or not the National Housing Authority (NHA) or the Housing and Land
Use Regulatory Board (HLURB) has jurisdiction over complaints arising from the
contracts.
RULING:
YES.
The Supreme Court held that the National Housing Authority (NHA) or the
Housing and Land Use Regulatory Board (HLURB) has jurisdiction over
complaints arising from contracts between the subdivision developer and the lot
buyer or those aimed at compelling the subdivision developer to comply with its
contractual and statutory obligations to make the subdivision a better place to live
in. The boom in the real estate business all over the country resulted in more
litigation between subdivision owners/developers and lot buyers with the issue of
the jurisdiction of the NHA or the HLURB over such controversies as against that
of regular courts. In the cases that reached this Court, the ruling has consistently
been that the NHA or the HLURB has jurisdiction over complaints arising from
contracts between the subdivision developer and the lot buyer or those aimed at
compelling the subdivision developer to comply with its contractual and statutory
obligations to make the subdivision a better place to live in.
 G.R. No. 131683. June 19, 2000. * and perimeter wall repairs and security.—In the case at bar, petitioners’ complaint
JESUS LIM ARRANZA; LORENZO CINCO; QUINTIN TAN; JOSE
ESCOBAR; ELBERT FRIEND; CLASSIC HOMES VILLAGE
ASSOCIATION, INC.; BF NORTHWEST HOMEOWNERS’
ASSOCIATION, INC.; and UNITED BF HOMEOWNERS’
ASSOCIATIONS, INC., petitioners, vs. B.F. HOMES, INC. and THE
HONORABLE COURT OF APPEALS, respondents.
FACTS:
Respondent BF Homes, Inc (BFHI) , is a domestic corporation engaged in
developing subdivision and selling residential lots. One of the subdivisions
that respondent developed was the BF Homes Paranaque Subdivision. With
the withdrawal of substantial investments in BFHI , respondent filed with
the SEC a petition for rehabilitation. Atty Florencio Orendain was
appointed as receiver. He was later relieved by the SEC of his duties as a
Receiver. The new Board of Receivers revoked the authority given by
Orendain to use the open spaces at Concha Cruz Drive and to collect
community assessment funds; deferred the purchase of new pumps ;
recognized BF Paranaque Homeowners Association (BFPHAI) as the
representative of all homeowners; took over the management of the
Clubhouse and deployed its own guards. Petitioners filed with the HLURB
a class suit “for and in behalf of the more than 7,000 homeowners” against
respondent BFHI et al to enforce the rights of purchasers of lots in BF
Homes Paranaque 3. Respondents asserts that the SEC, not the HLURB,
has jurisdiction arguing that the SEC, being the appointing authority
should be the one to take cognizance of controversies arising from the
performance of the receiver’s duties.
ISSUE:
Whether or not the HLURB has jurisdiction over petitioner’s complaint for
specific performance to enforce their rights as purchasers of subdivision
lots.
RULING:
YES.
The Supreme Court held that the Housing and Land Use Regulatory Board has
the jurisdiction over complaints for specific performance to enforce the rights of
purchasers of subdivision lots as regards rights of way, water, open spaces, road
is for specific performance to enforce their rights as purchasers of subdivision lots
as regards rights of way, water, open spaces, road and perimeter wall repairs, and
security. Indisputably then, the HLURB has jurisdiction over the complaint. The
fact that a subdivision developer is under receivership does not divest the Housing
and Land Use Regulatory Board of that jurisdiction; A receiver is a person
appointed by the court, or by a quasi-judicial administrative agency, in behalf of all
the parties for the purpose of preserving and conserving the property and
preventing its possible destruction or dissipation, if it were left in the possession of
any of the parties; Receivership is aimed at the preservation of, and at making more
secure, existing rights—it cannot be used as an instrument for the destruction of
those rights.—The fact that respondent is under receivership does not divest the
HLURB of that jurisdiction. A receiver is a person appointed by the court, or in
this instance, by a quasi-judicial administrative agency, in behalf of all the parties
for the purpose of preserving and conserving the property and preventing its
possible destruction or dissipation, if it were left in the possession of any of the
parties. It is the duty of the receiver to administer the assets of the receivership
estate; and in the management and disposition of the property committed to his
possession, he acts in a fiduciary capacity and with impartiality towards all
interested persons. The appointment of a receiver does not dissolve a corporation,
nor does it interfere with the exercise of its corporate rights. In this case where
there appears to be no restraints imposed upon respondent as it undergoes
rehabilitation receivership, respondent continues to exist as a corporation and
hence, continues or should continue to perform its contractual and statutory
responsibilities to petitioners as homeowners. Receivership is aimed at the
preservation of, and at making more secure, existing rights; it cannot be used as
an instrument for the destruction of those rights.
G.R. No. 125447. August 14, 1998. *
MARINA PROPERTIES CORPORATION, petitioner, vs. COURT OF
APPEALS and H.L. CARLOS CONSTRUCTION, INC., respondents.
FACTS:
Petitioner Marina Properties Corporation (MARINA for short) is a domestic
corporation engaged in the business of real estate development. Among its projects
is a condominium complex project, known as the “MARINA BAYHOMES
CONDOMINIUM PROJECT” consisting of 10 building clusters with 31 housing
units to be built on a parcel of land in Parañaque. The construction of the project
commenced sometime in 1988, with respondent H.L. Carlos Construction, Inc. (H.L.
CARLOS for brevity) as the principal contractor, particularly of Phase III.
As an incentive to complete the construction of Phase III, MARINA allowed H.L.
CARLOS to purchase a condominium unit therein known as Unit B-121. Thus, on
October 9, 1988, the parties entered into a Contract to Purchase and to Sell
covering Unit B-121 for P3,614,000.00. H.L. CARLOS paid P1,034,200.00 as
downpayment, P50,000.00 as cash deposit and P67,024.22 equivalent to 13
monthly amortizations. After paying P1,810,330.70, which was more than half of
the contract price, H.L. CARLOS demanded for the delivery of the unit, but
MARINA refused.
ISSUE:
Whether or not there is forum shopping by H.L. CARLOS when it sued MARINA
before the HLURB to enforce their Contract To Purchase and To Sell.
RULING:
NO.
The Supreme Court held that the issue of forum shopping raised by MARINA
deserves scant consideration. H.L. CARLOS was not guilty of forum shopping
when it sued MARINA before the HLURB to enforce their Contract To Purchase
and To Sell. Forum shopping is the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum other than by appeal or the special civil action
of certiorari, or the institution of two (2) or more actions or proceedings grounded
on the same cause on the supposition that one or the other court might look with
favor upon the party. Contrary to MARINA’s assertion, H.L. CARLOS’ complaint
was hardly a duplication of Civil Case No. 89-5870 which was filed to collect the
sum of money corresponding to unpaid billings from their Construction Contract.
The cause of action in the civil case was, therefore, totally distinct from the cause
of action in the complaint before the HLURB. For this reason, neither could there
have been splitting of a cause of action.
G.R. No. 135808. October 6, 2008.*
SECURITIES AND EXCHANGE COMMISSION,
petitioner, vs. INTERPORT RESOURCES CORPORATION,
MANUEL S. RECTO, RENE S. VILLARICA, PELAGIO RICALDE,
ANTONIO REINA, FRANCISCO ANONUEVO, JOSEPH SY and
SANTIAGO TANCHAN, JR., respondents.
FACTS:
On 6 August 1994, the Board of Directors of IRC approved a Memorandum of
Agreement with Ganda Holdings Berhad (GHB). The SEC averred that it received
reports that IRC failed to make timely public disclosures of its negotiations
with GHB and that some of its directors, respondents herein, heavily traded IRC shares
utilizing this material insider information. Consequently, the SEC Chairman issued an
Order finding that IRC violated the Rules on Disclosure of Material Facts, when it
failed to make timely disclosure of its negotiations with GHB. In addition, the SEC
pronounced that some of the officers and directors of IRC entered into transactions
involving IRC shares in violation of Section 30, in relation to Section 36, of the
Revised Securities Act. The respondents in turn filed a petition before the Court of
Appeals which promulgated a Decision in favor of the IRC. It determined that there
was no implementing rules and regulations regarding disclosure, insider trading, or any
of the provisions of the Revised Securities Acts which the IRC allegedly violated. The
CA likewise noted that it found no statutory authority for the SEC to initiate and file
any suit for civil liability under Sections 8, 30 and 36 of the Revised Securities Act.
Thus, it ruled that no civil, criminal or administrative proceedings may possibly be held
against the respondents without violating their rights to due process and equal
protection.
ISSUE:
Whether or not the SEC has authority to initiate and file any suit against IRC.
RULING:
YES. The Supreme Court held that
Chapter 3 of Book VII of the Administrative Code, entitled “Adjudication,” does not
affect the investigatory functions of the agencies—the Rules of Practice and
Procedure of Securities and Exchange Commission’s (SEC’s) Prosecution and
Enforcement Department (PED) need not comply with the provisions of the
Administrative Code on adjudication, particularly Section 12(3), Chapter 3, Book
VII.—It must be pointed out that Chapter 3, Book VII of the Administrative Code,
entitled “Adjudication,” does not affect the investigatory functions of the agencies.
The law creating the PED, Section 8 of Presidential Decree No. 902-A, as amended,
defines the authority granted to the PED, thus: SEC. 8. The Prosecution and
Enforcement Department shall have, subject to the Commission’s control and
supervision, the exclusive authority to investigate, on complaint
or motu proprio, any act or omission of the Board of Directors/Trustees of
corporations, or of partnerships, or of other associations, or of their stockholders,
officers or partners, including any fraudulent devices, schemes or representations,
in violation of any law or rules and regulations administered and enforced by the decide, settle, or decree, or to sentence or condemn. x x x Implies a judicial
Commission; to file and prosecute in accordance with law and rules and determination of a fact, and the entry of a judgment.”
regulations issued by the Commission and in appropriate cases, the corresponding
criminal or civil case before the Commission or the proper court or body upon prima
facie finding of violation of any laws or rules and regulations administered and Doctrine of Primary Jurisdiction; A criminal complaint is first filed with the
enforced by the Commission; and to perform such other powers and functions as Securities and Exchange Commission, which determines the existence of probable
may be provided by law or duly delegated to it by the Commission. (Emphasis cause, before a preliminary investigation can be commenced by the Department of
provided.) The law creating PED empowers it to investigate violations of the rules Justice—a criminal complaint for violation of any law or rule administered by the
and regulations promulgated by the SEC and to file and prosecute such cases. It Securities and Exchange Commission (SEC) must first be filed with the latter. If the
fails to mention any adjudicatory functions insofar as the PED is concerned. Thus, Commission finds that there is probable cause, then it should refer the case to the
the PED Rules of Practice and Procedure need not comply with the provisions of the Department of Justice (DOJ); A criminal charge for violation of the Securities
Administrative Code on adjudication, particularly Section 12(3), Chapter 3, Book Regulation Code is a specialized dispute, hence it must first be referred to an
VII. administrative agency of special competence, i.e., the Securities and Exchange
Commission (SEC); Under the doctrine of primary jurisdiction, courts will not
determine a controversy involving a question within the jurisdiction of the
administrative tribunal, where the question demands the exercise of sound
administrative discretion requiring the specialized knowledge and expertise of said
administrative tribunal to determine technical and intricate matters of fact.
“Investigate,” commonly understood, means to examine, explore, inquire or delve or
probe into, research on, study. The dictionary definition of “investigate” is “to
observe or study closely; inquire into systematically: “to search or inquire into” xx
to subject to an official probe xx: to conduct an official inquiry.” The purpose of an
investigation, of course is to discover, to find out, to learn, obtain information.
Nowhere included or intimated is the notion of settling, deciding or resolving a
controversy involved in the facts inquired into by application of the law to the facts
established by the inquiry. The legal meaning of “investigate” is essentially the
same: “(t)o follow up step by step by patient inquiry or observation. To trace or track;
to search into; to examine and inquire into with care and accuracy; to find out by
careful inquisition; examination; the taking of evidence; a legal inquiry;” “to inquire;
to make an investigation,” “investigation” being in turn described as “(a)n
administrative function, the exercise of which ordinarily does not require a hearing.
2 Am J2d Adm L Sec. 257; xx an inquiry, judicial or otherwise, for the discovery and
collection of facts concerning a certain matter or matters.” “Adjudicate,” commonly
or popularly understood, means to adjudge, arbitrate, judge, decide, determine,
resolve, rule on, settle. The dictionary defines the term as “to settle finally (the
rights and duties of parties to a court case) on the merits of issues raised: xx to pass
judgment on: settle judicially: xx act as judge.” And “adjudge” means “to decide or
rule upon as a judge or with judicial or quasi-judicial powers: xx to award or grant
judicially in a case of controversy x x x.” In a legal sense, “adjudicate” means: “To
settle in the exercise of judicial authority. To determine finally. Synonymous
with adjudge in its strictest sense;” and “adjudge” means: “To pass on judicially, to