midterm result

 poculan 23 
abellon 22
refugio;ualat;mejorada;sumingcan ;morandarte;camasura 21
sevilleno 20totao 20
dagumo 19mutia 19pagacian 19timosa co 19acaylar 19
18panares 18
lee 17tabiliran 17lim 17
tesoro 15

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

G.R. No. 151908            August 12, 2003
SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION (PILTEL), petitioners,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent.
x---------------------------------------------------------x
G.R. No. 152063 August 12, 2003
GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC. (ISLACOM), petitioners,
vs.
COURT OF APPEALS (The Former 6th Division) and the NATIONAL TELECOMMUNICATIONS COMMISSION, respondents.

YNARES-SANTIAGO, J.:

Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission (NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and regulations on the billing of telecommunications services. Among its pertinent provisions are the following:

(1) The billing statements shall be received by the subscriber of the telephone service not later than 30 days from the end of each billing cycle. In case the statement is received beyond this period, the subscriber shall have a specified grace period within which to pay the bill and the public telecommunications entity (PTEs) shall not be allowed to disconnect the service within the grace period.

(2) There shall be no charge for calls that are diverted to a voice mailbox, voice prompt, recorded message or similar facility excluding the customer's own equipment.

(3) PTEs shall verify the identification and address of each purchaser of prepaid SIM cards. Prepaid call cards and SIM cards shall be valid for at least 2 years from the date of first use. Holders of prepaid SIM cards shall be given 45 days from the date the prepaid SIM card is fully consumed but not beyond 2 years and 45 days from date of first use to replenish the SIM card, otherwise the SIM card shall be rendered invalid. The validity of an invalid SIM card, however, shall be installed upon request of the customer at no additional charge except the presentation of a valid prepaid call card.

(4) Subscribers shall be updated of the remaining value of their cards before the start of every call using the cards.

(5) The unit of billing for the cellular mobile telephone service whether postpaid or prepaid shall be reduced from 1 minute per pulse to 6 seconds per pulse. The authorized rates per minute shall thus be divided by 10.¹

The Memorandum Circular provided that it shall take effect 15 days after its publication in a newspaper of general circulation and three certified true copies thereof furnished the UP Law Center. It was published in the newspaper, The Philippine Star, on June 22, 2000.² Meanwhile, the provisions of the Memorandum Circular pertaining to the sale and use of prepaid cards and the unit of billing for cellular mobile telephone service took effect 90 days from the effectivity of the Memorandum Circular.

On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators which contained measures to minimize if not totally eliminate the incidence of stealing of cellular phone units. The Memorandum directed CMTS operators to:

a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation and verification of the identity and addresses of prepaid SIM card customers;

b. require all your respective prepaid SIM cards dealers to comply with Section B(1) of MC 13-6-2000;

c. deny acceptance to your respective networks prepaid and/or postpaid customers using stolen cellphone units or cellphone units registered to somebody other than the applicant when properly informed of all information relative to the stolen cellphone units;

d. share all necessary information of stolen cellphone units to all other CMTS operators in order to prevent the use of stolen cellphone units; and

e. require all your existing prepaid SIM card customers to register and present valid identification cards.³

This was followed by another Memorandum dated October 6, 2000 addressed to all public telecommunications entities, which reads:

This is to remind you that the validity of all prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years from date of first use pursuant to MC 13-6-2000.

In addition, all CMTS operators are reminded that all SIM packs used by subscribers of prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years from date of first use. Also, the billing unit shall be on a six (6) seconds pulse effective 07 October 2000.

For strict compliance.⁴

On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the National Telecommunications Commission, Commissioner Joseph A. Santiago, Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay, an action for declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary injunction and temporary restraining order. The complaint was docketed as Civil Case No. Q-00-42221 at the Regional Trial Court of Quezon City, Branch 77.⁵

Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no jurisdiction to regulate the sale of consumer goods such as the prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry under the Consumer Act of the Philippines; that the Billing Circular is oppressive, confiscatory and violative of the constitutional prohibition against deprivation of property without due process of law; that the Circular will result in the impairment of the viability of the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM and call cards; and that the requirements of identification of prepaid card buyers and call balance announcement are unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab initio.

Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion for Leave to Intervene and to Admit Complaint-in-Intervention.⁶ This was granted by the trial court.

On October 27, 2000, the trial court issued a temporary restraining order enjoining the NTC from implementing Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6, 2000.⁷

In the meantime, respondent NTC and its co-defendants filed a motion to dismiss the case on the ground of petitioners' failure to exhaust administrative remedies.

Subsequently, after hearing petitioners' application for preliminary injunction as well as respondent's motion to dismiss, the trial court issued on November 20, 2000 an Order, the dispositive portion of which reads:

WHEREFORE, premises considered, the defendants' motion to dismiss is hereby denied for lack of merit. The plaintiffs' application for the issuance of a writ of preliminary injunction is hereby granted. Accordingly, the defendants are hereby enjoined from implementing NTC Memorandum Circular 13-6-2000 and the NTC Memorandum, dated October 6, 2000, pending the issuance and finality of the decision in this case. The plaintiffs and intervenors are, however, required to file a bond in the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00), Philippine currency.

SO ORDERED.⁸

Defendants filed a motion for reconsideration, which was denied in an Order dated February 1, 2001.⁹

Respondent NTC thus filed a special civil action for certiorari and prohibition with the Court of Appeals, which was docketed as CA-G.R. SP. No. 64274. On October 9, 2001, a decision was rendered, the decretal portion of which reads:

WHEREFORE, premises considered, the instant petition for certiorari and prohibition is GRANTED, in that, the order of the court a quo denying the petitioner's motion to dismiss as well as the order of the court a quo granting the private respondents' prayer for a writ of preliminary injunction, and the writ of preliminary injunction issued thereby, are hereby ANNULLED and SET ASIDE. The private respondents' complaint and complaint-in-intervention below are hereby DISMISSED, without prejudice to the referral of the private respondents' grievances and disputes on the assailed issuances of the NTC with the said agency.

SO ORDERED.¹⁰

Petitioners' motions for reconsideration were denied in a Resolution dated January 10, 2002 for lack of merit.¹¹

Hence, the instant petition for review filed by Smart and Piltel, which was docketed as G.R. No. 151908, anchored on the following grounds:

A.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT THE REGULAR COURTS HAS JURISDICTION OVER THE CASE.

B.

THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLE ADMINISTRATIVE REMEDY.

C.

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BILLING CIRCULAR ISSUED BY THE RESPONDENT NTC IS UNCONSTITUTIONAL AND CONTRARY TO LAW AND PUBLIC POLICY.

D.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANT THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.¹²

Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning the following errors:

1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR LEGAL NULLIFICATION (BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW) OF A PURELY ADMINISTRATIVE REGULATION PROMULGATED BY AN AGENCY IN THE EXERCISE OF ITS RULE MAKING POWERS AND INVOLVES ONLY QUESTIONS OF LAW.

2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY WHEN THE QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.

3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY WHERE THE ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE, WHEN THERE IS NO OTHER REMEDY, AND THE PETITIONER STANDS TO SUFFER GRAVE AND IRREPARABLE INJURY.

4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE PETITIONERS IN FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES AVAILABLE TO THEM.

5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN ISSUING ITS QUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE A CLEAR RIGHT TO AN INJUNCTION.¹³

The two petitions were consolidated in a Resolution dated February 17, 2003.¹⁴

On March 24, 2003, the petitions were given due course and the parties were required to submit their respective memoranda.¹⁵

We find merit in the petitions.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.¹⁶

The rules and regulations that administrative agencies promulgate, which are the product of a delegated legislative power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law.¹⁷ They must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by an administrative body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an administrative order, the former must prevail.¹⁸

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.¹⁹

In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. This principle applies only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. In Association of Philippine Coconut Dessicators v. Philippine Coconut Authority,²⁰ it was held:

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rule- making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine.

Even assuming arguendo that the principle of exhaustion of administrative remedies apply in this case, the records reveal that petitioners sufficiently complied with this requirement. Even during the drafting and deliberation stages leading to the issuance of Memorandum Circular No. 13-6-2000, petitioners were able to register their protests to the proposed billing guidelines. They submitted their respective position papers setting forth their objections and submitting proposed schemes for the billing circular.²¹ After the same was issued, petitioners wrote successive letters dated July 3, 2000²² and July 5, 2000,²³ asking for the suspension and reconsideration of the so-called Billing Circular. These letters were not acted upon until October 6, 2000, when respondent NTC issued the second assailed Memorandum implementing certain provisions of the Billing Circular. This was taken by petitioners as a clear denial of the requests contained in their previous letters, thus prompting them to seek judicial relief.

In like manner, the doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence pursuant to the doctrine of primary jurisdiction. The courts will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. It applies where the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of such issues to the administrative body for its view.²⁴

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.²⁵ This is within the scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments.²⁶ Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.²⁷

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As such, petitioners were justified in invoking the judicial power of the Regional Trial Court to assail the constitutionality and validity of the said issuances. In Drilon v. Lim,²⁸ it was held:

We stress at the outset that the lower court had jurisdiction to consider the constitutionality of Section 187, this authority being embraced in the general definition of the judicial power to determine what are the valid and binding laws by the criterion of their conformity to the fundamental law. Specifically, B.P. 129 vests in the regional trial courts jurisdiction over all civil cases in which the subject of the litigation is incapable of pecuniary estimation, even as the accused in a criminal action has the right to question in his defense the constitutionality of a law he is charged with violating and of the proceedings taken against him, particularly as they contravene the Bill of Rights. Moreover, Article X, Section 5(2), of the Constitution vests in the Supreme Court appellate jurisdiction over final judgments and orders of lower courts in all cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.²⁹

In their complaint before the Regional Trial Court, petitioners averred that the Circular contravened Civil Code provisions on sales and violated the constitutional prohibition against the deprivation of property without due process of law. These are within the competence of the trial judge. Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail highly technical matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity with the workings of the cellular telephone service, including prepaid SIM and call cards – and this is judicially known to be within the knowledge of a good percentage of our population – and expertise in fundamental principles of civil law and the Constitution.

Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221. The Court of Appeals erred in setting aside the orders of the trial court and in dismissing the case.

WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution dated January 10, 2002 are REVERSED and SET ASIDE. The Order dated November 20, 2000 of the Regional Trial Court of Quezon City, Branch 77, in Civil Case No. Q-00-42221 is REINSTATED. This case is REMANDED to the court a quo for continuation of the proceedings.

SO ORDERED.

Davide, Jr., C.J., Vitug, and Carpio, JJ., concur.
Azcuna, J., took no part.

Footnotes

¹ Rollo, G.R. No. 151908, pp. 225-228.

² Rollo, G.R. No. 152063, p. 112.

³ Rollo, G.R. No. 151908, p. 229.

⁴ Id., p. 230.

⁵ Id., pp. 231-247.

⁶ Id., pp. 248-270.

⁷ Id., pp. 271-273, at 273; penned by Judge Vivencio S. Baclig.

⁸ Id., pp. 274-277.

⁹ Id., p. 278.

¹⁰ Id., pp. 123-132, at 131-132; penned by Associate Justice Rodrigo V. Cosico, concurred in by Associate Justices Ramon A. Barcelona and Alicia L. Santos.

¹¹ Id., pp. 134-136.

¹² Id., pp. 23-24.

¹³ Rollo, G.R. No. 152063, pp. 14-15.

¹⁴ Id., pp. 389-390.

¹⁵ Id., pp. 391-392.

¹⁶ Bellosillo, J., Separate Opinion, Commissioner of Internal Revenue v. Court of Appeals, 329 Phil. 987, 1017 [1996].

¹⁷ Romulo, Mabanta, Buenaventura, Sayoc and De Los Angeles v. Home Development Mutual Fund, G.R. No. 131082, 19 June 2000, 333 SCRA 777, 785-786.

¹⁸ Conte, et al. v. Commission on Audit, 332 Phil. 20, 36 [1996].

¹⁹ Bellosillo, J., Separate Opinion, Commissioner of Internal Revenue, G.R. No. 119761, 29 August 1996, supra.

²⁰ G.R. No. 110526, 10 February 1998, 286 SCRA 109, 117.

²¹ Rollo, G.R. No. 152063, pp. 57-78.

²² Id., pp. 79-86.

²³ Id., pp. 87-89.

²⁴ Fabia v. Court of Appeals, G.R. No. 132684, 11 September 2002.

²⁵ Spouses Mirasol v. Court of Appeals, G.R. No. 128448, 1 February 2001, 351 SCRA 44, 51.

²⁶ Santiago v. Guingona, Jr., G.R. No. 134577, 18 November 1998, 298 SCRA 756, 774.

²⁷ CONSTITUTION, Art. VIII, Sec. 1, second paragraph.

²⁸ G.R. No. 112497, 4 August 1994, 235 SCRA 135.

²⁹ Id., at 139-140.

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. EDUARDO JORGE Y RAMIREZ

G.R. No. 99379 April 22, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
EDUARDO JORGE Y RAMIREZ, accused-appellant.
The Solicitor General for plaintiff-appellee.
Nestor M. Hermida for accused-appellant.

BELLOSILLO, J.:

EDUARDO JORGE Y RAMIREZ appeals from the decision of the Court a quo finding him guilty of murder and sentencing him to reclusion perpetua. ¹

On 15 June 1989, an amended information was filed charging Eduardo Jorge, Romeo Lajera and Remedios Bernales with murder for the killing of Francisco Palma with the aggravating circumstances of treachery and evident premeditation. However, only Jorge was tried by the court a quo because Lajera and Bernales managed to remain at large, although Bernales was eventually arrested in August 1991 to face separate trial. ²

The case of the government is woven mainly around the testimony of Patricio Ocenar, a barangay tanod of Barangay Doña Imelda, Quezon City. Ocenar narrates that on 26 June 1990, at around nine-thirty in the evening, he was at the barangay hall. Then a person informed him that Francisco Palma was being molested by three men. ³ Taking with him his "knife-stick," ⁴ Ocenar proceeded to Paui Street pointed to by the informer. There, at a distance of some ten arms length, ⁵ Ocenar saw Eduardo Jorge and Romeo Lajera holding the hands of Palma and a woman ⁶ stabbing him on the left chest with a long instrument. Ocenar could not tell exactly what kind of weapon was used. He shouted at them and all three ran away leaving Palma behind to chase
his aggressors but he collapsed immediately on Baloy Street. ⁷ According to
Dr. Renato Bautista who examined the victim, the stab wound on his left chest was the cause of his death. ⁸

Corazon Palma, widow of the victim, was also presented to testify for the prosecution. But the trial court correctly discounted her testimony —

. . . because as per Patricio Ocenar she came to know of the incident only from him. Besides, according to Mrs. Palma, when someone came (sic) to her house to call her attention as regards her husband, the caller said "Cory, Cory, your husband is stabbed dead and he is in Baloy." Hence, her testimony that she saw her husband being mauled and then stabbed does not appear credible. Her testimony also reads like that of Mr. Ocenar which, considering her interest in this case, renders doubtful her narration on the identity of her husband's killers.

As the court a quo observed, "her testimony that she saw her husband being mauled and then stabbed does not appear credible." It was obviously perjured. We can only commiserate with the widow and say to her, it was good effort in aid of the prosecution but it was not good enough to pervert the facts and convince the court that she was telling the truth.

On the part of appellant Jorge, he denies any participation in the crime. He claims he was sleeping in his house at the time of the killing and was only awakened when policemen, led by the widow, forced him out of his house despite his protestations and profession of innocence, and brought to the police station. But, as earlier mentioned, the trial court convicted him of murder with abuse of superior strength.

Jorge now imputes eight errors to the trial court the salient points of which are: (a) in finding the prosecution evidence sufficient to establish his guilt; (b) in giving full faith to the testimony of Patricio Ocenar; (c) in finding him guilty of murder as principal without sufficient proof of conspiracy among him and his co-accused; and, (d) in qualifying the killing to murder with abuse of superior strength when such circumstance is not alleged in the Information.

Indeed, under the facts of the case, we cannot assert with moral certainty that the accused is guilty of the crime charged. The evidence for the prosecution does not meet the quantum of proof required to overcome the constitutional presumption of innocence of the accused. We are not saying here that appellant is innocent but that his guilt has not been proved beyond reasonable doubt; hence, he should be acquitted.

In order to convict appellant as a principal by direct participation in the case before us, it is necessary that conspiracy among him and his co-accused be proved. No conspiracy here was established. Conspiracy; like any other ingredient of the offense, must be proved as sufficient as the crime itself through clear and convincing evidence, not only by mere conjectures. ⁹ Proof beyond reasonable doubt is required to establish the presence of criminal conspiracy. ¹⁰ In fact, the appealed decision does not mention, much less discuss, conspiracy.

Unity of purpose and unity in the execution of the unlawful objective are essential to establish the existence of conspiracy. ¹¹ In this case, no unity of purpose was shown. The only involvement of appellant was his holding of the hand of Palma when he was stabbed by Bernales on the left chest. There was no other evidence to show unity of design. The simultaneousness of the act of stabbing the victim by Bernales with the holding of the hand of the same victim by appellant does not of itself demonstrate concurrence of wills or unity of purpose and action. ¹² For, it is possible that the appellant had no knowledge of the common design, if there was any, nor of the intended assault until the victim was actually stabbed. The thrust could have been made at the spur of the moment, totally unexpected by appellant. The mere holding of the victim's hand does not necessarily prove intention to kill. If the tragedy was a chance stabbing, there can be no conspiracy to speak of. ¹³ Perhaps it would have been different if the victim was stabbed more than once and appellant still held on to the hand of the victim. That would have indicated intent to kill and a community of purpose and design. But the evidence does not show that appellant knew that Bernales had a knife; that she intended to use it to stab the victim; and, even if she had such intention and appellant knew it, that he held the victim's hand to insure the effectiveness and fatality of Bernales' attack.

While the holding of the hand of the victim could demonstrate unity of purpose, yet, it could also mean a desire on the part of appellant to avoid a physical encounter between Palma and Bernales, a woman, who was not known to appellant to be armed with a knife. The distance of some ten arms length from the startling occurrence could have blurred the vision of Ocenar, the only eyewitness for the prosecution, who could no longer identify the weapon used except to say it was a long instrument. This also casts doubt on some of his factual accounts. The rule is well settled that if the facts apparently inculpatory may equally be explained consistent with one's innocence, the evidence does not fulfill the test of moral certainty to support a conviction. ¹⁴

Although Ocenar appears credible in his version, his testimony unfortunately does not establish the existence of conspiracy. It is elementary that, in the absence of conspiracy, each of the accused is responsible only for the consequences of his own acts. ¹⁵ All that appellant did was to hold the hand of Palma, which is not a crime.

Neither can the appellant be considered a principal by indispensable cooperation, nor an accomplice in the crime of murder. To be a principal by indispensable cooperation, one must participate in the criminal resolution, a conspiracy or unity in criminal purpose and cooperation in the commission of the offense by performing another act without which it would not have been accomplished. ¹⁶ In order that a person may be considered an accomplice, the following requisites must concur: (a) community of design, i.e., knowing that criminal design of the principal by direct participation, he concurs with the latter in his purpose; (b) he cooperates in the execution of the offense by previous or simultaneous acts; and, (c) there must be a relation between the acts done by the principal and those attributed to the person charged as accomplice.

The cooperation that the law punishes is the assistance knowingly or intentionally rendered, which cannot exist without previous cognizance of the criminal act intended to be executed. ¹⁷ It is therefore required in order to be liable either as a principal by indispensable cooperation, or as an accomplice, that the accused must unite with the criminal design of the principal by direct participation. There is indeed nothing on record to show that appellant knew that Bernales was going to stab Palma, thus creating a doubt as to appellant's criminal intent.

The appellant asserts that it was error for the trial court to consider "abuse of superior strength" as qualifying the killing to murder when such circumstance is not alleged in the Information. The accused is correct, although it could have been considered nonetheless as a generic aggravating circumstance even if not so alleged. ¹⁸ However, this is no longer significant considering the conclusion herein reached.

The defense of the accused is alibi, which is the weakest of defenses. But the case against him must still fail since the evidence of the prosecution is even weaker; for, as it has been repeated often enough, the conviction of the accused must not rest on the weakness of the defense but on the strength of the prosecution. ¹⁹

WHEREFORE, the decision appealed from is REVERSED and accused-appellant EDUARDO JORGE Y RAMIREZ is ACQUITTED of the crime charged. Accordingly, it appearing that he is detained, his immediate release from custody is ordered unless he is held for another cause.

SO ORDERED.

Cruz, Davide, Jr., Bellosillo, Quiason and Kapunan, JJ., concur.

#Footnotes

1 Penned by Judge Jaime N. Salazar, Regional Trial Court, Br. 103, Quezon City.
2 Appellant's Brief, p. 2.
3 TSN, 18 January 1989, pp. 3-4.
4 Presumably a "night stick."
5 TSN, 18 January 1989, p. 10.
6 Later identified as Remedios Bernales, also known as "Ache."
7 TSN, 18 January 1989, pp. 5, 8-10, 15.
8 TSN, 25 August 1989, p. 4.
9 People v. Marquez, No. L-31403, 14 December 1981, 110 SCRA 91.
10 People v. Saavedra, No. L-48738, 18 May 1987, 149 SCRA 610.
11 Orodio v. Court of Appeals, No. L-57519, 13 September 1988, 165 SCRA 316.
12 US v. Magcomot, 13 Phil. 386 (1909).
13 People v. Agapinay, G.R. No. 77776, 27 June 1990, 186 SCRA 812.
14 People v. Pacana, 47 Phil. 48 (1924).
15 Araneta v. Court of Appeals, G.R. No. L-43527, 3 July 1990, 187 SCRA 123.
16 Padilla, Criminal Law Book I, 1974 Ed., p. 517.
17 Id., p. 527.
18 People v. Garcia, G.R. No. L-30449, 31 October 1979.
19 People v. Cruz, G.R. No. 87884, 4 November 1992, 215 SCRA 339.

SPOUSES VICENTE and GLORIA MANALO, petitioners, vs. HON. NIEVES ROLDAN-CONFESOR

G.R. No. 102358 November 19, 1992
SPOUSES VICENTE and GLORIA MANALO, petitioners,
vs.
HON. NIEVES ROLDAN-CONFESOR, in her capacity as Undersecretary of Labor and Employment, JOSE SARMIENTO as POEA Administrator, CAREERS PLANNERS SPECIALISTS INTERNATIONAL, INC., and SPOUSES VICTOR and ELNORA FERNANDEZ, respondents.

BELLOSILLO, J.:

The Court views with grave concern the alarming incidents of illegal recruitment which demonstrate all too clearly that overseas employment has fast developed into a major source not only of much-needed foreign exchanged but also, for the cunning and the crafty, of easy money.

In response to a newspaper advertisement looking for a couple to work as driver and tutor cum baby sitter, petitioners Vicente and Gloria Manalo went to Career Planners Specialists International, Inc. (CPSI), a licensed service contracting firm owned by private respondents, the spouses Victor and Elnora Fernandez. After the requisite interview and testing, they were hired to work for a family in Saudi Arabia for a monthly salary of US$350.00 each. According to petitioners, a placement fee of P40,000.00 was imposed as a precondition for the processing of their papers. They paid only P30,000.00 in cash and executed a promissory note for the balance. Then they were allowed by respondent Elnora Fernandez to sign their contract papers but did not issue a receipt for the placement fee despite demand.

Shortly before boarding their flight to Saudi Arabia, petitioners were handed their contracts. According to Gloria, she was surprised to discover that her position had been changed to that of domestic help. However, a CPSI employee assured her that the change was only for the purpose of facilitating her departure and did not in any way alter her employment as tutor. Incidentally, CPSI provided petitioners with the Travel Exit Pass (TEP) of Filipino Manpower Services, Inc. (FILMAN), a duly licensed recruitment agency.

Contrary to the representation of her recruiter, Gloria was actually hired as a domestic help and not as a tutor, so that after working for only twenty-five (25) days in Jeddah, she returned to Manila. Soon after, Vicente also resigned from his work and followed her home. He could not stand the unbearable working conditions of his employment. However, before leaving, he had to execute a promissory note to cover his plane fare which respondent Victor Fernandez advanced. Vicente also had to sign a quitclaim in favor of CPSI and his employer.

On 29 February 1988, petitioners sued private respondents before the Philippines Overseas Employment Administration (POEA) charging them with illegal exaction, ¹ false adverstisement, ² and violation of other pertinents laws, rules and regulations. They demanded the refund of the amount exacted from them, plus payment of moral damages and the imposition of administrative sanctions. ³

Private respondents countered: (1) that Gloria applied as domestic help fully aware that she could not be a tutor since she did not speak Arabic; (2) that the promissory note for P10,000.00 was required of petitioners because they were hired without paying placement fees; (3) that it was unlikely for petitioners, who were mature, educated and experienced in overseas work, to part with P30,000.00 without securing a receipt; (4) that Vicente executed a quitclaim in favor of CPSI duly authenticated by embassy officials in Saudi Arabia; (5) that there was no impropriety in having the employment papers of petitioners processed by FILMAN because it was a sister company of CPSI, and private respondents Victor and Elnora were officers in both agencies.

Private respondents prayed for the disqualification of petitioners from overseas employment, and sought to recover from them the SR 1,150 plane fare advanced by Victor for Vicente, P10,000.00 as placement fee evidenced by a promissory note, and attorney's fees.

Mainly, on the basis of the transcripts of petitioners' testimonies in the clarificatory questioning before the Rizal Provincial Prosecutor in a related criminal case, ⁴ the POEA issued its Order of 7 May 1990 giving more weight and credence to petitioners' version thus —

After a careful evaluation of the facts and the evidence presented, we are more inclined to give weight to complainants' posture. Complainants' version of the case spontaneously presented in their pleadings is, to our mind, more convincing than respondent's stand. Moreover, the manner by which complainants narrated the whole incident inspired belief in the allegation that respondent Career is indeed guilty of illegal exaction. Thus, the actual expenses incurred by herein complainants computed hereinbelow less the allowable fees of P3,000.00 (P1,500.00 per worker, respondent being a service contractor) should be returned to them.

Actual Expenses —

P30,000.00 — placement fees
14.00 — application form
300.00 — psychological test
1,400.00 — medical exam
P31,000.00 — total
less 3,000.00 — processing fees at
P1,500.00 per applicant
P28,714.00 — amount to be refunded

It appearing, however, that only respondent Career Planners Specialist(s) Int'l. Inc., took part in the collection of the aforesaid amount, the same should be solely held liable.

We cannot likewise give credence to the Final Quitclaim signed by complainant Vicente Manalo before he left for the Philippines and presented by respondent as defense. While its genuineness may not be in question, we believe that it has no bearing on the issue at bar. The aforesaid Quitclaim deals more with matters concerning complainants' employment abroad. However, the subject of the instant claim is the refund of complainants' expenses prior to their deployment to Saudi Arabia.

On the other hand, we hold FILMAN liable for allowing its document such as the TEP to be used by other agency. Respondent's defense that there is nothing wrong in this because FILMAN is a sister company of CAREER does not merit consideration because such practice is not allowed under the POEA Rules and Regulations. A check with our records, however, showed that respondent FILMAN had been put in the list of forever banned agencies effective April 5, 1989.

Anent the claim for moral damages, this Office has no jurisdiction to entertain the same.

WHEREFORE, . . . the Authority of Career Planners Specialist(s) International is hereby suspended for four (4) months or in lieu thereof, a fine of P40,000.00 is hereby imposed for illegal exaction on two counts plus restitution of the amount of P28,714.00 to herein complainants in both instances.

Filipino Manpower Services, Inc. is hereby meted a fine of P40,000.00 for two counts of misrepresentation. Its perpetual disqualification from recruitment activities is hereby reiterated.

The claim for moral damages is dismissed for lack of jurisdiction.

Respondent Career's counterclaim is likewise dismissed or lack of merit. ⁵

Private respondents filed a motion for reconsideration and on 4 February 1991, POEA issued a resolution setting arise its earlier order stating that —

It is worth mentioning at this point that our sole basis for holding respondent Career liable for illegal exaction was the uncorroborated testimony of the complainants.

As we have consistently held, (the) charge of illegal exaction is a serious charge which may cause the suspension or cancellation of the authority or license of the offending agency. Hence, it should be proven and substantiated by a clear and convincing evidence. Mere allegation of complainant that the agency charged more than the authorized fee will not suffice to indict the agency for illegal exaction unless the allegation is supported by other corroborative circumstantial evidence.

Thus, for lack of concrete evidence or proof to support our initial findings, we are inclined to reconsider the penalty imposed upon respondent.

Foregoing premises, the penalty of suspension imposed upon respondent Career Planners Specialist(s) International, Inc. pursuant to our Order dated May 7, 1990 is hereby LIFTED.

Accordingly, the alternative fine of P40,000.00 which was paid under protest by respondent is hereby ordered refunded to them. ⁶

Petitioners appealed to the Secretary of Labor. On 5 July 1991, then Undersecretary of Labor Ma. Nieves Roldan-Confesor (now Secretary of Labor) sustained the reconsideration of POEA. Her Order reads in part —

We find . . . no cogent reason or sufficient justification to reverse or modify the assailed Order.

Records reveal that the only basis for holding respondent Career Planners Specialist(s) International, Inc., liable for illegal exaction, as held in the previous POEA Order dated May 7, 1990 was the uncorroborated testimony of the complainants. There was no concrete evidence or proof to support the POEA Administrator's initial findings.

We take this opportunity to inform the complainants that the charge of illegal exaction is a serious charge which may cause the suspension or cancellation of the authority or license of a recruitment agency. Therefore, said charge must be proven and substantiated by clear and convincing evidence. A mere allegation will not suffice to find an agency liable for illegal exaction unless said allegation is supported by other corroborative circumstantial evidence. In this connection, records show that complainants could not narrate the specific circumstances surrounding their alleged payment of the amount of P30,000.00. They could not even remember the specific date when said amount was paid to respondent agency. In addition, when complainants were separately questioned as to how the money was kept bundled together prior to being handed to respondent agency for payment, Gloria Manalo said it was wrapped in a piece of paper while Vicente Manalo said it was placed inside an envelope. ⁷

On the charge of petitioners that they were given jobs (driver/domestic help) different from those advertised by private respondents, the Undersecretary ruled that there was no misrepresentation by way of false advertisement because it was established that private respondents also caused to be printed in the same newspaper page a second box looking for a couple driver/domestic help.

In her Order of 9 October 1991, then Undersecretary Ma. Nieves Roldan-Confesor denied petitioners' motion for reconsideration. 8

In the present recourse, petitioners claim that public respondent POEA committed a fatal jurisdictional error when it resolved private respondents' motion for reconsideration in violation of Rule V, Book VI of the 1985 POEA Rules and Regulations directing the transmittal of motions for reconsideration to the National Labor Relations Commission (NLRC) for determination. Consequently, for want of legal competence to act on said motion, the Order of 4 February 1991, as well as the subsequent orders of public respondent Undersecretary of Labor dated 5 July 1991 and 9 October 1991, is null and void.

In Aguinaldo Industries Corporation v. Commissioner of Internal Revenue ⁹ We ruled —

To allow a litigant to assume a different posture when he comes before the court and challenge the position he had accepted at the administrative level, would be to sanction a procedure whereby the court — which is supposed to review administrative determinations — would not review, but determine and decide for the first time, a question not raised at the administrative forum. This cannot be permitted, for the same reason that underlies the requirement of prior exhaustion of administrative remedies to give administrative authorities the prior opportunity to decide controversies within its competence, and in much the same way that, on the judicial level, issues not raised in the lower court cannot be raised for the first time on appeal.

The alleged procedural lapse by respondent POEA was raised by petitioners only before Us, notwithstanding that such ground was already existing when they appealed to the Secretary of Labor. Ironically, petitioners now question the jurisdiction of the Secretary of Labor over the appeal which they themselves elevated to that office. When petitioners filed their motion for reconsideration with the Undersecretary of Labor, this procedural issue was not even mentioned. Clearly, it would be the height of unfairness and inequity if We now allow petitioners to backtrack after getting an unfavorable verdict from public respondents whose authority they themselves involved. In Tijam v. Sibonghanoy ¹⁰ We said: ". . . we frown upon the "undesirable practice" of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse . . . ."

In this regard, however, We find no procedural infirmity constituting reversible error.

The 1985 POEA Rules and Regulations ¹¹ is divided into eight (8) Books. Book VI, cited by petitioners, is entitled "Adjudication Rules". The procedure outlined therein relates to the original and exclusive jurisdiction exercised by POEA through its Adjudication Department "to hear and decide all cases involving employer-employee relations arising out of or by virtue of a law or contact involving Filipino workers for overseas employment," involving "[v]iolation of the terms and conditions of employment . . . . [d]isputes relating to the implementation and interpretation of employment contracts . . . [m]oney claims of workers against their employers and/or their duly authorized agents in the Philippines or vice versa . . . . [c]laims for death, disability and other benefits arising out of employment . . . . and . . . . [v]iolations of our non-compliance with any compromise agreement entered into by and between the parties in an overseas employment contract."

On the other hand, Book II entitled "Licensing and Regulations" of the 1985 POEA Rules and Regulations, notably Rule VI cited by private respondents, refers particularly to the procedure for suspension, cancellation and revocation of Authority or License ¹² through the POEA Licensing and Regulation Office (LRO).

The controversy in the present case centers on the liability of private respondents for illegal exaction, false advertisement and violation of pertinent laws and rules on recruitment of overseas workers and the resulting imposition of penalty of suspension of the Authority of respondent CPSI. Quite plainly, We are not concerned here with employer-employee relations, the procedure of which is outlined in Book VI; rather, with the suspension or revocation of Authority embodied in Book II.

Evidently, no jurisdictional error was accordingly committed because in cases affecting suspension, revocation or cancellation of Authority, the POEA has authority under Sec. 18, Rule VI, Book II, to resolve motions for reconsideration which may thereafter be appealed to the Secretary of Labor. Section 18, provides: "A motion for reconsideration of an order o suspension (issued by POEA) or an appeal to the Minister (now Secretary of Labor) from an order cancelling a license or authority may be entertained only when filed with the LRO within ten (10) working days from the service of the order or decision" (parenthesis supplied).

Petitioners also argue that public respondents gravely abused their discretion when they violated petitioners' right to administrative due process by requiring clear and convincing evidence to establish the charge illegal exaction. This point is well taken. There was grave abuse of discretion.

In the administrative proceedings for cancellation, revocation or suspension of Authority or License, no rule requires that testimonies of complainants be corroborated by documentary evidence, if the charge of unlawful exaction is substantially proven. All administrative determinations require only substantial proof and not clear and convincing evidence as erroneously contended by pubic respondents.

Clear and convincing proof is ". . . more than mere preponderance, but not to extent of such certainty as is required beyond reasonable doubt as in criminal cases . . ." ¹³ while substantial evidence ". . . consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance . . . ." ¹⁴ Consequently, in the hierarchy of evidentiary values, We find proof beyond reasonable doubt at the highest level, followed by clear and convincing evidence, preponderance of evidence, and substantial evidence, in that order.

That the administrative determination of facts may result in the suspension or revocation of the authority of CPSI does not require a higher degree of proof. The proceedings are administrative, and the consequent imposition of suspension/revocation of Authority/License does not make the proceedings criminal. Moreover, the sanctions are administrative and, accordingly, their infliction does not give rise to double jeopardy when a criminal action is instituted for the same act.

Thus We held in Atlas Consolidated Mining and Development Corporation v. Factoran, Jr. ¹⁵ —

. . . it is sufficient that administrative findings of fact are supported by evidence, or negatively stated, it is sufficient that findings of fact are not shown to be unsupported by evidence. Substantial evidence is all that is needed to support an administrative finding of fact, and substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion (Ang Tibay v. Court of Industrial Relations, 69 Phil. 635, 642; Police Commission v. Lood, 127 SCRA 762 [1984].

The POEA, after assessing the evidence of both parties, found that private respondents collected from petitioners P30,000.00 as placement fees; consequently, it ruled that there was illegal exaction. Surprisingly, without altering its findings of fact, POEA reconsidered its order. It held that uncorroborated testimonies were not enough to conclude that illegal exaction was committed, particularly so that this might result in the suspension or revocation of respondents' authority to engage in recruitment activities. The premise that testimonies of petitioners should be supported by some other form of evidence is, to say the least, fallacious. In Castillo v. Court of Appeals, ¹⁶ where the appellate court reversed the findings of fact of the trial court by requiring a higher degree of proof, We held —

. . . we find no strong and cogent reason which justifies the appellate court's deviation from the findings and conclusions of the trial court. As pointed out in Hernandez v. Intermediate Appellate Court (189 SCRA 758 [1990]), in agrarian cases, all that is required is mere substantial evidence. Hence, the agrarian court's findings of fact which went beyond the minimum evidentiary support demanded by law, that is, supported by substantial evidence, are final and conclusive and cannot be reversed by the appellate tribunal.

The seeming discrepancy in the statements of the witnesses (one saying the money was wrapped in paper, the other, that the money was in an envelope; neither testified on the specific date of the exaction), refers only to minor details. Perhaps it would be different if the variance refers to essential points, e.g., whether the amount of P30,000.00 was actually paid by petitioners to private respondents. Consequently, whether the money was wrapped in paper, or placed in an envelope, or unwrapped or whether the parties could not recall when there payment was effected is unimportant. After all, the money could have been wrapped in paper and placed in the envelope, or placed in the envelope without being wrapped, or wrapped with use of an unpasted envelope that appeared to be the envelope itself. In either case, petitioners, could have viewed them differently; but the difference is ultimately inconsequential. The crucial point to consider is that the petitioners categorically and unequivocally testified that respondents collected from them the amount of P30,000.00 as their placement fees and that they paid the amount demanded. In this regard, it may be worth to emphasize that only substantial evidence, not necessarily clear and convincing evidence, is required. Moreover, when confronted with conflicting assertions, the rule that "as between a positive and categorical testimony which has a ring of truth on one hand, and a bare denial on the other, the former is generally held to prevail . . . ." ¹⁷ applies.

But even on the supposition that there was no payment of P30,000.00, it cannot be denied that private respondents required petitioners to execute a promissory note for P10,000.00 purportedly because petitioners were hired without paying placement fees. The mere charging of P10,000.00, standing alone, is enough to hold private respondents answerable for illegal exaction because the allowable amount to be collected per contract worker according to respondent POEA was only P1,500.00, or P3,000.00 for both petitioners.

WHEREFORE, the petition is GRANTED. The challenged Orders of respondent Undersecretary of Labor dated 5 July 1991 and 9 October 1991, as well as the Resolution of respondent POEA dated 4 February 1991, having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction are SET ASIDE, and the original Order of respondent POEA dated 7 May 1990 is ordered REINSTATED and AFFIRMED.

SO ORDERED.

Cruz, Padilla and Griño-Aquino, JJ., concur.

Footnotes
1 Charging or accepting, directly or indirectly, any amount greater than that specified in the schedule of allowable fees (Art. 34, par. [a], P.D. 442, as amended, known as the Labor Code of the Philippines); imposing or accepting, directly or indirectly, any amount of money, goods or services, or any fee or bond in excess of what is prescribed by the POEA (Sec. 2, par. [a], Rule VI, Book II, 1985 POEA Rules and Regulations).
2 Engaging in act(s) of misrepresentation, such as publication or advertisement of false or deceptive notices or information in relation to the recruitment and placement of worker (Sec. 2, par. [b], Ibid.).
3 Petition, Annex "A", Rollo, p. 30.
4 I.S. No. 88-647, "Gloria Manalo v. Victor Fernandez and Elnora Fernandez", and I.S. No. 88-718, "Vicente Manalo v. Victor Manalo v. Victor Fernandez and Elnora Fernandez", both for estafa/illegal recruitment.
5 Petition, Annex "E", Rollo, pp. 122-124.
6 Petition, Annex "G", Rollo, pp. 133-134.
7 Petition, Annex "I", Rollo, pp. 138-139.
8 Petition, Annex "K", Rollo, p. 166.
9 No. L-29790, 25 February 1982; 112 SCRA 136, 140.
10 No. L-21450, 15 April 1968, 23 SCRA 29, 36, citing a number of related cases.
11 The 1985 POEA Rules and Regulations was then in effect during the proceedings before POEA. However, it is now superseded by the 1991 POEA Rules and Regulations promulgated 31 May 1991.
12 "Authority" is a document issued by the Minister (now Secretary of Labor) to a private recruitment entity authorized to deploy its own workers for its project overseas (Sec. 1, par. [d], Rule II Book I, 1985 POEA Rules and Regulations. "License" is a document issued by the Minister (now Secretary of Labor) to an agency authorizing it to recruit and hire Filipino workers for overseas employment (Sec. 1, par. [q], Ibid. Public respondent POEA appears to confuse Authority with License, for while POEA refers to CPSI, a licensed service contractor, what it suspended actually was the Authority of CPSI.
13 Black's Law Dictionary, 5th Ed., p. 227, citing Fred C. Walker C. Walker Agency, Inc. v. Lucas, 215 Va. 535, 211 S.E. 2d 88, 92.
14 Ibid., p. 1281, citing Marker v. Finch, D.C. Del., 322 F. Supp. 905, 910.
15 G. R. No. 75501, 15 September 1987; 154 SCRA 49, 54.
16 G. R. No. 98028, 27 January 1992; 205 SCRA 529, 535.
17 People v. Caballes, G. R. Nos. 93437-45, 12 July 1991; 199 SCRA 152, 167.

PHILIPPINE SINTER CORPORATION and PHIVIDEC INDUSTRIAL AUTHORITY, petitioners, vs. CAGAYAN ELECTRIC POWER and LIGHT CO., INC

Baguio City

THIRD DIVISION

G.R. No. 127371      April 25, 2002
PHILIPPINE SINTER CORPORATION and PHIVIDEC INDUSTRIAL AUTHORITY, petitioners,
vs.
CAGAYAN ELECTRIC POWER and LIGHT CO., INC., respondent.

SANDOVAL-GUTIERREZ, J.:

Before this Court is a petition for review¹ questioning the Decision² of the Court of Appeals dated July 23, 1996 in CA-G.R. SP No. 36943, "Cagayan Electric Power and Light Co., Inc. vs. Hon. Cesar M. Ybañez, et al." which reversed the decision of the Regional Trial Court of Cagayan de Oro City, Branch 17, in Civil Case No. 94-186 for injunction.

The antecedents are:

On January 21, 1987, President Corazon C. Aquino and her Cabinet approved a Cabinet Reform Policy for the power sector and issued a Cabinet Memorandum, Item No. 2 of which provides:

"Continue direct connection for industries authorized under the BOI-NPC Memorandum of Understanding of 12 January 1981, until such time as the appropriate regulatory board determines that direct connection of industry to NPC is no longer necessary in the franchise area of the specific utility or cooperative. Determination shall be based in the utility or cooperatives meeting the standards of financial and technical capability with satisfactory guarantees of non-prejudice to industry to be set in consultation with NPC and relevant government agencies and reviewed periodically by the regulatory board." (emphasis ours)

Pursuant to such Cabinet Memorandum, respondent Cagayan Electric Power and Light, Co. (CEPALCO), grantee of a legislative franchise³ to distribute electric power to the municipalities of Villanueva, Jasaan and Tagoloan, and the city of Cagayan de Oro, all of the province of Misamis Oriental, filed with the Energy Regulatory Board (ERB) a petition entitled "In Re: Petition for Implementation of Cabinet Policy Reforms in the Power Sector," docketed as ERB Case No. 89-430. The petition sought the "discontinuation of all existing direct supply of power by the National Power Corporation (NPC, now NAPOCOR) within CEPALCO's franchise area."⁴

The ERB issued a notice of public hearing which was published in the newspapers and posted in the affected areas. It likewise furnished NAPOCOR and the Board of Investments (BOI) copies of the petition and directed them to submit their comments.

After hearing, the ERB rendered a decision⁵ granting the petition, the dispositive portion reads:

"WHEREFORE, in view of the foregoing premises, where the petitioner has been proven to be capable of distributing power to its industrial consumers and having passed the secondary considerations with a passing mark of 85%, judgment is hereby rendered granting relief prayed for. Accordingly, it is hereby declared that all direct connection of industries to NPC within the franchise area of CEPALCO is no longer necessary. Therefore, all existing NPC (now NAPOCOR) direct supply of power to industrial consumers within the franchise area of CEPALCO is hereby ordered to be discontinued. x x x."⁶

NAPOCOR filed a motion for reconsideration, which the ERB denied. Thereafter, NAPOCOR filed a petition for review with the Court of Appeals. On October 9, 1992, the Court of Appeals dismissed the petition, holding that the motion for reconsideration filed by NAPOCOR with the ERB was out of time and therefore, the assailed decision became final and executory and could no longer be subject of a petition for review.1âwphi1.nêt

On a petition for review on certiorari,⁷ this Court affirmed the Resolution of the Court of Appeals. Judgment was entered on September 22, 1993, thus rendering final the decision of the ERB.⁸

To implement the decision in ERB Case No. 89-430, CEPALCO wrote Philippine Sinter Corporation (PSC), petitioner, and advised the latter of its desire "to have the power supply of PSC, directly taken from NPC (NAPOCOR), disconnected, cut and transferred" to CEPALCO.⁹ PSC is an entity operating its business within the PHIVIDEC¹⁰ Industrial Estate (located in the Municipalities of Tagoloan and Villanueva, Misamis Oriental, covered by CEPALCO's franchise). The Estate is managed and operated by the PHIVIDEC Industrial Authority (PIA).¹¹ PSC refused CEPALCO's request, citing its contract for power supply with NAPOCOR effective until July 26, 1996.

To restrain the execution of the ERB Decision, PSC and PIA filed a complaint for injunction against CEPALCO with the Regional Trial Court of Cagayan de Oro City, Branch 17, docketed as Civil Case No. 94-186. They alleged, inter alia, that there exists no legal basis to cut-off PSC's power supply with NAPOCOR and substitute the latter with CEPALCO since: (a) there is a subsisting contract between PSC and NAPOCOR; (b) the ERB decision is not binding on PSC since it was not impleaded as a party to the case; and (c) PSC is operating within the PHIVIDEC Industrial Estate, a franchise area of PIA, not CEPALCO, pursuant to Sec. 4 (1) of P.D. 538. Moreover, the execution of the ERB decision would cause PSC a 2% increase in its electrical bills.

On April 11, 1994, the trial court rendered judgment¹² in favor of PSC and PIA, thus:

"WHEREFORE, premises considered, judgment is hereby rendered, by preponderance of evidence, in favor of plaintiffs PSC and PIA and against defendant CEPALCO and the petition for injunction should be, as it is hereby, GRANTED. Accordingly, the defendant CEPALCO, its agents and/or representative, and all those acting in its behalf, are hereby ordered to refrain, cease and desist from cutting and disconnecting and/or causing to be cut and disconnected the direct electric power supply of the plaintiff PSC from the NPC and from transferring the same to defendant CEPALCO, now and until July 26, 1996, when the contract between plaintiff PSC and the NPC for direct power supply shall have expired. The counter-claim filed by defendant CEPALCO is DISMISSED. No pronouncement as to costs.

SO ORDERED."¹³

CEPALCO filed a motion for reconsideration but was denied by the trial court in its order dated December 13, 1994. Aggrieved, CEPALCO appealed to the Court of Appeals. On July 23, 1996, the Court of Appeals rendered its decision,¹⁴ the dispositive portion of which reads:

"WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby GRANTED. The assailed Decision dated April 11, 1994 and the Order dated December 13, 1994 are SET ASIDE. The writ of preliminary injunction earlier issued is DISSOLVED. No pronouncement as to costs.

SO ORDERED."¹⁵

PSC and PIA filed a motion for reconsideration, which was denied in a Resolution¹⁶ dated December 2, 1996. Hence the instant petition.

Petitioners submit the following issues for our resolution:

I. THE DECISION OF THE ERB IS CONTRARY TO THE CABINET POLICY REFORM.

II. THE ERB DECISION INVOLVED ADJUDICATION OF RIGHTS TO THE PREJUDICE OF PETITIONERS PIA AND PSC.

III. THE CABINET POLICY REFORM CANNOT AMEND THE CHARTER OF PIA, PD 538, AS AMENDED.

IV. PETITIONERS PIA AND PSC WERE NOT NOTIFIED BY CEPALCO OF ITS PETITION WITH THE ERB.

V. CIVIL CASE NO. 91-383 ENTITLED PHIVIDEC INDUSTRIAL AUTHORITY VS. CEPALCO BEFORE BRANCH 17, REGIONAL TRIAL COURT OF CAGAYAN DE ORO CITY REINFORCES THE ISSUE THAT THE ERB DECISION MUST NECESSARILY BE ENJOINED FROM BEING ENFORCED AGAINST PIA AND PSC.

VI. THE ERB DECISION IS NOT FINAL AND EXECUTORY.¹⁷

Petitioners contend that the ERB decision is contrary to the Cabinet Policy Reform since PIA, one of the relevant government agencies referred to in the Cabinet Memorandum, was not consulted, much less notified by the ERB before it rendered its decision; that since PIA is not a party in ERB Case No. 89-430, then the decision therein does not bind it; that P.D. 538 (the charter of PIA) excluded the municipalities of Tagoloan and Villanueva, Misamis Oriental, from the franchise area of CEPALCO and transferred the same to PIA; and that the ERB decision is not final and executory since the same is subject to periodic review under the Cabinet Memorandum.

For its part, respondent CEPALCO maintains that the ERB decision shows that it has met the requirements of the Cabinet Policy Reforms on financial and technical capability of the utility or cooperative. Anent petitioners' argument that the ERB decision does not bind them for lack of personal notice, respondent explains that such notice is not required since the proceedings in the ERB are in rem. Besides, the only issue in the ERB case is whether or not CEPALCO has met the standards mandated by the Cabinet Policy Reforms. Lastly, respondent contends that what is subject to periodic review under the Cabinet Memorandum is only the capability standards.

This is not the first time that a controversy arose involving the franchise of CEPALCO vis-à-vis the authority of NAPOCOR to supply power directly. In National Power Corporation vs. Court of Appeals,¹⁸ this Court held that CEPALCO is the lawful provider of the increased power supply to the Philippine Packing Corporation under PD 40¹⁹ promulgated on November 7, 1972. The Court ruled that distribution of electric power, whether an increase in existing voltage or a new and separate electric service, shall be undertaken by cooperatives, private utilities (such as CEPALCO), local governments and other entities duly authorized subject to state regulation.

Subsequently, this Court, in Cagayan Electric Power and Light Company, Inc. vs. National Power Corporation,²⁰ sustained the decision of the trial court ordering NAPOCOR to permanently desist from continuing the direct supply, sale and delivery of electricity to Ferrochrome Philippines, Inc., an industry operating its business within the PHIVIDEC Industrial Estate, Tagoloan, Misamis Oriental, because it violates the right of CEPALCO under its legislative franchise. The Court stressed that the statutory authority (PD 395) given to NAPOCOR with respect to sale of energy in bulk directly to BOI-registered enterprises should always be subordinate to the "total-electrification-of-the-entire-country-on-an-area-coverage-basis policy" enunciated in P.D. No. 40.

In National Power Corporation vs. Court of Appeals,²¹ this Court struck down as irregular the determination by the NAPOCOR on whether or not it should supply power directly to the PIA or the industries within the PHIVIDEC Industrial Estate-Misamis Oriental (PIE-MO); and held that such authority pertains exclusively to the ERB which was transferred to the Department of Energy (DOE) pursuant to Republic Act No. 7638. Consequently, the Court remanded the case to the DOE to determine whether it is CEPALCO or the NAPOCOR, through the PIA, which should supply electric power to the industries in the PIE-MO.

In the present case, the only issue for our determination is whether or not injunction lies against the final and executory judgment of the ERB.

We rule in the negative.

In Bachrach Corporation vs. Court of Appeals,²² this Court, through Mr. Justice Jose C. Vitug, pertinently held:

"The rule indeed is, and has almost invariably been, that after a judgment has gained finality, it becomes the ministerial duty of the court to order its execution. No court, perforce, should interfere by injunction or otherwise to restrain such execution. The rule, however, concededly admits of exceptions; hence, when facts and circumstances later transpire that would render execution inequitable or unjust, the interested party may ask a competent court to stay its execution or prevent its enforcement. So, also, a change in the situation of the parties can warrant an injunctive relief."

Clearly, an injunction to stay a final and executory decision is unavailing except only after a showing that facts and circumstances exist which would render execution unjust or inequitable, or that a change in the situation of the parties occurred. Here, no such exception exists as shown by the facts earlier narrated. To disturb the final and executory decision of the ERB in an injunction suit is to brazenly disregard the rule on finality of judgments. In Camarines Norte Electric Cooperative, Inc. vs. Torres,²³ we underscored the importance of this principle, thus:

"We have stated before, and reiterate it now, that administrative decisions must end sometime, as fully as public policy demands that finality be written on judicial controversies. Public interest requires that proceedings already terminated should not be altered at every step, for the rule of non quieta movere prescribes that what had already been terminated should not be disturbed. A disregard of this principle does not commend itself to sound public policy."

Corollarily, Section 10 of Executive Order No. 172 (the law creating the ERB) provides that a review of its decisions or orders is lodged in the Supreme Court.²⁴ Settled is the rule that where the law provides for an appeal from the decisions of administrative bodies to the Supreme Court or the Court of Appeals, it means that such bodies are co-equal with the Regional Trial Courts in terms of rank and stature, and logically, beyond the control of the latter.²⁵ Hence, the trial court, being co-equal with the ERB, cannot interfere with the decision of the latter. It bears stressing that this doctrine of non-interference of trial courts with co-equal administrative bodies is intended to ensure judicial stability in the administration of justice whereby the judgment of a court of competent jurisdiction may not be opened, modified or vacated by any court of concurrent jurisdiction.²⁶

Granting that the ERB decision has not attained finality, or that the ERB is not co-equal with the RTC, still injunction will not lie. As a rule, to justify the injunctive relief prayed for, the movant must show: (1) the existence of a right in esse or the existence of a right to be protected; and (2) the act against which injunction is to be directed is a violation of such right.²⁷ In the case at bar, petitioners failed to show any clear legal right which would be violated if the power supply of PSC from the NAPOCOR is disconnected and transferred to CEPALCO. If it were true that PSC has the exclusive right to operate and maintain electric light within the municipalities of Tagoloan and Villanueva pursuant to its charter (PD 538), then this Court would have made such pronouncement in National Power Corporation vs. Court of Appeals.²⁸ Exclusivity of any public franchise has not been favored by this Court such that in most, if not all, grants by the government to private corporations, the interpretation of rights, privileges or franchises is taken against the grantee.²⁹ More importantly, the Constitution prohibits monopoly of franchise.³⁰ Another significant fact which militates against the claim of PIA is that it previously allowed CEPALCO to distribute electric power to industries operating within the PHIVIDEC Industrial Estate. This, to our mind, sufficiently indicates PIA's recognition of CEPALCO's franchise. Indeed, it is unimaginable that an implementation of a long-standing government policy which had been sustained by this Court³¹ can be stalled by an injunctive writ.

Likewise, petitioners' assertion that the ERB decision contradicts the Cabinet Reform Policy is misplaced. On the contrary, we find the decision to be in accord with the policy that direct connection with the NAPOCOR is no longer necessary when a cooperative or utility, such as CEPALCO, operating within a franchise proves to be capable of distributing power to the industries therein. In this regard, it is apt to reiterate the pronouncement of this Court in Cagayan Electric Power and Light Company, Inc. vs. National Power Corporation:³²

"It is likewise worthy of note that the defunct Power Development Council, in implementing P.D. 395, promulgated on January 28, 1977 PDC Resolution No. 77-01-02, which in part reads:

'1) At any given service area, priority should be given to the authorized cooperative or franchise holder in the right to supply the power requirement of existing or prospective industrial enterprises (whether BOI-registered or not) that are located or plan to locate within the franchise area or coop service area as shall be determined by the Board of Power or National Electrification Administration whichever the case may be.'

The statutory authority given to respondent-appellant NPC in respect of sales of energy in bulk direct to BOI registered enterprises should always be subordinate to the "total-electrification-of-the-entire-country-on-an-area-coverage-basis policy" enunciated in P.D. No. 40. Thus, in NPC vs. CEPALCO, supra, this Court held:

'x x x The law on the matter is clear. PD 40 promulgated on 7 November 1973 expressly provides that the generation of electric power shall be undertaken solely by the NPC. However, Section 3 of the same decree also provides that the distribution of electric power shall be undertaken by cooperatives, private utilities (such as CEPALCO), local governments and other entities duly authorized, subject to state regulation. x x x.'" (emphasis ours)

WHEREFORE, the petition is DENIED. The challenged Decision of the Court of Appeals in CA-G.R. SP No. 36943 is hereby AFFIRMED.

SO ORDERED.

Vitug, Panganiban, and Carpio, JJ., concur.
Melo, J., on official leave.

Footnotes

¹ Under Rule 45 of the 1997 Rules of Civil Procedure, as amended.

² Penned by Associate Justice Fermin A. Martin, and concurred in by Presiding Justice Nathanael P. de Pano, Jr. and Associate Justice Conchita Carpio Morales, First Division.1âwphi1.nêt

³ On June 17, 1961, R.A. 3247 granted CEPALCO the franchise "to construct, maintain and operate an electric light, heat and power system for the purpose of generating and/or distributing electric light, heat and/or power for sale within the City of Cagayan de Oro and its suburbs" for fifty years. On June 21, 1963, R.A. 3570 expanded the area of coverage to include the Municipalities of Tagoloan and Opol, Misamis Oriental. R.A. 6020 (August 4, 1969) further expanded CEPALCO's authority to include the municipalities of Villanueva and Jasaan, also of said province.

⁴ ERB Decision, Rollo, p. 216.

⁵ Dated July 17, 1992, Annex "1," Comment, pp.216-224.

⁶ Ibid., pp. 223-224.

⁷ G.R. 108562.

⁸ CA Decision, Rollo, p. 49.

⁹ RTC Decision, Rollo, p. 64.

¹⁰ Presidential Decree No. 243, issued on July 12, 1973, created a "body corporate and politic" to be known as the Philippine Veterans Investment Development Corporation (PHIVIDEC) vested with authority to engage in "commercial, industrial, mining, agricultural and other enterprises" among other powers and "to allow the full and continued employment of the productive capabilities of and investment of the veterans and retirees of the Armed Forces of the Philippines."

¹¹ On August 13, 1974, Presidential Decree No. 538 was promulgated to create the PHIVIDEC Industrial Authority (PIA), a subsidiary of PHIVIDEC, to carry out the government policy "to encourage, promote and sustain the economic and social growth of the country and that the establishment of professionalized management of well-planned industrial areas shall further this objective." Under Sec. 3 of the said law, the first area for development shall be located in the municipalities of Tagoloan and Villanueva.

¹² Annex "C," Petition, Rollo, pp. 62-70.

¹³ Ibid., p. 70.

¹⁴ Annex "A," Petition, Rollo, pp. 46-57.

¹⁵ Ibid., p. 56.

¹⁶ Annex "B," Petition, Rollo, pp. 59-61.

¹⁷ Petitioners' Memorandum, Rollo, p. 345.

¹⁸ 161 SCRA 101 (1988).

¹⁹ Sections 1 and 3 of PD 40 entitled "Establishing Basic Policy for the Electric Power Industry" provides that:

"1. The attainment of total electrification on an area coverage basis, which is a declared policy of the State, shall be effected primarily through:

a) The setting up of island grids with central/linked-up generation facilities.

b) The setting up of cooperatives for distribution of power.

3. The distribution of electric power generated by the NPC shall be undertaken by:

a) Cooperatives

b) Private Utilities

c) Local governments

d) Other entities duly authorized subject to state regulation."

²⁰ 180 SCRA 628 (1989).

²¹ 279 SCRA 506 (1997).

²² 296 SCRA 487, 495 (1998).

²³ 286 SCRA 666, 681 (1998).

²⁴ Now transferred to the Court of Appeals by virtue of Rule 43 of the 1997 Revised Rule of Civil Procedure, as amended.

²⁵ Olaguer vs. Regional Trial Court, NCJR, Br. 48, 170 SCRA 478, 487 (1989), citing National Electrification Administration vs. Mendoza, 138 SCRA 635 (1985); PCGG vs. Peña, 159 SCRA 556, 564 (1988).

²⁶ Freeman, Inc. vs. Securities and Exchange Commission, 233 SCRA 735, 742 (1994), citing Philippine Pacific Fishing, Co, Inc. vs. Luna, G.R. No. 59070, March 15, 1982, 112 SCRA 604.

²⁷ Ortanez-Enderes vs. Court of Appeals, 321 SCRA 178, 186 (1999).

²⁸ Supra.

²⁹ National Power Corporation vs. Court of Appeals, supra.

³⁰ Sec. 11, Article XII of the 1987 Constitution.

³¹ National Power Corporation vs. Court of Appeals, supra; Cagayan Electric Power and Light Company, Inc. vs. National Power Corporation, supra.

³² Supra.