Friday, February 24, 2012

Paat vs CA Admin Law Digest

Leonardo Paat
Court of Appeals, et. Al.
GR No. 111107, 10 January 1997
266 SCRA 167

            The truck of private respondent Victoria de Guzman was seized by the DENR personnel while on its way to Bulacan because the driver could not produce the required documents for the forest product found concealed in the truck. Petitioner Jovito Layugan, CENRO ordered the confiscation of the truck and required the owner to explain. Private respondents failed to submit required explanation. The DENR Regional Executive Director Rogelio Baggayan sustained Layugan’s action for confiscation and ordered the forfeiture of the truck. Private respondents brought the case to the DENR Secretary. Pending appeal, private respondents filed a replevin case before the RTC against petitioner Layugan and Baggayan. RTC granted the same. Petitioners moved to dismiss the case contending, inter alia, that private respondents had no cause of action for their failure to exhaust administrative remedies. The trial court denied their motion. Hence, this petition for review on certiorari. Petitioners aver that the trial court could not legally entertain the suit for replevin because the truck was under administrative seizure proceedings.

            Whether or not the instant case falls within the exception of the doctrine.

            The Court held in the negative. The Court has consistently held that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processed afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before court’s judicial power can be sought. The premature invocation of court’ intervention is fatal to one’s cause of action.

            The doctrine is a relative one and its flexibility is called upon by the peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, it is disregarded (1) when there is violation of due process, (2) when the issue involved is purely a legal question, (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction, (4) when there is estoppels on the part of the administrative agency concerned, (5) when there is irreparable injury, (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter, (7) when to require exhaustion of administrative remedies would be unreasonable, (8) when it would amount to nullification of a claim, (9) when the subject matter is a private land in land case proceedings, (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention.

A suit for replevin cannot be sustained against the petitioners for the subject truck taken and retained by them for administrative forfeiture proceedings in pursuant to Sections 68-A of OD 705, as amended. Dismissal of the replevin suit for lack of cause of action in view of the private respondents’ failure to exhaust administrative remedies should have been the proper course of action by the lower court instead of assuming jurisdiction over the case and consequently issuing the writ ordering the return of the truck.

NDC vs Collector of Customs Admin Law Digest

National Development Company
Collector of Customs
GR No. L-19180, 31 October 1963
9 SCRA 429

            The customs authorities found that the vessel carried on board an unmanifested cargo consisting of one television set, and respondent Collector of Customs sent a written notice to the operator of the vessel and the latter answered stating that the television set was not cargo and so was not required by law to be manifested. The operator requested an investigation and hearing but respondent finding the operator’s explanation not satisfactory imposed on the vessel a fine of P5,000.00, ordering said fine to be paid within 48 hours from receipt, with a threat that the vessel would be denied clearance and a warrant of seizure would be issued if the fine will not be paid.

            NDC, as owner, and operator AV Rocha filed for special civil action for certiorari before the CFI of Manila against the respondent. Respondent contended that petitioners have not exhausted all available administrative remedies, one of which is to appeal to the Commissioner of Customs.

            Whether or not the contention of respondent is correct.

            The Court held in the negative. Respondent Collector committed grave abuse of discretion because petitioner NDC was not given an opportunity to prove that the television set involved is not a cargo that needs to be manifested. Exhaustion of administrative remedies is not required where the appeal to the administrative superior is not a plain, speedy or adequate remedy in the ordinary course of law, as where it is undisputed that the respondent officer has acted in utter disregard of the principle of due process.


De Leon vs Heirs of Reyes, GR No. L-74687, 12 November 1987, 155 SCRA 584

De Leon vs Heirs of Reyes
GR No. L-74687, 12 November 1987
155 SCRA 584

            The land in question is the subject of two separate applications, one for sale filed by Gregorio Reyes and one for free patent filed by petitioner Antonio De Leon. Both are based on the claim of actual possession.

            The Bureau of Lands ruled against Reyes, who appealed to the Ministry of Natural Resources. The Assistant Secretary for Legal Affairs set aside the decision of the Bureau, but was reversed by the Minister on motion for reconsideration. Private respondents elevated the case to the Office of the President where they were sustained.

            Whether or not the challenged decision was issued with grave abuse of discretion.

            The Court held in the affirmative. While there is no disputing the authority of administrative superiors to reverse the findings of their subordinates, this power must be exercised sparingly and only upon a clear showing of error. Lacking such flaw, the decision of the lower administrative officials should be sustained, if only because they have closer access to the problem sought to be resolved and have the direct opportunity to question the parties and their witnesses and to assess the evidence first-hand.

Corpus vs Cuaderna Admin Law Digest

Corpus vs Cuaderna, Sr.
GR No. L-17860, 30 March 1962
4 SCRA 749

            While petitioner-appellant R. Marino Corpus was a Special Assistant to the Governor of the Central Bank, he was administratively charged which resulted in his suspension by the Monetary Board of the Bank and the creation of a committee to investigate him. The committee found no basis on the complaint and recommended Corpus’ reinstatement. But the Board adopted Resolution No. 957 which considered Corpus resigned as of the date of his suspension. Petitioner filed with the trial court a petition for certiorari, mandamus and quo warranto, with preliminary injunction and damages against respondents. The court a quo dismissed the petition on the ground that petitioner did not exhaust all administrative remedies available to him in law, such as an appeal to the Commissioner of Civil Service, under RA 2260, or the President of the Philippines who, under the Constitution and the law, is the head of all executive departments of the government including its agencies and instrumentalities.

            Whether or not the doctrine of exhaustion of administrative remedies is applicable in this case

            The Court held in the negative. The doctrine does not apply where, by the terms or implications of the statute authorizing an administrative remedy, such remedy is permissive only, warranting the conclusion that the legislature intended to allow the judicial remedy even though the administrative remedy has not been exhausted.

            Case remanded to the lower court for further proceedings.

Arrow Transportation vs Board of Transportation Admin Law Digest

Arrow Transportation Corp
Board of Transportation and Sultan Rent-A-Car, Inc.
GR No. L-9655, 21 March 1975
63 SCR 193

            Petitioner Arrow and private respondent Sultan are both domestic corporations. Petitioner is a holder of a Certificate of Public Convenience to operate a public utility bus. Private respondent applied for the issuance of a CPC to operate a similar service. Without the required publication, public respondent Board granted a provisional permit to operate. Petitioner moved for reconsideration and cancellation of the provisional permit. Before resolution of the motion, petitioner filed for herein petition arguing that there must be publication before a provisional permit can be issued, with reference made to PD 101, which authorized the Board to grant provisional permits when warranted.

            Whether or not the issuance of the provisional permit was legal.

            The Court held in the affirmative. For a provisional permit to operate a public utility, an ex parte hearing would suffice. The decisive consideration is the existence of public need. That was shown in this case, respondent Board, on the basis of demonstrable data, being satisfied of the pressing necessity for the grant of the provisional permit sought.

            Petition dismissed.

First Metro vs Este del Sol Credit Digest

First Metro vs Este del Sol
GR No. 141811, 15 November 2001
369 SCRA 99

            FMIC granted Este del Sol a loan to finance a sports/resort complex in Montalban, Rizal. Under the agreement, the interest was 16% pa based on the diminishing balance. In case of default, an acceleration clause was provided and the amount due is subject to 20% one-time penalty on the amount due and such amount shall bear interest at the highest rate permitted by law. respondent executed a REM, individual continuing suretyship and an underwriting agreement whereby FMIC shall underwrite the public offering of one P120,000 common shares of respondent’s capital stock for one-time underwriting fee of P200,000. For failure to pay its obligation, FMIC caused the foreclosure of the REM. At the public auction, FIC was the highest bidder. Petitioner filed to collect for alleged deficiency balance against respondents since it failed to collect from the sureties, plus interest at 21% pa. the trial court ruled in favor of FMIC. Respondents appealed before the CA which held that the fees provided for in the Underwriting and Consultacy Agreements were mere subterfuges to camouflage the excessively usurious interest charged. The CA ordered FMIC to reimburse petitioner representing what is ue to petitioner and what is due to respondent.

            Whether or not the interests are lawful

            No. an apparently lawful loan is usurious when it is intended that additional compensation for the loan be disguised by an ostensibly unrelated contract for the payment by the borrower for the lender’s services which re of little value or which are not in fact to be rendered. Article 1957 clearly provides: contracts and stipulations, under any cloak or device whatever, intended to circumvent the law agaistn usury shall be void. The borrower may recover in accordance with the laws on usury.