Powers and Functions of Administrative Agencies

CASE DIGESTS AND NOTES | BY: TINA SIUAGAN 1

1 ADMINISTRATIVE LAW POWERS OF ADMINISTRATIVE AGENCIES

SIERRA MADRE TRUST vs. SECRETARY OF

AGRICULTURE AND NATURAL RESOURCES,

DIRECTOR OF MINES, JUSAN TRUST MINING

COMPANY, AND J & S PARTNERSHIP.

FACTS

In July 1962, the Sierra Madre Trust filed with the

Bureau of Mines an Adverse Claim against the lode lease

application (LLA) of Jusan Trust Mining Company (LLA

no. V-7872) over the latters six (6) lode mineral claims

namely: (1) FINLAND 2; (2) FINLAND 3; (3) FINLAND 5;

(4) FINLAND 6; (5) FINLAND 8; and (6) FINALND 9. In

this adverse claim, Sierra Madre Trust alleged that said

six lode claims encroached and overlapped its eleven

(11) lode mineral claims, namely: (1) A-12; (2) H-12; (3)

JC-11; (4) W-11; (5) JN-11; (6) WM-11; (7) F-10; (8) A-

9; (9) N-9; (10) W-8 and (11) JN-8, all situated in Sitio

Taduan, Barrio of Abaca, Municipality of Dupax,

Province of Nueva Vizcaya. Said adverse claim sought

for an order declaring that the six allegedly encroaching

lode mineral claims of Jusan Trust Mining Company are

null, void, and illegal.

In July 1966, Sierra Madre filed with the Bureau of

Mines another Adverse Claim, this time against J&S

Partnerships LLA no. V-9028 covering six (6) lode

mineral claims namely: (1) A-19, (2) A-20, (3) A-24, (4)

A-25, (5) A-29, and (6) A-30. This time, Sierra Madre

Trusts adverse claim alleged that said six lode mineral

claims encroached and overlapped the 13 lode mineral

claims of Sierra, namely: (1) Wm-14, (2) F-14, (3) A-13,

(4) H-12 (5) Jc-12, (6) W-12, (7) Jn-11, (8) Wm-11, (9)

F-11, (10) Wm-11, (11) F-11; (12) H-9 and (13) Jc-9, all

situated in Sitio Taduan, Barrio of Abaca Municipality of

Dupax, Province of Nueva Vizcaya and duly registered

with the office of the Mining Recorder at Bayombong,

Nueva Vizcaya, Sierra prayed for the same relief as it

sought for from the previous adverse claim it filed

against Jusan Trust Mining Company.

Sierra Madre Trusts adverse claims were heard jointly

before the Bureau of Mines, which dismissed such

claims. According to the Bureau, through the Director of

Mines, Sierra did not establish any intervening right

during such time when the former located the area

covered under the claims. With this, Sierra interposed

an appeal before the Department of Agriculture and

Natural Resources; however, the latter merely affirmed

the decision of the Director of Mines. Aggrieved, Sierra

filed a petition before the Honorable Supreme Court.

ISSUE

Whether or not there was encroachment of Sierra

Madre Trusts lode mineral claims.

HELD

None. On the outset, the Honorable Court did not see

any reason why it had to answer the questions

interposed in the petition, considering that there is no

justiciable issue among the parties, since there had not

been any intervening right established in favor of Sierra

Madre Trust.

Nonetheless, the Director of Mines, acting on the

adverse claims filed by the petitioner Sierra Madre,

found based on sheer force of evidence that there is

no conflict or overlapping among the mining claims. The

Court held that the interpretation by officers of laws

which are entrusted to their administration is entitled to

great respect.

WHEREFORE, the petition for review is hereby

dismissed for lack of merit. Costs against petitioner.



ANTIPOLO REALTY CORPORTION vs. THE NATIONAL

HOUSING AUTHORITY, HON. G.V. TOBIAS, in his

capacity as General manager of the National

Hoursing Authority, The HON. Jacobo C. Clave, in his

capacity as Presidential Execuctive Assistant and

Virgilio A. Yuson

FACTS

In August 1970, one Jose Hernando acquired

prospective and beneficial ownership over a certain Lot

no. 15, Block IV of the Ponderosa Heights Subdivision in

Antipolo, Rizal by virtue of a contract to sell he had

entered into with Antipolo Realty Corporation (herein

petitioner.) However, in August 1974, Mr. Hernando

transferred his rights over the subject lot to Virgilio

Yuson (herein private respondent), as embodied in a

Deed of Assignment and Substitution of Obligor

(Delegacion) executed with the consent of the Antipolo

Realty. By virtue of such assignment, Yuson was to

assume the performance of Hernandos obligations

under the original contract, which included the payment

of the latters arrears. However, Yuson paid only the

arrearages corresponding to the period of only until

August 1972 and stopped all monthly installment

payments falling due after such date because of Antipolo

Realtys failure to develop the subdivision project within

such time. Under Clause 17 of the Contract to Sell, in the

event of Antipolo Realtys failure to complete all the

mentioned improvements within a period of two (2)

years shall permit the buyer to suspend his monthly

installments without any penalties or interest charges

until such time that such improvements have been

completed.

In October 1976, Antipolo Realty advised Yuson

through a letter that the improvements in the

subdivision had already been built and requested the

latter to resume payment. In reply, Yuson stated that he

shall only resume payment as soon as he was able to

verify the truth of Antipolo Realtys notice. The same

advice and request had been reiterated in Antipolo

Realtys second letter to private respondent Yuson.

Together with the second letter, Antipolo also made a

formal demand for full and immediate payment of the

amount of Php 16,994.73, which represents installments

accruing during the period while the improvements

were being completed, from Yuson. Notwithstanding the

demand, Yuson refused to pay the monthly installments

from September 1972-October 1976 but agreed to pay

those due after October 1976. In response to this

refusal, Antipolo Realty rescinded the Contract to Sell,

and forfeited all the installment payments paid

previously by Yuson.

Aggrieved by the rescission, Yuson filed a complaint

against Antipolo Realty before the National Housing

Authority (NHA). On the other hand, Antipolo Realty

moved for the dismissal of the complaint. NHA denied

the motion to dismiss and scheduled Yusons case for

hearing. Thereafter, NHA rendered a decision in favor of

Yuson, i.e., the reinstatement of the Contract to Sell.

Subsequently, Antipolo Realty filed a motion for

reconsideration before the NHA, which was likewise

denied by NHAs General Manager, G. V. Tobias, who

happens to be one of the public respondents in this

present case. Thereafter, Antipolo Realty came to the

Supreme Court for relief; however, the same petition

was denied although without prejudice to petitioners

pursuing the administrative remedy. So, Antipolo

Realty went interposed an appeal to the Office of the

President (OP), assailing the NHA decision. Likewise, the

OP through public respondent Presidential Executive

Assistant Jacobo Clave dismissed the complaint.

Antipolo Realty interposed once again a petition before

the Honorable Supreme Court to assail the

aforementioned NHA decision/order. Petitioner

Antipolo Realty assers that the NHA had no jurisdiction

to hear and decide private respondent Yusons

complaint and that such jurisdiction is lodged only in

the regular courts since the complaint involved the

interpretation and application of the Contract to Sell.

ISSUE

(1) Whether or not the National Hoursing

Authority has the power to order for the

reinstatement of the Contract to Sell, which was

the subject matter of the dispute; and

(2) Whether or not the reinstatement of the

Contract to Sell between the petitioner and

private respondent is in order.

HELD

(1) Yes. The National Housing Authority has the

exclusive jurisdiction to hear and decide cases



involving specific performance of contractual

and statutory obligations filed by buyers of

subdivisions, pursuant to the authority

conferred upon it by Sec. 1 of Presidential

Decree (P.D.) no. 1344 and Presidential Decree

no. 957.

The Honorable Court held that the extent of the quasi-

judicial powers which an administrative agency may

exercise is defined by the provisions of the Act or law

creating and conferring authority to such agency.

Examining whether or not the NHA has the authority to

hear Yusons complaint, the Court cites Section 1 of P.D.

no. 1344:

In the exercise of its functions 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 lots or

condominium units against the owner,

developer, dealer, broker or salesman.

(Emphases mine.)

(2) As to whether or not the reinstatement by the

NHA of the Contract to Sell is proper, the Court

in this case ruled that the decision of the NHA in

ordering for the same is based on a substantive

provision under P.D. 957 the law which vests

exclusive authority on National Hoursing

authority to regulate the real estate trade and

business. Thus, in its Section 23:

No installment payment made by a

buyer in a subdivision or

condominium project for the lot or

unit he contracted to buy shall be

forfeited in favor of the owner or

developer when the buyer, after due

notice to the owner or developer,

desists from further payment due to

the failure of the owner or

developer to develop the

subdivision or condominium project

according to the approved plans and

within the time limit for complying

with the same. Such buyer may, at his

option, be reimbursed the total amount

paid including amortization and

interests but excluding delinquency

interests, with interest thereon at the

legal rate. (Emphasis mine.)

Since petitioner Antipolo Realty failed to

comply with its contractual obligation to

complete the specified improvements under the

Contract to Sell within the agreed period (two

years from the date of the execution of such

contract), the petitioner is not entitled for the

rescission of the contract and the forfeiture of

payments made by Yuson by virtue thereof.

Hence, the Court upheld the correctness of the

assailed decision/order of the NHA.

Furthermore, the Court ruled that the NHAs

order for the reinstatement of the contract to

sell is nothing but a logical consequence of the

NHAs correct ruling that the petitioner was not

entitled to rescind the Contract to Sell.

WHEREFORE, the Petition for certiorari is

DISMISSED. The NHA decision appealed from is

hereby AFFIRMED and clarified as providing for

the lengthening of the original contract period

for payment of installments under the Contract

to Sell by four (4) years and two (2) months,

during which extended time private respondent

shall continue to pay the regular monthly

installment payments until the entire original

contract price shall have been paid. No

pronouncement as to costs.

SO ORDERED.



THE CITY OF BAGUIO, MAURICIO DOMOGAN and

ORLANDO GENOVE vs. FRANCISCO NINO, JOSEFINA

NINO, EMMANUEL NINO, and EURLIE OCAMPO

FACTS

In 1966, one Narcisa Placino was awarded by the

Bureau of Lands (now known as the Land Management

Bureau) a parcel of land designated as Lot no. 10 located

in Saint Anthony Road, Brgy. Dominican-Mirador,

Baguio City. Francisco Nino, who is one of the private

respondents in this case, is an occupant or actual

possessor of said lot. By virtue of said award, Nino filed

before the Bureau of Lands a Petition Protest in 1975.

However, such protest was denied by the Director of

Lands in 1976. In turn, Nino appealed the petition

protest all the way until it reached the Supreme Court

level, albeit to no avail. The Director of Lands order,

having become final and executory likewise in 1976,

Placino petitioned before the Department of

Environment and Natural Resources Cordillera

Administrative Region (DENR-CAR) for the execution of

said order.

Meanwhile, attempts to execute the aforementioned

Order failed. This prompted Placino to file an ejectment

case before the Municipal Trial Court in Cities (MTCC) of

Baguio City. However, MTCC dismissed Placinos

complaint. Thereafter, Placino (through counsel, Atty.

Claravall) petitioned the DENR-CAR for the issuance of a

Special Order authorizing the City Sheriff of Baguio,

the City Police Station, and the Demolition Team of the

City Government to demolish the improvements built

thereon by private respondent Nino. DENR-CAR,

however, denied this petition for lack of jurisdiction

over the City Sheriff, the City Police Station, and the

Demolition Team and invoking the provision of Section

14 (now Section 10) of Rule 39 of the Rules of Court.

Atty. Claravall moved for the amendment of the Order of

Execution. Acting upon Claravalls motion, the DENR-

CAR Executive Director amended the Order of Execution

addressed to the Community Environment and Natural

Resources Office (CENRO), which (1) enjoins the CENRO

to enforce the amended order with the assistance upon

request of the Baguio City Sheriff, Baguio Police Station,

as well as the City Demolition Team; and to remove

whatever improvements that may have been built to

the land (or the lot).

In 1997, the aforementioned responsible parties started

demolishing the houses of Francisco Nino and his co-

respondents. Although such demolition was

subsequently temporarily stopped, Francisco Nino and

his wife, Josefina, filed with the Regional Trial Court a

petition for Temporary Restraining Order against the

DENR-CENRO (Guillermo Fianza and Teofilo Olimpo),

Baguio City Police Officer (Donato Bacquian), Head of

the Demolition Team (Engineer Orlando Genove), and

Baguio City Mayor Mauricio Domogan.

The Regional Trial Court dismissed the petition filed by

the Ninos for lack of merit. Aggrieved, private

respondent Ninos appealed before the Court of Appeals,

which granted the formers petition setting aside the

Orders issued by the DENR-CAR. The Appellate Court

ruled that the enforcement of the Amended Order shall

require a hearing and court order pursuant to the Rules

of Court. Contending that a hearing and court order are

not necessary in order to demolish Ninos

improvements on the subject land, the petitioners

herein assigns the same error to the Appellate Court in

the petition interposed before the Supreme Court.

ISSUE

Whether or not the DENR-CAR has the authority to issue

an order of demolition.

HELD

None. The Director of Bureau of Lands of the DENR-CAR

may not issue the demolition or removal of the

improvements introduced by Francisco Nino (and other

co-respondents) for the formers power is only limited

to the disposition and alienation of public lands.

In this case, the Court held that the ultimate power to

resolve conflicts of possession is recognized to be within

the situs or legal competence of the civil courts for the

purpose of extending protection to actual possessors

and occupants of lands with a view to quell social

unrest. Likewise, the power to order the sheriff to

remove the improvements made on and the turn-over of

the possession of the land belongs only to the courts of

justice and not to the Bureau of Lands.



Meanwhile, the Court in this case recognizes the

jurisdiction of the Bureau of Lands to the determination

of respective rights of rival claimants to public lands or

to cases which involve disposition of public lands.

However, the Court ruled that the power of the Bureau

of Lands is CLEARLY LIMITED to disposition and

alienation of public lands. While it may decide

disputes involving possession, it may do so ONLY

IN SO FAR AS MAKING THE PROPER AWARD of

public lands.

WHEREFORE, the petition is DISMISSED. The

questioned Decision and Resolution of the Court of

Appeals are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.



DEPARTMENT OF AGRARIAN REFORM, represented

b SECRETARY JOSE MARI B. PONCE (OIC) vs. DELIA T.

SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T.

SUTTON

FACTS

Private respondents Suttons inherited and owned a land

situated in Aroroy, Masbate. Such land had been

devoted exclusively to cow and calf breeding as early as

the 1940s since the Sutton family acquired such

landholding in 1948. With the enactment of the

Comprehensive Agrarian Reform Law (CARL) in June

10, 1988, private respondents made a voluntary offer to

sell (VOS) of their landholdings in order to avail certain

incentives provided for by the CARL. However, in

December 1990, the Court ruled in its en banc decision

in Luz Farms case that lands devoted to livestock and

poultry-raising are not included in the definition of

agricultural land. With that, the Supreme Court in such

case declared as unconstitutional certain provisions of

the CARL insofar as they included livestock farms within

the coverage of the CARL. Consequently, in December

1992, the Suttons filed before the Department of

Agrarian Reform (DAR) a formal request to withdraw

their previous VOS as their landholding was devoted

exclusively to cattle-raising and thus exempted from the

coverage of the CARL. Upon survey of the landholding,

the Municipal Agrarian Reform Officer (MARO) of

Masbate recommended that the private respondents

landholdings be exempted from the coverage of the

CARL. In 1993, private respondents Sutton reiterated

their formal request to withdraw their VOS to petitioner

DAR and asked for the return of the supporting papers

that the former submitted to the latter in connection to

such VOS. However, DAR did not respond to such

request.

In December 1993, the DAR issued Administrative

Order no. 9, series of 1993, which provided for the

inclusion of livestock farms within the coverage of the

CARL and maximum retention limits for their

ownership. By virtue of this administrative order, only

portions of private respondents lands, which are used

for raising livestock, poultry, and swine as of June 15,

1988 shall be excluded from the coverage of the CARL.

Contending that their land, having been devoted

exclusively for cattle-raising, must be exempted from

the coverage of CARL, the Suttons wrote the DAR

Secretary, advising the latter to consider as final and

irrevocable their withdrawal of their VOS.

In September 1995, the DAR Secretary Ernesto Garilao

issued an Order PARTIALLY granting the Suttons

application for exemption from the coverage of CARL By

applying the provisions of A.O. no. 9, s. 1993, Garilao

exempted 1,209 hectares of the Suttons landholdings

for grazing purposes, and a maximum of 102.5636

hectares for infrastructure. Then, Garilao ordered THE

REST OF THE SUTTONS LANDHOLDINGS TO BE

PLACED UNDER COMPULSORY ACQUISITION.

Private respondents Sutton moved for the

reconsideration of Garilaos order; however, the same

has been denied. Aggrieved, private respondents

elevated the case to the Office of the President, which in

turn affirmed that of Sec. Garilaos decision. Thereafter,

the Suttons elevated the case to the Court of Appeals,

which ruled in favor of them. According to the appellate

court, the assailed Administrative Order is void for

being contrary to the intent of the 1987 Constitution,

i.e., to exclude livestock farms from the coverage of the

agrarian reform. Acting upon the Court of Appeals

order, respondent DAR interposed a petition before the

Supreme Court.

ISSUE

Whether or not the Administrative Order no. 9 of the

Department of Agrarian Reform is valid.

HELD

No. The impugned DAR A.O. no. 9 is null and void for it

enlarges the coverage of agrarian reform beyond the

scope intended by the 1987 Constitution.

In this case, the Honorable Court ruled that as a

FUNDAMENTAL RULE IN ADMINISTRATIVE LAW,

administrative rules and regulations must be issued

by authority of law and must not contravene the

provisions of the Constitution. The assailed A.O.

sought to include livestock farms by including them

within the coverage of the agrarian reform program of

the government, and even prescribing retention limits

for ownership thereto.



As ruled by the Supreme Court in the case of Luz Farms,

livestock, swine, and poultry-raising are INDUSTRIAL

ACTIVITIES and do not fall within the definition of

agriculture or agricultural activity. This is so because

a great portion of investment in the aforesaid

enterprises is in the form of INDUSTRIAL PRINCIPAL

FIXED ASSETS such as: animal housing structures and

facilities, drainage, waterers and blowers, feedmill with

grinders, mixers, conveyors, exhausts and generators,

extensive warehousing facilities for feeds and other

supplies, anti-pollution equipment like bio-gas and

digester plants augmented by lagoons and concrete

ponds, deepwells, elevated water tanks, pumphouses,

sprayers, and other technological appurtenances.

Since the Suttons landholdings are devoted exclusively

to cattle-farming, clearly, the petitioner DAR has NO

POWER TO REGULATE their landholdings.

IN VIEW WHEREOF, the petition is DISMISSED. The

assailed Decision and Resolution of the Court of Appeals,

dated September 19, 2003 and February 4, 2004,

respectively, are AFFIRMED. No pronouncement as to

costs.

SO ORDERED.

ADDITIONAL NOTES:

While administrative rules and regulations have

the force and effect of law, they are not immune

from judicial review. They may be properly

challenged before the courts to ensure that

they do not violate the constitution and no

grave abuse of administrative discretion is

committed by the administrative body

concerned.



JESUS CABARRUS, JR. vs. JOSE ANTONIO BERNAS

FACTS

Jesus Cabarrus filed an administrative complaint for

disbarment against Atty. Jose Antonio Bernas for the

alleged violations of Article 172 of the Revised Penal

Code (Falsification of Public Document) and Code of

Professional Responsibility.

Cabarrus alleges that Atty. Bernas is the lawyer of one

Ramon B. Pascual, Jr., who subscribed under oath,

before Atty. Marie Lourdes Sia Bernas, a verification and

certification of non-forum shopping. Such verification

and certification was allegedly to Pascuals complaint

for Reconveyance of Property and Damages in a certain

civil case. Said Civil Case was filed in April 16, 1996.

By virtue of the aforesaid verification and certification

of non-forum shopping Pascual deposed and stated

under oath that he is the plaintiff in this case, and

certify that he cause the preparation of the foregoing

pleading, the content of which are true to his personal

knowledge and that he has not commenced any other

action or proceeding involving the same issues in any

court, including the Supreme Court, the Court of

Appeals, or any other tribunal or agency. If he should

learn that a similar action of (sic) proceeding has been

filed or is pending before the Supreme Court or any

other Tribunal agency, he undertake to report to (sic)

that the fact within Five (5) days from the notice to this

notice (sic) to this Honorable Court. (Emphasis mine.)

Cabarrus avers that contrary to verification and

certification of non-forum shopping, Atty. J.A. Bernas

(acting for his client, Pascual) caused the preparation

and filing of a criminal complaint for falsification of a

public document three days prior to the filing of the

aforesaid Civil Case. Complainant Cabarrus also alleged

that as early as 1995, Atty. J.A. Bernas filed a written

complaint at the NBI involving the same cause of action,

which was reiterated in another letter submitting to the

NBI standard specimen signatures. Hence, Atty. Bernas

must be disbarred for having instigated abetted and

facilitated the perversion and subversion of truth in the

said verification and certification of non-forum

shopping, which is contrary to the Code of Professional

Responsibility.

On the other hand, Atty. J.A. Bernas avers that the letter

transmitted to the NBI cannot constitute a complaint

because the functions of the NBI do not include quasi-

judicial powers/functions, as well as prosecutorial

functions; hence, it cannot grant any relief or remedy.

Atty. Bernas maintains that the NBI performs functions

that are merely investigatory and informational in

nature.

ISSUE

Whether or not Atty. Jose Antonio Bernas transmittal of

the letter containing standard specimen signatures to

the NBI constitutes a violation of the verification and

certification on non-forum shopping.

HELD

No. Atty. Bernas could not have transgressed the

verification and certification on non-forum shopping

when he sent the letter-complaint to the NBI, for the

latter is not a within the purview of a tribunal agency.

The Court ruled that the powers and functions of the

National Bureau of Investigation are merely

investigatory and informational in nature. It is an

investigative body whose findings are MERELY

RECOMMENDATORY. It does not fall within the purview

of courts, tribunal, and agencies that are referred to

under Circular No. 28-91, revised Circular No. 28-91 and

Administrative Circular No. 04-94, and which are vested

with judicial powers or quasi-judicial powers. These

courts, tribunals, and agencies do not only hear and

determine controversies between adverse parties, but

make binding orders or judgments.

As held further by the Honorable Court, citing as

reference R.A. 157, which authorizes the creation of a

Bureau of Investigation under the Department of

Justice:

The NBI is not performing judicial or quasi-judicial

functions. The NBI cannot therefore be among those

forums contemplated by the Circular that can entertain

an action or proceeding, or even grant any relief,

declaratory or otherwise.



WHEREFORE, premises considered, the instant

complaint is hereby DISMISSED.

SO ORDERED.

Powers and Functions of Administrative Agencies

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