X.

Decision, Appeal and Judicial Review

Gaudencio Demaisip v. Court of Appeals

Facts:

· On December 4, 1936, Gaudencio Demaisip filed an action in the CFI of Iloilo praying that
judgment be rendered:

o Ordering the Secretary of Agriculture and Natural Resources to execute a contract of lease of 3 lots of
Dumangas Cadastre, to issue the corresponding fishpond permit, and to order the Secretary not to
entertain the lease application of Luis Buenaflor

o Declaring null and void all actions of the Secretary of Agriculture and Natural Resources with respect
to the lease application of Luis Buenaflor

o Ordering Buenaflor to vacate the lands in question and deliver possession to him

o Ordering the Provincial Fiscal of Iloilo to prosecute Buenaflor for violation of the Forestry Law and
regulations pertaining thereto

o Ordering both defendants to pay him, jointly and severally, damages.

·The trial court dismissed the complaint on 2 grounds:

o Complaint is in reality a petition for mandamus;

o Plaintiff did not exhaust all available remedies before resorting to court action

Plaintiff appealed to the CA

CA affirmed in toto the decision of the court a quo

Plaintiff filed a petition for review.

CA facts (affirmed to be correct by the SC):

o First applicant for a fishpond permit was Geronimo Destacamento on April 1, 1927 which expired on
Dec. 31, 1930 for failure to make any improvements and to pay the rentals.

o Before he died in 1928, Destacamento without the knowledge and consent of the Director of
Forestry, executed a deed of sale in favor of Serafin Villanueva, an illegal act which is contrary to the
rules of the permit granted to him.

o Director of Forestry, notwithstanding the existence of the deed, requested Serafin Villanueva to apply
for a fishpond permit. Villanueva neglected and failed to file his application for a fishpond permit, as a
result, no permit was granted to him before the expiration of the permit of late Destacamento.

o In 1935, Gaudencio Demaisip filed with the Fish and Game Administration a fishpond permit
application of the aforementioned lots, with an area of 13.9859 hectares of public mangrove forest land
in Iloilo.
o On March 6, 1936, Demaisip complied with all the pre-requisites necessary for the issuance of a
fishpond permit.

o On March 19, 1936, when the fishpond permit was ready to be issued to Demaisip, Villanueva
executed a deed of sale covering the lots in question in favor of defendant Luis Buenaflor; in the same
month, Buenaflor started to occupy the lands and introduced improvements thereon which included a
dam. An investigation was conducted by the Fish and Game Administration, the dam deprives other
fishponds leased from the government of fresh and flowing water and was illegally constructed for
violating a rule of that Office prohibiting introduction to any improvements on the land applied for
before the issuance of a permit.

o On May 1936, or 7 months after Demaisip filed an application, that Buenaflor also filed his application
for the area in question

o Director of Fish and Game Administration was called upon to decide who of the conflicting claimants
– Luis Buenaflor or Gaudencio Demaisip – had a better right to be regarded as he lessee of the land.

o Director of Fish and Game Administration decided: Buenaflor’s application be rejected; the dam
constructed be opened; improvements on the area be forfeited in favor of the Government; all the
application of Demaisip be given due course upon payment of additional rental.

o Buenaflor appealed to the Secretary of Agriculture and Natural Resources where it reversed the
decision and awarded the right of lease to Buenaflor. Basis of the Secretary’s decision was not known.

Issue:

· WON CA erred in holding the present action partakes of the nature of a petition for mandamus
to be verified as required by Sec. 3, Rule 67, ROC.

· WON plaintiff need to exhaust all administrative remedies before resorting to court action.

Ruling:

First Issue:

· Yes.

· The claim is meritorious for it appears that the case was filed on December 4, 1936 and at the
time the procedural law in force was Act 190 because the ROC took effect only on July 1, 1940, and it is
well-settled that the formal as well as substantial requisites of a pleading are governed by the law
prevailing at the time of its filing. SC found the claim that the present action is not one for mandamus
but an ordinary action wherein several reliefs are prayed for concerning the lease of certain lots, and
since it is not one for mandamus, it is unnecessary to state in the complaint that the plaintiff has no
plain, speedy and adequate remedy in the ordinary course of law to entitle him to relief as required in
special civil actions.
· The plaintiff did not appeal from the decision of the Secretary to the President of the Philippines
when he reversed the decision of the Director of Fish and Game Administration, and ruled that the lease
application of Demaisip should be dined and that of defendant Buenaflor be given due course upon
compliance of the requirements, but such failure cannot preclude the plaintiff from taking court action
in view of the theory that the Secretary of a department is merely an alter-ego of the President. The
presumption is that the action of the Secretary bears the implied sanction of the President unless the
same is disapproved by the latter.

Second Issue:

· No.

· It is therefore incorrect to say that the plaintiff’s action should not be entertained because he
has failed to exhaust first all the administrative remedies available to him. Citing Diego v. CA:

o "Upon examination of the Record on Appeal, however, we note that this defense was not interposed
in the court of 􏰀rst instance. Perhaps because the pleader knew courts had entertained civil actions of
this nature against the Secretary of Agriculture and/or subordinate officers, even if complainants had
not previously taken the matter up to the Chief Executive; and perhaps because such defense might only
be valid in special civil actions — this is not one — wherein the petitioner must allege and prove that 'he
has no other speedy and adequate remedy.'" (Diego vs. The Court of Appeals, et al., 54 Off. Gaz., No. 4,
956; Emphasis supplied)

· As to whether the Secretary of Agriculture and Natural Resources has not acted properly or has
abused his discretion in reversing the decision of the Director of Fish and Game Administration, SC said
that they are not in the position to pass judgment on the actuation of the official for they do not have
the copy of his decision. SC agreed with the Solicitor General saying that to make an accurate findings of
grave abuse of discretion because the decision of the Secretary reversing the decision of the Director
had not been reconstituted and appended to the record of the case. To rule if he committed grave
abuse of discretion, without knowing his reasons for reversing the decision of the Director would be
tantamount to deciding the case against said official without giving him his day in court.

Calo v. Fuertes
In Bureau of Lands Claim No. 224 (N), Lot No. 143-A, Cadastral Case No. 84, Butuan City entitled Francis
C. Calo, claimant-contestant, vs. H.A. No. 86871 (E-40476) Delfin C. Fuertes, applicant-respondent, the
Director of Lands rendered on 12 April 1956 an opinion denying a dismissing former's claim and contest
against the Homestead Application No. 86871 (E-40476) of Delfin C. Fuertes, was ordering him to vacate
the premises within sixty days from receipt of a copy of the opinion, and stating that upon finality
thereof homestead patent would be issued to Delfin C. Fuertes. His request for reconsideration having
been denied by the Director of Lands on 25 January 1957, Francisco C. Calo brought to the Secretary of
Agriculture and Natural Resources the case, docketed as DANR case No. 1549. On 28 February 1958 the
Secretary of Agriculture and Natural Resources modified the opinion of the Director of Lands -

. . . in the sense that Delfin C. Fuertes should reimburse Francisco C. Calo of the difference between the
value of the improvements the latter introduced on the land in controversy and the value of the
consequential benefits derived by him therefrom within thirty (30) days from advice by the Director of
Lands who is hereby directed to determine the aforementioned difference within sixty (60) days from
receipt of a copy of this decision.

Still dissatisfied with the above opinion, Francisco C. Calo asked the Secretary of Agriculture and Natural
Resources to reconsider it but the latter denied a reconsideration thereof. Hence, on 1 August 1958
Francisco C. Calo appealed to the President of the Philippines (Annex A Answer, p. 54, rec. of case No.
55), but on 8 August 1958 he withdrew it before the President of the Philippines could act thereon
(Annex A to memorandum of the petitioner, p. 64, rec. of case No. 55).

On 22 August 1958 Francisco C. Calo filed in the Court of First Instance of Agusan a petition for writs of
certiorari and prohibition with preliminary injunction praying that the enforcement of the opinions of
the Director of Lands and the Secretary of Agriculture and Natural Resources be enjoined; that if a bond
be needed for the purpose he was willing to file it; that after hearing the injunction be made final and
permanent; that the respondent Delfin C. Fuertes pay him P18,000 as damages and attorney's fees and
costs of the suit; that he be declared the owner entitled to possess the parcel of land subject of the
litigation; and for any other just and equitable relief (special civil case No. 55).

On 24 December 1958 the respondent Delfin C. Fuertes filed an answer and, on 27 December 1958, an
amended answer to the petition; on 29 December 1958 and 3 January 1959 the respondent Secretary of
Agriculture and Natural Resources and the Director of Lands, respectively, filed their answers. After a
preliminary hearing as provided for in section 5, Rule 8, of the Rules of Court, on 31 July 1959 the court
rendered judgment, the dispositive part of which is -

WHEREFORE, for failure to state a cause of action, for lack of jurisdiction and for not exhausting all the
administrative remedies available to the petitioner in the ordinary course of law, the Court resolves to
dismiss as it hereby dismisses the herein petition with costs against petitioner.

The petitioner appealed, but as only a question of law is raised, the Court of Appeals certified the appeal
to this Court.
This appeal has not been perfected within the reglementary period, as provided for in section 17, Rule
41, for although the notice of appeal was filed on 31 August 1959 (p. 77, record of case No. 55) or on the
13th day from the receipt of case No. 55) the appeal bond was filed on 18 September 1959 (p. 78,
record of case No. 55) or on the 31st day after notice of judgment. This is enough to dispose of the case.

At any rate, the appellant's contention that, as the Secretary of Agriculture and Natural Resources is the
alter ego of the President and his acts or decisions are also those of the latter, he need not appeal from
the decision or opinion of the former to the latter, and that, such being the case, after he had appealed
to the Secretary of Agriculture and Natural Resources from the decision or opinion of the Director of
Lands he had exhausted all the administrative remedies, is untenable.

The withdrawal of the appeal taken to the President of the Philippines is tantamount to not appealing at
all thereto. Such withdrawal is fatal, because the appeal to the President is the last step he should take
in an administrative case.

Furthermore, a special civil action for certiorari and prohibition under Rule 67 of the Rules of Court lies
only when "there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of
law." In the case at bar, appeal from an opinion or order by the Secretary of Agriculture and Natural
Resources to the President of the Philippines is the plain, speedy and adequate remedy available to the
petitioner.1chanrobles virtual law library

The judgment appealed from already had become final and cannot be reviewed. The appeal is
dismissed, with costs against the petitioner-appellant

Bartulata v. Peralta
Appeal by petitioner Rufino G. Bartulata from the decision of the Court of First Instance of Rizal, Quezon
City Branch, in its Civil Case No. Q-6443, dismissing his petition for mandamus to compel herein
respondents Hon. Macario Peralta, Jr., in his capacity as Secretary of National Defense, and Lt. Gen.
Pelagio Cruz, in his capacity as Chief of Staff, Armed Forces of the Philippines, to retire him with the rank
of second lieutenant in the Philippine Army, the rank that he held when he was honorably discharged
from the military service on January 31, 1947, and to pay him his pension differentials. The judgment of
the lower court dismissing the petition is predicated on the finding that petitioner Bartulata is neither a
recognized guerrilla nor a reserve officer.
The evidence and the record show that Rufino G. Bartulata began his service in the armed forces of the
Philippines on January 15, 1924 upon his enlistment in the Philippine Constabulary. When the Pacific
war broke out in 1941, he held the rank of sergeant in the Philippine Constabulary. When the order for
surrender to the enemy was issued by the high command of the USAFFE, he refused to surrender and,
instead, he joined the 108th Infantry, 10th Military District, a guerrilla organization in Mindanao. This
guerrilla outfit was recognized on February 13, 1943 by the Headquarters, Philippine Ryukyus Command
of the United States Armed Forces, which recognition was later revised to take effect as of September
16, 1942. 1chanrobles virtual law library

While in the service of the aforementioned guerrilla outfit, petitioner Bartulata was promoted to the
rank of third lieutenant effective November 1, 1942, and to second lieutenant effective April 1, 1943. His
name, rank (2nd Lt.) and serial number (0-24220 PA) appeared in the Roster of Reserve Officers in the
Headquarters, Mindanao Zone Military Police Command, Philippine Army, per General Order No. 358,
dated June 28, 1946, Army Headquarters APO 75. 2chanrobles virtual law library

After the war, petitioner still carrying the rank of 2nd Lieutenant, continued to render service under the
postwar Philippine Army. He was assigned as Junior Officer of the 62nd Military Police Command (PA).
3As second lieutenant he was paid his salaries and allowances and was allowed to wear his uniform as
such officer. 4His services ended when he was honorably discharged, effective January 31, 1947, as a
second lieutenant. 5chanrobles virtual law library

On September 1, 1956, petitioner Bartulata filed an application for retirement pursuant to the
provisions of Republic Act No. 340, as amended. Since he had rendered more than 25 years of
continuous military service, his application was approved and officially announced in paragraph 13,
Special Order No. 126 of General Headquarters, Armed Forces of the Philippines, dated December 19,
1957, retiring him with the rank of Staff Sergeant effective January 31, 1947, the date when he was
separated from the service.

Contending that he should be retired as second lieutenant instead of staff sergeant, petitioner Bartulata,
on several occasions, requested re-adjustment of his retirement rank, but said requests were denied by
General Headquarters, Armed Forces of the Philippines, and by the Secretary of National Defense, upon
the ground that his name does not appear in the approved reconstructed roster of his guerrilla outfit,
and as such it is "conclusive that his service was not recognized or that the recognition of his guerrilla
status was revoked." 6Thereupon, Bartulata sought relief from the lower court, but the latter, on the
basis of the stipulation of facts submitted by the parties and the other documents admitted by them,
dismissed his petition as stated in the beginning of this opinion. Hence, this appeal.

As can readily be seen, there is no dispute regarding the qualification of petitioner for retirement under
Republic Act No. 340, as amended. The question is simply whether or not he should be retired with the
rank of staff sergeant as contended by respondents, or with the rank of second lieutenant as claimed by
petitioner. Obviously, in the face of the circumstances above narrated, the solution of this problem
hinges on the question of whether petitioner is a recognized guerrilla or not.

Petitioner claims that he is a recognized guerrilla officer by virtue of the recognition of the 108th
Infantry, 10th Military District, the guerrilla outfit for which he was an officer. 7Further, he claims to be a
reserve officer with the rank of second lieutenant 8under the terms of Executive Order No. 21 of the late
President Sergio Osmeña, issued on October 28, 1944, which reads as follows:

EXECUTIVE ORDER NO. 21

DECLARATION TO BE ON ACTIVE SERVICE IN THE PHILIPPINE ARMY ALL PERSONS NOW ACTIVELY
SERVING IN RECOGNIZED MILITARY FORCES IN THE PHILIPPINES

WHEREAS, these military forces have contributed in a large measure to all Allied military effort and to
the liberation of the Filipino people from the yoke of the Japanese invaders;

WHEREAS, it is the desire of the Government of the Philippines to recognize this allegiance;

NOW, THEREFORE, I, SERGIO OSMEÑA, President of the Philippines by virtue of the authority vested in
me by the Emergency Power Law, Section 22 (a), and Section 27 of the Commonwealth Act Numbered
One notwithstanding, do hereby ordain and promulgate the following:

1. All persons of any nationality or citizenship, who are actively serving in recognized military forces in
the Philippines, are hereby considered to be on active service the Philippine Army.

2. The temporary grades of enlisted men, enlisted or promoted in the field of commanders of
recognized military forces or by their delegated authority, are hereby confirmed.

3. The temporary ranks of all officers, appointed or promoted in the field prior to this date by
Commanders of recognized military forces are hereby confirmed.

4. The date of entry into active service in the Philippine Army will be that of a recognized military force.
5. The effective date of rank for commissioned officers and enlisted men will be the date on which they
were appointed or promoted to such ranks by the Commander of recognized military forces.

6. A recognized military force, as used herein, is defined as a force under a Commander who has been
appointed, designated or recognized by the Commander-in-Chief, Southwest Pacific Area. (Emphasis
supplied.)

The respondents, on the other hand, without disputing the applicability of the above-quoted
Presidential executive order to guerrilla services like those of petitioner, contend that said executive
order is not by itself self-executory; that the benefits granted thereunder may only be availed of by
persons whose claims were duly verified and whose names are included in the roster of recognized
guerrillas; and, since the name of petitioner is not carried in the revised roster 9of members of the
guerrilla unit to which he belonged, then he is an unrecognized guerrilla because "officially he did not
serve under said military force and that he was not even a member of said force." 10Stated differently,
although respondents admit the fact that petitioner was a member of a legitimate guerrilla organization
(the 108th Infantry, 10th Military District) as shown by its initial roster 11, they would not credit him for
his services under said guerrilla unit and would withhold from him the benefits to which he is entitled by
reason thereof, simply because his name, for reason or reasons not disclosed in the record, is not
included in the revised roster of recognized guerrillas.

The stand of the respondents had already been asserted before this Court in the case of Ramiro Aragon
vs. Hon. Macario Peralta, Jr., et al. 12In rejecting said stand, this Court, speaking of the probative weight
of the revised roster, said that the entries in the Army's roster of recognized guerrillas, assuming them
to be the official acts of duly authorized public officers, are merely prima facie evidence of the facts
therein stated. In other words, this roster or list is not to be considered the sole and exclusive evidence
of the government's recognition of guerrilla services. as there is nothing in the law making inadmissible
other proof of such recognition, where they are material and relevant. Further, this Court said that the
recognized roster (drawn up primarily for backpay purposes) must yield to the initial roster (which in
that case showed that Aragon was already serving six months before the Leyte landing of the liberation
troops).

In the case now before this Court, respondents' theory, as in the Aragon case, must be rejected. In
consonance with the ruling in the Aragon case, We hold that the Philippine Government had recognized
not only herein petitioner's wartime and post-liberation services in the Army, but also his rank as 2nd
lieutenant. The recognition was made when his name was included in the initial roster of the 108th
Infantry, 10th Military District; when he was given backpay for services rendered as second lieutenant
from April 1, 1943 to May 15, 1945 13; when he was paid his salaries and allowances as second
lieutenant; when he was allowed to wear the uniform as such officer; and when he was honorably
discharged with the rank of second lieutenant on January 31, 1947. Even the approval of petitioner's
retirement application indicated a clear showing of the recognition of petitioner's guerrilla and post
liberation services. It will be noted that in Special Orders No. 126 14, which officially announced the
approval of his retirement, it is stated that he had completed 23 years and 15 days of service. And it will
also be noted that in the stipulation of facts, respondents admit that petitioner had rendered more than
23 years of continuous military service. These 23 years and 15 days of service cover the period from
January 15, 1924 (date of original enlistment) up to January 30, 1947 inclusive, as the records do not
show that he had rendered further military service. If the petitioner, as contended by the respondents,
had not served under the 108th Infantry, 10th Military District, nor was he a member thereof 15or that
his guerrilla status was revoked 16, his wartime services, dating as early as October 1, 1942 and ending
May 15, 1945, could not have been included in the computation of his military service. The inclusion of
the period from October 1, 1942 to May 15, 1945 in petitioner's military service record simply means his
guerrilla services with the 108th Infantry, 10th Military District, the only guerrilla outfit he was known
and shown to have served in, was duly recognized by the authorities of the Philippine Army. The fact
that his name may not be included in the roster of recognized guerrillas of the Philippines that is kept by
the authorities of the United States Government should not matter. What should matter are the records
of the Philippine Government regarding his military activities, including his services in the guerrilla
during the last World War II

We hold that on the basis of the evidence, amply and adequately showing the Philippine government's
due recognition of petitioner's guerrilla services, it is but fair and legal, that he be accorded all the rights,
the benefits and the privileges that are due him as a recognized guerrilla to be retired with the rank of
second lieutenant, which was his rank when the afore-quoted Executive Order No. 121, confirming it,
was promulgated, and which was the rank that he was holding when honorably discharged from the
Army.

Respondents, however, would contend that the present action should be dismissed because petitioner
"has not exhausted all administrative remedies" available to him before coming to court. Respondents
would want petitioner to appeal his case to the Office of the President before availing of court
processes. In a long line of decisions, this Court has held that the doctrine requiring the previous
exhaustion of administrative remedies is not applicable where the respondent is a department secretary
whose acts, as an alter ego of the President, bear the implied or assumed approval of the latter, unless
actually disapproved by him. 17The present proceedings having been brought against the Secretary of
National Defense, respondents' contention is clearly untenable.

WHEREFORE, the judgment appealed from is reversed, and the writ of mandamus prayed for is granted.
The respondents, or whoever are their present successors in office, are ordered to make such
adjustments as would retire petitioner Rufino G. Bartulata with the rank of second lieutenant in the
Armed Forces of the Philippines, and to pay him the differentials between the pension and other
benefits a second lieutenant in the Armed Forces of the Philippines would be entitled to as of the time
of his retirement, and the pension and benefits that were granted to him as a staff sergeant at the time
he was retired, to be counted as of January 31, 1947 when he was retired. No pronouncement as to
costs.

Tan v. Director of Forestry

This is an appeal from the order dated January 20, 1965 of the then Court of First Instance of Manila,
Branch VII, in Civil Case No. 56813, a petition for certiorari, prohibition and mandamus with preliminary
prohibitory injunction (p. 2. rec.), which dismissed the petition of petitioner-appellant Wenceslao
Vinzons Tan on the ground that it does not state a sufficient cause of action, and upon the respondents-
appellees' (Secretary of Agriculture and Natural resources and the Director of Forestry) motion to
dismiss (p. 28, rec.).

Sometime in April 1961, the Bureau of Forestry issued Notice No. 2087, advertising for public bidding a
certain tract of public forest land situated in Olongapo, Zambales, provided tenders were received on or
before May 22, 1961 (p. 15, CFI rec.). This public forest land, consisting of 6,420 hectares, is located
within the former U.S. Naval Reservation comprising 7,252 hectares of timberland, which was turned
over by the United States Government to the Philippine Government (P. 99, CFI rec.).

On May 5, 1961, petitioner-appellant Wenceslao Vinzons Tan submitted his application in due form after
paying the necessary fees and posting tile required bond therefor. Nine other applicants submitted their
offers before the deadline (p. 29, rec.).

Thereafter, questions arose as to the wisdom of having the area declared as a forest reserve or allow the
same to be awarded to the most qualified bidder. On June 7, 1961, then President Carlos P. Garcia
issued a directive to the Director of the Bureau of Forestry, which read as follows:

It is desired that the area formerly covered by the Naval Reservation be made a forest reserve for
watershed purposes. Prepare and submit immediately a draft of a proclamation establishing the said
area as a watershed forest reserve for Olongapo, Zambales. It is also desired that the bids received by
the Bureau of Forestry for the issuance of the timber license in the area during the public bidding
conducted last May 22, 1961 be rejected in order that the area may be reserved as above stated. ...

(SGD.) CARLOS P. GARCIA

(pp. 98, CFI rec.).

On August 3, 1961, Secretary Cesar M. Fortich of Agriculture and Natural Resources sustained the
findings and re comendations of the Director of Forestry who concluded that "it would be beneficial to
the public interest if the area is made available for exploitation under certain conditions," and

We quote:

Respectfully forwarded to the honorable, the Executive Secretary Malacanang. Manila inviting particular
attention to the comment and recommendation of the Director of Forestry in the proceeding in
indorsement in which this Of fice fully concurs.

The observations of responsible forest officials are most revealing of their zeal to promote forest
conservation and watershed protection especially in Olongapo, Zambales area. In convincing fashion,
they have demonstrated that to declare the forest area involved as a forest reserve ratify than open it
for timber exploitation under license and regulation would do more harm than of to the public interest.
To convert the area into a forest reserve without an adequate forest protection force, would make of it
a 'Free Zone and Logging Paradise,' to the ever 'Problem Loggers' of Dinalupihan, Bataan . . . an open
target of timber smugglers, kaingineros and other forms of forest vandals and despoilers. On the other
hand, to award the area, as planned, to a reputable and responsible licensee who shall conduct logging
operations therein under the selective logging method and who shall be obliged to employ a sufficient
number of forest guards to patrol and protect the forest consecration and watershed protection.

Worthy of mention is the fact that the Bureau of Forestry had already conducted a public bidding to
determine the most qualified bidder to whom the area advertised should be awarded. Needless to
stress, the decision of the Director of Forestry to dispose of the area thusly was arrived at after much
thought and deliberation and after having been convinced that to do so would not adversely affect the
watershed in that sector. The result of the bidding only have to be announced. To be sure, some of the
participating bidders like Mr. Edgardo Pascual, went to much expense in the hope of winning a virgin
forest concession. To suddenly make a turn about of this decision without strong justifiable grounds,
would cause the Bureau of Forestry and this Office no end of embarrassment.

In view of the foregoing, it is earnestly urged that the Director of Forestry be allowed to proceed with
the announcement of the results of the bidding for the subject forest area (p. 13, CFI rec.).

The Office of the President in its 4th Indorsement dated February 2, 1962, signed by Atty. Juan Cancio,
Acting Legal Officer, "respectfully returned to the Honorable Secretary of the Department of Agriculture
and Natural Resources for appropriate action," the papers subject of Forestry Notice No. 2087 which
was referred to the Bureau of Forestry for decision (p. 14, CFI rec.).

Finally, of the ten persons who submitted proposed the area was awarded to herein petitioner-appellant
Wenceslao Vinzons Tan, on April 15, 1963 by the Bureau of Forestry (p. 17, CFI rec.). Against this award,
bidders Ravago Commercial Company and Jorge Lao Happick filed motions for reconsideration which
were denied by the Director of Forestry on December 6, 1963.

On May 30, 1963, the Secretary of Agriculture and Natural Resources Benjamin M. Gozon — who
succeeded Secretary Cesar M. Fortich in office — issued General Memorandum Order No. 46, series of
1963, pertinent portions of which state:

xxx xxx xxx

SUBJECT: ... ... ...

(D)elegation of authority to the Director of Forestry to grant ordinary timber licenses.

1. ... ... ...

2. The Director of Forestry is hereby authorized to grant (a) new ordinary timber licenses where the area
covered thereby is not more than 3,000 hectares each; and (be the extension of ordinary timber licenses
for areas not exceeding 5,000 hectares each;

3. This Order shall take effect immediately (p. 267, CFI rec.).

Thereafter, Jose Y. Feliciano was appointed as Acting secretary of Agriculture and Natural Resources,
replacing secretary Benjamin M. Gozon. Upon assumption of office he Immediately promulgate on
December 19, 19b3 General memorandum Order No. 60, revoking the authority delegated to the
Director of Forestry, under General Memorandum order No. 46, to grant ordinary timber licenses, which
order took effect on the same day, December 19, 1963. Pertinent portions of the said Order read as
follows:
xxx xxx xxx

SUBJECT: Revocation of General Memorandum Order No 46 dated May 30, 1963 —

1. In order to acquaint the undersigned with the volume and Nature of the work of the Department, the
authority delegated to the Director of forestry under General Memorandum Order No. 46, dated May
30, 1963, to grant (a) new ordinary timber licenses where the area covered thereby is not more than
3,000 hectares each; and (b) the extension of ordinary timber licenses for areas not exceeding 3,000
hectares each is hereby revoked. Until further notice, the issuance of' new licenses , including
amendments thereto, shall be signed by the secretary of Agriculture and Natural Resources.

2. This Order shall take effect immediately and all other previous orders, directives, circulars,
memoranda, rules and regulations inconsistent with this Order are hereby revoked (p. 268, CFl rec.;
Emphasis supplied).

On the same date that the above-quoted memorandum took effect, December 19, 1963, Ordinary
Timber License No. 20-'64 (NEW) dated April 22, 1963, in the name of Wenceslao Vinzons Tan, was
signed by then Acting Director of Forestry Estanislao R. Bernal without the approval of the Secretary of
Agriculture and Natural Resources. On January 6, 1964, the license was released by the Office of the
Director of Forestry (p. 30, CFI rec.; p. 77, rec.). It was not signed by the Secretary of Agriculture and
Natural Resources as required by Order No. 60 aforequoted.

On February 12, 1964, Ravago Commercial Company wrote a letter to the Secretary of Agriculture and
Natural Resources shall be considered by tile Natural Resources praying that, pending resolution of the
appeal filed by Ravago Commercial Company and Jorge Lao Happick from the order of the Director of
Forestry denying their motion for reconsideration, OTI No. 20-'64 in the name of Wenceslao V. Tan be
cancelled or revoked on the ground that the grant thereof was irregular, anomalous and contrary to
existing forestry laws, rules and regulations.

On March 9, 1964, acting on the said representation made by Ravago Commercial Company, the
Secretary of Agriculture and Natural Resources promulgated an order declaring Ordinary Timber License
No. 20-'64 issued in the name of Wenceslao Vinzons Tan, as having been issued by the Director of
Forestry without authority, and is therefore void ab initio. The dispositive portion of said order reads as
follows:
WHEREFORE, premises considered, this Office is of the opinion and so holds that O.T. License No. 20-'64
in the name of Wenceslao Vinzons Tan should be, as hereby it is, REVOKED AND DECLARED without
force and effect whatsoever from the issuance thereof.

The Director of Forestry is hereby directed to stop the logging operations of Wenceslao Vinzons Tan, if
there be any, in the area in question and shall see to it that the appellee shall not introduce any further
improvements thereon pending the disposition of the appeals filed by Ravago Commercial Company and
Jorge lao Happick in this case" (pp. 30-31, CFI rec.).

Petitioner-appellant moved for a reconsideration of the order, but the Secretary of Agriculture and
Natural Resources denied the motion in an Order dated March 25, 1964, wherein this paragraph
appears:

In this connection, it has been observed by the Acting Director of Forestry in his 2nd indorsement of
February 12, 1964, that the area in question composes of water basin overlooking Olongapo, including
the proposed Olongapo watershed Reservation; and that the United States as well as the Bureau of
Forestry has earmarked this entire watershed for a watershed pilot forest for experiment treatment
Concerning erosion and water conservation and flood control in relation to wise utilization of the forest,
denudation, shifting cultivation, increase or decrease of crop harvest of agricultural areas influenced by
the watershed, etc. .... (pp. 3839, CFI rec.; p. 78, rec.).

On April 11, 1964, the Secretary of Agriculture and Natural Resources, acting on the separate appeals
filed by Jorge Lao Happick and Ravago Commercial Company, from the order of the Director of Forestry
dated April 15, 1963, awarding to Wenceslao Vinzons Tan the area under Notive No. 2087, and rejecting
the proposals of the other applicants covering the same area, promulgated an order commenting that in
view of the observations of the Director of Forestry just quoted, "to grant the area in question to any of
the parties herein, would undoubtedly adversely affect public interest which is paramount to private
interests," and concluding that, "for this reason, this Office is of the opinion and so holds, that without
the necessity of discussing the appeals of the herein appellants, the said appeals should be, as hereby
they are, dismissed and this case is considered a closed matter insofar as this Office is concerned" (p. 78,
rec.).

On April 18, 1964, on the basis of the denial of his motion for reconsideration by the Secretary of
Agriculture and Natural Resources, petitioner-appellant filed the instant case before tile court a quo
(Court of First Instance, Manila), Special Civil Action No. 56813, a petition for certiorari, prohibition and
mandamus with preliminary prohibitory injunction (pp. 1-12, CFI rec.). Petitioner-appellant claims that
the respondents-appellees "unlawfully, illegally whimsically, capriciously and arbitrarily acted without or
in excess of their jurisdiction, and/or with grave abuse of discretion by revoking a valid and existing
timber license without just cause, by denying petitioner-appellant of the equal protection of the laws, by
depriving him of his constitutional right to property without due process of law, and in effect, by
impairing the obligation of contracts" (P. 6, CFI rec.). Petitioner-appellant prayed for judgment making
permanent the writ of preliminary injunction against the respondents- appellees; declaring the orders of
the Secretary of Agriculture and Natural Resources dated March 9, March 25, and April 11, 1964, as well
as all his acts and those of the Director of Forestry implementing said orders, and all the proceedings in
connection therewith, null and void, unlawful and of no force and effect; ordering the Director of
Forestry to renew OTI No. 20-'64 upon expiration, and sentencing the respondents, jointly and severally,
to pay the petitioner-appellant the sum of Two Hundred Thousand Pesos (P200,000.000) by way of
pecuniary damage, One Hundred Thousand Pesos (P100,000.00) by way of moral and exemplary
damages, and Thirty Thousand Pesos (P30,000-00) as attorney's fees and costs. The respondents-
appellees separately filed oppositions to the issuance of the writ of preliminary injunction, Ravago
Commercial Company, Jorge Lao, Happick and Atanacio Mallari, presented petitions for intervention
which were granted, and they too opposed the writ.

The Director of Forestry in his motion to dismiss dated April 24, 1964, alleges the following grounds: (1)
that the court has no jurisdiction; (2) that the respondents may not be sued without their consent; (3)
that the petitioner has not exhausted all available administrative remedies; (4) that the petition does
not state a cause of action; and (5) that purely administrative and discretionary functions of
administrative officials may not be interfered with by the courts. The Secretary of Agriculture and
Natural Resources joined the motion to dismiss when in his answer of May 18, 1964, he avers the
following special and affirmative defenses: (1) that the court has no jurisdiction to entertain the action
for certiorari, prohibition and mandamus; (2) that the petitioner has no cause of action; (3) that venue is
improperly laid; (4) that the State is immune from suit without its consent; (5) that the court has no
power to interfere in purely administrative functions; and (6) that the cancellation of petitioner's license
was dictated by public policy (pp. 172-177, rec.). Intervenors also filed their respective answers in
intervention with special and affirmative defenses (pp. 78-79, rec.). A hearing was held on the petition
for the issuance of writ of preliminary injunction, wherein evidence was submitted by all the parties
including the intervenors, and extensive discussion was held both orally and in writing.

After the said hearing, on January 20, 1965, the court a quo, from the evidence received, resolved not
only the question on the issuance of a writ of preliminary injunction but also the motion to dismiss,
declared that the petition did not state a sufficient cause of action, and dismissed the same accordingly.
To justify such action, the trial court, in its order dismissing the petition, stated that "the court feels that
the evidence presented and the extensive discussion on the issuance of the writ of preliminary
mandatory and prohibitory injunction should also be taken into consideration in resolving not only this
question but also the motion to dismiss, because there is no reason to believe that the parties will
change their stand, arguments and evidence" (p. 478, CFI rec.). His motion for reconsideration having
been denied (p. 488, CFI rec.), petitioner-appellant Wenceslao Vinzons Tan appealed directly to this
Court.

I
Petitioner-appellant now comes before this Court, claiming that the trial court erred in:

(1) holding that the petition does not state a sufficient cause of action: and

(2) dismissing the petition [p.27,rec. ].

He argues that the sole issue in the present case is, whether or not the facts in the petition constitute a
sufficient cause of action (p. 31, rec.). Petitioner-appellant, in his brief, presented a lengthy discussion on
the definition of the term cause of action wherein he contended that the three essential elements
thereon, — namely, the legal right of the plaintiff, the correlative obligation of the defendants and the
act or omission of the defendant in violation of that right — are satisfied in the averments of this
petition (pp. 31-32, rec.). He invoked the rule that when the ground for dismissal is that the complaint
states no cause of action, such fact can be determined only from the facts alleged in the complaint and
from no other, and the court cannot consider other matters aliunde He further invoked the rule that in a
motion to dismiss based on insufficiency of cause of action, the facts alleged in the complaint are
deemed hypothetically admitted for the purpose of the motion (pp. 32-33, rec.).

A perusal of the records of the case shows that petitioner-appellant's contentions are untenable. As
already observed, this case was presented to the trial court upon a motion to dismiss for failure of the
petition to state a claim upon which relief could be granted (Rule 16 [g], Revised Rules of Court), on the
ground that the timber license relied upon by the petitioner- appellant in his petition was issued by the
Director of Forestry without authority and is therefore void ab initio. This motion supplanted the general
demurrer in an action at law and, as a rule admits, for the purpose of the motion, ail facts which are well
pleaded however while the court must accept as true all well pleaded facts, the motion does not admit
allegations of which the court will take judicial notice are not true, nor does the rule apply to legally
impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by record or document
included in the pleadings to be unfounded (Vol. 1, Moran's Comments on the Rules of Court, 1970 ed.,
p. 505, citing cases).

It must be noted that there was a hearing held in the instant case wherein answers were interposed and
evidence introduced. In the course of the hearing, petitioner-appellant had the opportunity to introduce
evidence in support of tile allegations iii his petition, which he readily availed of. Consequently, he is
estopped from invoking the rule that to determine the sufficiency of a cause of action on a motion to
dismiss, only the facts alleged in the complaint must be considered. If there were no hearing held, as in
the case of Cohen vs. U.S. CCA Minn 1942,129 F. 2d 733), "where the case was presented to District
Court upon a motion to dismiss because of alleged failure of complaint to state a claim upon which relief
could be granted, and no answer was interposed and no evidence introduced, the only facts which the
court could properly consider in passing upon the motion were those facts appearing in the complaint,
supplemented be such facts as the court judicially knew.

In Llanto vs. Ali Dimaporo, et al. (16 SCRA 601, March 31, 1966), this Court, thru Justice Conrado V.
Sanchez, held that the trial court can properly dismiss a complaint on a motion to dismiss due to lack of
cause of action even without a hearing, by taking into consideration the discussion in said motion and
the opposition thereto. Pertinent portion of said decision is hereby quoted:

Respondents moved to dismiss. Ground therefor is lack of cause of action. The Court below granted the
motion, dismissed the petition. The motion to reconsider failed. Offshoot is this appeal.

1. The threshold questions are these: Was the dismissal order issued without any hearing on the motion
to dismiss? Is it void?

WE go to the record. The motion to dismiss was filed on February 1, 1961 and set for hearing on
February 10 following. On February 8, 1961 petitioner's counsel telegraphed the court, (r)equest
postponement motion dismissal till written opposition filed.' He did not appear at the scheduled
hearing. But on March 4, 1961, he followed up his wire, with his written opposition to the motion to
dismiss. Adverting to the 5-page motion to dismiss and the 6-page opposition thereto, We find that the
arguments pro and con on the question of the board's power to abolish petitioner's position to
discussed the problem said profusely cited authorities. The May 15, 1961 8-page court order recited at
length the said arguments and concluded that petitioner made no case.

One good reason for the statutory requirement of hearing on a motion as to enable the suitors to
adduce evidence in support of their opposing claims. But here the motion to dismiss is grounded on lack
of cause of action. Existence of a cause of action or lack of it is determined be a reference to the facts
averred in the challenged pleading. The question raised in the motion is purely one of law. This legal
issue was fully discussed in said motion and the opposition thereto. In this posture, oral arguments on
the motion are reduced to an unnecessary ceremony and should be overlooked. And, correctly so,
because the other intendment of the law in requiring hearing on a motion, i.e., 'to avoid surprises upon
the opposite party and to give to the latter time to study and meet the arguments of the motion,' has
been sufficiently met. And then, courts do not exalt form over substance (Emphasis supplied).

Furthermore even if the complaint stated a valid cause of action, a motion to dismiss for- insufficiency of
cause of action will be granted if documentary evidence admitted by stipulation disclosing facts
sufficient to defeat the claim enabled the court to go beyond disclosure in the complaint (LOCALS No.
1470, No. 1469, and No. 1512 of the International Longshoremen's Association vs. Southern Pacific Co.,
6 Fed. Rules Service, p. 107; U.S. Circuit Court of Appeals, Fifth Circuit, Dec. 7, 1952; 131 F. 2d 605). Thus,
although the evidence of the parties were presented on the question of granting or denying petitioner-
appellant's application for a writ of preliminary injunction, the trial court correctly applied said evidence
in the resolution of the motion to dismiss. Moreover, in applying said evidence in the resolution of the
motion to dismiss, the trial court, in its order dismissing the petition, pointed out that, "there is no
reason to believe that the parties will change their stand, arguments and evidence" (p. 478, CFI rec.).
Petitioner-appellant did not interpose any objection thereto, nor presented new arguments in his
motion for reconsideration (pp. 482-484, CFI rec.). This omission means conformity to said observation,
and a waiver of his right to object, estopping him from raising this question for the first time on appeal. "
I question not raised in the trial court cannot be raised for the first time on appeal" (Matienzo vs.
Servidad, Sept. 10, 1981, 107 SCRA 276).

Moreover, petitioner-appellant cannot invoke the rule that, when the ground for asking dismissal is that
the complaint states no cause of action, its sufficiency must be determined only from the allegations in
the complaint. "The rules of procedure are not to be applied in a very rigid, technical sense; rules of
procedure are used only to help secure substantial justice. If a technical and rigid enforcement of the
rules is made, their aim would be defeated. Where the rules are merely secondary in importance are
made to override the ends of justice; the technical rules had been misapplied to the prejudice of the
substantial right of a party, said rigid application cannot be countenanced" (Vol. 1, Francisco, Civil
Procedure, 2 ed., 1973, p. 157, citing cases).

What more can be of greater importance than the interest of the public at large, more particularly the
welfare of the inhabitants of Olongapo City and Zambales province, whose lives and properties are
directly and immediately imperilled by forest denudation.

The area covered by petitioner-appellant's timber license practically comprises the entire Olongapo
watershed (p. 265, CFI rec.). It is of public knowledge that watersheds serves as a defense against soil
erosion and guarantees the steady supply of water. As a matter of general policy, the Philippine
Constitution expressly mandated the conservation and proper utilization of natural resources, which
includes the country's watershed. Watersheds in the Philippines had been subjected to rampant abusive
treatment due to various unscientific and destructive land use practices. Once lush watersheds were
wantonly deforested due to uncontrolled timber cutting by licensed concessionaries and illegal loggers.
This is one reason why, in paragraph 27.of the rules and regulations included in the ordinary timber
license it is stated:

The terms and conditions of this license are subject to change at the discretion of the Director of
Forestry, and that this license may be made to expire at an earlier date, when public interests so require
(Exh. D, p. 22, CFI rec.).
Considering the overriding public interest involved in the instant case, We therefore take judicial notice
of the fact that, on April 30, 1964, the area covered by petitioner-appellant's timber license has been
established as the Olongapo Watershed Forest Reserve by virtue of Executive Proclamation No. 238 by
then President Diosdado Macapagal which in parts read as follows:

Pursuant to the provisions of Section 1824 of the Revised Administrative Code, as amended, 1, Diosdado
Macapagal, President of the Philippines do hereby withdraw from entry, sale, or settlement and
establish as Olongapo Watershed Forest Reserve for watershed, soil protection, and timber production
purposes, subject to private rights, if any there be, under the administration and control of the Director
of Forestry, xx the following parcels of land of the public domain situated in the municipality of
Olongapo, province of Zambales, described in the Bureau of Forestry map No. FR-132, to wit: ... ... (60
O.G. No. 23, 3198).

Petitioner-appellant relies on Ordinary Timber License No. 20-'64 (NEW) for his alleged right over the
timber concession in question. He argues thus: "The facts alleged in the petition show: (1) the legal right
of the petitioner to log in the area covered by his timber license; (2) the legal or corresponding
obligation on the part of the respondents to give effect, recognize and respect the very timber license
they issued to the petitioner; and (3) the act of the respondents in arbitrarily revoking the timber license
of the petitioner without giving him his day in court and in preventing him from using and enjoying the
timber license issued to him in the regular course of official business" (p. 32, rec.).

In the light of petitioner-appellant's arguments, it is readily seen that the whole controversy hinges on
the validity or invalidity of his timber license.

WE fully concur with the findings of the trial court that petitioner- appellant's timber license was signed
and released without authority by then Acting Director Estanislao R. Bernal of Forestry, and is therefore
void ab initio. WE hereby quote such findings:

In the first place, in general memorandum order No. 46 dated May 30, 1963, the Director of Forestry
was authorized to grant a new ordinary timber license only where the area covered thereby was not
more than 3,000 hectares; the tract of public forest awarded to the petitioner contained 6,420 hectares
(Exhs. 2-A and 2-B Ravago, embodied in Annex B; Exh. B). The petitioner contends that only 1,756
hectares of the said area contain commercial and operable forest; the authority given to the Director of
Forestry to grant a new ordinary timber license of not more than 3,000 hectares does not state that the
whole area should be commercial and operable forest. It should be taken into consideration that the
1,756 hectares containing commercial and operable forest must have been distributed in the whole area
of 6,420 hectares. Besides the license states, 'Please see attached sketch and technical description,'
gives an area of 6,420 hectares and does not state what is the area covered of commmercial and
operable forest (Exh. Ravago Also Annex B of the petition, which was marked as Exhibit B, states:
Under Notice No. 2087, a tract of public forest containing 6,420 hectares located in Olongapo, Zambales
was declared available for timber utilization and development. Pursuant to this Notice, there were
received bid proposals from the following persons: ...

Wherefore, confirming the findings of said Committee, the area described in Notice No. 2087 shall be
awarded, as it is hereby awarded to Wenceslao Vinzons Tan, subject to the following conditions: ... ...

In the second place, at the time it was released to the petitioner, the Acting Director of Forestry had no
more authority to grant any license. The license was signed by the Acting Director of Forestry on
December 19, 1963, and released to the petitioner on January 6, 1964 (Exh. RavaGo The authority
delegated to the Director of Forestry to grant a new ordinary timber license was contained in general
memorandum order No. 46 dated May 30, 1963. This was revoked by general memorandum order No.
60, which was promulgated on December 19, 1963. In view thereof, the Director of Forestry had no
longer any authority to release the license on January 6, 1964, and said license is therefore void ab initio
(pp. 479480, CFI rec.).

The release of the license on January 6, 1964, gives rise to the impression that it was ante-dated to
December 19, 1963 on which date the authority of the Director of Forestry was revoked. But, what is of
greatest importance is the date of the release or issuance, and not the date of the signing of the license.
While petitioner-appellant's timber license might have been signed on December 19, 1963 it was
released only on January 6, 1964. Before its release, no right is acquired by the licensee. As pointed out
by the trial court, the Director of Forestry had no longer any authority to release the license on January
6, 1964. Therefore, petitioner-appellant had not acquired any legal right under such void license. This is
evident on the face of his petition as supplemented by its annexes which includes Ordinary Timber
License No. 20-'64 (NEW). Thus, in the case of World Wide Insurance & Surety Co., Inc. vs. Macrohon, et
al. (105 Phil. 250, Feb. 28, 1959), this Court held that if from the face of the complaint, as supplemented
by its annexes, plaintiff is not the owner, or entitled to the properties it claims to have been levied upon
and sold at public auction by the defendants and for which it now seeks indemnity, the said complaint
does not give plaintiff any right of action against the defendants. In the same case, this Court further
held that, in acting on a motion to dismiss, the court cannot separate the complaint from its annexes
where it clearly appears that the claim of the plaintiff to be the A owner of the properties in question is
predicated on said annexes. Accordingly, petitioner-appellant's petition must be dismissed due to lack of
cause of action.

II
Petitioner-appellant, in his petition, alleged that he has exhausted all his administrative remedies to no
avail as respondents-appellees have failed, neglected, refused and continue to refuse to allow
petitioner-appellant to continue operation in the area covered by his timber license. He further alleged
that he has neither recourse by way of appeal, nor any plain, speedy and adequate remedy in the
ordinary course of law except thru this special civil action, as the last official act of the respondent-
appellee Secretary of Agriculture and Natural Resources in declaring void the timber license referred to
above after denying petitioner-appellant's motion for reconsideration, is the last administrative act.
Petitioner-appellant relies on the case of Demaisip vs. The Court of Appeals, et al. (106 Phil. 237, Sept.
24, 1959), wherein it was held that the failure of the plaintiff to appeal from the adverse decision of the
Secretary to the President cannot preclude the plaintiff from taking court action in view of the theory
that the Secretary of a department is merely an alter-ego of the President. The presumption is that the
action of the Secretary bears the implied sanction of the President unless the same is disapproved by
the latter (Villena vs. the Secretary of Interior, 67 Phil. 451; p. 7, CFI rec.).

To this We cannot agree. Petitioner-appellant did not appeal the order of the respondent Secretary of
Agriculture and Natural Resources to the President of the Philippines, who issued Executive
Proclamation No. 238 withdrawing the area from private exploitation, and establishing it as the
Olongapo Watershed Forest Reserve. Considering that the President has the power to review on appeal
the orders or acts of the respondents-appellees, the failure of the petitioner-appellant to take that
appeal is failure on his part to exhaust his administrative remedies. Thus, this Court, in the case of Calo
vs. Fuertes (5 SCRA 399, 400, June 29, 1962), held that:

At any rate, the appellant's contention that, as the Secretary of Agriculture and Natural Resources is the
alter ego of the President and his acts or decisions are also those of the latter, he need not appeal from
the decision or opinion of the former to the latter, and that, such being the case, after he had appealed
to the Secretary of Agriculture and Natural Resources from the decision or opinion of the Director of
Lands he had exhausted the administrative remedies, is untenable.

The withdrawal of the appeal taken to the President of the Philippines is tantamount to not appealing all
thereto. Such withdrawal is fatal, because the appeal to the President is the last step he should take in
an administrative case.

In 1912, in the case of Lamb vs. Phipps (22 Phil. 491-92, July 22, 1912), this Court stressed the doctrine
of exhaustion of administrative remedies, thus:

When a plain, adequate and speedy remedy is afforded by and within the executive department of the
government the courts will not interfere until at least that remedy has been exhausted. Jao Igco vs.
Shuster, 10 Phil. Rep. 448; Ekiu vs. U.S., 142 U.S. 651; U.S. vs. Sing Tuck, 194 U.S. 161; U.S. vs. Ju Toy 198
U.S. 253; Chill Yow vs. U.S., 28 Sup. Ct. Rep. 201). The administrative remedies afforded by law must first
be exhausted before resort can be had to the courts, especially when the administrative remedies are by
law exclusive and final. Some matters and some questions are by law delegated entirely and absolutely
to the discretion of particular branches of the executive department of the government. When the law
confers exclusive and final jurisdiction upon the executive department of the government to dispose of
particular questions, their judgments or the judgments of that particular department are no more
reviewable by the courts than the final judgment or decisions of the courts are subject to be reviewed
and modified by them" (emphasis supplied).

Moreover, this being a special civil action, petitioner-appellant must allege and prove that he has no
other speedy and adequate remedy (Diego vs. The Court of Appeals, et al., 54 Off. Gaz., No. 4, 956). In
the case at bar, petitioner- appellant's speedy and adequate remedy is an appeal to the President of the
Philippines.

Accordingly, "it is settled to the point of being elementary that the only question involved n certiorari is
jurisdiction, either want of jurisdiction or excess thereof, and abuse of discretion shall warrant the
issuance of the extraordinary remedy of certiorari when the same is so grave as when the power is
exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal hostility, and it
must be so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal to
perform a duty enjoined, or to act at all in contemplation of law" FS Divinagracia Agro-Commercial Inc.
vs. Court of Appeals, 104 SCRA 191 [April .1, 1981]). The foregoing is on the assumption that there is any
irregularity, albeit there is none in the acts or omissions of the respondents-appellees. certiorari is not a
substitute for appeal as held time and again by this Court (People vs. Villanueva, 110 SCRA 465), "it
being a time honored and well known principle that before seeking judicial redress, a party must first
exhaust the administrative remedies available" (Garcia vs. Teehankee, 27 SCRA 944, April 18, 1969).

Moreover, from the decision of the Secretary of Agriculture and Natural Resources complained of,
petitioners had a plain, speedy and adequate remedy by appealing therefrom to the Chief Executive. In
other words, before filing the present action for certiorari in the court below, they should have availed
of this administrative remedy and their failure to do so must be deemed fatal to their case [Calo vs.
Fuertes, et al., G.R. No. L-16537, June 29,1962]. To place petitioners' case beyond the pale of this rule,
they must show that their case falls — which it does not — within the cases where, in accordance with
our decisions, the aggrieved party need not exhaust administrative remedies within his reach in the
ordinary course of the law [Tapales vs. The President and the Board of Regents of the U.P., G.R. No. L-
17532, March 30, 1963; Mangubat vs. Osmena, G.R. No. L- 12837, April 30, 1959; Baguio vs. Hon. Jose
Rodriguez, G. R. No. L-11078, May 27, 1959; Pascual vs. Provincial Board, G.R. No. L-11959, Oct. 31,
1959; Marinduque Iron Mines, etc. vs. Secretary of Public Works, G.R. No. L-15982, May 31, 1963; Alzate
vs. Aldaba, G.R. No. L-14407, Feb. 29, 1960 and Demaisip vs. Court of Appeals, G.R. No. L- 13000, Sept.
25, 1959] (Ganob vs. Ramas, 27 SCRA 1178, April 28, 1969).

III
Petitioner-appellant not only failed to exhaust his administrative remedies, but also failed to note that
his action is a suit against the State which, under the doctrine of State immunity from suit, cannot
prosper unless the State gives its consent to be sued Kawananakoa vs. Polybank, 205 U.S. 349; Siren vs.
U.S., 7 Wall. 152; Sec. 16, Art. XV, 1973 Constitution).

The respondents-appellees, in revoking the petitioner-appellant's timber license, were acting within the
scope of their authority. Petitioner-appellant contends that "this case is not a suit against the State but
an application of a sound principle of law whereby administrative decisions or actuations may be
reviewed by the courts as a protection afforded the citizens against oppression" (p. 122, CFI rec.). But,
piercing the shard of his contention, We find that petitioner-appellant's action is just an attempt to
circumvent the rule establishing State exemption from suits. He cannot use that principle of law to profit
at the expense and prejudice of the State and its citizens. The promotion of public welfare and the
protection of the inhabitants near the public forest are property, rights and interest of the State.
Accordingly, "the rule establishing State exeraiption from suits may not be circumvented by directing
the action against the officers of the State instead of against the State itself. In such cases the State's
immunity may be validly invoked against the action as long as it can be shown that the suit really affects
the property, rights, or interests of the State and not merely those of the officer nominally made party
defendant" (SINCO, Phil. Political Law, 10th ed., p. 35; Salgado vs. Ramos, 64 Phil. 724; see also Angat
River Irrigation System vs. Angat River Workers' Union, G.R. No. L-10943-44, Dec. 28, 1957, 102 Phil.
789, 800-802; Mobil PhiL vs. Customs Arrastre Service, 18 SCRA 1120, 1121-1125; Bureau of Printing vs.
Bureau of Printing Employees' Association, 1 SCRA 340, 341, 343).

Both the Secretary of Agriculture and Natural Resources and the Director of Forestry acted in their
capacity as officers of the State, representatives of the sovereign authority discharging governmental
powers. A private individual cannot issue a timber license.

Consequently, a favorable judgment for the petitioner-appellant would result in the government losing a
substantial part of its timber resources. This being the case, petitioner-appellant's action cannot prosper
unless the State gives its consent to be sued.

IV

Granting arguendo, that petitioner-appellant's timber license is valid, still respondents-appellees can
validly revoke his timber license. As pointed out earlier, paragraph 27 of the rules and regulations
included in the ordinary timber license states: "The terms and conditions of this license are subject to
change at the discretion of the Director of Forestry, and that this license may be made to expire at an
earlier date, when public interests so require" (Exh. D, p. 22, CFI rec.). A timber license is an instrument
by which the State regulates the utilization and disposition of forest resources to the end that public
welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is
only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public
welfare as in this ceise

"A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal, granting it and the person to whom it is granted;
neither is it property or a property right, nor does it create a vested right; nor is it taxation" (37 C.J. 168).
Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property
or property rights (People vs. Ong Tin 54 O.G. 7576). In the case of Pedro vs. Provincial Board of Rizal (56
Phil. 123), it was held that:

A license authorizing the operation and exploitation of a cockpit is not property of which the holder may
not be deprived without due process of law, but a mere privilege which may be revoked when public
interests so require.

The welfare of the people is the supreme law. Thus, no franchise or right can be availed of to defeat the
proper exercise of police power (Surigao Electric Co., Inc. vs. Municipality of Surigao, 24 SCRA 898, Aug.
30, 1968). The State has inherent power enabling it to prohibit all things hurtful to comfort, safety, and
welfare of society (Edu vs. Ericta, 35 SCRA 481, Oct. 24,1970).

As provided in the aforecited provision, timber licenses are subject to the authority of the Director of
Forestry. The utilization and disposition of forest resources is directly under the control and supervision
of the Director of Forestry. However, "while Section 1831 of the Revised Administrative Code provides
that forest products shall be cut, gathered and removed from any forest only upon license from the
Director of Forestry, it is no less true that as a subordinate officer, the Director of Forestry is subject to
the control of the Department Head or the Secretary of Agriculture and Natural Resources (See. 79[c],
Rev. Adm. Code), who, therefore, may impose reasonable regulations in the exercise of the powers of
the subordinate officer" (Director of Forestry vs. Benedicto, 104 SCRA 309, May 5, 1981). The power of
control of the Department Head over bureaus and offices includes the power to modify, reverse or set
aside acts of subordinate officials (Province of Pangasinan vs. Secretary of Public Works and
Communications, 30 SCRA 134, Oct. 31, 1969; Montano vs. Silvosa, 97 Phil. 143, 144, 147-148).
Accordingly, respondent-appellee Secretary of Agriculture and Natural Resources has the authority to
revoke, on valid grounds, timber licenses issued by the Director of Forestry. There being supporting
evidence, the revocation of petitioner-appellant's timber license was a wise exercise of the power of the
respondent- appellee (Secretary of Agriculture and Natural Resources) and therefore, valid.
Thus, "this Court had rigorously adhered to the principle of conserving forest resources, as corollary to
which the alleged right to them of private individuals or entities was meticulously inquired into and
more often than not rejected. We do so again" (Director of Forestry vs. Benedicto, supra). WE reiterate
Our fidelity to the basic policy of conserving the national patrimony as ordained by the Constitution.

WHEREFORE, IN VIEW OF ALL THE FOREGOING, THE ORDER APPEALED FROM IS HEREBY .AFFIRMED IN
TOTO. COSTS AGAINST PETITIONER-APPELLANT.

Fortrich v. CA
Facts: This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the
Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), one of the
petitioners. Pursuant to Section 20 of R.A. No. 7160, otherwise known as the Local Government Code,
the Sangguniang Bayan of Sumilao, Bukidnon, on March 4, 1993, enacted Ordinance No. 24 converting
or re-classifying 144 hectares of land in Bgy. San Vicente, said Municipality, from agricultural to
industrial/institutional with a view of providing an opportunity to attract investors who can inject new
economic vitality, provide more jobs and raise the income of its people. Notwithstanding the foregoing
favorable recommendation, however, on November 14, 1994, the DAR, thru Secretary Garilao, invoking
its powers to approve conversion of lands under Section 65 of R.A. No. 6657, issued an Order denying
the instant application for the conversion of the subject land from agricultural to agro-industrial and,
instead, placed the same under the compulsory coverage of CARP and directed the distribution thereof
to all qualified beneficiaries. After a careful evaluation of the petition vis-a-vis the grounds upon which
the denial thereof by Secretary Garilao was based, we find that the instant application for conversion by
the Municipality of Sumilao, Bukidnon is impressed with merit. To be sure, converting the land in
question from agricultural to agro-industrial would open great opportunities for employment and bring
about real development in the area towards a sustained economic growth of the municipality. On the
other hand, distributing the land to would-be beneficiaries (who are not even tenants, as there are
none) does not guarantee such benefits. In pursuance of the spirit and intent of the said legal mandate
and in view of the favorable recommendations of the various government agencies, the subject Order of
Department of Agrarian Reform, was SET ASIDE, DAR filed a motion for reconsideration of the OP
decision which having been filed beyond the reglementary period of fifteen (15) days. The DAR filed a
second motion for reconsideration of the June 23, 1997 Order of the President.

Some alleged farmer-beneficiaries began their hunger strike in front of the DAR Compound in Quezon
City to protest the OP Decision of March 29, 1996. On October 10, 1997, some persons claiming to be
farmer-beneficiaries of the NQSRMDC property filed a motion for intervention (styled as Memorandum
In Intervention) in O.P. Case No. 96-C-6424, asking that the OP Decision allowing the conversion of the
entire 144-hectare property be set aside. President Fidel V. Ramos then held a dialogue with the strikers
and promised to resolve their grievance within the framework of the law. He created an eight (8)-man
Fact Finding Task Force (FFTF) chaired by Agriculture Secretary Salvador Escudero to look into the
controversy and recommend possible solutions to the problem. On November 7, 1997, the Office of the
President resolved the strikers’ protest by issuing the so-called “Win/Win” Resolution penned by then
Deputy Executive Secretary Renato C. Corona. A copy of the “Win-Win” Resolution was received by
Governor Carlos O. Fortich of Bukidnon, Mayor Rey B. Baula of Sumilao, Bukidnon, and NQSRMDC on
November 24, 1997 28 and, on December 4, 1997, they filed the present petition for certiorari,
prohibition (under Rule 65 of the Revised Rules of Court) and injunction with urgent prayer for a
temporary restraining order and/or writ of preliminary injunction (under Rule 58, ibid.), against then
Deputy Executive Secretary Renato C. Corona and DAR Secretary Ernesto D. Garilao. Hence this case.

Issue: Whether the Office of the president still have Jurisdiction when it entertained the Second Motion
for Reconsideration and became the basis of the Win-Win Resolution?

Held: No, When the Office of the President issued the Order dated June 23, 1997 declaring the Decision
of March 29, 1996 final and executory, as no one has seasonably filed a motion for reconsideration
thereto, the said Office had lost its jurisdiction to re-open the case, more so modify its Decision. Having
lost its jurisdiction, the Office of the President has no more authority to entertain the second motion for
reconsideration filed by respondent DAR Secretary, which second motion became the basis of the
assailed “Win-Win” Resolution. Section 7 of Administrative Order No. 18 and Section 4, Rule 43 of the
Revised Rules of Court mandate that only one (1) motion for reconsideration is allowed to be taken from
the Decision of March 29, 1996. And even if a second motion for reconsideration was permitted to be
filed in “exceptionally meritorious cases,” as provided in the second paragraph of Section 7 of AO 18, still
the said motion should not have been entertained considering that the first motion for reconsideration
was not seasonably filed, thereby allowing the Decision of March 29, 1996 to lapse into finality. Thus,
the act of the Office of the President in re-opening the case and substantially modifying its March 29,
1996 Decision which had already become final and executory, was in gross disregard of the rules and
basic legal precept that accord finality to administrative determinations.

Dulay v. minister of natural resources

Petitioner Godeliva S. Dulay comes to this Court and asks Us to confine public respondent Director of the
Bureau of Fisheries and Aquatic Resources within his jurisdiction and to uphold the principle of res
judicata in administrative proceedings by nullifying (1) his February 24, 1978 order giving due course to
the letter-petition of private respondent Angeles D. Dico requesting for the reopening of Fishpond
Conflict case of Mrs. Angeles Dico against Juan Quibete, Petronilo Retirado and petitioner Mrs. Godeliva
S. Dulay and the "Cancellation of Fishpond Lease Agreement No. 2165 of Mrs. Godeliva S. Dulay" and (2)
his telegrams dated August 14, 1978 stating that petitioner's motion for reconsideration of said February
24, 1978 interlocutory order "cannot be entertained" and advising petitioner of the continuation of the
formal investigation of the private respondent's letter-petition scheduled for September 4 to 9, 1978.

This present conflict stems from two earlier cases decided by the Office of the President, both of which
have attained finality. As condensed by the Office of the Solicitor General, these are as follows:

1. Re: DANR Case No. 2898

entitled "Angeles Dico

v. Juan Quibete"

Annex ("A")1

The salient antecedent facts stated in the decision of the Office of the President dated November 14,
1969, are as follows:

That by a barter agreement entered into between Juan Quibete and Jose Padios sometime in 1932, the
former exchanged his parcel of land situated at Sitio Palaypay, municipality of San Dionisio, province of
Iloilo, for the latter's fishpond area of about 24 hectares located at sitio Talaba-an, municipality of Cadiz
(now Cadiz City), province of Negros Occidental;

That Juan Quibete, also in 1932, applied for a Fish and Game Special Permit over the area (F.P.L.A. No.
1709). The application was disapproved because the area covered thereby was not yet declared
available for fishpond purposes. The records of that application were lost during World War II so much
so that Juan Quibete had to renew his application in 1945 (Fp. A. No. 716). His application was approved
on February 10, 1949 and Fishpond Permit No. F-738-E was issued;

That on February 6, 1958, private respondent (Angeles Dico) filed her fishpond application (Fp. A. No.
18206) to occupy the area covered by petitioner's fishpond lease agreement;

That her application was disapproved on the ground that the area she applied had already been
awarded to Juan Quibete, predecessor-in-interest of the petitioner, under Fishpond Permit

No. F-738-E, and that a motion for reconsideration thereon was denied;
That on February 29, 1964, Juan Quibete meanwhile sold and/or transferred his rights and interests over
the area under Fishpond Permit No. F-738-E to one Petronilo Retirado;

That on April 28, 1964, private respondent Angeles Dico filed a protest with the Philippine Fisheries
Commission alleging that Juan Quibete was occupying and improving lot (Lot No. 489-C) which was not
the area covered by his fishpond permit and that he transferred his rights and interests over the said
area without the approval of the Secretary of Agriculture and Natural Resources;

That the Philippine Fisheries Commissioner dismissed the protest on October 16, 1964 and declared that
Lot No. 489-C was the same area granted to Juan Quibete under his fishpond permit and not any other
lot;

That from the decision private respondent Angeles Dico brought her case to the Secretary of Agriculture
and Natural Resources who dismissed her appeal on December 7, 1965;

That after denial of a motion for reconsideration, she appealed to the Office of the President. Her appeal
was in turn dismissed in the decision of November 14, 1969.

2. Re: DANR Case No. 3447

entitled "F.P.A. No.

V-3-3852, Angeles Dico,

Applicant-Appellant v.

Juan Quibete, Claimant-

Appellee" (Annex "F")2

The facts of the case are as follows:

That on November 13, 1965, while DANR Case No. 2898, supra, was still pending decision by the
Secretary of Agriculture and Natural Resources, private respondent Angeles Dico filed with the Director
of Lands a free patent application (No. V-3-3852) for a 4-hectare dry portion of Lot 489-C covered by
Fishpond Permit

No. F-738-E of Juan Quibete;

That Juan Quibete, claiming preferential right over the area applied for, protested to the application;

That the Director of Lands, in a decision dated May 30, 1967, rejected the application of private
respondent Dico and directed Juan Quibete to file the appropriate public land application, if qualified,
for the 4-hectare dry portion;

That a motion for reconsideration having been denied, private respondent Dico appealed to the
Secretary of Agriculture and Natural Resources;

That under the same set of facts found in DANR Case

No. 2898 aforesaid, the Secretary affirmed on July 9, 1970 the decision of the Director of Lands (Annex
"F"), stating that the 4-hectare area subject of the appeal covered a portion of the same tract of land
which was the subject matter of DANR Case No. 2898;

That private respondent Dico moved to reconsider the Secretary's decision, Annex "F", but her motion
was denied on January 26, 1971. A second motion for reconsideration was likewise denied per Order
dated May 5, 1971.

3. As already stated, Petronilo Retirado became the successor-in-interest of Juan Quibete by virtue of a
deed of transfer of rights and improvements executed by Juan Quibete in favor of Petronilo Retirado on
February 29, 1964 over the area covered by Fishpond Permit No. F-738-E of Juan Quibete (Annex "A").

4. Ultimately, petitioner (Godeliva S. Dulay) succeeded to the rights and interests over the area in
question. On May 21, 1973, the heirs of Petronilo Retirado executed a "Deed of Sale of Fishpond
Improvements and Transfer of Rights" (Annex "J") transferring their rights and interests in favor of the
petitioner over a portion of Lot No. 489-Cconsisting of 19.15 hectares, more or less, and covered by their
Fishpond Permit No. 158-2.

5. On October 22, 1974, after application with the Department of Agriculture and Natural Resources,
petitioner was issued a fishpond lease agreement (No. 2169) [Annex "K"] over a portion of Lot 489-C
consisting of 18.3675 hectares, expiring on December 31, 1998.

6. On October 28, 1977, private respondent (Angeles Dico) submitted a letter-petition to the respondent
officials (Annex "L") requesting for a "reopening of fishpond conflict of Angeles Dico vs. Juan Quibete,
Petronilo Retirado and Mrs. Godeliva S. Dulay based on newly discovered evidence". It was there alleged
that Fishpond Permit No. F-738-E of Juan Quibete did not cover the area in question (Lot No. 489-C)
located in Sitio Talaba-an, Municipality of Cadiz (now Cadiz City) but Lot No. 487 located in Barrio Luna,
Cadiz City. She prayed that petitioner's Fishpond Lease Agreement No. 2169 be cancelled and, in lieu
thereof, a new one be issued in her name.

7. Petitioner moved to dismiss the letter-petition on the ground of res judicata (Annex "M"). She argued
that the two administrative decisions in DANR Case No. 2898 and DANR Case No. 3447 (Annexes "A" and
"F"), involving the same parties, subject matter and cause of action, have already become final and
settled the matter once and for all.

8. Claiming that res judicata is not applicable, private respondent opposed the motion to dismiss (Annex
"P"). This was the subject of a rejoinder (Annex "Q") which was again excepted to by private respondent
on the argument that res judicata does not apply in cases where the government has to exercise its
inherent power to regulate (Annex "R").

Respondent Director held resolution of the motion to dismiss in abeyance. In an "Interlocutory Order"
dated February 24, 1978, he reserved to resolve the motion "until after termination of the investigation"
brought about by private respondent's letter-petition.3

By reason of the denial not only of her Motion to Dismiss the letter-petition of respondent Angeles Dico
dated October 28, 1977 but also the

denial4 of her motion for reconsideration5 and the insistence of respondent Director in conducting his
investigation on September 4 to 9, 1978 at the Bacolod City Fisheries Office,6 the situation had become
urgent for petitioner. Thus, she filed the instant petition praying for the issuance of a writ of preliminary
injunction or restraining order claiming that unless one is immediately issued, respondent will proceed
with the investigation as scheduled, and if petitioner refuses or fails to appear in said investigation by
reason of this petition, the respondents will proceed with the investigation and reception of evidence
ex-parte as clearly threatened by the respondent Director in his telegrams to the petitioner and his
counsel, marked as Annexes "I", "U", "W" and "W-1" herein.

As prayed for, We issued a temporary restraining order in the Resolution of September 7, 1978.7

Private respondent Angeles Dico's request for the reopening of the case of "Dico vs. Quibete, et al." and
the cancellation of the Fishpond Lease Agreement of petitioner Godeliva S. Dulay on the ground of fraud
committed by Juan Quibete and Petronila Retirado is anchored, allegedly, on the following pieces of
newly-discovered evidence, to wit:
(1) Order of then Philippine Fisheries Commissioner Arsenio N. Rolden, dated May 12, 1964, recognizing
the fishpond application (No. 18206) of private respondent, dated Feb. 6, 1958, over the area in
question located at Barrio Daga, Talaba-an, Diotay, Cadiz City;

(2) The Plan of the Bureau of Lands for the entire area of Lot 489 of which the subject area is a portion;

(3) The Fishpond Application (No. 18950) of Juan Quibete (herein petitioner's successor-in-interest) for 5
hectares covered by Lot 489-B (25 hectares), situated at Barrio Daga, Talaba-an, Diotay, Cadiz City, was
denied by Hon. Jose R. Montilla Assistant Director of Fisheries on May 19, 1960 because Juan Quibete
was already a holder of a previously approved fishpond application under Permit No. 738-E under Lot
487 covering a 20-hectare area situated at Barrio Luna, Cadiz City;

(4) The Plan of the aforesaid Lot 487;

(5) Affidavits of three (3) persons who attest to the fact that Juan Quibete's fishpond area (Lot 487) is
located at Barrio Luna, Cadiz City. The witnesses are Mansueto D. Alarcon, then Municipal Secretary of
the Municipality of Cadiz, Negros Occidental dated January 6, 1965; Patrolman Eligio O. Javier, member
of the police force of Cadiz, Negros Occidental, dated October 22, 1963 and Melecio Quibete, son of
Juan, executed in May 1964.8

After an exhaustive review of the records of the case, We grant the petition and make permanent the
temporary restraining order issued earlier on September 7, 1978.

Private respondent's letter-petition,9 filed October 28, 1977, states clearly that it is a "Request for
Reopening of Fishpond Conflict of Mrs. Angeles Dico vs. Juan Quibete, Petronilo Retirado and Mrs.
Godeliva S. Dulay based on New Discovered Evidence . . . ."

It is already well-settled in our jurisprudence that the decisions and orders of administrative agencies
rendered pursuant to their quasi-judicial authority, have, upon their finality, the force and binding effect
of a final judgment within the purview of the doctrine of res judicata. The rule of res judicata which
forbids the reopening of a matter once judicially determined by competent authority applies as well to
the judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within
their jurisdiction. 10
DANR Case No. 2898, entitled "Angeles Dico vs. Juan Quibete" was decided by the Office of the
President on November 14, 1969. 11 Since the same was not brought to the courts for judicial review,
the same has long become final and executory.

DANR Case No. 3447, entitled "Angeles Dico vs. Juan Quibete" involved Free Patent Application No. V-3-
385 of private respondent Dico. The Director of Lands in a decision dated May 30, 1967 rejected her
application. The Secretary of Agriculture and Natural Resources affirmed the same on July 9, 1970. 12
The findings of fact in said DANR case, which were found by the Secretary to be the same facts in DANR
Case No. 2898, are deemed conclusive by operation of law. 13 Said DANR case, not having been brought
likewise to the courts for judicial review has also become final and executory. 14

Private respondent points out that the Director of Lands, Ramon N. Casanova, treated her motion for
reconsideration as a petition for relief from judgment. That may be so but Director Casanova's action
was not in accord with the administrative rules on appeal. Actually, the next step that private
respondent should have taken from the July 9, 1970 Decision of the Secretary of Agriculture and Natural
Resources was to appeal the same to the Office of the President within 30 days from receipt of said
Decision. 15 Private respondent received the Decision on September 21, 1970, 16 and should have been
appealed the same by October 24, 1970, the last day of filing. Instead she filed a motion for
reconsideration only on November 3, 1970. Clearly, the July 9, 1970 decision of the Secretary of
Agriculture and Natural Resources in DANR Case No. 3447 had become final and executory.

On the assumption, however, that private respondent's November 3, 1970 motion for reconsideration
was properly treated as a petition for relief from judgment, thereby also assuming that E.O. 19 (1966)
was not applicable to private respondent's case, a careful review of her alleged "newly discovered
evidence" does not support the charge of fraud.

Private respondent's allegation is that petitioner's predecessor-in-interest, Juan Quibete, was given Lot
487 under Fishpond Permit No. F-738-E while Lot 489-C, which she applied for under Fp. A. No. 18206,
was what Juan Quibete actually improved. He sold his rights over this Lot 489-C to Retirado, who in turn
sold his rights to petitioner.

Actually, private respondent filed on February 6, 1958 with the Bureau of Fisheries Fishpond Application,
Fp. A. No. 18206, to occupy Lot No. 489-C after having allegedly verified from the records of the Bureau
of Forestry that there was no prior lessee. 17 Her application was initially denied on the ground that said
Lot 489-C, mistakenly written as Lot 487 in Quibete's original sketch, had already been granted to
Quibete under Fishpond Permit No. F-738-E as early as February 10, 1949. 18
In fact, it appears that what private respondent applied for was the very area of her husband, Celso
Dico. This was confirmed by the Assistant Director of Forestry in his letter dated October 15, 1963 to the
Commissioner of the Philippine Fisheries Commission. 19

Private respondent protested on April 18, 1964 the denial of her application. To allow for further
verification of her claim, the November 6, 1963 order denying her application was set aside by the order
of May 12,

1964 20 — the first alleged newly-discovered evidence of private respondent — and another verification
made on May 23, 1964 by one of the Commission's investigators, Mr. Cesar Alelis. 21 It was established
that it was Quibete's Lot 489-C which private respondent was claiming, although erroneously labelled as
Lot 487 by Quibete himself in the handwritten sketch he submitted to the Bureau of Fisheries on
December 5, 1946. 22 Consequently, private respondent's Fishpond Application No. 18206 was denied
with finality by the Philippine Fisheries Commission on October 16, 1964. 23

Again, acting on the motion for reconsideration of his Office's denial of private respondent's appeal of
said October 16, 1964 Order, the Secretary of Agriculture and Natural Resources ordered on March 6,
1968, one of the lawyers in his Office's Legal Division, Atty. Guillermo B. Bautista, to conduct another
investigation and ocular inspection of the fishpond in dispute. 24

The results were the same. It was Lot 489-C that was improved by Juan Quibete and not Lot 487. A
surprise that cropped up in this latest investigation was the withdrawal by Melecio Quibete, son of Juan
Quibete, of his statements in favor of private respondent which he said he made during the initial
investigation regarding private respondent's Fishpond Application No. 18206 only because he was
promised money to do so. 25 It turned out that private respondent welched on her promise. Since
private respondent's claim to the land is anchored on her purchase of said land, together with
improvements, from Melecio Quibete, 26 the withdrawal by the latter of his statements renders private
respondent Dico's claim fallacious.

To sum up, the matter of which lot Juan Quibete improved as a fishpond and which rights he sold to
Retirado was investigated TWICE after the Philippine Fisheries Commission reinstated private
respondent's Fishpond Application No. 18206 in its Order of May 12, 1964. Both investigations — more
than three years apart with investigators from different offices — showed that Juan Quibete occupied
and improved Lot 489-C although in the different documents, including maps, which make up this case,
it was designated as Lot 487. Thus, no merit can be given to private respondent's alleged pieces of
evidence, number 2 and 5(page 7-8, supra) as all these HAD already been studied thoroughly by both
Investigator Alelis and Atty. Bautista in these separate investigations.
The matter having become final as of August or September 1970, 27 it was grave abuse of discretion on
the part of public respondent Director of the Bureau of Fisheries and Aquatic Resources to give due
course to private-respondent's letter-petition of October 28, 1977 requesting for a re-opening of the
fishpond conflict involved herein.

WHEREFORE, premises considered, the petition is hereby GRANTED. Ordered ANNULLED and SET ASIDE
are the (1) February 20, 1978 Order of the public respondent giving due course to the letter-petition of
private respondent and the (2) two August 14, 1978 telegrams issued by public respondent setting
private respondent's letter-complaint for formal investigation. The temporary restraining order issued
last September 7, 1978 is hereby made PERMANENT. Costs against private respondent.

Encinas v. PO1 Agustin

This is a Rule 45 Petition for Review on Certiorari assailing the Decision dated 20 November 20081 and
Resolution dated 30 March 20092 issued by the Court of Appeals (CA). Affirming the findings of the Civil
Service Commission (CSC), the CA found petitioner Carlito C. Encinas (petitioner) administratively liable
for grave misconduct and conduct prejudicial to the best interest of service- offenses proscribed by
Section 46(b)(4) and (27), Book V of Executive Order No. 292, or the Administrative Code of 1987 - and
affirmed his dismissal.

The relevant facts are summarized as follows:

Respondents were then both holding positions as Fire Officer I in Nueva Ecija. They claim that on 11
March 2000, at around 9:00 p.m., petitioner who was then Provincial Fire Marshall of Nueva Ecija
informed them that unless they gave him five thousand pesos (P5,000), they would be relieved from
their station at Cabanatuan City and transferred to far-flung areas. Respondent Alfredo P. Agustin
(Agustin) would supposedly be transferred to the Cuyapo Fire Station (Cuyapo), and respondent Joel S.
Caubang (Caubang) to Talugtug Fire Station (Talugtug). Fearing the reassignment, they decided to pay
petitioner. On 15 March 2000, in the house of a certain "Myrna," respondents came up short and
managed to give only two thousand pesos (P2,000), prompting petitioner to direct them to come up
with the balance within a week. When they failed to deliver the balance, petitioner issued instructions
effectively reassigning respondents Agustin and Caubang to Cuyapo and Talugtug, respectively
Based on the above-narrated circumstances, respondents filed with the Bureau of Fire Protection (BFP)
a letter-complaint (BFP Complaint) on 27 March 2000 for illegal transfer of personnel under Republic Act
(R.A.) No. 6975 or the Department of Interior and Local Government (DILG) Act of 1990.4 The record is
not clear as to why this Complaint was later docketed by the BFP for preliminary investigation for
violation of R.A. No. 3019 or the Anti-Graft and Corrupt Practices Act.5 The BFP Complaint provides in
pertinent part:

Chief Inspector Carlito C. Encinas relieved us from our present assignment and transferred us to
different far places without any cause and due process of law based from the BFP Manual (Republic Act
6975)

The reason why he relieved us was due to our failure to give the money he was asking from both of us in
the amount of Five Thousand Pesos (P5,000) in exchange for our present assignment to be retained.

x x x.

On 12 April and 25 April 2000, on the basis of similar facts, respondents likewise filed with the CSC
Regional Office in San Fernando, Pampanga (CSCRO), as well as with the CSC Field Office in Cabanatuan
City,6 their Joint Affidavit/Complaint (CSCRO Complaint).7 This time, they accused petitioner of violation
of Section 4(c) of R.A. No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and
Employees. The relevant portion of the CSCRO Complaint provides:

6. That we executed this affidavit to file a complaint against C. Insp. Carlito C. Encinas BFP for violation of
Section 4 (C) R.A. 6713, that is "Justness and sincerity. - Public officials and employees shall remain true
to the people at all times. They must act with justness and sincerity and shall not discriminate against
anyone, especially the poor and the underprivileged. They shall at all times respect the rights of others,
and shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order,
public safety and public interest."

The CSCRO Complaint erroneously pertained to the above-quoted provision as Section 4(c), but it should
be denoted as Section 4(A)(c).
On 27 October 2000, after a fact-finding investigation was conducted in connection with his alleged
extortion activities, petitioner was formally charged with dishonesty, grave misconduct, and conduct
prejudicial to the best interest of service. He was required to file an answer within five (5) days from
notice.8 The Formal Charge specifically reads in part:

WHEREFORE, Carlito C. Encinas is hereby formally charged with the offenses of Dishonesty, Grave
Misconduct and Conduct Prejudicial to the Best Interest of the Service. Accordingly, he is given five (5)
days from receipt hereof to submit to this Office a written answer under oath, together with the
affidavits of his witnesses and documentary evidence, if any, and a statement whether or not he elects a
formal investigation. He is advised of his right to the assistance of his counsel of his own choice.

Although it was not specifically mentioned in the records, the offenses of dishonesty, grave misconduct,
and conduct prejudicial to the best interest of service can be found in Section 46(b)(1), (4) and (27),
Book V, respectively, of the Administrative Code of 1987.10 The record does not indicate whether
petitioner was formally charged with violation of R.A. No. 6713.

BFP Complaint

In answer to the BFP Complaint against him, petitioner claimed that in an alleged Confidential
Investigation Report dated 31 July 2000 (Confidential Report), no copy of which was attached to the
record, 11 the investigating body recommended that charges against him be dropped for insufficiency of
evidence. Instead, it recommended that respondents be charged with conducting unauthorized fire
safety inspection and engaging in the sale of fire extinguishers, both in violation of the rules.

It appears on record that the Internal Audit Services (IAS) of the BFP issued a Resolution dated 05 July
2005,12 recommending that the administrative complaint against petitioner be dismissed for
insufficiency of evidence.13 The IAS ruled that the reassignment of respondents was within the ambit of
authority of the head of office. Thus, said reassignment may have been ordered as long as the exigencies
of the service so required.14 The Resolution dated 05 July 2005 states in pertinent part:

The re-assignment of the complainants is within the ambit of authority, CSC Resolution No. 93402 dated
11 February 1993, the commission ruled as follows:

"That reassignment may be ordered by the head of office of the duly authority [sic] representative when
the exigencies of the service so require but subject to the condition that there will be no reduction in
rank, status or salary, further on Bongbong vs Paracaldo (57 SCRA 623) the supreme court ruled held
[sic] that "on general principle petitioner may be transferred as to the exigencies of the service require".
xxx

In view of the documents on record, the undersigned investigator finds no sufficient ground to warrant
the filing of appropriate administrative offense against the respondent.

WHEREFORE, premises considered, this office (IAS) most respectfully recommends that the
administrative complaint against C/INSP CARLITO ENCINAS, BFP be dismissed for insufficiency of
evidence.

CSCRO Complaint

In his Answer to the formal charge of dishonesty, grave misconduct, and conduct prejudicial to the best
interest of service,15 petitioner claimed that the CSCRO Complaint was an offshoot of the reassignment
of respondents. He alleged that they were reassigned after it was discovered that they had conducted a
fire safety inspection of establishments within Nueva Ecija without any mission order. In relation to this
operation, they supposedly sold fire extinguishers to the owners of the establishments they had
inspected.16 He cited the alleged Confidential Report in which the investigating body recommended the
dropping of charges against him.17 He further added that, in view of his exemplary and faithful service,
the then-incumbent governor even requested the continuance of his stint as Provincial Fire Marshall of
Nueva Ecija.18 In his Position Paper,19 petitioner claimed that respondents' transfer had been made in
compliance with the directive of Supt. Simeon C. Tutaan (Supt. Tutaan) and pursuant to law.

CSCRO Ruling

Subsequently, the CSCRO issued its Decision dated 30 July 2004,21 finding petitioner administratively
liable for grave misconduct and conduct prejudicial to the best interest of service, and ordered his
dismissal from service.

The CSCRO ruled that respondents, through their respective testimonies, were able to establish the fact
that petitioner demanded from them the amount of P5,000 in exchange for their non-reassignment to
far-flung fire stations.22 The fact that they did not present any document to show that petitioner
received P2,000 did not preclude a finding of administrative liability.23 The consistency of their oral
testimonies already constituted substantial evidence. Granting that they committed illegal acts prior to
their reassignment, this allegation nevertheless did not rebut their claims that petitioner had extorted
money from them. The admission of Supt. Tutaan that he gave instructions for their reassignment did
not disprove the accusation of extortion, but merely established that there was indeed an order to
reassign them.

Petitioner filed a Motion for Reconsideration.25 He argued that the Sworn Statements of his witnesses
should have been given weight instead of respondents' testimonies. He explained that Mrs. Angelina
Calanoc (Mrs. Calanoc), owner of Reynand Gas Dealer, confirmed that respondents had conducted a
physical inspection of her establishment, after which they recommended that she pay conveyance
permit fees as a requisite for the issuance of a Fire Safety Certificate.26 Also, Carlito Umali confirmed
that he had indeed accompanied petitioner when the latter investigated the Complaint filed by Mrs.
Calanoc against respondents.27 Furthermore, Myrna Villanueva the owner of the house where
respondents supposedly paid petitioner P2,000 claimed that she did not know them personally or recall
either petitioner or respondents ever visiting her house.28 Likewise, Supt. Tutaan confirmed that he had
instructed petitioner to cause the transfer of respondents.29 The latter also argued that the BFP
Complaint had already been dismissed by virtue of the Confidential Report, and that the dismissal had
already served as a bar to the further prosecution of any administrative charge against him.

The Motion, however, was subsequently denied by the CSCRO in its Order dated 19 May 2006.31 It
affirmed its previous ruling that the statements of petitioner's witnesses were incompetent and
immaterial, having failed to disprove that petitioner had indeed extorted money from respondents.32 It
likewise rejected the argument of res judicata proffered by petitioner and ruled that the dismissal of the
BFP Complaint by virtue of the Confidential Report was not a judgment on the merits rendered by a
competent tribunal. Furthermore, the Confidential Report was the result of the recommendation of a
fact-finding committee formed to determine the veracity of the Complaint charging petitioner with
extortion, unjustified transfer of BFP personnel, and malversation of funds.33 Res judicata cannot be
raised as a defense, since the dismissal of the BFP Complaint did not constitute a bar by former
judgment.

Aggrieved, petitioner filed an Appeal Memorandum35 with the CSC main office. In his Appeal, he argued
that respondents were guilty of forum-shopping for having filed two (2) separate administrative
Complaints before the CSCRO on the one hand, and before the BFP/DILG on the other.36 Petitioner
argued that respondents failed to attach a certificate of non-forum shopping to either Complaint.37
Moreover, the CSCRO should not have entertained the Complaint filed before it, considering that it
already knew of the then-pending investigation conducted by the BFP/DILG.

Petitioner further argued that the CSCRO only had appellate jurisdiction or authority to decide cases
brought before it by the head of agency or, in this case, the BFP.39 He explained that the administrative
Complaint was investigated and heard by the BFP/DILG. The BFP department head or fire director,
Rogelio F. Asignado, by virtue of the Resolution dated 05 July 2005, dismissed the complaint for
insufficiency of evidence.40 On the basis of the dismissal of the case, and there being no appeal or
petition filed pertaining thereto, the CSCRO Complaint should have been dismissed as well.41 Petitioner
further argued that the CSCRO erred in concluding that the resolution of the fact-finding committee was
not a judgment on the merits.42 The BFP being an agency of the government, any decision or resolution
it arrives at is also a judgment on the merits.

Petitioner likewise reiterated his previous arguments on the appreciation of the testimonies of his
witnesses.44 He alleged that on 09 June 2006, respondent Agustin executed an Affidavit of Desistance in
the former's favor and was no longer interested in pursuing the case against him

In answer to the Appeal Memorandum, the CSCRO argued that there was no forum-shopping,
considering that the BFP Complaint was based on a different cause of action.46 The Complaint, which
pertained to the alleged illegal transfer of personnel under R.A. No. 6975, was docketed for preliminary
investigation of the alleged violation of the Anti-Graft and Corrupt Practices Act or R.A. No. 3019.47 The
CSCRO further argued that there could be no res judicata, since the dismissal of the BFP Complaint by
virtue of the Resolution dated 05 July 200548 was not a judgment on the merits rendered by a
competent tribunal. The dismissal was, instead, the result of the recommendation of the preliminary
investigators of the Internal Audit Service (IAS) of the BFP.

CSC Ruling

Petitioner's appeal was subsequently denied by CSC in its Resolution No. 080941 dated 19 May 2008
(CSC Resolution).50 It ruled that there was no forum-shopping committed by respondents, and that
substantial evidence existed to hold petitioner administratively liable for grave misconduct and conduct
prejudicial to the best interest of the service.

The CSC explained that the CSCRO Complaint was for violation of R.A. No. 6713, while the BFP Complaint
was for violation of R.A. No. 6975.51 It further ruled that, although both Complaints were anchored on a
similar set of facts, there was no identity of causes of action: thus, even if they were successively filed
before different fora, no forum-shopping existed.52 Although an investigation was then ongoing at the
BFP when the CSCRO took cognizance of the case, no forum-shopping resulted. A perusal of the
proceedings conducted at the BFP shows that only a preliminary investigation was initiated by the IAS-
BFP, a fact-finding committee that recommended the dismissal of the case, which was accordingly
approved by the fire director. The approval of this recommendation cannot be regarded as one based on
merits. Otherwise, it would bar the filing of another case, particularly, with the CSCRO.

With regard to petitioner's administrative liability, the CSC found that because of the nature of the case
extortion of money hardly any documentary evidence could be gathered to prove the act complained of.
As expected, the CSCRO based its findings on the written and oral testimonies of the parties and their
witnesses, as well as on the circumstances surrounding the incident. Respondents clearly established
that petitioner had demanded P5,000 in exchange for their reassignment.54 The CSC further ruled that
it was contrary to human nature for respondents, who were merely rank-and-file employees, to impute
such a grave act to their boss. Their disparity in rank would show that respondents could not have
fabricated their charges.55 It further ruled that the withdrawal of the complaint would not result in their
outright dismissal or absolve the person complained of from administrative liability.

Aggrieved yet again, petitioner filed a Rule 43 Petition with the CA. His main argument was that the CSC
erred in not dismissing respondents' Complaint despite the absence of a certification of non-forum
shopping and respondent's actual forum-shopping, as well as the lack of substantial evidence to hold
him administratively liable.

In his Rule 43 Petition, petitioner claimed that a certificate of non-forum shopping attached to a
complaint is a mandatory requirement as stated in Section 8, Rule I of the Uniform Rules on
Administrative Cases.58 He argued that the causes of action in the two Complaints were similar. With
regard to the proceedings before the CSC, aside from respondents' sole charge of violation of R.A. No.
6713, also included were charges of dishonesty, grave misconduct, and conduct prejudicial to the best
interest of service. Petitioner reasoned that the additional offenses charged were equivalent to a
violation of R.A. No. 6975, so the issues investigated were substantially the same.

In relation to his administrative liability, petitioner argued that the testimonies of respondents should
not be given weight, as their credibility had been rendered questionable by their dismissal from the
service.60 Also, they had already withdrawn their Complaints against him, as stated in their Affidavit of
Desistance (Affidavit),61 in which they admitted that the cases were filed out of a misapprehension of
facts and a misunderstanding between the parties.

Significantly, respondent Caubang denounced the supposed execution of the Affidavit. He claimed that
he did not sign it, and that his purported signature therein was a forgery.63chanroblesvirtualawlibrary

CA Ruling

Subsequently, the CA, in its assailed Decision,64 denied petitioner's appeal. The CA ruled that it was not
the letter-complaint filed by respondents that commenced the administrative proceedings against
petitioner; instead, it was the formal charge filed by Atty. Marasigan-De Lima. The letter-complaint
merely triggered the CSCRO's fact-finding investigation. Considering that the Complaint was initiated by
the proper disciplining authority, it need not contain a certification of non-forum-shopping.
The CA similarly ruled that respondents' act of simultaneously filing Complaints against petitioner both
at the CSC and the BFP did not constitute forum-shopping. While it was conceded that the two
Complaints were founded on the same set of facts involving the same parties, they were nonetheless
based on different causes of action more specifically, the BFP Complaint was for alleged violation of R.A.
No. 3019, while the CSC Complaint was for violation of the provisions of R.A. No. 6713.66 Furthermore,
the doctrine of res judicata applies only to judicial or quasi-judicial proceedings, not to the exercise of
administrative powers.

With regard to the administrative liability of petitioner, the CA found that substantial evidence
supported the CSC's findings.68 It likewise ruled that the testimonies of the witnesses of petitioner were
incompetent and immaterial, as these could prove something else entirely, but did not disprove
petitioner's extortion.69 Also, the withdrawal of a complaint does not result in outright dismissal or
discharge a person from any administrative liability.

Petitioner filed a Motion for Reconsideration,71 but the CA denied it in its assailed Resolution dated 30
March 2009.72chanroblesvirtualawlibrary

Petitioner is now before this Court arguing the following: (1) the CA erred in affirming the CSC
Resolution and in ruling that respondents were not guilty of forum-shopping; and (2) substantial
evidence does not exist to hold petitioner administratively liable for grave misconduct and conduct
prejudicial to the best interest of the service.

In their Comment, respondents counter that a certificate of non-forum shopping is not required if the
one who files the formal charge is the head of agency.73 They further argue that the case filed with the
BFP was in the nature of violation under R.A. No. 3019, whereas the case filed before the CSC was in
violation of R.A. No. 6713. A single act may result in two or more unlawful transgressions punishable
under different laws.74 As to the matter of administrative liability, the CSC's findings, especially when
affirmed by the CA, are binding upon this Court.

Issues

Based on the submissions of both parties, the following main issues are presented for resolution by this
Court

I. Whether or not respondents are guilty of forum-shopping.

II. Whether the CA erred in ruling that substantial evidence exists to hold petitioner administratively
liable for grave misconduct and conduct prejudicial to the best interest of service.

The Court's Ruling

The Petition is devoid of merit. We rule that petitioner is administratively liable for grave misconduct
and conduct prejudicial to the best interest of the service under the Administrative Code of 1987; thus,
we affirm his dismissal from service.

Discussion

I.

Respondents are not guilty of forum-shopping.

Petitioner argues that respondents are guilty of forum-shopping for filing two allegedly identical
Complaints in violation of the rules on forum-shopping.76 He explains that dishonesty, grave
misconduct, and conduct prejudicial to the best interest of the service charges included in the CSCRO
Complaint were charges that were equivalent to the BFP Complaint, the subject of which was his alleged
violation of R.A. 6975 or illegal transfer of personnel.

We do not agree with petitioner. In Yu v. Lim,78 this Court enumerated the requisites of forum-shopping
as follows:

Forum-shopping exists when the elements of litis pendentia are present or where a final judgment in
one case will amount to res judicata in another. Litis pendentia requires the concurrence of the
following requisites: (1) identity of parties, or at least such parties as those representing the same
interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded
on the same facts; and (3) identity with respect to the two preceding particulars in the two cases, such
that any judgment that may be rendered in the pending case, regardless of which party is successful,
would amount to res judicata in the other case.79 (Emphasis supplied)
Applying the foregoing requisites to this case, we rule that the dismissal of the BFP Complaint does not
constitute res judicata in relation to the CSCRO Complaint. Thus, there is no forum-shopping on the part
of respondents.

Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter
settled by judgment." It lays down the rule that an existing final judgment or decree on the merits,
rendered without fraud or collusion by a court of competent jurisdiction upon any matter within its
jurisdiction, is conclusive of the rights of the parties or their privies in all other actions or suits, in the
same or any other judicial tribunal of concurrent jurisdiction, on the points and matters in issue in the
first suit.

In order that res judicata may bar the institution of a subsequent action, the following requisites must
concur: (a) the former judgment must be final; (b) it must have been rendered by a court having
jurisdiction over the subject matter and the parties; (c) it must be a judgment on the merits; and (d)
there must be between the first and the second actions (i) identity of parties, (ii) identity of subject
matter, and (iii) identity of cause of action.81chanroblesvirtualawlibrary

A judgment may be considered as one rendered on the merits "when it determines the rights and
liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory
objections;"or when the judgment is rendered "after a determination of which party is right, as
distinguished from a judgment rendered upon some preliminary or formal or merely technical point."

In this case, there is no "judgment on the merits" in contemplation of the definition above. The dismissal
of the BFP Complaint in the Resolution dated 05 July 2005 was the result of a fact-finding investigation
for purposes of determining whether a formal charge for an administrative offense should be filed.
Hence, no rights and liabilities of parties were determined therein with finality.

The CA was correct in ruling that the doctrine of res judicata applies only to judicial or quasi-judicial
proceedings, and not to the exercise of administrative powers.83 Administrative powers here refer to
those purely administrative in nature,84 as opposed to administrative proceedings that take on a quasi-
judicial character.

In administrative law, a quasi-judicial proceeding involves (a) taking and evaluating evidence; (b)
determining facts based upon the evidence presented; and (c) rendering an order or decision supported
by the facts proved.86 The exercise of quasi-judicial functions involves a determination, with respect to
the matter in controversy, of what the law is; what the legal rights and obligations of the contending
parties are; and based thereon and the facts obtaining, the adjudication of the respective rights and
obligations of the parties.87 In Bedol v. Commission on Elections,88 this Court declared
Quasi-judicial or administrative adjudicatory power on the other hand is the power of the administrative
agency to adjudicate the rights of persons before it. It 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.

The Court has laid down the test for determining whether an administrative body is exercising judicial or
merely investigatory functions: adjudication signifies the exercise of the power and authority to
adjudicate upon the rights and obligations of the parties. Hence, if the only purpose of an investigation
is to evaluate the evidence submitted to an agency based on the facts and circumstances presented to
it, and if the agency is not authorized to make a final pronouncement affecting the parties, then there is
an absence of judicial discretion and judgment.

In this case, an analysis of the proceedings before the BFP yields the conclusion that they were purely
administrative in nature and constituted a fact-finding investigation for purposes of determining
whether a formal charge for an administrative offense should be filed against petitioner.

It can be gleaned from the Resolution dated 05 July 2005 itself that the purpose of the BFP proceedings
was to determine whether there was sufficient ground to warrant the filing of an appropriate
administrative offense against petitioner. To recall, the Resolution dated 05 July 2005 states:

The re-assignment of the complainants is within the ambit of authority, CSC Resolution No. 93402 dated
11 February 1993, the commission ruled as follows:

"That reassignment may be ordered by the head of office of the duly authority [sic] representative when
the exigencies of the service so require but subject to the condition that there will be no reduction in
rank, status or salary, further on Bongbong vs Paracaldo (57 SCRA 623) the supreme court ruled held
[sic] that "on general principle petitioner may be transferred as to the exigencies of the service require".
xxx
In view of the documents on record, the undersigned investigator finds no sufficient ground to warrant
the filing of appropriate administrative offense against the respondent.

WHEREFORE, premises considered, this office (IAS) most respectfully recommends that the
administrative complaint against C/INSP CARLITO ENCINAS, BFP be dismissed for insufficiency of
evidence.90 (Emphases supplied)

The proceedings before the BFP were merely investigative, aimed at determining the existence of facts
for the purpose of deciding whether to proceed with an administrative action. This process can be
likened to a public prosecutor's preliminary investigation, which entails a determination of whether
there is probable cause to believe that the accused is guilty, and whether a crime has been committed.

The Ruling of this Court in Bautista v. Court of Appeals91 is analogously applicable to the case at bar. In
that case, we ruled that the preliminary investigation conducted by a public prosecutor was merely
inquisitorial and was definitely not a quasi-judicial proceeding:

A closer scrutiny will show that preliminary investigation is very different from other quasi-judicial
proceedings. A quasi-judicial body has been defined as "an organ of government other than a court and
other than a legislature which affects the rights of private parties through either adjudication or rule-
making."

xxx

On the other hand, the prosecutor in a preliminary investigation does not determine the guilt or
innocence of the accused. He does not exercise adjudication nor rule-making functions. Preliminary
investigation is merely inquisitorial, and is often the only means of discovering the persons who may be
reasonably charged with a crime and to enable the fiscal to prepare his complaint or information. It is
not a trial of the case on the merits and has no purpose except that of determining whether a crime has
been committed and whether there is probable cause to believe that the accused is guilty thereof. While
the fiscal makes that determination, he cannot be said to be acting as a quasi-court, for it is the courts,
ultimately, that pass judgment on the accused, not the fiscal. (Emphases supplied)

This principle is further highlighted in MERALCO v. Atilano,92 in which this Court clearly reiterated that a
public prosecutor, in conducting a preliminary investigation, is not exercising a quasi-judicial function. In
a preliminary investigation, the public prosecutor inspects the records and premises, investigates the
activities of persons or entities coming under the formers' jurisdiction, or secures or requires the
disclosure of information by means of accounts, records, reports, statements, testimony of witnesses,
and production of documents. In contrast, judicial adjudication signifies the exercise of power and
authority to adjudicate upon the rights and obligations of concerned parties, viz.:

This is reiterated in our ruling in Spouses Balangauan v. Court of Appeals, Special Nineteenth Division,
Cebu City, where we pointed out that a preliminary investigation is not a quasi-judicial proceeding, and
the DOJ is not a quasi-judicial agency exercising a quasi-judicial function when it reviews the findings of a
public prosecutor regarding the presence of probable cause. A quasi-judicial agency performs
adjudicatory functions when its awards determine the rights of parties, and its decisions have the same
effect as a judgment of a court." This is not the case when a public prosecutor conducts a preliminary
investigation to determine probable cause to file an information against a person charged with a
criminal offense, or when the Secretary of Justice reviews the former's orders or resolutions" on
determination of probable cause.

In Odchigue-Bondoc, we ruled that when the public prosecutor conducts preliminary investigation, he
thereby exercises investigative or inquisitorial powers. Investigative or inquisitorial powers include the
powers of an administrative body to inspect the records and premises, and investigate the activities of
persons or entities coming under his jurisdiction, or to secure, or to require the disclosure of information
by means of accounts, records, reports, statements, testimony of witnesses, and production of
documents. This power is distinguished from judicial adjudication which signifies the exercise of power
and authority to adjudicate upon the rights and obligations of concerned parties. Indeed, it is the
exercise of investigatory powers which sets a public prosecutor apart from the court. (Emphasis
supplied)

Indeed, the public prosecutor exercises investigative powers in the conduct of a preliminary
investigation to determine whether, based on the evidence presented, further action should be taken
through the filing of a criminal complaint in court. Similarly, in the instant case, the BFP exercised its
investigative or fact-finding function to determine whether, based on the facts and the evidence
presented, further administrative action in the form of a formal charge should be taken against
petitioner. In neither instance is there in adjudication upon the rights, obligations, or liabilities of the
parties before them.

With the above disquisition, we rule that the dismissal of the BFP Complaint cannot operate as res
judicata. Therefore, forum-shopping is unavailing in this case.

II.

The CA was correct in ruling that there was substantial evidence to hold petitioner administratively
liable for grave misconduct and conduct prejudicial to the best interest of the service.
On the substantive issue, petitioner claims that the findings are based on a misapprehension of facts.
The dismissal of respondents from service allegedly placed their credibility in question.

We do not agree. We find petitioner administratively liable for his act of demanding P5,000 from
respondents in exchange for their non-reassignment.

At the outset, we stress the settled rule that the findings of fact of administrative bodies will not be
interfered with by the courts in the absence of grave abuse of discretion on the part of the former, or
unless the aforementioned findings are not supported by substantial evidence.94 These factual findings
carry even more weight when affirmed by the CA, in which case they are accorded not only great
respect, but even finality. These findings are binding upon this Court, unless it is shown that the
administrative body has arbitrarily disregarded or misapprehended evidence before the latter to such an
extent as to compel a contrary conclusion, had the evidence been properly appreciated.95 This rule is
rooted in the doctrine that this Court is not a trier of facts.96 By reason of the special knowledge and
expertise of administrative agencies over matters falling under their jurisdiction, they are in a better
position to pass judgment on those matters.

This Court will not disturb the factual findings of both the CSC and the CA, absent any compelling reason
to do so. The conclusion reached by the administrative agencies involved after their own thorough
investigations and hearings, as well as their consideration of the evidence presented before them and
their findings thereon, especially when affirmed by the CA must now be regarded with great respect and
finality by this Court.

We rule that the alleged dismissal of respondents from the service would not suffice to discredit them as
witnesses. In People v. Dominguez,98 this Court had occasion to rule that even a prior criminal
conviction does not by itself suffice to discredit a witness; the testimony of that witness must be assayed
and scrutinized in exactly the same way the testimonies of other witnesses must be examined for their
relevance and credibility.99 In Gomez v. Gomez-Samson,100 this Court echoed its previous
pronouncement that even convicted criminals are not excluded from testifying as long as, having organs
of sense, they "can perceive and perceiving can make known their perceptions to others."

This pronouncement is even more significant in this case, as what petitioner is alleging is not any past
criminal conviction of respondents, but merely their dismissal from the service.102 Scrutinizing the
testimonies of respondents, we find, as did both the CSC and the CA, that these testimonies carry more
weight than petitioner's self-serving statements and blanket denials.
Respondents, through their testimonies, were able to establish that petitioner told them that unless
they paid him P5,000, they would be re-assigned to far-flung areas. The consistency of their testimonies
was further bolstered by the fact that they had been cross-examined by petitioner's counsel. Petitioner
was unable to rebut their claims other than by mere denials. Even the admission of Supt. Tutaan that he
gave the instructions to reassign respondents cannot disprove the latter's claims. As regards the
testimonies of the witnesses of petitioner, we hold that even these testimonies are irrelevant in
disproving the alleged extortion he committed, as these were mainly related to respondents' supposed
illegal activities, which are not the issue in this case.

Even assuming that an Affidavit of Desistance was indeed executed by respondents, petitioner is still not
exonerated from liability. The subsequent reconciliation of the parties to an administrative proceeding
does not strip the court of its jurisdiction to hear the administrative case until its resolution. Atonement,
in administrative cases, merely obliterates the personal injury of the parties and does not extend to
erase the offense that may have been committed against the public service.103 The subsequent
desistance by respondents does not free petitioner from liability, as the purpose of an administrative
proceeding is to protect the public service based on the time-honored principle that a public office is a
public trust.104 A complaint for malfeasance or misfeasance against a public servant of whatever rank
cannot be withdrawn at any time for whatever reason by a complainant, as a withdrawal would be
"anathema to the preservation of the faith and confidence of the citizenry in their government, its
agencies and instrumentalities."105 Administrative proceedings "should not be made to depend on the
whims and caprices of complainants who are, in a real sense, only witnesses therein."

In view of the foregoing, we rule that petitioner's act of demanding money from respondents in
exchange for their non-reassignment constitutes grave misconduct. We have defined grave misconduct
as follows:

Misconduct is a transgression of some established and definite rule of action, more particularly,
unlawful behavior or gross negligence by a public officer; and the misconduct is grave if it involves any of
the additional elements of corruption, such as willful intent to violate the law or to disregard established
rules, which must be established by substantial evidence.107 (Emphasis supplied)

Furthermore, petitioner's acts likewise constitute conduct prejudicial to the best interest of the service.
In Philippine Retirement Authority v. Rupa108 this Court elaborated on the specific acts that constitute
the grave offense of conduct prejudicial to the best interest of the service, considering that no concrete
description is provided under the Civil Service Law and rules. The Court outlined therein following acts:
misappropriation of public funds, abandonment of office, failure to report back to work without prior
notice, failure to keep in safety public records and property, making false entries in public documents,
and falsification of court orders.
Applying this principle to the present case, we hold that petitioner's offense is of the same gravity or
odiousness as that of the aforementioned acts and would likewise amount to conduct prejudicial to the
best interest of the service.

As to the imposable penalty, grave misconduct is a grave offense punishable by dismissal even for the
first offense.110 The penalty of dismissal includes forfeiture of retirement benefits, except accrued leave
credits, and perpetual disqualification from reemployment in government service and bar from taking
civil service examinations.111 On the other hand, conduct prejudicial to the best interest of the service
is likewise a grave offense, but with a less severe penalty of suspension of six ( 6) months and one ( 1)
day to one ( 1) year for the first offense and dismissal for the second offense.

Considering that petitioner was found guilty of two (2) offenses, then the penalty of dismissal from the
service-the penalty corresponding to the most serious offense-was properly imposed.

WHEREFORE, in view of the foregoing, this petition is hereby DENIED. The Decision dated 20 November
2008 and the Resolution dated 30 March 2009 issued by the CA in CA-G.R. SP No. 104074 are hereby
AFFIRMED.