FACTS:
NAMECOR was a corporation with shares owned by a foreign corporation which in turn has some of its shares owned by private
respondents. Petitioners sat as directors and officers of the subject corporation. Private respondents averred that these petitioners violate their duties of loyalty and diligence by unlawfully refusing the private respondents from participating in the management of the corporation. Meanwhile, the US court issued a temporary restraining order prohibiting the private respondents from being proxies for the American corporation. This order was unheeded.
They were elected as the new directors in an annual stockholders’
meeting and yet they averred that they were prohibited unlawfully by the sitting directors from assuming office. They sought thereby a temporary restraining order against the petitioners. Hence, these petition by the petitioners against it.
HELD:
The petitioners do not question the jurisdiction of the SEC over the case between them and the private respondents. What they challenge is the continuance of the temporary restraining order issued by the respondent SEC and the apparent delay of the latter's en banc division in resolving their main and supplemental petitions which also pray for th e lifting of the question ed restraining ord er.
The SEC "in order to effectively exercise such jurisdiction," is conferred the power, inter alia, "to issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent
provisions of the Rules of Court shall apply."
Since the SEC is at least a co-equal body of the Regional Trial Court when it adjudicates controversies over which it has jurisdiction, it follows that the temporary restraining order issued by SEC must have the same life-span as that issued by the trial court. It is a well-settled rule that a temporary restraining order issued by a trial court has a life of only twenty (20) days—under Section 5, Batas Pambansa Blg. 224, a judge may issue a temporary
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-restraining order with a limited life of twenty (20) days from date of issue. If before the expiration of the 20-day period the application for preliminary injunction is denied, the temporarily restraining order would thereby be deemed automatically vacated. If no action is taken by the judge on the application for preliminary injunction within the said 20 days, the temporary restraining order would automatically expire on the 20th day by the sheer force of law, no judicial declaration to that effect being necessary. A temporary restraining order can no longer exist indefinitely for it has become truly temporary.
To the extent, therefore, that the enforcement of the temporary restraining order issued by the respondent SEC exceeded twenty (20) days, this Court rules that the said respondent committed grave abuse of discretion. However, although the questioned order no longer has any force and effect, the respondent SEC still has the jurisdiction and obligation to p roceed with th e h earing of th e cas e on the merits and to issue the appropriate orders pursuant thereto subject to review by the Court of Appeals and eventually this Court.
EXCEPTIONS TO DOCTRINE OF FINALITY 98 PT & T V. COA
146 SCRA 190 FACTS:
Petitioner was granted a franchise whereby he was given a preferential tax rate. A subsequent law was passed whereby it was ruled that any grant of a similar franchise which extends benefits to another not mentioned with the franchise of petitioner shall likewise be given to petitioner. Thereafter, a franchise was granted to another provider and had a smaller tax rate. The COA conducted an audit and found out the deficiency tax payment of petitioner. It then sought exception averring that it applied the tax rate given to DOMSAT.
HELD:
A curs ory ex amination of the two (2) letters in question shows that the same are not a "final award, order or decision" within the meaning of the aforequoted provisions. Respondent Commission in the said letters did not decide the issue. It did not render a decision, order or final award. It merely expressed an opinion.
Even assuming that the "opinion" of respondent Commission expressed in its two (2) letters is proper subject for review, the same is in accordance with the law.
In construing the "most favored treatment clause" of Republic Act No. 5048, it has been held that the principle behind such provision is that of "fair play" ! "to place both competing groups or entities on equal footing and not to give one an advantage over the other."
(Davao Light and Power Co., Inc. vs. The Commissioner of Customs, 44 SCRA 127). An examination of the franchises of petitioner PT & T and DOMSAT discloses that while they are both engaged in telecommunication activities, they are not necessarily in competition with each other. DOMSAT is a "carrier's carrier". It is a communications outfit that provides services to other communication petitions outfits. It was formed for the exploitation of the benefits of the communications satellite system. It is principally a "middleman" between the operators of the communications satellite system and the domestic carriers such as petitioner. Thus, its franchise states that petitioner shall have "the right and authority ... to construct, maintain and operate such ground and other facilities, as needed to deliver telecommunications services to and from the communications satellite system and the telephone, telegraph, telex and other networks and terminals of specialized telecommunications network of government and/or private persons and/or corporations such as
NOTES: ADMINISTRATIVE LAW PAGE 80
-computer-data communications systems and point-to-point or switched voice networks.
On the other hand, petitioner was granted a franchise to render communications services to end users. It was not licensed to operate as a "carrier's carrier." Thus, its franchise states that it has authority to install and operate facilities for "international and domestic public communications." Therefore, since DOMSAT caters to other carriers while petitioner caters to end users, they are not competitors. Stated otherwise, there can be no business rivalry between the two firms inasmuch as the customers of one are not the customers of the other and vice-versa.
Another reason why DOMSAT and petitioner cannot be considered competing firms is the fact that the former principally provides communications services through the communications-satellite system, while the latter-does so principally through its own facilities.
Since petitioner and DOMSAT are not competitors, petitioner cannot avail itself of the privilege of paying its franchise tax at the rate of 1/2% instead of 1-1/2% as provided in its franchise.
Moreover, what petitioner is claiming in effect, is a reduction of its taxes due the Government. The rule is that, as the power of taxation is a high prerogative of sovereignty, its relinquishment is never presumed and any reduction or dimunition thereof with respect to its mode or its rate must be strictly construed and the same must be couched in clear and unmistakable terms in order that it may be applied.
DOCTRINE OF PRIOR RESORT/PRIMARY JURISDICTION 99 INDUSTRIAL ENTERPRISES V. CA
184 SCRA 426
FACTS:
Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through the Bureau of Energy Development (BED) for the exploration of two coal blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for another coal operating contract for the exploration of three additional coal blocks which, together with the srcinal two blocks, comprised the so-called "Giporlos Area."
IEI was later on advised that in line with the objective of rationalizing the country's over-all coal supply-demand balance . . . the logical coal operator in the area should be the Marinduque Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to MMIC. Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the subject of IEI's coal operating contract.
Subsequently, IEC sought the rescission of the memorandum of agreement due to several raised issues and strangely enough, the president of the IEC and MMIC is one and the same person.
Anyway, the trial court th rough a summary jud gment held th at the rescission was valid but this was reversed by the appellate court.
HELD:
The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decide the suit for rescission of the Memorandum of Agreement concerning a coal operating contract over coal blocks. A corollary question is whether or not respondent Court of Appeals erred in holding that it is the Bureau of Energy
NOTES: ADMINISTRATIVE LAW PAGE 81
-Development (BED) which has jurisdiction over said action and not the civil court.
While the action filed by IEI sought the resciss ion of what app ears to be an ordinary civil contract cognizable by a civil court, the fact is that the Memorandum of Agreement sought to be rescinded is derived from a coal-operating contract and is inextricably tied up with the right to develop coal-bearing lands and the de termination of whether or not the reversion of the coal operating contract over the subject coal blocks to IEI would be in line with the integrated national program for coal-development and with the objective of rationalizing the country's over-all coal-supply-demand balance, IEI's cause of action was not merely the rescission of a contract but the reversion or return to it of the operation of the coal blocks.
Thus it was that in its Decision ordering the rescission of the Agreement, the Trial Court, inter alia, declared the continued efficacy of the coal-operating contract in IEI's favor and directed the BED to give due course to IEI's application for three (3) IEI more coal blocks. These are matters properly falling within the domain of the BED.
For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D. No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive and integrated national program for the exploration, exploitation, and development and extraction of fossil fuels, such as the country's coal resources; adopting a coal development program; regulating all activities relative thereto; and undertaking by itself or through service contracts such exploitation and development, all in the interest of an effective and coordinated development of extracted resources.
100 RCPI V. NTC 184 SCRA 517
FACTS:
PLDT filed an application with respondent Commission for the Approval of Rates for Digital Transmission Service F acilities und er NTC Case No. 84-003. The respondent Commission provisionally approved and set the case for hearing within the prescribed 30-day period allowed by law. The petitioners except PT&T were informed of the hearing. They moved to oppose and file a reply to the application of PLDT but was denied.
HELD:
The Public Service Commission found that the application involved in the present petition is actually an application for approval of rates for digital transmission service facilities which it may approve provisionally and without the necessity of any notice and hearing as provided in the above-quoted provision of law.
Well-settled is the rule tha t the Public Service Commission now is empowered to approve provisionally rates of utilities without the necessity of a prior hearing. Under the Public Service Act, as amended (CA No. 146), the Board of Communications then, now the NTC, can fix a provisional amount for the subscriber's investment to be effective immediately, without hearing makes no distinction between initial or revised rates. These rates are necessarily proposed merely, until the Commission approves them.
Moreover, the Commission can hear and approve revised rates without published notices or hearing. The reason is easily discerned from the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved after final hearing (Republic v. Medina, supra; Cordero v. Energy Regulatory Board, G.R. No. 83931, November 3, 1988, En Banc, Minute Resolution) and it was so stated in the case at bar, in the National Telecommunications Commission's order of January 25, 1984.
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-The Commission did not grant the PLDT any authority to engage in new communication service, but merely in any new proved provisionally PLDT's proposed revision of its then authorized schedule of rates for the lease on availment by endusers of the digital full period leased lines or channels for data transmission which said company acquired, installed, and presently maintain in serviceable condition, a relief well within its power to grant.
Undoubtedly, a public utility is entitled to a just compensation and a fair return upon the value of its property while it is being used in public service.
Finally, there is a legal presumption that the rates are reasonable and it must be conceded that the fixing of rates by the government through its authorized agent, involves the exercise of reasonable discretion, and unless there is an abuse of that discretion, the courts will not interfere. Likewise, as a rule, the court does not interfere with administrative action prior to its completion on finality.
A doctrine long recognized is that where the law confines in an administrative office the power to determine particular questions or matters upon the facts presented, the jurisdiction of such office shall prevail over the courts. Hence, findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence.
101 VIDAD V. RTC 227 SCRA 271 FACTS:
A group of public school teachers held a strike against the non-payment of their salaries by the Department of Budget as well as against the corruption allegedly existing in the DECS. This prompted a return-to-work order and following circumstances.
Afterwards, the teache rs filed a petition for proh ibition.
HELD:
It should be conceded that the various complaints against the DECS officials have prescinded from the administrative actions taken, and contemplated to be yet taken, against public school teachers, the plaintiffs in the cases pending with the court a quo.
The said complaints charge the defendants, all government officials, with having illegally withheld their salaries, having wrongfully filed administrative cha rges against the plaintiffs, having unjustifiably refused to inform the latter of the nature and accuse of accusation upon which the charges were initiated, having inexcusably violated elemental due process, and having erroneously applied the law. The school teachers pray for actual and moral damages, plus attorney's fees, as well as for an order restraining the defendants from further proceeding with the administrative investigations.
The contention of the school teachers that the DECS officials are being sued solely in their private capacity certainly is not borne out by their above allegations and prayers. The root of the cases filed below deals, in fact, on the performance of official functions by the DECS officials. Whether the actions they have taken were proper or improper, or whether they have acted in good faith or bad faith, cannot, pending a full hearing that would aptly afford all parties an opportunity to ventilate their respective contentions, be yet determined. Until then, we must presume that official duties have been regularly performed.
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We accordingly hold that the Solicitor General did not act improperly in deciding to represent the DECS officials in the above cases.
The defendants' motion to dismiss the complaints have likewise been precipitately sought, and we see no reversible error in the denial thereof by the lower court. The various complaints filed by the public school teachers allege bad faith on the part of the DECS officials. It cannot be pretended this early that the same could be impossible of proof. On the assumption that the plaintiffs are able to establish their allegations of bad faith, a judgment for damages can be warranted. Public officials are certainly not immune from damages in their personal capacities arising from the acts done in bad faith; in these and similar cases, the public officials may not be said to have acted within the scope of their official authority, and no longer are they protected by the mantle of immunity for official actions. 12
It was, nonetheless, inopportune for the lower court to issue the restraining orders. The authority of the DECS Regional Director to issue the return to work memorandum, to initiate the administrative charges and to constitute the investigating panel can hardly be disputed.
102 SAAVEDRA V. DOJ 226 SCRA 438 FACTS:
The owners of shares of stock of PPI sold the same to petitioner. A memorandum of agreement and deed of assignment was drafted to evidence the transaction. There was however non-payment of balance by petitioner and that is why the private respondents filed with the SEC for rescission. The petitioner in turn filed a complaint for damages against the private respondents. He alleged
in the verification that he is the president of the PPI. A complaint for perjury was filed against him. Probable cause was found to exist for perjury. Petitioner sought the reversal of this finding.
HELD:
Under the doctrine of primary jurisdiction, courts cannot and will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal having been so placed within its special competence under a regulatory scheme. In such instances the judicial process is suspended pending referral to the administrative body for its view on the matter in dispute. 13 Consequently, if the courts cannot resolve a question which is within the leg al co mpetence of an administrative body prior to the resolution of that question by the administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative agency to ascertain technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered, 14 much less can the Provincial Prosecutor arrogate to himself the jurisdiction vested so lely with the SEC.
In the case at bar, the applicable regulatory statute is P.D. No. A conferring upon the SEC the legal competence to rule on intracorporate disputes, which competence had already been upheld by us in a number of cases. 15 Considering that it was definitely settled in Saavedra, Jr. v. SEC that the issues of ownership and automatic rescission are intracorporate in nature, then the Provincial Prosecutor, clearly, has no authority whatsoever to rule on the same. In fact, if we were to uphold the validity of the DOJ Resolutions brought before us, as respondents suggest, we would be sanctioning a flagrant usurpation or preemption of that primary and exclusive jurisdiction which SEC already enjoys.