Lupangco vs. Court of Appeals
Lupangco vs. Court of Appeals
ANNOTATED
Lupangco vs. Court of Appeals
________________
* FIRST DIVISION.
849
VOL. 160, APRIL 29, 1988 849
Lupangco vs. Court of Appeals
ruling which resulted from proceedings wherein the administrative body involved
exercised its quasi-judicial functions. In Black’s Law Dictionary, quasi-judicial is defined as
a term applied to the action, discretion, etc., of public administrative officers or bodies
required to investigate facts, or ascertain the existence of facts, hold hearings, and draw
conclusions from them, as a basis for their official action, and to exercise discretion of a
judicial nature. To expound thereon, quasi-judicial adjudication would mean a determination
of rights, privileges and duties resulting in a decision or order which applies to a specific
situation. This does not cover rules and regulations of general applicability issued by the
administrative body to implement its purely administrative policies and functionB like
Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the
integrity of licensure examinations.
Same; Same; Same;Axiom In administrative law that administrative authority should
not act arbitrarily and capriciously in the issuance of rules and regulations.—It is an axiom
in administrative law that administrative authorities should not act arbitrarily and
capriciously in the issuance of rules and regulations. To be valid, such rules and regulations
must be reasonable and fairly adapted to secure the end in view. If shown to bear no
reasonable relation to the purposes for which they are authorized to be issued, then they
must be held to be invalid.
Same; Same; Same; Resolution No. 105 prohibiting examinees from attending any review
class, briefing conference conducted by or shall receive any hand-out, review materials or any
tip from any school, college or any university or any review center infringes on the examinees’
right to liberty guaranteed by the Constitution; Reason.—Resolution No. 105 is not only
unreasonable and arbitrary, it also infringes on the examinees’ right to liberty guaranteed
by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how
they should prepare themselves for the licensure examinations. They cannot be restrained
from taking all the lawful steps needed to assure the fulfillment of their ambition to become
public accountants. They have every right to make use of their faculties in attaining success
in their endeavors. They should be allowed to eDjoy their freedom to acquire useful
knowledge that will promote their personal growth.
Same; Same; Same; Resolution No. 105 violates the academic freedom of the schools
concerned.—Another evident objection to Resolution No. 105 is that it violates the academic
freedom of the schools concerned. Respondent PRC cannot interfere with the conduct of
850
review that review schools and centers believe would best enable their enrollees to meet
the standards required before becoming a fullfledged public accountant. Unless the means or
methods of instruction are clearly found to be inefficient, impractical, or riddled with
corruption, review schools and centers may not be stopped from helping out their students.
PETITION for certiorari to review the decision of the Court of Appeals.
GANCAYCO, J.:
Is the Regional Trial Court of the same category as the Professional Regulation
Commission so that it cannot pass upon the validity of the administrative acts of the
latter? Can this Commission lawfully prohibit the examinees from attending review
classes, receiving handout materials, tips or the like three (3) days before the date of
examination? These are the issues presented to the court by this petition for certiorari
to review the decision of the Court of Appeals promulgated on January 13,1987,
in CA-G.R. SP No. 10591, declaring nuU and void the Order dated October 21,1986
**
issued by the Regional Trial Court of Manila, Branch 32 in Civil Case No. 86–37950
entitled “Lupo L. Lupangco, et al. vs. Professional Regulation Commission.”
The records show the following undisputed facts:
On or about October 6,1986, herein respondent Professional Regulation
Commission (PRC) issued Resolution No. 105 as part of its “Additional Instructions
to Examinees,” to all those applying for admission to take the licensure examinations
in accountancy. The resolution embodied the following pertinent provisions:
“No examinee shall attend any review class, briefing, conference or the like conducted by, or
shall receive any hand-out, review material, or any tip from any school, college or university,
or any review
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** Penned by Justice Segundino C. Chua, and concurred in by Justices Carolina C. Griiio-Aquino and
851
center or the like or any reviewer. lecturer. instructor official or employee of any of the
aforementioned or similar institutions during the three days immediately preceding every
examination day including the examination day.
“Any examinee violating this instruction shall be subject to the sanctions prescribed by
Sec. 8, Art. III of the Rules and Regulations of the Commission." 1
On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure
examinations in accountancy scheduled on October 25 and November 2 of the same
year, filed in their own behalf and in behalf of all others similarly situated like them,
with the Regional Trial Court of Manila, Branch XXXII, a complaint for injunction
with a prayer for the issuance of a writ of preliminary injunction against respondent
PRC to restrain the latter from enforcing the above-mentioned resolution and to
declare the same unconstitution.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that
the lower court had no jurisdiction to review and to enjoin the enforcement of its
resolution. In an Order of October 21,1987, the lower court declared that it had
jurisdiction to try the case and enjoined the respondent commission from enforcing
and giving effect to Resolution No. 105 which it found to be unconstitutional,
Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the
Court of Appeals a petition for the nullification of the above Order of the lower court.
Said petition was granted in the Decision of the Court of Appeals promulgated on
January 13,1987, to wit:
“WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the order
dated October 21, 1986 issued by respondent court is declared null and void. The respondent
court is further directed to dismiss with prejudice Civil Case No. 86–37950 for want of
jurisdiction over the subject matter thereof. No costs in this instance.
SO ORDERED." 2
Hence, this petition. The Court of Appeals, in deciding that the Regional Trial
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852
Court of Manila had no jurisdiction to entertain the case and to enjoin the
enforcement of Resolution No. 105, stated as its basis its conclusion that the
Professional Regulation Commission and the Regional Trial Court are co-equal
bodies. Thus it held—
“That the petitioner Professional Regulatory Commission is at least a co-equal body with the
Regional Trial Court is beyond question, and co-equal bodies have no power to control each
other or interfere with each other’s acts." 3
To strengthen its position, the Court of Appeals relied heavily on National
Electrification Administration vs. Mendoza, which
4 cites Pineda vs.
Lantin and Philippine Pacific Fishing, Inc. vs. Luna, where this Court held that a
5 6
Court of First Instance cannot interefere with the orders of the Securities and
Exchange Commission, the two being co-equal bodies.
After a close scrutiny of the facts and the record of this case, We rule in favor of
the petitioner.
The cases cited by respondent court are not in point. It is glaringly apparent that
the reason why this Court ruled that the Court of First Instance could not interfere
with the orders of the Securities and Exchange Commission was that this was so
provided for by the law. In Pineda vs. Lantin, We explained that whenever a party is
aggrieved by or disagrees with an order or ruling of the Securities and Exchange
Commission, he cannot seek relief from courts of general jurisdiction since under the
Rules of Court and Commonwealth Act No. 83, as amended by Republic Act No. 635,
creating and setting forth the powers and functions of the old Securities and
Exchange Commission, his remedy is to go to the Supreme Court on a petition for
review. Likewise, in Philippine Pacific Fishing Co., Inc. vs. Luna, it, was stressed
that if an order of the Seeurities and Exchange Commission is erroneous, the
appropriate remedy to take is first, within the Commission itself, then, to the
Supreme Court as mandated in Presidential Decree No. 902-A, the law creating the
new Securities and Exchange Commission.
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853
Nowhere in the said cases was it held that a Court of First Instance has no
jurisdiction over all other government agencies. On the contrary, the ruling was
specifically limited to the Securities and Exchange Commission.
The respondent court erred when it placed the Securities and Exchange
Commission and the Professional Regulation Commission in the same category. As
already mentioned, with respect to the Securities and Exchange Commission, the
laws cited explicitly provide for the procedure that need be taken when one is
aggrieved by its order or ruling. Upon the other hand, there is no law providing for
the next course of action for a party who wants to question a ruling or order of the
Professional Regulation Commission. Unlike Commonwealth Act No. 83 and
Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223,
the law creating the Professional Regulation Commission, that orders or resolutions
of the Commission are appealable either to the Court of Appeals or to the Supreme
Court. Consequently, Civil Case No. 86–37950, which was filed in order to enjoin the
enforcement of a resolution of the respondent Professionai Regulation Commission
alleged to be unconstitutional, should fall within the general jurisdiction of the Court
of First Instance, now the Regional Trial Court. 7
What is clear from Presidential Decree No. 223 is that the Professional Regulation
Commission is attached to the Office of the President for general direction and
coordination. Well settled iii’Our jurisprudence is the view that even acts of the
8
Office of the President may be reviewed by the Court of First Instance (now the
Regional Trial Court). In Medalla vs. Sayo,9 this rule was thoroughly propounded on,
to wit:
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“Sec, 19. Jurisdiction in civil cases.—Regional Trial Courts shall exercise exclusive original jurisdiction.
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation.
xxxx
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial
or quasijudicial functions.”
854
“In so far as jurisdiction of the Court below to review by Certiorari decisions and/or
resolutions of the Civil Service Commission and of the Presidential Executive Assistant is
concerned, there should be no question but that the power of judicial review should be upheld.
The following rulings buttress this conclusion:
The objection to a judicial review of a Presidential act arises from a failure to recognize the most
important principle in our system of government, i.e., the separation of powers into three co-equal
departments, the executives, the legislative and the judicial, each supreme within its own assigned
powers and duties. When a presidential act is challenged before the courts of justice, it is not to be
implied therefrom that the Executive is being made subject and subordinate to the courts. The legality
of his acts are under judicial review, not because the Executive is inferior to the courts, but because
the law is above the Chief Executive himself, and the courts seek only to interpret, apply or implement
it (the law). A judicial review of the President’s decision on a case of an employee decided by the Civil
Service Board of Appeals should be viewed in this light and the bringing of the case to the Courts
should be governed by the same principles as govern the judicial review of all administrative acts of
all administrative officers.’ “
10
Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, is another case in point.
11
Here, “the Executive Office” of the Department of Education and Culture issued
Memorandum Order No. 93 under the authority of then Secretary of Education Juan
Manuel. As in this case, a complaint for injunction was filed with the Court of First
Instance of Lanao del Norte because, allegedly, the enforcement of the circular would
impair some contracts already entered into by public school teachers. It was the
contention of petitioner therein that “the Court of First Instance is not empowered to
amend, reverse and modify what is otherwise the clear and explicit provision of the
memorandum circular issued by the Executive Office which has the force and effect
of law.” In resolving the issue, We held:
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Hence there is a clear infringement of private respondent’s constitutional right to enter into
agreement not contrary to law, which might run the risk of being violated by the thereatened
implementation of Executive Office Memorandum Circular No. 93, dated February 5, 1968,
which prohibits, with certain exceptions, cashiers and disbursing officers from honoring
special powers of attorney executed by the payee employees. The respondent Court is not only
right but duty bound to take cognizance of cases of his nature wherein a constitutional and
statutory righty is allegedly infringed by the administrative action of a government office.
Courts of First Instance have original jurisdiction over all civil actions in which the subject of
the litigation is not capable of pecuniary estimation (Sec. 44, Republic Act 296, as
amended)." (Italics supplied.)
12
In San Miguel Corporation vs. Avelino, We ruled that a judge of the Court of First
13
Instance has the authority to decide on the validity of a city tax ordinance even after
its validity had thereon had been rendered.
In view of the foregoing, We find no cogent reason why Resolution No. 105, issued
by the respondent Professional Regulation Commission, should be exempted from the
general jurisdiction of the Regional Trial Court.
Respondent PRC, on the other hand, contends that under Section 9, paragraph 3
B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said
law provides:
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856
cover rules and regulations of general applicability issued by the administrative body
to implement its purely administrative policies and functions like Resolution No. 105
which was adopted by the respondent PRC as a measure to preserve the integrity of
licensure examinations.
The above rule was adhered to in Filipinas Engineering and Machine Shop
vs. Ferrer. In this case, the issue presented was whether or not the Court of Pirst
15
As to whether or not the Court of First Instance had jurisdiction in said case, We
said:
“We are however, far from convinced that an order of the COMELEC awarding a contract to
a private party, as a result of its choice
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14 Gonzales, Administrative Law, Law on Public Officers and Election Law, 1966 ed., p. 63.
15 135 SCRA 25.
16 135 SCRA 31.
857
among various proposals submitted in response to its invitation to bid comes within the
purview of a ‘final order’ which is exclusively and directly appealable to this court on
certiorari. What is contemplated reviewable by certiorari by the Supreme Court as provided
by law are taken cognizance of by the said body in the exercise of its adjudicary or quasi-
judicial powers. (Italics supplied.)
x x x x
“We agree with petitioner’s contention that the order of the Commission granting the
award to the bidder is not an order rendered in a legal controversy before it wherein the
parties filed their respective pleadings and presented evidence after which the questioned
order was issued; and that this order of the commissionwas issued pursuant to its authority
to enter into contracts in relation to election purposes. In short, the COMELEC resolution
awarding the contract in favor of merely as an incident of its inherent administrative functions
but conduct of elections, and hence, the said resolution may not be deemed as a ‘final order’
reviewable by certiorari by the Supreme Court. Being non-judicial in character, no contempt
order may be imposed by the certiorari to this Tribunal lie from such order. Any question
arising from said order may be well taken in an ordinary civil action before the trial courts.
(Italics supplied.)17
One ither case that should be mentioned in this regard is Salud vs. Central Bank of
the Philippines. Here, petioner Central bank, like respondent in this case, argued
18
that under Section 9, paragraph 3 of B.P. Blg. 129, orders of the monetary Board are
appealable only to the Intermediate Appelate Court. Thus:
“The Central Bank and its Liquidator also postulate, for the very first time, that the
Monetary Board is among the “quasi-judicial” x x boards’ whose judgments are within the
exclusive appelate jurisdiction of the iAC; hence, it is only said Court, ‘to the exclusion of the
Regional Trial Courts,’ that may review the Monetary Board’s resolutions." 19
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858
ing pronouncement:
The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over
resolutions or orders of the Monetary Board. No law prescribes any mode of appeal from the
Monetary Board to the IAC," 20
In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to
entertain Civil Case No. 86–37950 and enjoin the respondent PRC from enforcing its
resolution.
Although We have finally settled the issue of jurisdiction, We find it imperative to
decide once and for all the validity of Resolution No. 105 so as to provide the much
awaited relief to those who are and will be affected by it.
Of course, We realize that the questioned resolution was adopted for a
commendable purpose which is “to preserve the integrity and purity of the licensure
examinations.” However, its good aim cannot be a cloak to conceal its constitutional
infirmities. On its face, it can be readily seen that it is unreasonable in that an
examinee cannot even attend any review class, briefing, conference or the like, or
receive any hand-out, review material, or any tip from any school, college or university,
or any review center or the like or any reviewer, lecturer, instructor, official or employee
of any of the aforementioned or similar institutions x x x. 21
The unreasonableness is more obvious in that one who is caught committing the
prohibited acts even without any 111 motives will be barred from taking future
examinations conducted by the respondent PRC. Purthermore, it is inconceivable how
the Commission can manage to have a watchful eye on each and every examinee
during the three days before the examination period.
It is an axiom in administrative law that administrative au= thorities should not
act arbitrarily and capriciously in the issuance of rules and regulations. To be valid,
such rules and regulations must be reasonable and fairly adapted to secure the end
in view. If shown to bear no reasonable relation to the
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859
purposes for which they are authorized to be issued, then they must be held to be
invalid. 22
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the
examinees’ right to liberty guaranteed by the Constitution. Respondent PRC has no
authority to dictate on the reviewees as to how they should prepare themselves for
the licensure examinations. They cannot be restrained from taking all the lawful
steps needed to assure the fulfUlment of their ambition to become public accountants.
They have every right to make use of their faculties in attaining success in their
endeavors. They should be allowed to enjoy their freedom to acquire useful knowledge
that will promote their personal growth. As defined in a decision of the United States
Supreme Court:
“The term ‘liberty’ means more than mere freedom from physical restraint or the bounds of
a prison. It means freedom to go where one may choose and to act in such a manner not
inconsistent with the equal rights of others, as his judgment may dictate for the promotion
of his happiness, to pursue such callings and vocations as may be most suitable to develop
his capacities, and giv to them their highest enjoyment."
23
Another evident objection to Resolution No. 105 is that it violates the academic
freedom of the schools concerned. Kespondent PRC cannot interfere with the conduct
of review that review schools and centers believe would best enable their enrolees to
meet the standards required before becoming a fullfledged public accountant. Unless
the means or methods of instruction are clearly found to be inefficient, impractical,
or riddled with corruption, review schools and centers may not be stopped from
helping out their students. At this juncture, We call attention to Our pronouncement
in Garcia vs. The Faculty Admission Committee, Loyola School of
Theology regarding academic freedom, to wit:
24
x x x x It would follow then that the school or college itself is possessed of such a right. It
decides for itself its aims and objectives and how best to attain them. It is free from outside
coercion or interference save possibly when the overriding public welfare calls for
________________
22 Gonzales, Administrative Law, Law on Public Officers and Election Law, 1966, page 52.
23 Munn. vs. Illinois, 94 U.S. 143.
24 68 SCRA 277.
860
some restraint. It has a wide sphere of autonomy certainly extending to the choice of students.
This constitutional provision is not to be construed in a niggardly manner or in a grudging
fashion.”
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the
alleged leakages in the licensure examinations will be eradicated or at least
minimized. Making the examinees suffer by depriving them of legitimate means of
review or preparation on those last three precious days—when they should be
refreshing themselves with all that they have learned in the review classes and
preparing their mental and psychological make-up for the examination day itself—
would be like uprooting the tree to get ride of a rotten branch. What is needed to be
done by the respondent is to find out the source of such leakages and stop it right
there. If corrupt officials or personnel should be terminated from their loss, then so
be it. Pixers or swindlers should be flushed out. Strict guidelines to be observed by
examiners should be set up and if violations are committed, then licenses should be
suspended or revoked. These are all within the powers of the respondent commission
as provided for in Presidential Decree No. 223. But by all means the right and
freedom of the examinees to avail of all legitimate means to prepare for the
examinations should not be curtailed.
In the light of the above, We hereby REVERSE and SET ASIDE, the decision of
the Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby
rendered declaring Resolution No. 105 null and void and of no force and effect for
being unconstitutional. This decision is immediately executory. No costs.
SO ORDERED.
——o0o——
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