People vs Dacuycuy (ADMINISTRATIVE LAW)

G.R. No. L-45127 May 5, 1989

PEOPLE OF THE PHILIPPINES, represented by the Provincial Fiscal of Leyte, petitioner,
vs.
HON. JUDGE AUXENCIO C. DACUYCUY, CELESTINO S. MATONDO, SEGUNDINO A, CAVAL and CIRILO M. ZANORIA, respondents.

The Office of the Solicitor General for petitioner.

Adelino B. Sitoy for private respondents.

REGALADO, J.:

FACTS:

On October 26, 1975, private respondents filed a petitions 6 for certiorari and prohibition with preliminary injunction before the former Court of First Instance of Leyte, Branch VIII, where it was docketed as Civil Case No. B-622, to restrain the Municipal Judge, Provincial Fiscal and Chief of Police of Hindang, Leyte from proceeding with the trial of said Criminal Case No. 555 upon the ground that the former Municipal Court of Hindang had no jurisdiction over the offense charged. Subsequently, an amended petition 7 alleged the additional ground that the facts charged do not constitute an offense since the penal provision, which is Section 32 of said law, is unconstitutional for the following reasons: (1) It imposes a cruel and unusual punishment, the term of imprisonment being unfixed and may run to reclusion perpetua; and (2) It also constitutes an undue delegation of legislative power, the duration of the penalty of imprisonment being solely left to the discretion of the court as if the latter were the legislative department of the Government.

1. The disputed section of Republic Act No. 4670 provides:

Sec. 32. Penal Provision. — A person who shall wilfully interfere with, restrain or coerce any teacher in the exercise of his rights guaranteed by this Act or who shall in any other manner commit any act to defeat any of the provisions of this Act shall, upon conviction, be punished by a fine of not less than one hundred pesos nor more than one thousand pesos, or by imprisonment, in the discretion of the court. (Emphasis supplied).

ISSUE:

Whether section 32 or RA 4670 is unconstitutional.

RULING:

The respondent judge erronneously assumed that since the penalty of imprisonment has been provided for by the legislature, the court is endowed with the discretion to ascertain the term or period of imprisonment. We cannot agree with this postulate. It is not for the courts to fix the term of imprisonment where no points of reference have been provided by the legislature. What valid delegation presupposes and sanctions is an exercise of discretion to fix the length of service of a term of imprisonment which must be encompassed within specific or designated limits provided by law, the absence of which designated limits well constitute such exercise as an undue delegation, if not-an outright intrusion into or assumption, of legislative power.

Section 32 of Republic Act No. 4670 provides for an indeterminable period of imprisonment, with neither a minimum nor a maximum duration having been set by the legislative authority. The courts are thus given a wide latitude of discretion to fix the term of imprisonment, without even the benefit of any sufficient standard, such that the duration thereof may range, in the words of respondent judge, from one minute to the life span of the accused. Irremissibly, this cannot be allowed. It vests in the courts a power and a duty essentially legislative in nature and which, as applied to this case, does violence to the rules on separation of powers as well as the non-delegability of legislative powers. This time, the preumption of constitutionality has to yield.

On the foregoing considerations, and by virtue of the separability clause in Section 34 of Republic Act No. 4670, the penalty of imprisonment provided in Section 32 thereof should be, as it is hereby, declared unconstitutional.

ANG TIBAY vs CIR (ADMINISTRATIVE LAW)

G.R. No. L-46496             February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and 

NATIONAL WORKERS BROTHERHOOD, petitioners, 

vs.

THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations.

Antonio D. Paguia for National Labor Unon.

Claro M. Recto for petitioner "Ang Tibay".

Jose M. Casal for National Workers' Brotherhood.

LAUREL, J.:

FACTS:

The respondent National Labor Union, Inc., prays for the vacation of the judgement rendered by the majority of this Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers:

That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.

ISSUE:

Whether the case should be set for new trial.

RULING:

The CIR is free from rigidity of certain procedural requirements, but this not mean that it can in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are cardinal primary rights which must be respected even in proceedings of this character:

(1) the right to a hearing, which includes the right to present one’s cause and submit evidence in support thereof;

(2) The tribunal must consider the evidence presented;

(3) The decision must have something to support itself;

(4) The evidence must be substantial;

(5) The decision must be based on the evidence presented at the hearing; or at least contained in the record and disclosed to the parties affected;

(6) The tribunal or body or any of its judges must act on its own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate;

(7) The Board or body should, in all controversial questions, render its decision in such manner that the parties to the proceeding can know the various Issue involved, and the reason for the decision rendered.

The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly, the motion for a new trial should be, and the same is hereby granted, and the entire record of this case shall be remanded to the CIR, with instruction that it reopen the case receive all such evidence as may be relevant, and otherwise proceed in accordance with the requirements set forth.

Power Homes Unlimited vs SEC (SECURITIES)

G.R. No. 164182

FIRST DIVISION

POWER HOMES UNLIMITED G.R. No. 164182

CORPORATION,

Petitioner,

Present:

PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,

- versus - CORONA,

AZCUNA, and

LEONARDO-DE CASTRO, JJ.

SECURITIES AND EXCHANGE

COMMISSION AND NOEL Promulgated:

MANERO,

Respondents. February 26, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

PUNO, C.J.:

FACTS:

Petitioner is a domestic corporation duly registered with public respondent SEC on October 13, 2000 under SEC Reg. No. A200016113. Its primary purpose is:

To engage in the transaction of promoting, acquiring, managing, leasing, obtaining options on, development, and improvement of real estate properties for subdivision and allied purposes, and in the purchase, sale and/or exchange of said subdivision and properties through network marketing.[4]

On October 27, 2000, respondent Noel Manero requested public respondent SEC to investigate petitioners business. He claimed that he attended a seminar conducted by petitioner where the latter claimed to sell properties that were inexistent and without any brokers license.

On November 21, 2000, one Romulo E. Munsayac, Jr. inquired from public respondent SEC whether petitioners business involves legitimate network marketing.

On the bases of the letters of respondent Manero and Munsayac, public respondent SEC held a conference on December 13, 2000 that was attended by petitioners incorporators John Lim, Paul Nicolas and Leonito Nicolas. The attendees were requested to submit copies of petitioners marketing scheme and list of its members with addresses.

The following day or on December 14, 2000, petitioner submitted to public respondent SEC copies of its marketing course module and letters of accreditation/authority or confirmation from Crown Asia, Fil-Estate Network and Pioneer 29 Realty Corporation.

On January 26, 2001, public respondent SEC visited the business premises of petitioner wherein it gathered documents such as certificates of accreditation to several real estate companies, list of members with web sites, sample of member mail box, webpages of two (2) members, and lists of Business Center Owners who are qualified to acquire real estate properties and materials on computer tutorials.

On the same day, after finding petitioner to be engaged in the sale or offer for sale or distribution of investment contracts, which are considered securities under Sec. 3.1 (b) of Republic Act (R.A.) No. 8799 (The Securities Regulation Code),[5] but failed to register them in violation of Sec. 8.1 of the same Act,[6] public respondent SEC issued a CDO .

ISSUE:

The issues for determination are: (1) whether public respondent SEC followed due process in the issuance of the assailed CDO; and (2) whether petitioners business constitutes an investment contract which should be registered with public respondent SEC before its sale or offer for sale or distribution to the public.

RULING:

On the first issue, Sec. 64 of R.A. No. 8799 provides:

Sec. 64. Cease and Desist Order. 64.1. The Commission, after proper investigation or verification, motu proprio or upon verified complaint by any aggrieved party, may issue a cease and desist order without the necessity of a prior hearing if in its judgment the act or practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public.

We hold that petitioner was not denied due process. The records reveal that public respondent SEC properly examined petitioners business operations when it (1) called into conference three of petitioners incorporators, (2) requested information from the incorporators regarding the nature of petitioners business operations, (3) asked them to submit documents pertinent thereto, and (4) visited petitioners business premises and gathered information thereat. All these were done before the CDO was issued by the public respondent SEC. Trite to state, a formal trial or hearing is not necessary to comply with the requirements of due process. Its essence is simply the opportunity to explain ones position. Public respondent SEC abundantly allowed petitioner to prove its side.

The second issue is whether the business of petitioner involves an investment contract that is considered security[11] and thus, must be registered prior to sale or offer for sale or distribution to the public pursuant to Section 8.1 of R.A. No. 8799, viz:

Section 8. Requirement of Registration of Securities. 8.1. Securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission. Prior to such sale, information on the securities, in such form and with such substance as the Commission may prescribe, shall be made available to each prospective purchaser.

Public respondent SEC found the petitioner as a marketing company that promotes and facilitates sales of real properties and other related products of real estate developers through effective leverage marketing.

We therefore rule that the business operation or the scheme of petitioner constitutes an investment contract that is a security under R.A. No. 8799. Thus, it must be registered with public respondent SEC before its sale or offer for sale or distribution to the public. As petitioner failed to register the same, its offering to the public was rightfully enjoined by public respondent SEC. The CDO was proper even without a finding of fraud. As an investment contract that is security under R.A. No. 8799, it must be registered with public respondent SEC, otherwise the SEC cannot protect the investing public from fraudulent securities. The strict regulation of securities is founded on the premise that the capital markets depend on the investing publics level of confidence in the system.

CEBU OXYGEN & ACETYLENE CO., INC. (COACO) vs. SECRETARY FRANKLIN M. DRILON (ADMINISTRATIVE LAW)

G.R. No. 82849 August 2, 1989

CEBU OXYGEN & ACETYLENE CO., INC. (COACO) petitioner, 

vs.

SECRETARY FRANKLIN M. DRILON OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, ASSISTANT REGIONAL DIRECTOR CANDIDO CUMBA OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7 AND CEBU OXYGEN-ACETYLENE & CENTRAL VISAYAS EMPLOYEES ASSOCIATION (COACVEA) respondents.

Michael L. Rama for petitioner.

Armando M. Alforque for private respondent.

GANCAYCO, J.;

FACTS:

Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central Visayas Employees Association (COAVEA) entered into a collective bargaining agreement (CBA) covering the years 1986 to 1988. 

On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, as follows:

Sec. 2. The statutory minimum wage rates of workers and employees in the private sector, whether agricultural or non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural workers and employees outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per day: Provided, that those already receiving above the minimum wage up to one hundred pesos (Pl 00.00 shall receive an increase of ten pesos (Pl 0.00) per day. Excepted from the provisions of this Act are domestic helpers and persons employed in the personal service of another.

The Secretary of Labor issued the pertinent rules implementing the provisions of Republic Act No. 6640. Section 8 thereof provides:

Section 8. Wage Increase Under Individual/Collective Agreements. — No wage increase shall be credited as compliance with the increase prescribed herein unless expressly provided under valid individual written/collective agreements; and, provided further, that such wage increase was granted in anticipation of the legislated wage increase under the act. Such increases shall not include anniversary wage increases provided on collective agreements.

In sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary wage increases negotiated under a collective bargaining agreement against such wage increases mandated by Republic Act No. 6640.

ISSUE:

The principal issue raised in this petition is whether or not an Implementing Order of the Secretary of Labor and Employment (DOLE) can provide for a prohibition not contemplated by the law it seeks to implement.

RULING:

As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which prohibits the employer from crediting the anniversary wage increases provided in collective bargaining agreements, it is a fundamental rule that implementing rules cannot add or detract from the provisions of law it is designed to implement. The provisions of Republic Act No. 6640, do not prohibit the crediting of CBA anniversary wage increases for purposes of compliance with Republic Act No. 6640. The implementing rules cannot provide for such a prohibition not contemplated by the law. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. The law itself cannot be expanded by such regulations. An administrative agency cannot amend an act of Congress. 3 Thus petitioner's contention that the salary increases granted by it pursuant to the existing CBA including anniversary wage increases should be considered in determining compliance with the wage increase mandated by Republic Act No. 6640, is correct. However, the amount that should only be credited to petitioner is the wage increase for 1987 under the CBA when the law took effect. The wage increase for 1986 had already accrued in favor of the employees even before the said law was enacted.

Section 8 of the rules implementing Republic 6640, is hereby declared null and void in so far as it excludes the anniversary wage increases negotiated under collective bargaining agreements from being credited to the wage increase provided for under Republic Act No. 6440.

De Pineda vs Peña (ADMINISTRATIVE LAW)

G.R. No. L-57665 July 2, 1990

ALEJA SIBAYAN VDA. DE PINEDA, CLARA SIBAYAN VDA. DE GADDI, and MIGUELA SIBAYAN RAMENTO, petitioners, 
vs.
The HON. TEODORO PEÑA, MINISTER OF NATURAL RESOURCES; The HON. JUANITO FERNANDEZ, DIRECTOR OF MINES & GEO-SCIENCES; and the KM. 21 MINING EXPLORATION CORPORATION; The BAGUIO GOLD MINING COMPANY, INC.; ELVIRA DE CARMELO and JOSEPH PALENGAOAN, respondents.

Rodolfo D. Dela Cruz for petitioners.

Emiliano L. Gayo and Honorato Y. Aquino for private respondents.

CORTES, J.:

FACTS:

This case originated from a protest case for alleged overlapping or encroachment between two mining claims.

ISSUE:

The issues to be resolved in this case are (1) whether or not public respondents have jurisdiction to pass upon the validity of the "Ped" claim in a protest case of overlapping of mining claims; and (2) should public respondents have such jurisdiction, whether or not they committed grave abuse of discretion or excess of jurisdiction in declaring petitioners to have abandoned their mining claim.

RULING:

(1) Yes, 

Sec. 128. Issues Joined . . .

The Director, or the Secretary, in case of appeals, may motu proprio look into the validity of mining claims, whether raised as an issue or not.

It is established in jurisprudence that Congress may validly delegate to administrative agencies the authority to promulgate rules and regulations to implement a given legislation and effectuate its policies [People v. Exconde, 101 Phil. 1125 (1957); Director of Forestry v. Munoz, G.R. No. L-24796, June 28, 1968, 23 SCRA 1183]. In order to be valid, the administrative regulation must be germane to the objects and purposes of the law, conform to the standards that the law prescribes [People v. Exconde, supra, citing Calalang v. Williams, 70 Phil. 727 (1940); Pangasinan Transportation v. Public Service Commission, 70 Phil. 221 (1940)], and must relate solely to carrying into effect the general provisions of the law [U.S. v. Tupasi Molina, 29 Phil. 119 (1914)].

With these guidelines, Section 128 of the implementing rules invoked by public respondents as basis for their jurisdiction cannot be tainted with invalidity. First, it was issued by the Department Head pursuant to validly delegated rule-making powers. Second, it does not contravene the provisions of Pres. Decree No. 463, nor does it expand the coverage of the Decree. Section 128 merely prescribes a procedural rule to implement the general provisions of the enabling law. It does not amend or extend the provisions of the statute [People v. Maceren, G.R. No. L-32166, October 18, 1977, 79 SCRA 450, citing University of Santo Tomas v. Board of Tax Appeals, 93 Phil. 376 (1953)].

Neither can it be maintained that such an implementing rule results in a denial of procedural due process, for it is axiomatic in administrative law that what the law prohibits is not the absence of previous notice, but the absolute absence thereof and lack of opportunity to be heard [Catura v. Court of Industrial Relations, G.R. No. L-27392, January 30,1971, 37 SCRA 303, citing De Borja v. Tan, 93 Phil. 167 (1953)]. In this case, petitioners were afforded the opportunity to be heard on the validity of the "Ped" mining claim when they submitted rebuttal evidence on appeal.

Section 128, being a valid implementing rule, has the force and effect of law. Thus, public respondents were duly empowered to inquire into the validity of the mining claims involved in the protest case, even if not raised in issue.

(2) Respondent committed grave abuse of dicretion.

Private respondents argue that the documents were not filed at the proper time since they were not formally offered in evidence when the case was still before the respondent Director, and were only submitted on appeal.

The contention is clearly untenable. Petitioners precisely were unaware that the validity of the "Ped" claim would be passed upon in the protest case since such was not raised as an issue. Hence it was only after the decision in the protest case was rendered that petitioners found the need to present evidence on appeal relating to the validity of the "Ped" claim.

Clearly, respondent Minister gravely abused his discretion when he disregarded the rebuttal evidence submitted by petitioners which otherwise would have had the effect of reversing respondent Director's finding.

LUZVIMINDA C. LIJAUCO vs. ATTY. ROGELIO P. TERRADO (PROBLEM AREAS IN LEGAL ETHICS)

LUZVIMINDA C. LIJAUCO vs ATTY. ROGELIO P. TERRADO,

YNARES-SANTIAGO, J.:

FACTS:

According to the complainant, she engaged the services of respondent sometime in January 2001 for P70,000.00 to assist in recovering her deposit with Planters Development Bank, Buendia, Makati branch in the amount of P180,000.00 and the release of her foreclosed house and lot located in Calamba, Laguna. The property identified as Lot No. 408-C-2 and registered as TCT No. T-402119 in the name of said bank is the subject of a petition for the issuance of a writ of possession then pending before the Regional lTrial Court of Binan, Laguna, Branch 24 docketed as LRC Case No. B-2610.

Respondent denied the accusations against him.  He averred that the P70,000.00 he received from complainant was payment for legal services for the recovery of the deposit with Planters Development Bank and did not include LRC Case No. B-2610 pending before the Regional Trial Court of Biñan, Laguna.   

The complaint was referred[3] to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. On September 21, 2005, the Investigating Commissioner submitted his report finding respondent guilty of violating Rules 1.01 and 9.02 of the Code of Professional Responsibility.

ISSUE:

Whether the respondent violated Canon 9 Rule 9.02 of the Code of Professional Responsibility.

RULING:

By openly admitting he divided the Php70,000.00 to other individuals as commission/referral fees respondent violated Rule 9.02, Canon 9 of the Code of Professional Responsibility which provides that a lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law. Worst, by luring complainant to participate in a compromise agreement with a false and misleading assurance that complainant can still recover after Three (3) years her foreclosed property respondent violated Rule 1.01, Canon 1 of the Code of Professional Responsibility which says a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.[4]

Respondent’s admission[14] that he divided the legal fees with two other people as a referral fee does not release him from liability. A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except in certain cases.[15]

The Investigating Commissioner thus recommended:

WHEREFORE, finding respondent responsible for aforestated violations to protect the public and the legal profession from his kind, it is recommended that he be suspended for Six (6) months with a stern warning that similar acts in the future will be severely dealt with.[5]

ENGR. GILBERT TUMBOKON vs. ATTY. MARIANO R. PEFIANCO (PROBLEM AREAS IN LEGAL ETHICS)

A.C. No. 6116               August 1, 2012

ENGR. GILBERT TUMBOKON, Complainant,
vs.
ATTY. MARIANO R. PEFIANCO, Respondent.

PERLAS-BERNABE, J.:

FACTS:

Before the Court is an administrative complaint for disbarment filed by complainant Engr. Gilbert Tumbokon against respondent Atty. Mariano R. Pefianco for grave dishonesty, gross misconduct constituting deceit and grossly immoral conduct.

Respondent undertook to give him 20% commission, later reduced to 10%, of the attorney's fees the latter would receive in representing Spouses Amable and Rosalinda Yap (Sps. Yap), whom he referred, in an action for partition of the estate of the late Benjamin Yap (Civil Case No. 4986 before the Regional Trial Court of Aklan). Their agreement was reflected in a letter2 dated August 11, 1995. However, respondent failed to pay him the agreed commission notwithstanding receipt of attorney's fees amounting to 17% of the total estate or about ₱ 40 million. Instead, he was informed through a letter3 dated July 16, 1997 that Sps. Yap assumed to pay the same after respondent had agreed to reduce his attorney's fees from 25% to 17%. He then demanded the payment of his commission4 which respondent ignored.

In his defense, respondent explained that he accepted Sps. Yap's case on a 25% contingent fee basis, and advanced all the expenses. He disputed the August 11, 1995 letter for being a forgery and claimed that Sps. Yap assumed to pay complainant's commission which he clarified in his July 16, 1997 letter. He, thus, prayed for the dismissal of the complaint and for the corresponding sanction against complainant's counsel, Atty. Florencio B. Gonzales, for filing a baseless complaint.6

IBP Commissioner recommended that respondent be suspended for one (1) year from the active practice of law, for violation of the Lawyer's Oath, Rule 1.01, Canon 1; Rule 7.03, Canon 7 and Rule 9.02, Canon 9 of the Code of Professional Responsibility (Code).

Respondent moved for reconsideration10 which was denied in Resolution No. XIX-2011-141 dated October 28, 2011.

ISSUE:

Whether the respondent violated Canon 9, Rule 9.02 of the Code of Professional Responsibility.

RULING:

The practice of law is considered a privilege bestowed by the State on those who show that they possess and continue to possess the legal qualifications for the profession. As such, lawyers are expected to maintain at all times a high standard of legal proficiency, morality, honesty, integrity and fair dealing, and must perform their four-fold duty to society, the legal profession, the courts and their clients, in accordance with the values and norms embodied in the Code.11 Lawyers may, thus, be disciplined for any conduct that is wanting of the above standards whether in their professional or in their private capacity.

In the present case, respondent's defense that forgery had attended the execution of the August 11, 1995 letter was belied by his July 16, 1997 letter admitting to have undertaken the payment of complainant's commission but passing on the responsibility to Sps. Yap. Clearly, respondent has violated Rule 9.02,12 Canon 9 of the Code which prohibits a lawyer from dividing or stipulating to divide a fee for legal services with persons not licensed to practice law, except in certain cases which do not obtain in the case at bar.

WHEREFORE, respondent ATTY. MARIANO R. PEFIANCO is found GUILTY of violation of the Lawyer’s Oath, Rule 1.01, Canon 1 of the Code of Professional Responsibility and Rule 9.02, Canon 9 of the same Code and SUSPENDED from the active practice of law ONE (1) YEAR effective upon notice hereof.