Doctrine of Primary Administrative Jurisdiction

NESTLE PHILS. vs. UNIWIDE Sales (GR 174674)

Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact.

Fabia vs. CA (GR 132684)

RESOLUTION

In light of the amendment brought about by RA 8799, the doctrine of primary jurisdiction no longer precludes the simultaneous filing of the criminal case with the corporate/civil case.

In cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence in observance of the doctrine of primary jurisdiction. The Court has ratiocinated that it cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered.

Samar II Electronic Cooperative vs. Seludo, Jr. (GR 173840)

It may not be amiss to reiterate the prevailing rule that the doctrine of primary jurisdiction applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice.

Corollary to the doctrine of primary jurisdiction is the principle of exhaustion of administrative remedies. The Court, in a long line of cases, has held that before a party is allowed to seek the intervention of the courts, it is a pre-condition that he avail himself of all administrative processes afforded him. Hence, if a remedy within the administrative machinery can be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the courts power of judicial review can be sought. The premature resort to the court is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel, the case may be dismissed for lack of cause of action.

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The doctrines of primary jurisdiction and exhaustion of administrative remedies are subject to certain exceptions, to wit:

(a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction;

(c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant;

(d) where the amount involved is relatively so small as to make the rule impractical and oppressive;

(e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;

(f) where judicial intervention is urgent;

(g) where the application of the doctrine may cause great and irreparable damage;

(h) where the controverted acts violate due process;

(i) where the issue of non-exhaustion of administrative remedies has been rendered moot;

(j) where there is no other plain, speedy and adequate remedy;

(k) where strong public interest is involved; and (l) in quo warranto proceedings.

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Provisional Remedies: Receivership

Chavez vs. CA (GR 174356)

We hold that the CA erred in granting receivership over the property in dispute in this case. For one thing, a petition for receivership under Section 1(b), Rule 59 of the Rules of Civil Procedure requires that the property or fund subject of the action is in danger of being lost, removed, or materially injured, necessitating its protection or preservation. Its object is the prevention of imminent danger to the property. If the action does not require such protection or preservation, the remedy is not receivership.

Sps. Larrobis vs. Philippine Veterans Bank (GR 135706)

When a bank is declared insolvent and placed under receivership, the Central Bank, through the Monetary Board, determines whether to proceed with the liquidation or reorganization of the financially distressed bank. A receiver, who concurrently represents the bank, then takes control and possession of its assets for the benefit of the banks creditors. A liquidator meanwhile assumes the role of the receiver upon the determination by the Monetary Board that the bank can no longer resume business. His task is to dispose of all the assets of the bank and effect partial payments of the banks obligations in accordance with legal priority. In both receivership and liquidation proceedings, the bank retains its juridical personality notwithstanding the closure of its business and may even be sued as its corporate existence is assumed by the receiver or liquidator. The receiver or liquidator meanwhile acts not only for the benefit of the bank, but for its creditors as well.

Vivares vs. Eng’r. Reyes (GR 155408)

Since a notice of lis pendens has been annotated on the titles of the disputed properties, the rights of petitioners are amply safeguarded and preserved since there can be no risk of losing the property or any part of it as a result of any conveyance of the land or any encumbrance that may be made thereon posterior to the filing of the notice of lis pendens. Once the annotation is made, any subsequent conveyance of the lot by the respondent would be subject to the outcome of the litigation since the fact that the properties are under custodia legis is made known to all and sundry by operation of law. Hence, there is no need for a receiver to look after the disputed properties.

Lucia Barrameda Vda. De Ballesteros vs. Rural Bank of Canaman Inc. (GR176260)

The cited Morfe case held that after the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the equal benefit of all the creditors, including depositors. The assets of the insolvent banking institution are held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over another by an attachment, execution or otherwise.

Thus, to allow Lucias case to proceed independently of the liquidation case, a possibility of favorable judgment and execution thereof against the assets of RBCI would not only prejudice the other creditors and depositors but would defeat the very purpose for which a liquidation court was constituted as well.

Making Enterprises Inc. vs. Marfori (GR 152239)

Here, respondents submit that they have satisfactorily established their legal right over the Marsman Building. They alleged that the building and the income and rentals thereof are in danger of being lost, removed or materially injured by the apathy, neglect and fraudulent design of petitioners thereby rendering the appointment of a receiver both urgent and imperative. However, they failed to show how the building as well as the income thereof would disappear or be wasted if not entrusted to a receiver. They were not able to prove that the property has been materially injured, necessitating its protection and preservation.Because receivership is a harsh remedy that can be granted only in extreme situations, respondents must prove a clear right to its issuance. This they failed to do.

We furthermore observe that in granting the appointment of a receiver, the CA merely concluded that respondents have sufficiently proven that they have an interest in the Marsman Building. It further held that unless a receiver is appointed, there is a danger of loss or material injury, considering that petitioners presently possess absolute control of the building and the rentals accruing thereof. However, there was no justification on how the CA arrived at its conclusion.

Koruga vs. Arcenas (GR 168332), Arcenas Vs. Judge Marella Jr (GR 169053)

Consolidated 

Crystal clear in Section 30 is the provision that says the appointment of a receiver under this section shall be vested exclusively with the Monetary Board. The term exclusively connotes that only the Monetary Board can resolve the issue of whether a bank is to be placed under receivership and, upon an affirmative finding, it also has authority to appoint a receiver. This is further affirmed by the fact that the law allows the Monetary Board to take action summarily and without need for prior hearing.

And, as a clincher, the law explicitly provides that actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory, and may not be restrained or set aside by the court except on a petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction.

From the foregoing disquisition, there is no doubt that the RTC has no jurisdiction to hear and decide a suit that seeks to place Banco Filipino under receivership.

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Thus, the courts jurisdiction could only have been invoked after the Monetary Board had taken action on the matter and only on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction.

NESTLE Phils. vs. Uniwide Sales (GR 174674)

Undeniably, supervening events have substantially changed the factual backdrop of this case. The Court thus defers to the competence and expertise of the SEC to determine whether, given the supervening events in this case, the SARP is no longer capable of implementation and whether the rehabilitation case should be terminated as a consequence.

Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact.

In other words, if a case is such that its determination requires the expertise, specialized training, and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the court is had even if the matter may well be within the latter’s proper jurisdiction.

The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.

ALEMARS Sibal and Sons vs. NLRC (GR 114761)

Since receivership proceedings have ceased and petitioners rehabilitation receiver and liquidator, Ledesma Saludo & Associates, has been given the imprimatur to proceed with corporate liquidation, the cited order of the Securities and Exchange Commission has been rendered functus officio. Thus, there is no legal impediment for the execution of the decision of the Labor Arbiter for the payment of separation pay.

Considering that petitioners monetary obligation to private respondent is long overdue and that petitioner has signified its willingness to comply with such obligation by entering into an agreement with private respondent as to the amount and manner of payment, petitioner can not delay satisfaction of private respondents claim. However, due to events subsequent to the filing of this petition, private respondent must present its claim with the rehabilitation receiver and liquidator of petitioner, subject to the rules on preference of credits.

 

 

Provisional Remedies: Preliminary Injunction

Australian Professional Realty Inc. vs. Municipality of Padre Garcia, Batangas (GR 183367)

A writ of preliminary injunction and a TRO are injunctive reliefs and preservative remedies for the protection of substantive rights and interests. An application for the issuance of a writ of preliminary injunction and/or TRO may be granted upon the filing of a verified application showing facts entitling the applicant to the relief demanded.

Essential to granting the injunctive relief is the existence of an urgent necessity for the writ in order to prevent serious damage. A TRO issues only if the matter is of such extreme urgency that grave injustice and irreparable injury would arise unless it is issued immediately. Under Section 5, Rule 58 of the Rule of Court, a TRO may be issued only if it appears from the facts shown by affidavits or by the verified application that great or irreparable injury would be inflicted on the applicant before the writ of preliminary injunction could be heard.

Thus, to be entitled to the injunctive writ, petitioners must show that (1) there exists a clear and unmistakable right to be protected; (2) this right is directly threatened by an act sought to be enjoined; (3) the invasion of the right is material and substantial; and (4) there is an urgent and paramount necessity for the writ to prevent serious and irreparable damage.

The grant or denial of a writ of preliminary injunction in a pending case rests on the sound discretion of the court taking cognizance of the case, since the assessment and evaluation of evidence towards that end involves findings of fact left to the said court for its conclusive determination. Hence, the exercise of judicial discretion by a court in injunctive matters must not be interfered with, except when there is grave abuse of discretion.

Grave abuse of discretion in the issuance of writs of preliminary injunction implies a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction; or the exercise of power in an arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. The burden is thus on petitioner to show in his application that there is meritorious ground for the issuance of a TRO in his favor.

Sps. Arevalo vs. Planters Development Bank (GR 193415)

The Court rules that upon dismissal of the First Complaint by the trial court on 27 October 2009, the issue of whether the writ of injunction should issue has become moot. Although both parties failed to raise this particular argument in their submissions, we deny the instant Petition on this ground.

A case becomes moot and academic when there is no more actual controversy between the parties or useful purpose that can be served in passing upon the merits.

There remains no actual controversy in the instant Petition because the First Complaint has already been dismissed by the trial court. Upon its dismissal, the question of the non-issuance of a writ of preliminary injunction necessarily died with it.

PNB vs. Castalloy Technology Corp. (GR 178367)

In a line of cases, this Court has explained this rule and emphasized that a writ of preliminary injunction is issued to preserve the status quo ante, upon the applicants showing of two important requisite conditions, namely: (1) the right to be protected exists prima facie, and (2) the acts sought to be enjoined are violative of that right. It must be proven that the violation sought to be prevented would cause an irreparable injustice.

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As regards to the element of irreparable injury which was determined by the trial court in view of the difference of P57,249,912.08 in the parties respective computations, this Court finds the same insufficient to support the requirement of injury in the issuance of an injunctive writs. An injury is considered irreparable if it is of such constant and frequent recurrence that no fair or reasonable redress can be had therefor in a court of law, or where there is no standard by which their amount can be measured with reasonable accuracy, that is, it is not susceptible of mathematical computation. The provisional remedy of preliminary injunction may only be resorted to when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation.

Unilever Phils. vs. CA (GR 119280)

The sole objective of a writ of preliminary injunction is to preserve the status quo until the merits of the case can be heard fully. A writ of preliminary injunction is generally based solely on initial and incomplete evidence. Thus, it was impossible for the court a quo to fully dispose of the case, as claimed by petitioner, without all the evidence needed for the full resolution of the same. To date, the main case still has to be resolved by the trial court.

The issuance of a preliminary injunction rests entirely on the discretion of the court and is generally not interfered with except in cases of manifest abuse. There was no such abuse in the case at bar, especially because petitioner was given all the opportunity to oppose the application for injunction. The fact was, it failed to convince the court why the injunction should not be issued. Thus, in Santos v. Court of Appeals, we held that no grave abuse of discretion can be attributed to a judge or body issuing a writ of preliminary injunction where a party has not been deprived of its day in court as it was heard and it exhaustively presented all its arguments and defenses.

Buyco vs. Baraquia (GR 177486)

A writ of preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts. It is merely a provisional remedy, adjunct to the main case subject to the latters outcome. It is not a cause of action in itself. Being an ancillary or auxiliary remedy, it is available during the pendency of the action which may be resorted to by a litigant to preserve and protect certain rights and interests therein pending rendition, and for purposes of the ultimate effects, of a final judgment in the case.

The writ is provisional because it constitutes a temporary measure availed of during the pendency of the action and it is ancillary because it is a mere incident in and is dependent upon the result of the main action.

It is well-settled that the sole object of a preliminary injunction, whether prohibitory or mandatory, is to preserve the status quo until the merits of the case can be heard. It is usually granted when it is made to appear that there is a substantial controversy between the parties and one of them is committing an act or threatening the immediate commission of an act that will cause irreparable injury or destroy thestatus quo of the controversy before a full hearing can be had on the merits of the case.

Cases about Provisional Remedies

The follwing are provisional remedies under the Rules of Court

Rule 57 Preliminary Attachment

Rule 58 Preliminary Injunction

Rule 59 Receivership

Rule 60 Replevin

Rule 61 Support Pendente Lite

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RELIMINARY ATTACHMENT

Silangan Textile Manufacturing Corp. vs. Hon. Demetria (GR 166719)

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching party to realize upon relief sought and expected to be granted in the main or principal action. Being an ancillary or auxiliary remedy, it is available during the pendency of the action which may be resorted to by a litigant to preserve and protect certain rights and interests therein pending rendition, and for purposes of the ultimate effects, of a final judgment in the case. They are provisional because they constitute temporary measures availed of during the pendency of the action and they are ancillary because they are mere incidents in and are dependent upon the result of the main action.

Republic of the Philippines vs. Estate of alfonso Lim, Sr (GR 164800)

Nature of Preliminary Attachment 

Attachment is an ancillary remedy applied for not for its own sake but to enable the attaching party to realize upon relief sought and expected to be granted in the main or principal action; it is a measure auxiliary or incidental to the main action. As such, it is available during the pendency of the action which may be resorted to by a litigant to preserve and protect certain rights and interests therein pending rendition, and for purposes of the ultimate effects, of a final judgment in the case. As a corollary proposition, an order granting an application for a writ of preliminary attachment cannot, owing to the incidental or auxiliary nature of such order, be the subject of an appeal independently of the main action.

Torres vs. Satsatin (GR 166759)

A writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an action is pending to be levied upon the property or properties of the defendant therein, the same to be held thereafter by the sheriff as security for the satisfaction of whatever judgment that might be secured in the said action by the attaching creditor against the defendant.

In Cuartero v. Court of Appeals, this Court held that the grant of the provisional remedy of attachment involves three stages: first, the court issues the order granting the application; second, the writ of attachment issues pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that jurisdiction over the person of the defendant be first obtained.However, once the implementation of the writ commences, the court must have acquired jurisdiction over the defendant, for without such jurisdiction, the court has no power and authority to act in any manner against the defendant. Any order issuing from the Court will not bind the defendant.

Security Pacific Assurance Corp. vs. Hon. Infante (GR 144740)

Under the Rules, there are two (2) ways to secure the discharge of an attachment. First, the party whose property has been attached or a person appearing on his behalf may post a security. Second, said party may show that the order of attachment was improperly or irregularly issued.

Allied Banking Corp. vs. South Pacific Sugar Corp.( GR 163692)

We take this opportunity to reiterate that an application for a writ of attachment, being a harsh remedy, is to be construed strictly in favor of the defendant. For by it, the reputation of the debtor may be seriously prejudiced. Thus, caution must be exercised in granting the writ. There must be more compelling reasons to justify attachment beyond a mere general assertion of fraud. This must be so lest we, asGarcia v. Reyes puts it, be spinning tight webs on gossamer filigrees.

Philippine Bank of Communications vs. CA (GRs 115678, 119723)

As was frowned upon in D.P. Lub Oil Marketing Center, Inc., not only was petitioners application defective for having merely given general averments; what is worse, there was no hearing to afford private respondents an opportunity to ventilate their side, in accordance with due process, in order to determine the truthfulness of the allegations of petitioner. As already mentioned, private respondents claimed that substantial payments were made on the proceeds of the trust receipts sued upon. They also refuted the allegations of fraud, embezzlement and misappropriation by averring that private respondent Filipinas Textile Mills could not have done these as it had ceased its operations starting in June of 1984 due to workers strike. These are matters which should have been addressed in a preliminary hearing to guide the lower court to a judicious exercise of its discretion regarding the attachment prayed for. On this score, respondent Court of Appeals was correct in setting aside the issued writ of preliminary attachment.

Time and again, we have held that the rules on the issuance of a writ of attachment must be construed strictly against the applicants. This stringency is required because the remedy of attachment is harsh, extraordinary and summary in nature. If all the requisites for the granting of the writ are not present, then the court which issues it acts in excess of its jurisdiction.

Republic of the Philippines vs. Maj. Gen Carlos F. Garcia (GR 167741)

Did the Sandiganbayan commit grave abuse of discretion when it rejected the Republics claim of exemption from the filing of an attachment bond? Yes.

Before a writ of attachment may issue, a bond must first be filed to answer for all costs which may be adjudged to the adverse party and for the damages he may sustain by reason of the attachment. However, this rule does not cover the State.

The pronouncement in Spouses Badillo applies in this case even if Spouses Badillo involved the filing of a supersedeas bond. The pronouncement that the State is not required to put up a bond for damages or even an appeal bond is general enough to encompass attachment bonds. Moreover, the purpose of an attachment bond (to answer for all costs and damages which the adverse party may sustain by reason of the attachment if the court finally rules that the applicant is not entitled to the writ) and a supersedeas bond (to answer for damages to the winning party in case the appeal is found frivolous) is essentially the same.

In filing forfeiture cases against erring public officials and employees, the Office of the Ombudsman performs the States sovereign functions of enforcing laws, guarding and protecting the integrity of the public service and addressing the problem of corruption in the bureaucracy.

The filing of an application for the issuance of a writ of preliminary attachment is a necessary incident in forfeiture cases. It is needed to protect the interest of the government and to prevent the removal, concealment and disposition of properties in the hands of unscrupulous public officers. Otherwise, even if the government subsequently wins the case, it will be left holding an empty bag.