G.R. No. 165993           September 30, 2008 Neither P.D. No. 1067, as cited by petitioners, nor P.D. No.

ited by petitioners, nor P.D. No. 1479, which

governs the procedure for the review of water rates, expressly states
MERIDA WATER DISTRICT; ITS BOARD OF DIRECTORS, NAMELY: that the NWRB has original and exclusive jurisdiction over a dispute
SUSANO TOREJAS JR., LOURDES QUINTE, ROMULO PALES, concerning the increase of water rates. Moreover, petitioners failed to
CARMELITA DE LOS ANGELES, VILLAFRANCA ROSAL; AND MWD cite any law which impliedly grants the NWRB original and exclusive
GENERAL MANAGER NILO C. LUCERO, Petitioners, jurisdiction to resolve a dispute regarding the increase of water rates. A
vs. grant of exclusive jurisdiction cannot be implied from the language of a
FRANCISCO BACARRO, VICTORINO DOMANILLO, PATRICK statute in the absence of a clear legislative intent to that effect. An
BACOL, CARLITO BARRERA, RUSTICA MENDOLA, JOSE DELIO administrative agency with quasi-judicial power is a tribunal of limited
HERMOSO, CHARITO TOLORIO, MA. VICTORIA MAINGqUE, ELMER jurisdiction, and "[i]ts jurisdiction should be interpreted in strictissimi
GO, and GERARDO BIOCO, Respondents. juris.

Facts: The case at bar concerns a local water district’s increase of water rates,
and P.D. No. 1479 provides for the administrative procedure regarding a
Petitioners are Merida Water District, a government-owned and review of the said rates. Second, the Court discussed the NWRB’s
controlled corporation4 that operates the water utility services in the jurisdiction vis-à-vis the doctrine of the exhaustion of administrative
municipality of Merida, Leyte. On October 10, 2001, Merida Water remedies. The doctrine of exhaustion does not apply when
District conducted a public hearing for the purpose of increasing the jurisdiction is exclusive. An administrative agency’s exclusive
water rate. Merida Water District received a letter from the Local Water jurisdiction over a certain dispute renders the courts without
Utilities Administration (LWUA).6 The letter stated that on March 5, jurisdiction to adjudicate the same at that stage. The doctrine of
2002, the LWUA Board of Trustees, per Board Resolution No. 63, series exhaustion applies "where a claim is cognizable in the first
of 2002, confirmed Merida Water District’s proposed water rates. instance by an administrative agency alone; judicial intervention is
withheld until the administrative process has run its course. Thus,
Merida Water District approved Resolution No. 006-02, implementing a petitioners’ contention that the RTC has no jurisdiction because the
water rate increase of P90 for the first ten cubic meters of water NWRB has original and exclusive jurisdiction over a dispute concerning
consumption. Thereafter, petitioners issued notices of disconnection to the increase of water rates is clearly without merit.
concessionaires who refused to pay the water rate increase and did not
render service to those who opted to pay the increased rate on It is incumbent upon the party who has an administrative remedy to
installment basis. pursue the same to its appropriate conclusion before seeking judicial
intervention. The Court has consistently reiterated the rationale behind
Respondents, consumers of Merida Water District, filed a Petition for the doctrine of the exhaustion of administrative remedies:
Injunction, etc. against petitioners before the RTC. Respondents sought
to enjoin the petitioners from collecting payment of P90 for the first ten One of the reasons for the doctrine of exhaustion is the separation of
cubic meters of water consumption. Respondents alleged that this powers, which enjoins upon the Judiciary a becoming policy of non-
imposed rate was contrary to the rate increase agreed upon during the interference with matters coming primarily (albeit not exclusively) within
public hearing. Respondents claimed that petitioners violated Letter of the competence of the other departments. The theory is that the
Instructions (LOI) No. 700 by: (1) implementing a water rate increase administrative authorities are in a better position to resolve questions
exceeding 60% of the current rate; and (2) failing to conduct a public addressed to their particular expertise and that errors committed by
hearing for the imposed rate of P90. subordinates in their resolution may be rectified by their superiors if
given a chance to do so… It may be added that strict enforcement of the
Petitioners filed a Motion to Dismiss, alleging that respondents’ petition rule could also relieve the courts of a considerable number of avoidable
lacked a cause of action as they failed to exhaust administrative cases which otherwise would burden their heavily loaded dockets.
remedies under Presidential Decree (P.D.) No. 198, the Provincial
Water Utilities Act of 1973, as amended by P.D. Nos. 768 and 1479. Although the doctrine of exhaustion does not preclude in all cases a
party from seeking judicial relief, cases where its observance has been
One of the respondents questioned the legality of the water rate disregarded require a strong showing of the inadequacy of the
increase before the National Water Resources Board (NWRB). prescribed procedure and of impending harm.

RTC denied petitioners’ motion to dismiss. Petitioners filed a Petition Respondents justify their failure to observe the administrative process
for Certiorari with the CA, assailing the RTC’s orders for lack of on the following exceptions to the doctrine of exhaustion of
jurisdiction. The CA affirmed the RTC’s orders, upholding its jurisdiction administrative remedies: (1) patent illegality; and (2) a denial of due
and the propriety of respondents’ recourse to the trial court process. However, respondents fail to show that the instant case merits
notwithstanding the rule on the exhaustion of administrative remedies. the application of these exceptions. The failure of the respondents to
show that the instant case falls within the exceptions to the doctrine of
Issues: exhaustion necessitates in the due observance of exhausting the proper
administrative remedies before seeking judicial intervention.
Whether or not the RTC has jurisdiction over the case and whether
there is a need to exhaust administrative remedies first. IN VIEW WHEREOF, the petition is GRANTED

Ruling:

it must be clarified that P.D. No. 1067 vests the NWRB with original
jurisdiction over disputes relating to the utilization of waters within the
context of the Water Code. However, it must be noted that respondents’
allegations all point to the legality in Merida Water District’s
implementation of the water rate increase. P.D. No. 1479 provides for LAND BANK OF THE PHILIPPINES, petitioner,
the administrative remedies regarding a review of water rates, to vs.
determine whether a local water district had complied with the legal COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F.
requirements in establishing such rates
SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT The conclusive effect of administrative construction is not
CORP., respondents. absolute. Action of an administrative agency may be disturbed or
set aside by the judicial department if there is an error of law, a
Facts: grave abuse of power or lack of jurisdiction or grave abuse of
discretion clearly conflicting with either the letter or the spirit of a
Separate petitions for review were filed by petitioners Department of legislative enactment. In this regard, it must be stressed that the
Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the function of promulgating rules and regulations may be legitimately
Philippines (G.R. No. 118712) following the adverse ruling by the Court exercised only for the purpose of carrying the provisions of the law
of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by into effect. The power of administrative agencies is thus confined
private respondents, the petitions were ordered consolidated. to implementing the law or putting it into effect. Corollary to this is
that administrative regulations cannot extend
Petitioners assail the decision of the Court of Appeals promulgated on the law and amend a legislative enactment, for settled is the rule
October 20, 1994, which granted private respondents' Petition that administrative regulations must be in harmony with the
for Certiorari and Mandamus. provisions of the law. And in case there is a discrepancy between
the basic law and an implementing rule or regulation, it is the
Private respondents are landowners whose landholdings were acquired former that prevails.
by the DAR and subjected to transfer schemes to qualified beneficiaries
under the Comprehensive Agrarian Reform Law (CARL, Republic Act In the present suit, the DAR clearly overstepped the limits of its power to
No. 6657). enact rules and regulations when it issued Administrative Circular No. 9.
There is no basis in allowing the opening of a trust account in behalf of
Aggrieved by the alleged lapses of the DAR and the Landbank with the landowner as compensation for his property because, as heretofore
respect to the valuation and payment of compensation for their land discussed, Section 16(e) of RA 6657 is very specific that the deposit
pursuant to the provisions of RA 6657, private respondents filed with must be made only in "cash" or in "LBP bonds". In the same vein,
this Court a Petition for Certiorari and Mandamus with prayer for petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because
preliminary mandatory injunction. Private respondents questioned the these implementing regulations cannot outweigh the clear provision of
validity of DAR Administrative Order No. 6, Series of 19926 and DAR the law. Respondent court therefore did not commit any error in striking
Administrative Order No. 9, Series of 1990, 7 and sought to compel the down Administrative Circular No. 9 for being null and void.
DAR to expedite the pending summary administrative proceedings to
finally determine the just compensation of their properties, and the WHEREFORE, the foregoing premises considered, the petition is
Landbank to deposit in cash and bonds the amounts respectively hereby DENIED for lack of merit and the appealed decision is
"earmarked", "reserved" and "deposited in trust accounts" for private AFFIRMED in toto.
respondents, and to allow them to withdraw the same.

Private respondents argued that Administrative Order No. 9, Series of

1990 was issued without jurisdiction and with grave abuse of discretion
because it permits the opening of trust accounts by the Landbank, in
lieu of depositing in cash or bonds in an accessible bank designated by
the DAR, the compensation for the land before it is taken and the titles
are cancelled as provided under Section 16(e) of RA 6657.9 Private
respondents also assail the fact that the DAR and the Landbank merely
"earmarked", "deposited in trust" or "reserved" the compensation in their
names as landowners despite the clear mandate that before taking
possession of the property, the compensation must be deposited in
cash or in bonds. 

Petitioner DAR, however, maintained that Administrative Order No. 9 is

a valid exercise of its rule-making power pursuant to Section 49 of RA
6657. Moreover, the DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was a substantial compliance
with Section 16(e) of RA 6657 and the ruling in the case of Association
of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of
Agrarian Reform.

Issue:

Whether or not the Admin Order was issued without jurisdiction and with
grave abuse of discretion.

Ruling:

It is very explicit that the deposit must be made only in "cash" or in "LBP
bonds". Nowhere does it appear nor can it be inferred that the deposit
can be made in any other form. If it were the intention to include a "trust
account" among the valid modes of deposit, that should have been
made express, or at least, qualifying words ought to have appeared
from which it can be fairly deduced that a "trust account" is allowed. In
PHILIPPINE NATIONAL BANK, Petitioner, v. OFFICE OF THE
sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an
PRESIDENT, HOUSING AND LAND USE REGULATORY BOARD
expanded construction of the term "deposit".
(HLURB).
Facts:

Private respondents were buyers on installment of subdivision lots from

Marikina Village, Inc. Notwithstanding the land purchase agreements it
executed over said lots, the subdivision developer mortgaged the lots in
favor of the petitioner, Philippine National Bank. Unaware of this
mortgage, private respondents duly complied with their obligations as lot
buyers and constructed their houses on the lots in question.
Subsequently, the subdivision developer defaulted and PNB foreclosed
on the mortgage. As highest bidder at the foreclosure sale, the bank
became owner of the lots.

Acting on suits brought by private respondents (which were later

consolidated), the HLURB Office of Appeals Adjudication and Legal
Affairs (OAALA) in a decision rendered on October 28, 1988 ruled that
PNB — without prejudice to seeking relief against Marikina Village, Inc.
— may collect from private respondents only the "remaining
amortization, in accordance with the land purchase agreements they
had previously entered into with "Marikina Village. Inc., and cannot
compel private respondents to pay all over again for the lots they had
already bought from said subdivision developer. On May 2, 1989, the
Housing and Land Use Regulatory Board affirmed this decision. On
March 10, 1992, the Office of the President, invoking P.D. 957, likewise
concurred with the HLURB.

Issue:

Whether or not the CA may take cognizance of appeals from judgments

and finals orders of the Office of the President.

Ruling:

Under Revised Administrative Circular No. 1-95, "appeals from

judgments or final orders of the . . . Office of the President . . . may
be taken to the Court of Appeals . . . ." However, in order to hasten
the resolution of this case, which was deemed submitted for
decision three years ago, the Court resolved to make an exception
to the said Circular in the interest of speedy justice.

WHEREFORE, in view of the foregoing considerations, the petition is

hereby DENIED, petitioner having failed to show any REVERSIBLE
ERROR or GRAVE ABUSE OF DISCRETION in the assailed decision.

(the case also tackles retroactive application of P.D. 957)