VILLARAMA, BIANCA DANICA S. CASE # 40 PAGE 1 OF 2

L U P A N G C O v . C O U R T O F A P P E A L S 29 Apr. 1988 G.R. No. 77372 Gancayco, J.

TOPIC: Tests determining validity of rules; Must bear relation to purpose

SUMMARY: Prior to the 1986 licensure exams in accountancy, PRC issued Resolution No. 105 which prohibited examinees from attending review classes, receiving handouts, etc. for the 3 days immediately preceding every exam day. SC held that the Resolution was unconstitutional.

NATURE: Petition for certiorari to review the CA decision, which declared the RTC's order null and void.

Oct. 6, 1986 - Professional Regulation Commission (PRC) issued Resolution No. 105 as part of its "Additional Instructions to Examinees" for those taking the licensure exams in accountancy. o The Resolution reads in part, "No examinee shall attend any review class, briefing, conference or

the like conducted by, or shall receive any handout, 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 during the three days immediately preceding every examination day including the examination day."

o Purpose: "To preserve the integrity and purity of the licensure examinations." Oct. 16 - Petitioners, all reviewees preparing to take the exams on Oct. 25 and Nov. 2, filed a complaint

for injunction with a prayer for the issuance of a writ of preliminary injunction against to restrain PRC from enforcing the resolution, and to declare it unconstitutional. o PRC filed a motion to dismiss on the ground that the RTC had no jurisdiction. o RTC declared that it had jurisdiction, and it enjoined PRC from enforcing and giving effect to

Resolution No. 105 which it found to be unconstitutional. PRC filed a petition for the nullification of the above Order.

o CA declared the Order null and void and directed the RTC to dismiss the civil case for want of jurisdiction, being co-equal with PRC. It relied on NEA v. Mendoza where the SC held that a CFI cannot interfere with the orders of the SEC, the two being co-equal bodies.

RESPONDENT PRC ARGUES: Under Sec. 9, Par. 3, of BP 129, CA has jurisdiction over the case. (1) W/N the RTC and PRC are co-equal NO.

It is glaringly apparent that the Court ruled that the CFI could not interfere with the orders of the SEC because this was so provided for by the law. CA erred in placing SEC and PRC in the same category. o Pineda vs. Lantin: When a party is aggrieved by an order/ruling of the SEC, he cannot seek relief from courts

of general jurisdiction since under the Rules of Court and Comm. Act 83, as amended (law creating the old SEC), his remedy is to go to the SC on a petition for review.

o Philippine Pacific Fishing Co., Inc. vs. Luna: If an order of the SEC is erroneous, the appropriate remedy to take is first within SEC itself, then to SC as provided in PD 902-A (creating the new SEC).

o Nowhere in the said cases was it held that a CFI has no jurisdiction over all other government agencies. On the contrary, the ruling was specifically limited to the SEC.

There is no provision in PD 223 (law creating the PRC) that orders of the PRC are appealable to the CA or the SC. Consequently, this case should fall within the general jurisdiction of the RTC.

PD 223 says: PRC is attached to the Office of the President (OP) for general direction and coordination. o Well-settled in jurisprudence: Even acts of the OP may be reviewed by the CFI. Medalla vs. Sayo: "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."

o Republic vs. CFI Lanao del Norte Br. 11: CFI is not only right but duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is allegedly infringed by the administrative action of a government office. CFIs have original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary estimation.

o SMC vs. Avelino: A CFI judge has the authority to decide on the validity of a city tax ordinance even after its validity had been contested before the SOJ and an opinion thereon had been rendered.

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(2) W/N CA has jurisdiction NO. In order to invoke the exclusive appellate jurisdiction of the CA as provided for in Sec. 9, BP 129, there has to be a

final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasijudicial functions. o "Quasijudicial": 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. (Black's Law Dictionary)

o This does not 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.

o This was demonstrated in Filipinas Engineering and Machine Shop v. Ferrer and Salud v. Central Bank.

(3) W/N Resolution No. 105 is valid NO. While the Resolution was adopted for a commendable purpose, its good aim cannot be a cloak to

conceal its constitutional infirmities. 1. UNREASONABLE. On its face, it can be readily seen that it is unreasonable in that an examinee

cannot even attend any review class, briefing, conference, etc. The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how PRC can manage to have a watchful eye on each and every examinee during the three days before the examination period.

2. ARBITRARY. 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.

3. INFRINGES ON EXAMINEES' RIGHT TO LIBERTY. PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the exams. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. o 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 give to them their highest enjoyment. (Munn vs. Illinois)

4. VIOLATES SCHOOLS' ACADEMIC FREEDOM. 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 fullpledged public accountant.

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. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there.

CA decision REVERSED and SET ASIDE. Resolution No. 105 is declared NULL AND VOID and of no force and effect for being unconstitutional.