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KILUSANG BAYAN v. DOMINGUEZ

FACTS:

The consolidated cases involve the validity of an order issued by the Secretary of Agriculture, Carlos G. Dominguez, which directed the Department of Agriculture to take over the management of Kilusang Bayan sa Paglilingkod Ng Mga Magtitinda Ng Bagong Pamilihang Bayan ng Muntinlupa, Inc. (KBMBPM). The KBMBPM is a service cooperative formed by vendors occupying the new Muntinlupa Public Market. It entered into a contract with the Municipal Government of Muntinlupa for the management and operation of the market. After a change in administration, the new mayor requested opinions from the Commission on Audit and the Metro Manila Commission (MMC) regarding the validity of the contract. Both agencies recommended the contract's rescission. Upon the approval of a resolution by the Municipal Council, the mayor, together with his co-petitioners and elements of the Philippine Constabulary, announced the Municipality's takeover of the market. KBMBPM filed a complaint against the Municipality and its officers for breach of contract and damages. The officers resisted the takeover attempts, and the case was elevated to the Court of Appeals. A letter-complaint was also filed by Amado Perez, the General Manager of KBMBPM, accusing the mayor and his co-petitioners of oppression and violation of the Anti-Graft and Corrupt Practices Act. Two days before the expiration of the period granted to file certain documents, Bunye and his group filed an urgent motion for a 15-day extension to comply with the subpoena. Subsequently, on October 29, 1988, respondent Madriaga and Coronado, allegedly accompanied by Mayor Bunye and armed men, forcibly broke open the doors of the offices of the petitioners in order to serve an Order from the Secretary of Agriculture and implement it. Based on these facts, the petitioners filed a petition asserting that the Secretary had acted in excess of his jurisdiction, that the disbandment of the Board of Directors was done without authority of law, and that the Order was a violation of the cooperative's By-Laws and the penal provisions under Presidential Decree No. 175. This case involves a dispute over the management and operation of the public market of Kabaka-Balintawak Market Benefit and Marketing Cooperative (KBMBPM). The individual petitioners, who were elected officers of KBMBPM, filed a petition seeking to restrain the implementation of an order issued by the Secretary of Agriculture appointing a management committee to take over the cooperative. They also sought the restoration of their management and operation of the public market, the removal of the respondents from the premises, and the declaration of the challenged order as null and void. Respondent Bunye filed his comment denying the factual allegations and claiming that the petitioners failed to exhaust administrative remedies. Respondent Coronado filed two comments, one filed by his counsel and the other filed by respondent Madriaga. The Solicitor General was required to file a comment to the petition, and a motion to dismiss the petition was subsequently filed. In a resolution issued on August 9, 1989, the petition was given due course, and the parties were required to file their memoranda. In the course of the proceedings, additional motions were filed by the petitioners, including a motion for the immediate issuance of a cease and desist order and a motion to consider an invitation to pre-qualify and bid for a new contract published by respondent Bunye. Another issue raised by the petitioners is the alleged failure to rule on their motion for an extension of time to file their counter-affidavits, which was received by the Office of the Special Prosecutor.

ISSUES:

  1. Whether the new board of directors of KBMBPM has the authority to withdraw and dismiss the petition.

  2. Whether the petitioners were deprived of their right to a preliminary investigation.

  3. Whether petitioners have the personality to file the instant petition and if they have exhausted administrative remedies.

  4. Whether the 28 October 1988 Order of the Secretary of Agriculture is valid and lawful.

  5. Whether the respondent Secretary of Agriculture had the power to summarily disband the board of directors and remove the officers of the KBMBPM.

  6. Whether petitioners were denied due process in the administrative proceedings.

  7. Whether reversion to the status quo is feasible given the passage of time and the change in the cooperative's management.

  8. Whether lack of preliminary investigation is a ground to quash or dismiss a complaint or information, and whether it affects the court's jurisdiction.

  9. Whether the petitioners were denied the right to preliminary investigation due to the failure to consider their counter-affidavits and comments.

  10. Whether the Sandiganbayan disregarded the alleged discrepancy between the date the criminal information was filed and the date the preliminary investigation was concluded.

  11. Whether or not the respondents violated the petitioners' right to due process by not allowing them to file their counter-affidavits before the preliminary investigation is completed.

  12. Whether or not the lack of preliminary investigation prior to the filing of the Amended Information is a violation of the petitioners' rights.

RULING:

  1. The Supreme Court denied the new board of directors' motion to withdraw and dismiss the petition, stating that the election of new directors is not a supervening event independent of the main issue in the present petition.

  2. The Supreme Court ruled that the petitioners were deprived of their right to a preliminary investigation, as the Special Prosecutor issued a resolution finding sufficient evidence to establish a prima facie case and recommending the filing of a corresponding information before the Sandiganbayan without ruling on the petitioners' motion for an extension to file their counter-affidavits.

  3. Petitioners have the personality to file the instant petition as they are ousted directors of the cooperative and are questioning the act of the Secretary of Agriculture in disbanding the board of directors. They are entitled to file suit under Section 3, Rule 65 of the Rules of Court. The doctrine of exhaustion of administrative remedies does not apply in this case because the respondent Secretary's act bears the implied approval of the President. Moreover, the question involved in the case is purely legal and the act of the Secretary is patently illegal, arbitrary, or oppressive.

  4. The 28 October 1988 Order of the Secretary of Agriculture is invalid and unlawful as it did not follow the established procedure for the removal of directors and officers of cooperatives, which includes an opportunity to be heard. The Order arrogated unto the Secretary the power to remove directors and officers without complying with the requisite procedure.

  5. The respondent Secretary of Agriculture did not have the power to summarily disband the board of directors and remove the officers of the KBMBPM. The power of the Secretary is limited to the supervision and control of cooperatives, which includes acting directly whenever a specific function is entrusted by law or regulation, directing the performance of duty, reviewing and approving acts and decisions of subordinate officials, determining priorities, and prescribing standards and guidelines. The power to summarily disband the board of directors cannot be inferred from these powers. Additionally, even if the power to disband and remove officers was included in the Secretary's authority, a hearing should have been conducted prior to the exercise of such power.

  6. Petitioners were denied due process in the administrative proceedings. The Order to disband the board of directors and remove the officers was based solely on an alleged petition without any notice of a hearing or opportunity to be heard. Due process requires a hearing, which includes the right to present one's case and submit evidence. The absence of notice and hearing constitutes a clear denial of due process.

  7. Reversion to the status quo preceding October 29, 1988 is not feasible due to the passage of time and subsequent elections. The management of the cooperative is now being handled by a new board of directors duly elected in accordance with the cooperative's by-laws.

  8. Lack of preliminary investigation is not a ground to quash or dismiss a complaint or information, and it does not affect the court's jurisdiction. Even if there was no preliminary investigation, the proper course of action is to suspend proceedings and remand the case to the Office of the Ombudsman for a preliminary investigation.

  9. The petitioners were not denied the right to preliminary investigation as they were given a reasonable period to submit their counter-affidavits. Any failure to consider their counter-affidavits was cured when they filed a motion for reconsideration which was taken into account upon review.

  10. The discrepancy between the date the criminal information was filed and the date the preliminary investigation was concluded does not invalidate the information. There was a second investigation conducted upon the Ombudsman's directive, and the issues raised in the counter-affidavits were considered in the 18 January 1989 Order.

  11. The respondents did not violate the petitioners' right to due process. Due process does not require the accused to actually file their counter-affidavits before the preliminary investigation is considered complete. The only requirement is that the accused be given the opportunity to submit such counter-affidavits if they wish to do so. In this case, although the petitioners submitted their counter-affidavits belatedly, they were still considered in subsequent reviews of the information by the prosecutors.

  12. The lack of preliminary investigation prior to the filing of the Amended Information did not violate the petitioners' rights. The prosecution is allowed to amend the information without leave of court before arraignment, and this does not prejudice the accused. The case of Doromal vs. Sandiganbayan, cited by the petitioners, is not applicable because it involved the preparation of an entirely new information, whereas in this case, only amendments were made to the original information.

PRINCIPLES:

  • The election of new directors does not serve as a basis for the withdrawal and dismissal of a petition if it is not a supervening event independent of the main issue.

  • Deprivation of the right to a preliminary investigation is a ground for questioning the legality of the information filed against the accused.

  • The Supreme Court may not rule on an issue that was not discussed or raised in the available text.

  • The petitioner's personality to file a petition is determined by their entitlement to the right or office from which they have been excluded.

  • The doctrine of exhaustion of administrative remedies does not apply when the respondent is a department secretary and their acts bear the implied approval of the President, unless disapproved by him.

  • The doctrine of exhaustion of administrative remedies also does not apply when the question involved is purely legal or when the act in question is patently illegal, arbitrary, or oppressive.

  • There is an established procedure for the removal of directors and officers of cooperatives, which includes an opportunity to be heard.

  • The right to due process, including an opportunity to be heard, cannot be deprived from individuals even if there is no express provision for it.

  • An administrative officer has only such powers as are expressly granted to him and those necessarily implied in the exercise thereof.

  • Supervision and control include only specific functions entrusted by law or regulation, directing the performance of duty, reviewing and approving acts and decisions of subordinate officials, determining priorities, and prescribing standards and guidelines.

  • The power to summarily disband the board of directors and remove officers cannot be inferred from the powers of supervision and control.

  • Due process in administrative proceedings includes the right to notice and a hearing, which allows a party to present their case and submit evidence.

  • The need for notice and the opportunity to be heard is the heart of procedural due process, and the absolute absence thereof constitutes a denial of due process.

  • Even if there is a defect in the notice of hearing, if the party is given the opportunity to be heard on a subsequent motion for reconsideration, the denial of procedural due process is cured.

  • If there are genuine grievances against officers, they should be raised in the appropriate assembly or pursued through judicial recourse.

  • Lack of preliminary investigation is not a ground to quash or dismiss a complaint or information, and it does not affect the court's jurisdiction. (People v. Casiano)

  • The right to preliminary investigation is not among the rights guaranteed by the Bill of Rights and its existence and right thereto can be invoked when granted by law. (Marcos v. Cruz)

  • If the right to preliminary investigation is not waived, its absence may amount to a denial of due process. (Marcos v. Cruz)

  • If there is a lack of preliminary investigation, the proper course of action is to suspend proceedings and remand the case to the Office of the Ombudsman for a preliminary investigation. (Doromal v. Sandiganbayan)

  • Due process does not require the accused to actually submit their counter-affidavits before the preliminary investigation is deemed complete, as long as they are given the opportunity to do so.

  • The prosecution may amend the information without leave of court before arraignment, and this does not violate the rights of the accused.