Land Car, Inc. vs. Bachelor Express, Inc. and Vallacar Transit, Inc.

Where the Office of the President has validly acquired jurisdiction over an appeal from the determination of a department head, the Court of Appeals may not order the dismissal of that appeal on the ground of forum shopping; only the Office of the President may dismiss the case pending before it, and its jurisdiction, once attached, continues until the final resolution of the case.

Land Car, Inc. sought authority to operate a public utility bus service over the Davao City–Cagayan de Oro City route via Butuan City, a corridor already served by Bachelor Express, Inc. and Vallacar Transit, Inc., both holders of certificates of public convenience. Applications of this kind are heard and determined by the LTFRB, whose dispositions may be elevated to the Secretary of the Department of Transportation and Communications and, thereafter, to the Office of the President by virtue of the President's power of control over all executive departments, bureaus and offices. The case turns on the interaction between that administrative hierarchy and the rule against forum shopping.

On 21 May 1999, Land Car, Inc. filed with the Regional Office of the Land Transportation Franchising and Regulatory Board, Region XII, a verified application to operate a public utility bus service from Davao City to Cagayan de Oro City via Butuan City. Bachelor Express, Inc. and Vallacar Transit, Inc., themselves grantees of certificates of public convenience, opposed the application, alleging that the route applied for was sufficiently being served by them and that "cutthroat competition" would only result if the application were favorably acted upon.

On 29 October 1999, the LTFRB rendered its decision granting petitioner's application and directing the issuance of the corresponding Certificate of Public Convenience. The board denied respondents' motion for reconsideration in its resolution of 27 January 2000, prompting respondents to appeal to the Office of the Secretary of the Department of Transportation and Communications. On 05 June 2000, the DOTC Secretary reversed the decision of the LTFRB.

Petitioner moved for reconsideration of the DOTC Secretary's resolution, but the motion was denied in the Secretary's order of 30 August 2000. Respondents thereupon moved for the immediate implementation by the LTFRB of the DOTC Secretary's decision, and on 03 October 2000 the LTFRB granted the motion and directed petitioner to cease and desist from operating its buses along the contested route.

On 07 October 2000, petitioner filed a letter-appeal with the Office of the President seeking to set aside the DOTC resolution and order of 05 June 2000 and 30 August 2000. Petitioner likewise filed with the Court of Appeals a petition for certiorari, docketed C.A.-G.R. SP No. 61159, questioning the same resolution and order. Upon the advice of new counsel, petitioner filed a notice of withdrawal of the certiorari petition, but the appellate court did not act upon the notice and instead dismissed the petition in its resolution of 09 November 2000 for failure of compliance with Section 1, Rule 42, of the 1997 Rules of Civil Procedure on non-forum shopping.

On 20 October 2000, the Office of the President issued a memorandum directing that the execution of the DOTC resolution and order be meanwhile stayed. On 15 January 2001, respondents filed with the Court of Appeals a petition for certiorari under Rule 65, docketed C.A.-G.R. SP No. 62619, assailing the Memorandum Order of the Office of the President. Respondents argued that the Office of the President had no jurisdiction to issue the assailed order in the absence of any law providing for an appeal from the DOTC to the Office of the President, and added that petitioner was guilty of forum shopping in addressing a letter-appeal to that office.

• Conflict with Applicable Jurisprudence: Petitioner contended that the Court of Appeals had decided a question in a way not in accord with applicable jurisprudence, and sought the setting aside of the DOTC Secretary's resolution and order of 05 June 2000 and 30 August 2000 through its letter-appeal to the Office of the President.

• Jurisdiction of the Office of the President: Respondents argued that the Office of the President had no jurisdiction to issue the assailed Memorandum Order in the absence of any law providing for an appeal from the DOTC to the Office of the President.
• Forum Shopping: Respondents argued that petitioner was guilty of forum shopping in addressing a letter-appeal to the Office of the President while it had simultaneously filed a petition for certiorari before the Court of Appeals assailing the same DOTC issuances.

• Forum Shopping: Whether petitioner committed forum shopping in filing a letter-appeal with the Office of the President while simultaneously maintaining a petition for certiorari before the Court of Appeals assailing the same resolution and order of the DOTC Secretary.
• Jurisdiction of the Office of the President: Whether the Office of the President validly acquired jurisdiction over petitioner's appeal from the resolution and order of the DOTC Secretary.
• Authority of the Court of Appeals to Dismiss the Appeal Pending Before the Office of the President: Whether the Court of Appeals may order the dismissal of the appeal pending before the Office of the President on the ground of forum shopping.

• Forum Shopping: Yes, in the limited sense that identity of cause of action and reliefs sought existed between the letter-appeal to the Office of the President and the certiorari petition in the Court of Appeals, both of which sought to set aside the same DOTC resolution and order.
• Jurisdiction of the Office of the President: Yes. The doctrine of exhaustion of administrative remedies empowers the Office of the President to review any determination or disposition of a department head, pursuant to the President's power of control over all executive departments, bureaus and offices.
• Authority of the Court of Appeals to Dismiss the Appeal Pending Before the Office of the President: No. Only the Office of the President could dismiss the case pending before it; the appellate court's order of dismissal constituted an undue intrusion into a valid exercise of jurisdiction by the President over acts of subordinates within that office.

• Forum Shopping: Forum shopping refers to the act of availing oneself of several judicial remedies in different courts, either simultaneously or successively, substantially founded on the same transaction and identical material facts and circumstances, raising basically like issues either pending in, or already resolved by, some other court. The principle applies not only to suits filed before courts but also to litigation commenced in court while an administrative proceeding is pending, undertaken to defeat administrative processes in anticipation of an unfavorable administrative ruling and possibly a favorable court ruling. It exists where the elements of litis pendentia are present, or where a final judgment in one case would amount to res judicata in the other, or where there is identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought. Applying these standards, the Court found identity of cause of action and reliefs sought between petitioner's letter-appeal filed with the Office of the President and its petition for certiorari filed with the Court of Appeals in C.A.-G.R. SP No. 61159, since the DOTC resolution and order of 05 June 2000 and 30 August 2000 were sought to be set aside in both appeals. The Court traced the certification requirement from Circular 28-91, dated 08 February 1994, through Administrative Circular No. 04-94, effective 01 April 1994, to Section 5, Rule 7 of the 1997 Rules of Civil Procedure, which ordains that a violation constitutes contempt of court and is a cause for the summary dismissal of both petitions, without prejudice to appropriate action against counsel.

• Jurisdiction of the Office of the President: The doctrine of exhaustion of administrative remedies empowers the Office of the President to review any determination or disposition of a department head. The doctrine allows, and indeed requires, that an administrative decision first be appealed to the administrative superiors up to the highest level before it may be elevated to a court of justice for review; where a remedy within the administrative machinery can still be had by giving the administrative officer concerned every opportunity to decide on a matter within his jurisdiction, that remedy should be exhausted before the court's judicial power is invoked. The appellate court correctly ruled that the action of a department head bears only the implied approval of the President, and the latter is not precluded from exercising the power to review the decision of the former pursuant to the President's power of control over all executive departments, bureaus and offices. The Office of the President validly acquired jurisdiction over the case upon the filing therewith of petitioner's appeal, and that jurisdiction was not lost by petitioner's subsequent recourse to certiorari proceedings before the Court of Appeals; jurisdiction which has attached in the first instance continues until the final resolution of the case.

• Authority of the Court of Appeals to Dismiss the Appeal Pending Before the Office of the President: The appellate court, while recognizing the validity of the exercise of jurisdiction by the Office of the President, incongruently ordered the dismissal of the appeal pending with that office on the basis of forum shopping. That disposition was clearly flawed: it is the Office of the President, not the appellate court, which could dismiss the case pending before that office. Courts of justice, if only for reasons of comity and convenience, should shy away from a dispute until the system of administrative redress is completed, so as to give the administrative office every opportunity to correct its error and to properly dispose of the case. The appellate court's order to dismiss the appeal pending with the Office of the President could well constitute an undue intrusion into a valid exercise of jurisdiction by the President over acts of subordinates within that office.

• Forum Shopping — The act of availing oneself of several judicial remedies in different courts, either simultaneously or successively, substantially founded on the same transaction and identical material facts and circumstances, raising basically like issues either pending in, or already resolved by, some other court. It exists where the elements of litis pendentia are present, or where a final judgment in one case would amount to res judicata in the other, or where there is identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought. The doctrine extends to litigation commenced in court while an administrative proceeding is pending, where the purpose is to defeat administrative processes in anticipation of an unfavorable administrative ruling and possibly a favorable court ruling. In this case, the Court found identity of cause of action and reliefs sought between the letter-appeal to the Office of the President and the certiorari petition in the Court of Appeals, both seeking to set aside the same DOTC issuances.

• Exhaustion of Administrative Remedies — An administrative decision must first be appealed to the administrative superiors up to the highest level before it may be elevated to a court of justice for review; if a remedy within the administrative machinery can still be had by giving the administrative officer concerned every opportunity to decide on a matter within his jurisdiction, that remedy should be priorly exhausted before the court's judicial power is invoked. The doctrine empowers the Office of the President to review any determination or disposition of a department head. Applied here, it sustained the Office of the President's competence to take cognizance of petitioner's appeal from the DOTC Secretary's resolution and order.

• Power of Control of the President — The action of a department head bears only the implied approval of the President, and the latter is not precluded from exercising the power to review the decision of the former pursuant to the President's power of control over all executive departments, bureaus and offices. This power furnished the jurisdictional basis for the Office of the President's review of the DOTC Secretary's disposition, even absent an express statutory provision for appeal from the DOTC to the Office of the President.

• Continuing Jurisdiction — Jurisdiction which has attached in the first instance continues until the final resolution of the case. The Office of the President validly acquired jurisdiction upon the filing of petitioner's appeal, and that jurisdiction was not lost by petitioner's subsequent recourse to certiorari proceedings before the Court of Appeals.

• Comity and Convenience in Administrative Redress — Courts of justice, if only for reasons of comity and convenience, should shy away from a dispute until the system of administrative redress is completed, so as to give the administrative office every opportunity to correct its error and to properly dispose of the case. The Court invoked this principle to hold that the appellate court's order dismissing the appeal pending before the Office of the President could constitute an undue intrusion into a valid exercise of jurisdiction by the President over acts of subordinates within that office.

• "Forum shopping refers to the act of availing oneself of several judicial remedies in different courts, either simultaneously or successively, substantially founded on the same transaction and identical material facts and circumstances, raising basically like issues either pending in, or already resolved by, some other court." — The canonical definition of forum shopping adopted by the Court, from which the elements of the doctrine are drawn; it anchors the finding that identity of cause of action and reliefs existed between the two proceedings initiated by petitioner.

• "Jurisdiction which has attached in the first instance continues until the final resolution of the case." — The ratio for rejecting the argument that petitioner's subsequent certiorari petition in the Court of Appeals divested the Office of the President of jurisdiction over the appeal already filed before it.

• "It is the latter, not the appellate court, which could dismiss the case pending before that office." — The core holding of the decision: the Court of Appeals exceeded its authority in ordering the dismissal of the appeal pending before the Office of the President, since only that office could dismiss a case pending before it.

• "It also behooves courts of justice, if only for reasons of comity and convenience, to shy away from a dispute until the system of administrative redress is completed so as to give the administrative office every opportunity to correct its error and to properly dispose of the case." — The Court's articulation of the comity-and-convenience rationale underlying exhaustion of administrative remedies, invoked to characterize the appellate court's order as an undue intrusion into the President's exercise of jurisdiction over subordinates.

• Gatmaytan vs. Court of Appeals, 267 SCRA 487 — Cited as authority for the definition of forum shopping as the act of availing oneself of several judicial remedies in different courts, simultaneously or successively, founded on the same transaction and identical material facts and circumstances.
• First Philippine International Bank vs. Court of Appeals, 252 SCRA 259 — Cited for the principle that forum shopping applies not only to suits filed before courts but also to litigation commenced in court while an administrative proceeding is pending, in order to defeat administrative processes.
• Buan vs. Lopez, Jr., 145 SCRA 34 — Cited for the rule that forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case would amount to res judicata in the other.
• Employees' Compensation Commission vs. Court of Appeals, 257 SCRA 717 — Cited for the element test of forum shopping: identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought.
• Fil-Estate Golf and Development, Inc. vs. Court of Appeals, 265 SCRA 614 — Cited, together with Administrative Circular No. 04-94, in connection with the certification requirement against forum shopping and its consequences.
• Prubankers Association vs. Prudential Bank & Trust Company, 302 SCRA 74 — Cited alongside Administrative Circular No. 04-94 on the certification requirement against forum shopping.
• Paat vs. Court of Appeals, 266 SCRA 167 — Cited as authority for the doctrine of exhaustion of administrative remedies and the requirement that an administrative decision be appealed to the administrative superiors up to the highest level before elevation to a court of justice.

• Section 1, Rule 42, 1997 Rules of Civil Procedure — The provision on non-forum shopping with which petitioner failed to comply, and the ground on which the Court of Appeals dismissed C.A.-G.R. SP No. 61159 in its resolution of 09 November 2000.
• Section 5, Rule 7, 1997 Rules of Civil Procedure — The codified certification requirement against forum shopping, adopted from paragraphs (1) and (2) of Administrative Circular No. 04-94; it ordains that a violation constitutes contempt of court and is a cause for the summary dismissal of both petitions, without prejudice to appropriate action against the counsel of the party concerned.
• Circular 28-91 (08 February 1994) — Requires that every petition filed with the Supreme Court or the Court of Appeals be accompanied by a certification of non-forum shopping, cited as the origin of the certification requirement.
• Administrative Circular No. 04-94 (effective 01 April 1994) — Expanded the certification requirement to include cases filed in court and quasi-judicial agencies below the Supreme Court and the Court of Appeals; its paragraphs (1) and (2) were ultimately adopted as Section 5, Rule 7 of the 1997 Rules of Civil Procedure.
• Section 17, Article VI, 1987 Constitution — Cited in the decision as the source of the President's power of control over all executive departments, bureaus and offices, which supplied the basis for the Office of the President's authority to review the determination of the DOTC Secretary.

Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ.