Lupangco vs. Court of Appeals

Absent a statute prescribing a specific mode of review or appeal from an administrative agency's order, RTCs have general jurisdiction to entertain actions assailing the constitutionality or validity of such administrative acts via ordinary civil actions (e.g., injunction); additionally, administrative rules and regulations must be reasonable and fairly adapted to their purpose to be valid, and cannot infringe upon constitutional rights to liberty and academic freedom.

The Professional Regulation Commission (PRC) adopted Resolution No. 105 as a measure to "preserve the integrity and purity of the licensure examinations" following alleged leakages in previous bar and board examinations. The resolution imposed an absolute prohibition on examinees attending review classes or receiving review materials during the three days immediately preceding examination dates.

• Filed in RTC Manila, Br. 32 (Civil Case No. 86-37950) on October 16, 1986 — complaint for injunction with prayer for writ of preliminary injunction
• RTC Order dated October 21, 1986 — denied PRC's motion to dismiss, assumed jurisdiction, and enjoined PRC from enforcing Resolution No. 105; declared resolution unconstitutional
• CA Decision dated January 13, 1987 (CA-G.R. SP No. 10598) — granted PRC's petition, declared the RTC order null and void for lack of jurisdiction, dismissed Civil Case No. 86-37950 with prejudice
• Elevated to SC via petition for certiorari

• October 6, 1986: PRC issued Resolution No. 105 as "Additional Instructions to Examinees" for the accountancy licensure examinations scheduled for October 25 and November 2, 1986
• Resolution prohibited examinees from:
  • Attending any review class, briefing, or conference
  • Receiving handouts, review materials, or tips from any school, college, university, review center, reviewer, lecturer, or official
  • During the three days immediately preceding every examination day, including examination day itself
  • Violators subjected to sanctions under Sec. 8, Art. III of PRC Rules and Regulations
  • Petitioners (reviewees preparing for the exams) filed a class suit on their own behalf and others similarly situated, seeking to restrain enforcement and declare the resolution unconstitutional
  • PRC moved to dismiss on grounds of lack of jurisdiction (co-equal bodies doctrine) and exclusivity of CA jurisdiction under B.P. Blg. 129

• The RTC possesses jurisdiction to review the validity of PRC Resolution No. 105 and to enjoin its enforcement, as no statute prescribes a specific mode of appeal from PRC resolutions
• Resolution No. 105 is unconstitutional for being arbitrary, unreasonable, and violative of:
  • The examinees' right to liberty (freedom to prepare for examinations)
  • Academic freedom of review schools
  • Due process (excessive penalty of barring future examinations)
  • The CA erred in applying the "co-equal bodies" doctrine since PRC is not similarly situated to the SEC, which has specific statutory review procedures

• Court of Appeals: The PRC and RTC are co-equal bodies; co-equal bodies have no power to control or interfere with each other's acts
• Relied on National Electrification Administration v. Mendoza, Pineda v. Lantin, and Philippine Pacific Fishing, Inc. v. Luna (SEC cases) to assert that a court of general jurisdiction cannot interfere with orders of administrative agencies
• Professional Regulation Commission: Under Sec. 9(3) of B.P. Blg. 129, the CA has exclusive appellate jurisdiction over quasi-judicial agencies; the PRC is a quasi-judicial body, and its resolutions must be appealed to the CA, not reviewed by the RTC via certiorari or injunction

• Procedural Issue: Whether the RTC has jurisdiction to entertain a civil action to enjoin enforcement of a PRC resolution and to pass upon its constitutionality when no statute provides a specific mode of review from PRC orders
• Substantive Issue: Whether PRC Resolution No. 105 is unconstitutional for being arbitrary, unreasonable, and violative of the examinees' right to liberty and the academic freedom of schools

• Procedural: YES, the RTC has jurisdiction. The SC distinguished the PRC from the SEC, which has specific statutory review procedures under Commonwealth Act No. 83 and Presidential Decree No. 902-A. No similar provision exists in Presidential Decree No. 223 (creating the PRC) providing for appeal of PRC orders to the CA or SC. Resolution No. 105 is a general regulation issued in the exercise of administrative/policy functions (to preserve exam integrity), not a quasi-judicial adjudication determining specific rights in a particular controversy. Therefore, it falls under the RTC's general original jurisdiction under Sec. 19 of B.P. Blg. 129 over civil actions where the subject is incapable of pecuniary estimation and not within the exclusive jurisdiction of any other tribunal.
• Substantive: Resolution No. 105 is NULL and VOID for being UNCONSTITUTIONAL. The resolution is arbitrary and unreasonable because:
  • It imposes a sweeping ban on legitimate review activities regardless of motive
  • The penalty (permanent disqualification from future examinations) is excessive and bears no reasonable relation to the purpose of preventing leakage
  • It is practically unenforceable (monitoring all examinees)
  • It violates the examinees' right to liberty — freedom to use their faculties, pursue their calling, and acquire knowledge
  • It violates academic freedom — the right of schools to determine how best to prepare their students without outside coercion
  • The "cure" (banning all review) is worse than the disease; it constitutes "uprooting the tree to get rid of a rotten branch" when the PRC should instead address the source of leakages directly

• Doctrine of Co-Equal Bodies — Co-equal bodies cannot interfere with each other's acts only where specifically provided by statute (as with the SEC under its special charter). Absent such statutory limitation, the RTC retains general jurisdiction to review administrative acts of other government agencies.
• Quasi-Judicial vs. Administrative Functions Test —
• Quasi-judicial: Involves investigation of facts, holding hearings, and determining rights/duties in specific controversies resulting in decisions or orders applicable to particular situations
• Administrative/Rule-making: Involves issuance of general rules and regulations to implement policy
• Only quasi-judicial orders fall under the CA's appellate jurisdiction under Sec. 9(3) of B.P. Blg. 129; general administrative rules are reviewable by RTCs via ordinary civil actions
• Reasonableness of Administrative Regulations — To be valid, administrative rules and regulations must be reasonable and fairly adapted to the end in view. If shown to bear no reasonable relation to the authorized purpose, or if arbitrary and capricious, they must be held invalid.
• Right to Liberty (Substantive Due Process) — "Liberty" encompasses more than freedom from physical restraint; it includes the right to act, pursue callings and vocations, develop capacities, and acquire useful knowledge for personal happiness and growth.
• Academic Freedom — Schools and colleges possess the right to determine their aims and objectives and how best to attain them, free from outside coercion or interference save when overriding public welfare demands restraint. This right extends to the choice of students and methods of instruction.

• "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 (the law)." (On judicial review of administrative acts)
• "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 the end in view."
• "The term '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..."
• "[The enforcement of Resolution No. 105] would be like uprooting the tree to get rid of a rotten branch."
• "This constitutional provision [academic freedom] is not to be construed in a niggardly manner or in a grudging fashion."

• National Electrification Administration v. Mendoza (138 SCRA 632) — Distinguished; basis for CA's ruling but SC clarified this applies only to SEC under specific statutory provisions
• Pineda v. Lantin — Distinguished; established SEC reviewability only by SC under CA No. 83
• Philippine Pacific Fishing, Inc. v. Luna (112 SCRA 604) — Distinguished; SEC review under PD 902-A
• Republic v. Presiding Judge, CFI of Lanao del Norte (69 SCRA 235) — Followed; RTC has jurisdiction when constitutional rights are allegedly infringed by administrative action
• San Miguel Corporation v. Avelino (89 SCRA 69) — Followed; CFI has authority to decide validity of ordinances despite contrary executive opinion
• Filipinas Engineering and Machine Shop v. Ferrer (135 SCRA 25) — Followed; COMELEC resolution awarding contract was administrative, not quasi-judicial; hence CFI had jurisdiction
• Salud v. Central Bank (143 SCRA 590) — Followed; IAC has no appellate jurisdiction over Monetary Board resolutions absent specific law
• Garcia v. Faculty Admission Committee (68 SCRA 277) — Followed; on the scope of academic freedom

• Presidential Decree No. 223 — Creates the Professional Regulation Commission; contains no provision for appeal of its resolutions to CA or SC
• B.P. Blg. 129, Section 19 — RTC exclusive original jurisdiction over civil actions where subject is incapable of pecuniary estimation and cases not within exclusive jurisdiction of any court, tribunal, or body exercising judicial or quasi-judicial functions
• B.P. Blg. 129, Section 9(3) — CA exclusive appellate jurisdiction over quasi-judicial agencies; SC held this inapplicable to PRC's general administrative rule-making
• Commonwealth Act No. 83 and Presidential Decree No. 902-A — Distinguished as statutes providing specific SC review procedures for SEC orders
• Constitution — Provisions on Liberty (Due Process) and Academic Freedom (implied)

• Narvasa and Cruz, JJ. — Concur with the majority decision. N/A (no separate opinions).

• Griño-Aquino, J. — Took no part.