University of Santo Tomas vs. Sanchez

A complaint for damages and mandamus against a university for unjustifiably withholding a student's Transcript of Records states a valid cause of action, and the doctrine of exhaustion of administrative remedies does not apply where the administrative agency lacks quasi-judicial power to award damages.

Respondent Danes B. Sanchez graduated from the University of Santo Tomas (UST) with a Bachelor of Science in Nursing degree. When he sought his Transcript of Records (ToR) to take the nursing board examinations, UST refused to release it, claiming he was not officially enrolled during his last three semesters. Respondent subsequently filed a complaint for damages against UST and its officials, alleging unjustified refusal to release his ToR, which deprived him of the opportunity to take the board exams and earn a living.

• Graduation and Withholding of Records: Respondent graduated from UST on April 2, 2002, and was included in the list of candidates for graduation. On April 18, 2002, he requested his ToR, paid the required fees, but was only given a Certificate of Graduation. Despite repeated attempts and the submission of class cards as proof of enrollment, UST refused to release his ToR, preventing him from taking the nursing board examinations.
• Motion to Dismiss: Instead of filing an Answer, petitioners filed a Motion to Dismiss, arguing that respondent was not a registered student for the last three semesters and thus not entitled to a ToR. They claimed paragraph 10 of the complaint admitted this non-enrollment.
• Supplemental Motion: Petitioners later filed a Supplement to their Motion to Dismiss, alleging that respondent had also sought administrative recourse before the CHED via a letter-complaint. Petitioners argued that the CHED had primary jurisdiction over school controversies and that the filing of the court case was premature.
• RTC and CA Rulings: The RTC denied the motion, finding that the issues required the examination of evidence during trial. The CA affirmed the RTC's ruling, directing the trial court to proceed with the case.

• Primary Jurisdiction and Exhaustion of Administrative Remedies: Petitioners argued that the CHED exercises quasi-judicial power over controversies involving school matters and possesses primary jurisdiction over demands for the release of student records; thus, respondent failed to exhaust administrative remedies before resorting to the courts.
• Forum Shopping: Petitioners maintained that by seeking recourse with both the CHED and the RTC, respondent violated the rule against forum shopping.
• Failure to State a Cause of Action: Petitioners argued that the complaint failed to state a cause of action because it admitted in paragraph 10 that respondent was not enrolled at UST in the last three semesters prior to graduation.

• Existence of a Cause of Action: Respondent countered that the complaint stated a valid cause of action for mandamus and damages, as the unjustified withholding of his ToR violated his rights under Articles 19-21 of the Civil Code.
• Inapplicability of Exhaustion Doctrine: Respondent argued that exhaustion of administrative remedies was inapplicable because the CHED cannot award damages, and the issues involved require the application and interpretation of the Civil Code, which is within the jurisdiction of the courts.
• No Forum Shopping: Respondent contended that there was no forum shopping because the CHED lacks quasi-judicial power to resolve the controversy or grant the reliefs prayed for.

• Exhaustion of Administrative Remedies: Whether the doctrine of exhaustion of administrative remedies applies, requiring recourse to the CHED before filing a court action for the release of a Transcript of Records and damages.
• Forum Shopping: Whether the respondent committed forum shopping by filing a letter-complaint with the CHED and simultaneously filing a case with the RTC.
• Cause of Action: Whether the complaint failed to state a cause of action based on the alleged admission in paragraph 10 that the respondent was not enrolled for the last three semesters.

• Exhaustion of Administrative Remedies: The doctrine does not apply because the CHED lacks quasi-judicial power to adjudicate the case. Section 8 of R.A. 7722 does not expressly grant the CHED judicial or quasi-judicial power. The CHED cannot award damages, which is the primary relief sought. Furthermore, the provisions of the Manual of Regulations for Private Schools cited by petitioners are inapplicable: Section 33 concerns fraudulent graduation, which was not invoked, and Section 72 concerns withholding for suspension, expulsion, or non-payment, none of which are present. Exhaustion may also be dispensed with when issues are purely legal and within the trial court's jurisdiction.
• Forum Shopping: Forum shopping does not exist because the CHED is without quasi-judicial power and cannot make any disposition of the case. A requisite for forum shopping is that the alternative forum can entertain an action or grant relief, which the CHED cannot do.
• Cause of Action: The complaint sufficiently states a cause of action. Paragraph 10 does not admit non-enrollment; rather, it alleges force and intimidation by petitioners, which strengthens the claim for damages. The test is whether, admitting the facts alleged, the court could render a valid judgment. Assuming the facts are true, the RTC could grant the relief prayed for. The factual issues—whether respondent was enrolled, whether his degree was obtained fraudulently, and whether there was fault or negligence—require a full-blown trial.

• Exhaustion of Administrative Remedies — Requires that before a party resorts to the courts, the administrative agency must first be given the opportunity to decide the matter within its jurisdiction. The doctrine admits exceptions, such as when the issue is purely legal, when the agency cannot grant the relief sought (e.g., damages), or when the agency lacks quasi-judicial power.
• Primary Jurisdiction — Applies only where the administrative agency exercises quasi-judicial or adjudicatory functions. An essential requisite is the actual existence of quasi-judicial power, meaning the power to investigate facts, hold hearings, weigh evidence, and draw conclusions.
• Failure to State a Cause of Action — The test is whether, admitting the facts alleged in the pleading, the court could render a valid judgment in accordance with the prayer. A complaint asserts a sufficient cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for.

• "Where a valid cause of action exists, parties may not simply bypass litigation by the simple expediency of a Motion to Dismiss. Instead of abbreviating the proceedings, it has had the opposite effect: unnecessary litigation for almost seven years."
• "The doctrine of exhaustion of administrative remedies admits of numerous exceptions, one of which is where the issues are purely legal and well within the jurisdiction of the trial court, as in the present case."
• "Here, there can be no forum shopping precisely because the CHED is without quasi-judicial power, and cannot make any disposition of the case – whether favorable or otherwise."

• Regino v. Pangasinan Colleges of Science and Technology, 485 Phil. 446 (2004) — Followed. Established that exhaustion of administrative remedies is inapplicable when the administrative agency (CHED) lacks the competence to act on the matter, specifically the power to award damages.
• Smart Communications, Inc. v. National Telecommunications Commission, 456 Phil. 145 (2003) — Followed. Defined quasi-judicial power as the power to investigate facts, hold hearings, weigh evidence, and draw conclusions, which is an essential requisite for the doctrine of primary jurisdiction to apply.
• Cabarrus, Jr. v. Bernas, 344 Phil. 802 (1997) — Followed. Clarified that forum shopping applies only to courts, tribunals, and agencies vested with judicial or quasi-judicial powers that can hear and determine controversies and make binding orders or judgments.

• Rule 16, Section 1(g), Rules of Court — Provides the ground for a motion to dismiss based on failure to state a cause of action. Applied to test the sufficiency of the complaint; the Court found the complaint stated a valid cause of action.
• Section 8, Republic Act No. 7722 (Higher Education Act of 1994) — Enumerates the powers and functions of the CHED. Interpreted as not containing any express grant of judicial or quasi-judicial power to the CHED.
• Section 33, Manual of Regulations of Private Schools — Authorizes the CHED to cancel or revoke the graduation of a student whose records are fraudulent. Held inapplicable because there was no action by the CHED to revoke the respondent's graduation.
• Section 72, Manual of Regulations of Private Schools — Permits a school to withhold credentials for suspension, expulsion, or non-payment, and authorizes the CHED to issue them if unjustifiably withheld. Held inapplicable because none of these circumstances were present in the withholding of the respondent's ToR.
• Articles 19-21, Civil Code — Cited as the basis for the respondent's claim for damages resulting from the petitioners' unjustified refusal to release his ToR.

Renato C. Corona (Chief Justice, Chairperson), Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Jose Portugal Perez