canilang v. c.a. (2004)

SECOND DIVISION

G.R. No. 137862 November 11, 2004

ALFREDO ESTRADA, RENATO T. CANILANG and MANUEL C. LIM, petitioners,
vs.
COURT OF APPEALS AND BACNOTAN CEMENT CORPORATION (BCC), respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before this Court is a petition for review on certiorari of the decision¹ of the Court of Appeals in CA-G.R. SP No. 44324, promulgated on April 6, 1998, and the resolution² dated February 24, 1999 denying petitioners’ motion for reconsideration.

The facts are as follows:

Alfredo Estrada, Renato T. Canilang and Manuel C. Lim, as concerned citizens and taxpayers, filed on July 31, 1996, before the Regional Trial Court (RTC) of Olongapo City, a complaint for Injunction and Damages with Prayer for Preliminary Injunction and Temporary Restraining Order against Bacnotan Cement Corp. (BCC), Wawandue Fishing Port, Inc. (WFPI), Jeffrey Khong Hun as President of WFPI, Manuel Molina as Mayor of Subic, Zambales, and Ricardo Serrano as Regional Director of the Department of Environment and Natural Resources (DENR).

The complaint alleges that: WFPI and the Municipality of Subic entered into an illegal lease contract, which in turn became the basis of a sub-lease in favor of BCC; the sub-lease between WFPI and BCC is a violation of the first lease because the cement plant, which BCC intended to operate in Wawandue, Subic, Zambales, is not related to the fish port business of WFPI; and BCC’s cement plant is a nuisance because it will cause pollution, endanger the health, life and limb of the residents and deprive them of the full use and enjoyment of their properties. The plaintiffs prayed that an order be issued: to restrain and prohibit BCC from opening, commissioning, or otherwise operating its cement plant; and to require the defendants to jointly and solidarily pay the plaintiffs P205,000.00 by way of actual, moral and exemplary damages and attorney’s fees.³

Defendants WFPI/Khong Hun and BCC filed separate motions to dismiss, both alleging that the complaint states no cause of action. BCC, in its motion, added that: the plaintiffs failed to exhaust administrative remedies before going to court; that the complaint was premature; and that the RTC has no jurisdiction on the matter. Respondent Serrano of the DENR also filed a motion to dismiss stating that there was no cause of action insofar as he is concerned since there was nothing in the complaint that shows any dereliction of duty on his part.⁴

On December 6, 1996, Judge Eliodoro G. Ubiadas of RTC Olongapo City, Branch 72, issued an order denying respondents’ motions to dismiss and granting the prayer for a writ of preliminary injunction.⁵ Pertinent portions of the order read as follows:

The Court notes that the powers vested by law under Executive Order 192, Republic Act 3931 and Presidential Decree 984 are regulatory merely and for the purpose of determining whether pollution exists.

However, under the laws above-mentioned, the powers granted to the DENR thru the Pollution Adjudication Board did not expressly exclude the Courts which under the law are empowered to try both questions of facts and law to determine whether pollution which maybe nuisance per se or by accidents (sic) exist or likely to exist. Under the Constitution, the courts are imbued the inherent power of general jurisdiction to resolve these issues. While it maybe (sic) true that petitioners might have first to seek relief thru the DENR’s Pollution Adjudication Board a resort to the remedy provided under the Pollution Adjudication Board is rendered useless and ineffective in the light of the urgency that the said pollution be restrained outright in lieu of the impending risk described in the petition. It will be noted that the DENR did not have the power either in Executive Order 192, Republic Act 3931 and Presidential Decree 984 to issue a writ of injunction. The argument therefore for the exhaustion of administrative remedy and lack of jurisdiction does not warrant the dismissal of this petition against Bacnotan Cement Corporation.⁶

Respondents’ motions for reconsideration were likewise denied by the trial court in an order dated May 13, 1997.⁷

Respondent BCC then went to the Court of Appeals on a petition for certiorari and prohibition with preliminary injunction and/or temporary restraining order seeking to reverse and set aside the orders dated December 6, 1996 and May 13, 1997 as well as to lift the writ of preliminary injunction dated December 11, 1996.

On April 6, 1998, the Court of Appeals rendered its decision, granting BCC’s petition, thus:

WHEREFORE, in the light of the foregoing disquisitions, the instant petition for certiorari is GRANTED. The assailed Orders dated December 6, 1996 and May 13, 1997 are hereby SET ASIDE. The writ of injunction issued by the public respondent under date of December 11, 1996 is forthwith, LIFTED and the Complaint insofar as petitioner BCC is concerned is ordered forthwith DISMISSED. No costs.

SO ORDERED.⁸

It reasoned that:

FIRSTLY. …We find that the denial of said Motion to Dismiss by the Court a quo, was a grave abuse of discretion because of the doctrine of Administrative Remedy which requires that where an administrative remedy is provided by statute, relief must be sought administratively first before the Court will take action thereon. As ruled by the Supreme Court in the case of Abe Abe, et al. vs. Manta (90 SCRA 524). "When an adequate remedy may be had within the Executive Department of the government but nevertheless a litigant fails or refuses to avail himself of the same, the Judiciary shall decline to interfere. This traditional attitude of the Court is based not only on respect for party litigants but also on respect for a co-equal office in the government. In fine, our Supreme Court has categorically explained in Aquino vs. Mariano (129 SCRA 209) that whenever, there is an available Administrative Remedy provided by law, no judicial recourse can be made until such remedy has been availed of and exhausted for three (3) reasons that: (1) Resort to court maybe unnecessary if administrative remedy is available; (2) Administrative Agency may be given a chance to correct itself; and (3) The principle of Amity and Convenience requires that no court can act until administrative processes are completed. Commissioner of Customs vs. Navarro (77 SCRA 264).

SECONDLY, it is a well-settled rule that the jurisdiction of the Regional Trial Court is general in character, referring to the existence of nuisance under the provision of Article 694 of the New Civil Code. On the other hand, the Department of Environment and Natural Resources, through the Pollution Adjudication Board (PAB) under R.A. 3931 as amended by P.D. 984, prescribes the Abatement of Pollution. In fine, when it comes to nuisance, the Court has general jurisdiction under the New Civil Code. But when it comes to pollution which is specific, the administrative body like the DENR has jurisdiction. Clearly, nuisance is general or broader in concept while pollution is specific. Following the rule that the specific issue of pollution, which is under the jurisdiction of DENR prevails over the general issue of nuisance which is under the jurisdiction of the RTC (Lagman vs. City of Manila, 17 SCRA 579), there is no doubt that the DENR and not the Court should have jurisdiction. Hence, the motion to dismiss filed by petitioner should have been GRANTED by the Court a quo. Since it has no jurisdiction over the subject matter. Its denial by public respondent was therefore a grave abuse of discretion, which is correctible by certiorari.

THIRDLY. We should not lose sight of the fact that the authority to construct in this case is necessarily required prior to the actual construction of petitioner’s cement bulk terminal while the permit to operate likewise is required before the petitioner’s cement bulk terminal commences its operation. In this case, the petitioner, at the time, had only the authority to construct, pursuant to a valid contract between the WFPI and the petitioner BCC, approved by the Sangguniang Bayan of Subic and Sangguniang Panlalawigan of Zambales and pursuant to the requisite of DENR. Again, it should be remembered that, at the time, petitioner did not yet have the permit to operate (which should properly be made only after a factual determination of the levels of pollution by the DENR). Hence, the injunction issued in this case is premature and should not have been issued at all by public respondent.

FOURTHLY. The effect of the writ of injunction enjoining petitioner from operating the cement bulk terminal (Order of December 6, 1996) and the public respondent’s refusal to defer the proceedings below, virtually preempt the DENR from making such determination, nay even the authority to issue the permit to operate is likewise preempted. How can we therefore enjoin operation before the issuance of the permit to operate? It is also a settled rule that the remedy of injunction is not proper where an administrative remedy is available. The permit to operate may not even be issued, at all, by the DENR (Buayan Cattle Co. Inc., vs. Quintillan, 128 SCRA 276).

Evidently, the writ of injunction issued in this case, as We view it, is premature. In fact, by issuing the Order of Dec. 6, 1996, the public respondent wrestled the authority from the DENR to determine whether the cement bulk terminal will cause pollution or not, or whether the pollution may only be on acceptable level as to justify the issuance of the permit to operate.

While conceding that prior resort should be made to the DENR, the respondent Judge proceeded to take the contrary stand, following the private respondent’s contention that the doctrine of exhaustion of administrative remedies are [sic] inapplicable, since it would cause irreparable injury if private respondents should avail of administrative step before taking Court action.

We do not agree.

The respondents’ contention is clearly baseless and highly speculative because how can it possibly produce irreparable injury before the actual operation since petitioner has not yet been issued permit to operate. Besides, We find no evidence shown in the complaint or alleged therein that will support the presence of pollution and which could properly be the subject of injunction.

Finally, it is interesting to note that the complaint filed by the private respondents has no prayer for preliminary injunction (it was not asked, why then should it be given?). Furthermore, the Sublease Agreement having been partly executed, it could no longer be enjoined.

By and large, the lower court’s denial of petitioner’s motion to dismiss is undoubtedly a grave abuse of discretion amounting to lack of jurisdiction.⁹

The Court of Appeals denied petitioners’ motion for reconsideration on February 24, 1999.¹⁰ Hence the present petition alleging that:

I

. . . THE HONORABLE COURT OF APPEALS HAD CLEARLY DEPARTED FROM THE ESTABLISHED JURISPRUDENCE ENUNCIATED BY THIS HONORABLE COURT WHEN IT RULED THAT THE HEREIN PETITIONERS FAILED TO EXHAUST ADMINISTRATIVE REMEDIES AVAILABLE TO THEM BEFORE THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR) POLLUTION ADJUDICATION BOARD (PAB); and that

II

THE COURT OF APPEALS ALSO GROSSLY ERRED IN RULING THAT THE REGIONAL TRIAL COURT OF OLONGAPO CITY, BRANCH 72 HAS NO JURISDICTION OVER THE ISSUE OF POLLUTION.¹¹

Petitioners argue that: prior resort to an administrative agency is futile and unnecessary since great and irreparable injury would ensue if the cement repacking plant is allowed to operate in Wawandue, Subic, Zambales; only the court can grant them speedy, effective and immediate relief since the DENR-Pollution Adjudication Board (PAB) has no authority to issue the needed writ of injunction prayed for by petitioners; E.O. No. 192,¹² R.A. No. 3931¹³ or P.D. No. 984¹⁴ does not expressly exclude the power and authority of the RTC to try both questions of fact and of law relative to the determination of the existence of pollution arising from the operation of respondent’s cement repacking plant either as a nuisance per se or a nuisance per accidens; and the lower court under the Constitution is imbued with the inherent power and jurisdiction to resolve the issue of pollution.¹⁵

In its Comment, BCC contends that: the instant petition should be dismissed because it is not accompanied by a copy of the petition in CA G.R. SP No. 44324, which violates Rule 45, Sec. 4 of the Rules of Court requiring that the petition be accompanied by relevant pleadings;¹⁶ the Court of Appeals correctly held that the jurisdiction to determine the issue of pollution is lodged primarily with the DENR and not with the RTC; under P.D. No. 984, the task of determining the existence of pollution was bestowed on the National Pollution Control Commission (NPCC), the powers of which were assumed by the DENR under E.O. No. 192; the jurisdiction of the trial courts anent abatement of nuisance in general cannot prevail over the specific, specialized and technical jurisdiction of the DENR-PAB; under the doctrine of exhaustion of administrative remedies, where competence to determine the same issue is placed in the trial court and an administrative body and the issue involves a specialized and technical matter, relief should first be sought before the administrative body prior to instituting suit before the regular courts; the relief sought by the petitioners to prevent the supposedly injurious operation of BCC’s cement bulk terminal can be effectively obtained from the DENR, which, under P.D. No. 984, has the authority to grant, modify and revoke permits, and to issue orders for the abatement of pollution and impose mandatory pollution control measures for compliance;¹⁷ since the BCC only has an "authority to construct" and not yet "permit to operate" at the time of the filing of the complaint, the writ of injunction issued by the trial court preempted the DENR from making the determination of whether or not BCC should be allowed to operate; the complaint was properly dismissed since petitioners have no legal capacity to bring a suit for abatement of nuisance; and the right invoked by petitioners is abstract and is not sufficient to confer locus standi.¹⁸

In their Reply, petitioners reiterated their arguments and added that they have fully complied with the requirements of Rule 45.¹⁹

The principal issue that needs to be resolved is whether or not the instant case falls under the exceptional cases where prior resort to administrative agencies need not be made before going to court.

We answer in the negative.

The doctrine of exhaustion of administrative remedies requires that resort be first made with the administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to a court of justice for review.²⁰ If a remedy within the administrative machinery is still available, with a procedure pursuant to law for an administrative officer to decide the controversy, a party should first exhaust such remedy before going to court. A premature invocation of a court’s intervention renders the complaint without cause of action and dismissible on such ground.²¹

The reason for this is that prior availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed and complied with.²²

As we explained in Gonzales vs. Court of Appeals,²³

The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. It is presumed that an administrative agency, if afforded an opportunity to pass upon a matter, will decide the same correctly, or correct any previous error committed in its forum. Furthermore, reasons of law, comity and convenience prevent the courts from entertaining cases proper for determination by administrative agencies. Hence, premature resort to the courts necessarily becomes fatal to the cause of action of the petitioner.²⁴

While the doctrine of exhaustion of administrative remedies is flexible and may be disregarded in certain instances, such as:

(1) when there is a violation of due process,

(2) when the issue involved is purely a legal question,

(3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction,

(4) when there is estoppel on the part of the administrative agency concerned,

(5) when there is irreparable injury,

(6) when the respondent is a department secretary whose acts as an alter ego of the President bears [sic] the implied and assumed approval of the latter,

(7) when to require exhaustion of administrative remedies would be unreasonable,

(8) when it would amount to a nullification of a claim,

(9) when the subject matter is a private land in land case proceedings,

(10) when the rule does not provide a plain, speedy and adequate remedy,

(11) when there are circumstances indicating the urgency of judicial intervention,

(12) when no administrative review is provided by law,

(13) where the rule of qualified political agency applies, and

(14) when the issue of non-exhaustion of administrative remedies has been rendered moot.²⁵

we find, however, that the instant case does not fall under any of the recognized exceptional circumstances.

Petitioners claim that their action before the trial court, without going to the DENR first, is justified because they are in danger of suffering grave and irreparable injury from the operation of respondent’s cement repacking plant and the DENR does not have the power to grant them the relief they are praying for.

We do not agree.

Republic Act No. 3931, An Act Creating the National Water and Air Pollution Control Commission, was passed on June 18, 1964 to maintain reasonable standards of purity for the waters and air of the country with their utilization for domestic, agricultural, industrial and other legitimate purposes. It created the NPCC which had the power, to issue, renew, or deny permits, for the prevention and abatement of pollution.²⁶

In 1976, Presidential Decree No. 984 was enacted to strengthen the NPCC giving it, among others, the following:

Sec. 6. Powers and Functions – . . .

. . .

(e) Issue orders or decisions to compel compliance with the provisions of this Decree and its implementing rules and regulations only after proper notice and hearing.

(f) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such discontinuance must be accomplished.

(g) Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for the prevention and abatement of pollution, for the discharge of sewage, industrial waste, or for the installation or operation of sewage works and industrial disposal system or parts thereof…

…

(j) serve as arbitrator for the determination of reparations, or restitution of the damages and losses resulting from pollution.

P.D. No. 984 also empowered the commission to issue ex parte orders directing the discontinuance or temporary suspension or cessation of operation of an establishment or person generating sewage or wastes without the necessity of prior public hearing whenever it finds a prima facie evidence that the discharged sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or plant life, or exceed the allowable standards set by the commission.²⁷

In 1987, Executive Order No. 192 was passed, reorganizing the DENR. It transferred the power of the NPCC to the Environmental Management Bureau²⁸ and created the PAB, under the Office of the Secretary, which assumed the powers and functions of the NPCC with respect to the adjudication of pollution cases under R.A. No. 3931 and P.D. No. 984.²⁹

In Pollution Adjudication Board vs. Court of Appeals,³⁰ we stated that the PAB is the very agency of the government with the task of determining whether the effluents of a particular industrial establishment comply with or violate applicable anti-pollution statutory and regulatory provisions.³¹ We also recognized its power to issue, ex parte, cease and desist orders, thus:

. . . under . . . Section 7(a) of P.D. No. 984, an ex parte cease and desist order may be issued by the (PAB) (a) whenever the wastes discharged by an establishment pose an "immediate threat to life, public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the allowable standards set by the [NPCC]." . . . [I]t is not essential that the Board prove that an "immediate threat to life, public health, safety or welfare, or to animal or plant life" exists before an ex parte cease and desist order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards set by the [NPCC]." In respect of discharges of wastes as to which allowable standards have been set by the Commission, the Board may issue an ex parte cease and desist order when there is prima-facie evidence of an establishment exceeding such allowable standards. Where, however, the effluents or discharges have not yet been the subject matter of allowable standards set by the Commission, then the Board may act on an ex parte basis when it finds at least prima facie proof that the wastewater or material involved presents an immediate threat to life, public health, safety or welfare or to animal or plant life. . . .

. . .

Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely because stopping continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. . . .³²

In Laguna Lake Development Authority vs. Court of Appeals,³³ we also pronounced that:

The matter of determining whether there is…pollution of the environment that requires control, if not prohibition, of the operation of a business establishment is essentially addressed to the Environmental Management Bureau (EMB) of the DENR which, by virtue of Section 16 of Executive Order No. 192, series of 1987 has assumed the powers and functions of the defunct National Pollution Control Commission created under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication Board (PAB) under the Office of the DENR Secretary now assumes the powers and functions of the National Pollution Control Commission with respect to adjudication of pollution cases.

As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases where the special law provides for another forum.³⁴

Clearly, the claim of petitioners that their immediate recourse to the regular courts is justified because the DENR is powerless to grant them proper relief is without basis.

The Court of Appeals correctly found that the petitioners failed to exhaust administrative remedies before going to court which renders their complaint dismissible on the ground of lack of cause of action.

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.

Callejo, Sr., and Chico-Nazario, JJ., concur.
Puno, (Chairman), J., on official leave.
Tinga, J., on leave.

Footnotes

¹ Penned by Associate Justice Jainal Rasul and concurred in by Associate Justices Eugenio Labitoria and Marina Buzon; Rollo, pp. 61-77.

² Rollo, pp. 79-80.

³ Rollo, pp. 29-40.

⁴ Id., Rollo, pp. 63-65.

⁵ Id., pp. 54-57.

⁶ Id., p. 55.

⁷ Id., pp. 58-59.

⁸ Id., pp. 76-77.

⁹ Rollo, pp. 72-76.

¹⁰ Id., p. 80.

¹¹ Id., pp. 20-21.

¹² PROVIDING FOR THE REORGANIZATION OF THE DEPARTMENT OF ENVIRONMENT, ENERGY AND NATURAL RESOURCES, RENAMING IT AS THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, AND FOR OTHER PURPOSES.

¹³ AN ACT CREATING THE NATIONAL WATER AND AIR POLLUTION CONTROL COMMISSION.

¹⁴ PROVIDING FOR THE REVISION OF REPUBLIC ACT NO. 3931, COMMONLY KNOWN AS THE POLLUTION CONTROL LAW, AND FOR OTHER PURPOSES.

¹⁵ Rollo, pp. 24-25.

¹⁶ Id., pp. 97-98.

¹⁷ Rollo, pp. 105-106.

¹⁸ Id., pp. 101-112.

¹⁹ Id., pp. 118-120.

²⁰ Castro vs. Gloria, G.R. No. 132174, August 20, 2001, 363 SCRA 417, 422.

²¹ Bangus Fry Fisherfolk vs. Lanzanas, G.R. No. 131442, July 10, 2003, 405 SCRA 530.

²² Paat vs. Court of Appeals, G.R. No. 111107, January 10, 1997, 266 SCRA 167, 175-176.

²³ G.R. No. 106028, May 9, 2001, 357 SCRA 599.

²⁴ Id., p. 604.

²⁵ Social Security Commission vs. Court of Appeals, G.R. 152058, September 27, 2004.

²⁶ Sec. 6(a).

²⁷ Sec. 7(a).

²⁸ Sec. 16.

²⁹ Sec. 19.

³⁰ G.R. No. 93891, March 11, 1991, 195 SCRA 112.

³¹ Id., p. 118.

³² Id., pp. 117-118, 123-124.

³³ G.R. No. 110120, March 16, 1994, 231 SCRA 292.

³⁴ Id., pp. 303-304.