FELIPE B. OLLADA, ETC., PETITIONER AND APPELLANT VS. CENTRAL BANK OF THE PHILIPPINES, RESPONDENT AND APPELLEE.

Felipe B. Ollada is a certified public accountant, having passed the
examination given by the Board of Accountancy, and is duly qualified to
practice his profession. On July 28, 1952 his name was placed on the
rolls, of certified public accountants authorized and accredited to
practice accountancy in the office of the Central Bank of the
Philippines. In December, 1955, by reason of a requirement of the
Import-Export Department of said bank that CPAs submit to an
accreditation under oath before they could certify financial statements
of their clients applying for import dollar allocations with its
office, Ollada’s previous accreditation was nullified.

Pursuant to the new requirement the Import-Export Department of the
Central Bank issued application for accreditation of certified public
accountants (CB-IED Form No. 5) and accreditation card for certified
public accountants (CB-IED Form No. 6) for CPAs to accomplish under
oath. Assailing said accreditation requirement on the ground that it
was (a) an unlawful invasion of the jurisdiction of the Board of
Accountancy, (b) in excess of the powers of the Central Bank and (c)
unconstitutional in that it unlawfully restrained the legitimate
pursuit of one’s trade, Ollada, for himself and allegedly on behalf of
numerous other CPAs, filed a petition for Declaratory Relief in the
Court of First Instance of Manila to nullify said accreditation
requirement.

On April 16, 1956 the Central Bank filed a motion to dismiss the
petition for Declaratory Relief for lack of cause of action. Its main
contention was that the Central Bank has the responsibility of
administering the Monetary Banking System of the Republic and is
authorized to prepare and issue, through its Monetary Board, rules and
regulations to make effective the discharge of such responsibility;
that the accreditation requirement alleged in the petition was issued
in the exercise of such power and authority; that the purpose of such
requirement is not to regulate the practice of accountancy in the
Philippines but only the manner in which certified public accountants
should transact business with the Central Bank.

On May 3, 1956 petitioner Ollada applied for a writ of preliminary
injunction to restrain the respondent Central Bank of the Philippines
from enforcing the accreditation requirement aforesaid until final
adjudication of the case. In a memorandum submitted by said respondent
opposing the issuance of the writ, it manifested that it was willing to
delete paragraph 13 from its CB-IED Form No. 5 (Application for
accreditation of certified public accountants), which required CPAs to
answer the query whether they agreed, if accredited with the
Import-Export Department, Central Bank of the Philippines, to follow
strictly the rules and regulations promulgated by the Philippine
Institute of Accountants and, if not, to state their reasons therefor,
and that it was also willing to modify paragraph 14 of the same form to
read as follows:

“14. Do you agree, if accredited with the
Import-Export Department, to follow strictly the rules and regulations
of the Central Bank of the Philippines concerning the practice of your
profession as CPA, with reference to its importing licensing functions
which may hereinafter be promulgated and which are not inconsistent
with the rules and regulations promulgated by the Board of Accountancy
of the Philippines, and to give written notice (s) of any change (s) in
your professional status as practitioner, or the name and style under
which you practice your profession as Certified Public Accountant (s)?
…. If not, state your reasons: . . .”

On May 22, 1956 the trial court required respondent to submit within
ten days from notice, proof that it had deleted paragraph 13 and
modified paragraph 14 of its CB-IED Form No. 5, as manifested in its
memorandum, otherwise the writ of preliminary injunction prayed for by
petitioner would be granted. Having complied with said order by
submitting CB-ID Form No. 5 (formerly CB-IED Form No. 5) showing that
paragraph 13 of CB-IED Form No. 5 had been deleted, and paragraph 14
thereof had been modified, the court, on June 27, 1956, denied the
petition for preliminary injunction. On June 29, 1956, petitioner filed
a motion for reconsideration alleging that, despite the deletion of
paragraph 13 from respondent’s CB-IED Form No. 5, it was still
enforcing the rules and regulations of the Philippine Institute of
Accountants in its CB-IED Form No. 6 (Accreditation card for certified
public accountants) which was still a part of the questioned
accreditation requirement. All this notwithstanding, however, on July
5, 1956 petitioner, in the interests of its clients, filed his
application for accreditation with the CB under protest.

On July 7, 1956, the court reconsidered its previous order and
issued another granting the petition for thte writ of preliminary
injunction upon the filing of a bond in the sum of P2,000.00 on the
ground that CPAs applying for accreditation with respondent were still
required to execute under oath CB-IED Form No. 6 (Accreditation card
for certified public accountants) to be governed hy the rules and
regulations of the Philippine Institute of Accountants. In a motion for
the reconsideration of this last order, respondent stated that CB-IED
Form No. 6 of its Import-Export Department had been modified by CB-ID
Form No. 6 wherein the requirement that the applicant should sign a
statement under oath has been eliminated, and that, upon accreditation,
a CPA would be governed-by the rules and regulations of the Central
Bank and not by those of the Philippine Institute of Accountants. The
modified form (OB-ID No. 6) read as follows:

“I/We hereby agree to be governed by your rules and
regulations relating to the practice of my/our profession as Certified
Public Accountant (s), particularly Memorandum to Accredited CPAs No. 1
of the Central Bank of the Philippines dated June 15, 1956. Please
recognize my/our certification (s) of exhibit (s), statement (s),
schedule (s), or other form (s) of accountancy work issued in behalf of
my/our clients under the following signature (s).”

Consequently, on July 12, 1956 the court set aside its order of July 7, 1956 granting the writ of preliminary injunction.

Finally, on July 31, 1956, the lower court, resolving the motion to
dismiss filed by respondent, dismissed the complaint. The order to that
effect says, in part, the following:

“The only issue in this case is whether or not the
respondent Central Bank of the Philippines has the authority under its
charter to require petitioner and all other certified public
accountants to accredit themselves before they can transact business
with respondent Import and Export Department.

“This Court is
of the opinion that the respondent is not barred from promulgating
internal rules and regulations necessary to carry out its purpose
pursuant to the charter creating it provided, however, that such rules
and regulations are not contrary to law, public morals or public policy.

“The
only objectionable features of respondent’s aforementioned requirement
have already been eliminated by said respondent having deleted from its
CB-IED Form No. 5 known as Application for Accreditation of Certified
Public Accountants (Annex B of petitioner’s Petition), paragraph 13 and
modified paragraph 14 thereof, as well as by modifying CB-IED Form No.
6 known as Accreditation Card for Certified Public Accountants (Annex C
of Petitioner’s Petition).

“It appears, therefore, that after
respondent had eliminated said objectionable features, the petition for
declaratory relief has become groundless and should be dismissed.”

Upon motion of petitioner, We issued a resolution dated November 5,
1956 granting a writ of preliminary injunction restraining respondent
from requiring CPAs to comply with the accreditation requirement of its
Import-Export Department, on the ground that there was nothing in the
record showing that the same was issued by its Monetary Board or by
someone else duly authorized by the latter.

The main issue involved in this appeal is whether upon the facts
alleged in the petition for Declaratory Relief and others elicited from
the parties and made of record by them prior to the issuance of the
order appealed from, this case was properly dismissed.

The Monetary Board of the Central Bank has authority to prepare and
issue such rules and regulations as it may consider necessary for the
effective discharge of the responsibilities and exercise of the powers
assigned to it and to the Central Bank under the provisions of Section
14(a), Republic Act No. 265. The Governor of the Central Bank is also
authorized to delegate his power to represent the Bank “to other
officers of the Bank upon his own responsibility (Sec. 17(d), Rep. Act
265).

To implement its authority to temporarily suspend or restrict sales
of exchange by the Central Bank and subject all transactions in gold
and foreign exchange to license by the latter (Sec. 74, Rep. Act 265),
the Monetary Board approved Resolution No. 1528, Minutes No. 80 dated
August 30, 1955 authorizing the Import-Export Department to revise
quota allocations and to prepare revised procedures for the
determination of violations of Central Bank Import-Export regulations.
Among the revised procedures adopted by the aforesaid Department was
its accreditation system, the purpose of which was to correct certain
irregularities committed by some CPAs in their certification of the
financial statements of their clients applying for dollar allocations.

As held by the lower court, “the only objectionable features of
respondent’s aforementioned requirement haq” already been eliminated *
* * from its CB-IED Form No. 5″ and that CB-IED Form No. 6 had also
been modified. For this reason, the court held that “the petition for
declaratory relief has become groundless” and, as a result, ordered its
dimissal.

Without deciding the question of whether the petition under
consideration has, in reality “become groundless”, we believe that,
upon the facts appearing of record, said petition was correctly
dismissed.

As stated heretofore, in connection with the motion to dismiss filed
by respondent, petitioner filed a written opposition in which he
alleged that his petition-

“has sufficiently alleged ultimate facts which
violated his right as a duly qualified and acredited Certified Public
Accountant by the Board of Accountancy (which is the only Government
body with absolute powers to regulate the practice of CPAs), and in
addition to such allegations, he has also alleged that by virtue of the
violation of his right and that of numerous CPAs, he has suffered
serious injury in that the questioned requirement which is collaterally
attacked by this “action (in the honest belief of the petitioner that
the same) is an unlawful restraint of the free pursuit and practice of
petitioner’s profession as a CPA; and also that the action of the
respondent Central Bank of the Philippines complained of, is also an
unlawful invasion into the exclusive jurisdiction of the Board of
Accountancy as the sole body vested by our laws to lay down rules and
regulations for the practice of public accountancy in the Philippines.
* * *

“In order to dismiss an action under the aforecited
ground, Sutherland, Code of Pleadings, Practice and Form, 167, has laid
down the essential test which should serve as the controlling guide in
determining whether a petition states a cause of action, to wit:

1. Does the complaint show the plaintiff suffered an injury?
2. Is it an injury the law recognizes as a wrong?
3. Is the defendant liable for the alleged wrong?
4. If the defendant is liable, to what extent is he liable and what will
   be legal remedy from such injury? (Sutherland, Code of Pleadings, Supra)

“It is clear from the allegations of the petition
that the petitioner has sufficiently stated facts to satisfy the
foregoing requisites of a pleading in order that petitioner’s action
should be given due course by this Court.

“Petitioner submits
that the respondent’s requirement complained of (CB-IED Forms No. 5 and
6), is an act of constituting a violation of the Constitution and also
a violation of the petitioner’s right to freely practice his profession
anywhere and in any government office in the Philippines. It is
undisputed that the only body that can regulate the practice of
accountancy in the Philippines is the Board of Accountancy. The action
thus of the respondent in requiring the accredidation of CPAs before
they can practice with the Central Bank of the Philippines is an
unlawful invasion into the exclusive jurisdiction of the said Board of
Accountancy. Why was petitioner’s right as a CPA violated by the
respondent? Because the respondent’s placing of a ban to CPAs including
the petitioner with respect to certification of financial statements of
their clients applying for dollar ($) allocation in the Central Bank of
the Philippines has resulted in the unlawful restraint in the practice
of CPAs in the Office of the Central Bank of the Philippines.” (Italics
supplied) (Rec. on Appeal pp. 17, 18-20)

Again, in his brief petitioner reiterates the same view in the following language:

“On April 20, 1956, petitioner-appellant filed his
opposition to respondent’s motion to dismiss on the simple and
fundamental ground that, from its face, the complaint’s allegations of
facts make clear showing of petitioner’s rights having been violated by
respondent, and that he (petitioner) has suffered serious injury
therefrom that such injury is recognized by law as a wrong, and that
the respondent is liable therefor to a great extent.” (Italics
supplied) (Petitioner’s brief, p. 5)

Petitioner commenced this action as, and clearly intended it to be
one for Declaratory Relief under the provisions of Rule 66 of the Rules
of Court. On the question of when a special civil action of this nature
would prosper, we have already held that the complaint for declaratory
relief will not prosper if filed after a contract, statute or right has
been breached or violated. In the present case such is precisely the
situation arising from the facts alleged in the petition for
declaratory relief. As vigorously claimed by petitioner himself,
respondent had already invaded or violated his right and caused him
injury—all these giving him a complete cause of action enforceable in
an appropriate ordinary civil action or proceeding. The dismissal of
the action was, therefore, proper in the light of our ruling in De
Borja vs. Villadolid,. 85 Phil., 36; 47 Off. Gaz. (5) p. 2315, and
Samson vs. Andal, 89 Phil., 627 where we held that an action for
declaratory relief should be filed before there has been a breach of a
contract, statute or right, and that it is sufficient, to bar such
action, that there had been a breach— which would constitute actionable
violation. The rule is that an action for Declaratory Relief is proper
only if adequate relief is not available through the means of other
existing forms of action or proceeding (1 C.J.S. 1027-1028).

Wherefore, the order of dismissal appealed from is hereby affirmed,
without prejudice to the aggrieved party seeking relief in another
appropriate action. The writ of preliminary injunction issued by Us on
November 5, 1956 is hereby set aside, and the motion for contempt filed
by petitioner on September 30, 1957 is denied. With costs against
appellant.

Padilla, Bautista Angelo, Labrador, Conception, Reyes, J. B. L., Barrera and Paredes, JJ.; concur.