THE EXECUTIVE SECRETARY, ASSISTANT EXECUTIVE SECRETARY GILBERTO M. DUAVIT, THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, THE DIRECTOR OF FORESTRY AND AGUS-MIN PROMOTIONAL …

Agusmin Promotional Enterprises versus De Jesus

The Case

This is a special civil action for certiorari, prohibition and mandamus with preliminary injunction, brought by Pedro B. de Jesus and his company against the Executive Secretary, the Assistant Executive Secretary, the Secretary of Agriculture and Natural Resources, the Director of Forestry, and Agus-Min Promotional Enterprises, Incorporated. The private respondents below, De Jesus and his company, asked the courts to nullify a letter-decision of the Assistant Executive Secretary that took away from them a contested forest area and restored it to Agusmin. The case matters because it teaches the boundary between an administrative appeal and the jurisdiction of the Office of the President, and because it shows when damages may be awarded in a special civil action even though the writ of mandamus itself does not issue.

Procedural History

The controversy began in the administrative agencies. The Director of Forestry cancelled Agusmin's timber license, and the Secretary of Agriculture and Natural Resources later ruled in favor of De Jesus. Agusmin appealed to the Office of the President, and the Assistant Executive Secretary rendered a letter-decision reversing the Secretary and restoring the contested area to Agusmin. De Jesus then filed a special civil action for certiorari, prohibition and mandamus with preliminary injunction before the Court of First Instance, which granted the writ, declared the Assistant Executive Secretary's letter-decision null and void, upheld the Secretary's earlier award to De Jesus, and ordered the return of the contested area plus damages and attorney's fees. On appeal, the Court of Appeals upheld the trial court but reduced the damages to 632,000 pesos as actual and consequential damages and 10,000 pesos as attorney's fees. The case then reached the Supreme Court by petition for review of the Court of Appeals decision.

Facts

Before July 1963, Agusmin and De Jesus were concessionaires of adjacent portions of the public forest in Talacogon, Agusan. On July 26, 1963, the Acting Director of Forestry cancelled Agusmin's Ordinary Timber License for alleged violations of forestry rules, and the Director of Forestry, the Secretary, and the President all denied Agusmin's appeals. The Director then advertised the former Agusmin area for public bidding. Agusmin hired Attorney Tranquilino Calo, Junior, promising him a portion of its concession as part of his legal fees, and Calo in turn promised one-half of that area to the Manila law office of Congressman Benjamin Ligot. Agusmin's board ratified the arrangement and wrote the forestry officials waiving 5,000 hectares in favor of Calo or his assignee.

De Jesus applied for an additional 2,500 hectares taken from that waived area, and the Ligot law office waived its right over the same 2,500 hectares in his favor. The Assistant Director of Forestry recommended approval, and the Acting Secretary approved the grant to De Jesus, conditioned on the outcome of an investigation. Agusmin later protested the grant and asked that the 2,500 hectares be returned to it. The new Director of Forestry ordered the renewal of Agusmin's license and the return of the area, but De Jesus protested, and the Secretary of Agriculture and Natural Resources reversed the Director and upheld De Jesus.

Agusmin appealed to the Office of the President, paying an appeal fee of 10 pesos. De Jesus moved to dismiss the appeal as filed out of time, and also moved for an extension to file his reply. Those motions were never resolved. On May 7, 1968, Assistant Executive Secretary Gilberto Duavit rendered a letter-decision reversing the Secretary and ordering the restoration of the 2,500 hectares to Agusmin. De Jesus filed this special civil action and obtained a writ of preliminary injunction. Despite the writ, Agusmin continued cutting timber in the disputed area, removing 11,603.95 cubic meters of logs, which were later washed away by floods.

Issues

• Whether or not the Office of the President, through the Executive and Assistant Executive Secretaries, exceeded its jurisdiction in rendering the letter-decision of May 7, 1968.
• Whether or not the Executive and Assistant Executive Secretaries committed grave abuse of discretion in deciding the administrative cases without first resolving the two motions filed by De Jesus.
• Whether or not the decision of the Secretary of Agriculture and Natural Resources dated May 17, 1967 is final and executory.
• Whether or not the Court of Appeals erred in evaluating anew the evidence already passed upon in the administrative proceedings.
• Whether or not damages may be awarded in the special civil action even though the writ of mandamus was not granted.
• Whether or not the award of damages was supported by the evidence or based on speculation and guesswork.
• Whether or not attorney's fees were properly awarded.

Applicable Provisions

Section 3 of Rule 65 of the Revised Rules of Court, on the petition for mandamus, provides:

Sec. 3. Petition for mandamus. — When any tribunal, corporation, board or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust or station, or unlawfully excludes another from the use or enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant.

This provision is the basis of the petitioners' argument that damages cannot be awarded when the writ of mandamus does not issue, an argument the Court rejects because the damages here arose from a separate cause of action.

Ruling

On the first issue, the Court held that the question of whether Agusmin perfected its appeal to the Office of the President had already been resolved in an earlier case between the same parties, and that in any event the issue had been rendered moot and academic. While the petition was pending, the President issued Letter of Instruction No. 172, which cancelled or terminated the timber licenses of thirty-three licensees, including Agusmin. That instruction, in effect, reversed and set aside the decisions of the Executive Secretary before they became final and enforceable. The Court therefore found no useful purpose in further discussing the issue.

On the issue of damages, the Court held that the petitioners' argument rested on a mistaken premise. Mandamus was sought to compel the public officials to issue a timber license in favor of De Jesus, not against Agusmin, which owed no ministerial duty that could be compelled. The award of damages was not made under Rule 65 but was in connection with the loss of the logs cut by Agusmin from the disputed area. The Court held that the issue of damages was raised in the pleadings and in the proceedings before the trial court, where evidence was presented and Agusmin was given the opportunity to rebut it. The issue of damages was therefore totally distinct and separate from the issue of whether mandamus would issue.

On the amount of damages, the Court held that the findings of fact of the Court of Appeals are entitled to great respect and will not ordinarily be disturbed, the jurisdiction of the Supreme Court being limited to the review of errors of law. Both the trial court and the Court of Appeals found that Agusmin cut logs from the disputed area in contravention of its undertaking not to do so during the pendency of its appeal, and that the logs were subsequently lost when washed away by floods. Having acted in bad faith, Agusmin could not escape liability by alleging force majeure. The Court also held that the amount was not speculative, because the Court of Appeals reduced the award to conform with the actual figures presented in evidence.

Doctrine

First, the findings of fact of the Court of Appeals are entitled to great respect and will not ordinarily be disturbed by the Supreme Court, whose jurisdiction is limited to the review of errors of law, absent special circumstances. Second, in a special civil action for certiorari, prohibition and mandamus, an independent cause of action for damages may be joined and adjudicated even if the writ of mandamus does not issue, provided the issue was raised in the pleadings and the parties were given the opportunity to present evidence. Third, a party who acts in bad faith in cutting logs in contravention of its undertaking cannot escape liability for their loss by alleging force majeure.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, with costs against the petitioners.

Remember This

The single line worth memorizing is that damages in a special civil action may be awarded as an independent cause of action even when the writ of mandamus does not issue, because the damages rest on a separate wrong. Examiners like to use this case to test the distinction between the relief of mandamus and a joined claim for damages, and to test the respect accorded to the factual findings of the Court of Appeals.