PHILIPPINE COCONUT AUTHORITY, PETITIONER, VS. PRIMEX COCO PRODUCTS, INC., RESPONDENT.

Philippine Coconut Authority versus Primex Coco Products

The Case

This is a petition for review on certiorari brought by the Philippine Coconut Authority against Primex Coco Products, Incorporated. The respondent is a domestic corporation engaged in the manufacture of desiccated coconut. The dispute is whether the Authority may be compelled by mandamus to issue a regular certificate of registration to Primex, valid for the calendar year 1999 and renewable yearly thereafter, or whether the grant and renewal of that certificate is a discretionary act that the courts cannot command. The case matters because it draws the working line between a ministerial duty, which mandamus may compel, and a discretionary duty, which it may not, in the setting of a regulatory agency acting under a statute that both prohibits and permits.

Procedural History

The story begins in the Regional Trial Court of Lucena City, where Primex filed a petition for mandamus to compel the Authority to act on its application for registration. That court ruled in favor of Primex and ordered the Authority to act on the application. Later, after the Authority issued only a provisional certificate, Primex filed a second petition for mandamus, this time before the Regional Trial Court of Quezon City. That court granted the petition and ordered the Authority to issue a regular certificate of registration valid for the calendar year 1999, renewable yearly thereafter upon compliance with all legal requirements, and denied the claims for damages and attorney's fees on both sides. The Authority appealed to the Court of Appeals, which dismissed the appeal and affirmed the trial court, holding that the Authority could not invoke its failure to secure the President's approval as a justification, and that the certificates issued from 1993 to 1998 presupposed that the required approval had been obtained. The Court of Appeals denied the Authority's motion for reconsideration. The Authority then elevated the case to the Supreme Court through a petition for review on certiorari, assigning a single error: that the courts below gravely erred in holding that the issuance of a certificate of registration in favor of Primex may be compelled by mandamus.

Facts

On August 28, 1982, the President issued Executive Order Number 826, which prohibited government agencies from authorizing new desiccated coconut processing plants, subject to a narrow exception. Under that exception, the Philippine Coconut Authority could authorize a new plant only upon a proper determination of need and evaluation of market demand, production capacity, the level and flow of raw materials, and other circumstances affecting the industry, and subject to the approval of the President. In October 1987, the Authority adopted a resolution authorizing additional plants in view of increasing world demand, again subject to implementing guidelines and presidential approval.

Primex filed its application for registration as a new exporter, trader, and manufacturer of desiccated coconut in September 1990 and paid the registration fee, but the Authority did not issue the certificate. Primex sued in mandamus before the Regional Trial Court of Lucena City, which ruled in its favor and ordered the Authority to act. The Governing Board then adopted Resolution Number 044-92, approving Primex's application subject to compliance with the necessary requirements and pertinent regulations, and expressly subject to the final approval of the President. Seven processing companies then obtained a writ of preliminary injunction barring the Authority from processing and issuing the license. In March 1993, the Governing Board issued Resolution Number 018-93, deregulating the establishment of new coconut processing plants and limiting the Authority to mere registration for monitoring purposes. The next day, the Authority issued Certificate of Registration Number 014254 to Primex.

The Association of Philippine Coconut Desiccators challenged that deregulation before the Supreme Court, which in February 1998 declared Resolution Number 018-93 and all certificates of registration issued under it null and void for having been issued in excess of the Authority's power. The Authority then consulted the affected parties and issued interim guidelines, granting Primex only a provisional certificate effective until June 30, 1999, later extended for another six months. Primex insisted that its certificate flowed not from the void resolution but from Resolution Number 044-92 and the Lucena court's judgment, and filed the second petition for mandamus in Quezon City, which ultimately led to this appeal.

Issues

• Whether or not the issuance and yearly renewal of a certificate of registration to Primex is a ministerial duty of the Philippine Coconut Authority that may be compelled by mandamus.
• Whether or not the Authority may invoke the absence of the President's final approval under Executive Order Number 826 to justify withholding the regular certificate of registration.

Applicable Provisions

Section 3, Rule 65 of the 1997 Rules of Civil Procedure defines when mandamus lies:

SEC. 3. Petition for mandamus. - When any tribunal, corporation, board, officer 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 and 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 respondent, immediately or at some other time to be specified by the court, 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 respondent.

This is the procedural gateway: mandamus reaches only an act which the law specifically enjoins as a duty, not an act left to official judgment.

Section 1 of Executive Order Number 826 states the prohibition and its exception:

Section 1. Prohibition. Except as herein provided, no government agency or instrumentality shall hereafter authorize, approve, or grant any permit or license for the establishment or operations of new desiccated coconut processing plants, including the importation of machinery or equipment for the purpose. In the event of a need to establish a new plant, or expand the capacity, relocate or upgrade the efficiencies of any existing desiccated plant, the Philippine Coconut Authority may, upon proper determination of such need and evaluation of the condition relating to: the existing market demand; the production capacity prevailing in the country or locality; the level and flow of raw materials; and other circumstances which may affect the growth or viability of the industry concerned. may authorize or grant the application for the establishment or expansion of capacity, relocation or upgrading of efficiencies of such desiccated coconut processing plant, subject to the approval of the President.

This is the source of the Authority's discretion: the word "may," the required determination of need, and the reservation of presidential approval all show that the initial grant is not a ministerial act.

Ruling

The Court ruled in favor of the Philippine Coconut Authority and held that mandamus does not lie. It began with the settled definition: mandamus lies to compel the performance, when refused, of a ministerial duty, but not to compel the performance of a discretionary duty. A purely ministerial act is one performed in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to the officer's own judgment upon the propriety of the act. The duty is ministerial only when its discharge requires neither the exercise of official discretion nor judgment. The Court stressed that for the writ to issue, the petitioner must have a clear legal right to the thing demanded, and the respondent must be under an imperative duty to perform the act required; the writ neither confers powers nor imposes duties, and it will not issue where the right is doubtful.

Applying this to the statute, the Court held that under Executive Order Number 826 the Authority is vested with discretion on whether or not to grant an application for the establishment of a new plant, the expansion of capacity, the relocation, or the upgrading of efficiencies. Relative to renewal, the Authority may refuse registration unless the applicant has complied with the procedural and substantive requirements. But the Court added the decisive qualification: once the requirements are complied with, the renewal of registration becomes a ministerial function. Because the records did not establish Primex's compliance as a settled matter, and because the Authority's discretion over the initial grant had not been shown to have been exercised in the manner the law requires, the Court found that the courts below erred in commanding the issuance and yearly renewal of the certificate as though the duty were purely ministerial.

Doctrine

First, mandamus compels only a ministerial duty, never a discretionary one. A duty is ministerial only when its discharge requires neither the exercise of official discretion nor judgment; where the law gives the officer the right to decide how or when the duty shall be performed, the duty is discretionary.

Second, the writ issues only upon a clear legal right in the petitioner and an imperative duty in the respondent; it does not lie where the right is doubtful, and it neither confers powers nor imposes duties.

Third, under Executive Order Number 826, the grant of a permit for a new desiccated coconut plant is discretionary because the Authority must determine need and evaluate market demand, production capacity, raw material flow, and other circumstances, subject to the approval of the President. The renewal of a registration, by contrast, becomes ministerial only once the applicant has complied with the procedural and substantive requirements.

Disposition

The Supreme Court granted the petition of the Philippine Coconut Authority, set aside the rulings of the Court of Appeals and the Regional Trial Court of Quezon City, and held that the issuance and renewal of the certificate of registration could not be compelled by mandamus.

Remember This

Memorize the line: mandamus lies to compel a ministerial duty but never a discretionary one, and renewal of registration turns ministerial only after compliance with all requirements. Examiners use this case to test the ministerial versus discretionary distinction and the requisites of mandamus under Rule 65.