LT. (RET.) EDUARDO DE OCAMPO, PETITIONER, VS. PO3 EUZUETO R. REY, RESPONDENT.

De Ocampo versus Rey

The Case

This is a petition for review on certiorari brought by Eduardo de Ocampo against Euzueto R. Rey, arising from a dispute over the allocation of residential lots and the houses built on them inside the Villamor Airbase Housing Project. The petitioner, an occupant who later claimed the status of a house owner, asks the Supreme Court to reverse the Court of Appeals, which had set aside the award made in his favor by the National Housing Authority and ordered a remand. The case matters because it fixes a clean rule on administrative procedure: where policy guidelines create a specific body to which the recommendations of an awards committee must be appealed, that body — and not the general manager of the implementing agency — is the proper appellate authority, and practice cannot override the written rule.

Procedural History

The dispute began before the Awards and Arbitration Committee of the Villamor Airbase Housing Project, which recommended that the absentee house owner be disqualified and that the lots be distributed among the renters. The National Housing Authority, through its general manager, later modified that recommendation, increasing the petitioner's allocation and reducing the respondent's. The respondent's motion for reconsideration was denied by the National Housing Authority. The respondent then appealed to the Office of the President, which dismissed the appeal and affirmed the findings and recommendation of the National Housing Authority; his motion for reconsideration was likewise denied.

The respondent then filed a petition for review in the Court of Appeals, which granted it, set aside the resolution and order of the Office of the President, and remanded the case to the National Housing Authority with a directive to award the lots in accordance with the allocations recommended by the Awards and Arbitration Committee. Both the National Housing Authority and the petitioner moved for reconsideration. The Court of Appeals issued an amended decision denying both motions, holding that under the policy guidelines the recommendations of the Awards and Arbitration Committee were appealable to the Executive Committee en banc, and that any review by the general manager of the National Housing Authority was not binding on that Committee unless approved by it. The petitioner then came to the Supreme Court by petition for review on certiorari, with a prayer for a writ of preliminary injunction or a temporary restraining order.

Facts

Rodolfo Ambata was the registered owner of two houses inside the Villamor Airbase Housing Project, identified by tag numbers, with the petitioner Eduardo de Ocampo and the respondent Euzueto R. Rey as the respective occupants or lessees. In 1995, a census reported Ambata to be an absentee house owner. Under the project's policy guidelines, absentee house owners were disqualified from owning lots within the project, but the occupants or lessees of their houses could be awarded the lots. On October 16, 1996, the Awards and Arbitration Committee recommended Ambata's disqualification and the distribution of the lots among the renters, including fifty square meters each for the respondent and the petitioner, subject to a prequalification process.

On January 27, 1999, Ambata executed a special power of attorney in favor of Gliceria B. Moore, authorizing her to sign, execute, deliver and endorse a deed of absolute sale or other documents of conveyance for the transfer of his interest over the house occupied by the petitioner. The Committee's recommendation was forwarded to the National Housing Authority for affirmation on June 18, 1999. On April 8, 2000, Moore, by virtue of the special power of attorney, sold that residential house to the respondent.

On October 6, 2000, the petitioner filed a petition with the National Housing Authority to change his status from rent-free occupant to censused house owner-occupant, and requested that the lot on which his house stood be awarded to him, since under the guidelines a house owner had priority over lessees. In a letter dated June 18, 2002, the National Housing Authority confirmed the Committee's recommendation disqualifying Ambata, granted the petitioner's request for a change of status, and modified the lot allocations: the petitioner was awarded one hundred fifty square meters of Lot 13, while Lot 21 was to be divided equally among de Raya, Falceso, the respondent and Abad. The petitioner's allocation rose from fifty to one hundred fifty square meters, and the respondent's fell from fifty to thirty square meters. The respondent's motion for reconsideration, grounded on his claim of a right of pre-emption, was denied, as was his appeal to the Office of the President.

Issues

• Whether or not the National Housing Authority could modify the recommendation of the Awards and Arbitration Committee.
• Whether or not the recommendation of the Awards and Arbitration Committee became final and executory for want of an appeal to the Executive Committee en banc.

Applicable Provisions

Paragraph 11.2 of the Villamor Airbase Housing Project policy guidelines provides:

The decisions of the AAC shall be appealable to the Executive Committee en banc whose decision shall be final and executory.

This is the provision the Court construes: it identifies the Executive Committee en banc as the appellate body over the Committee's decisions, which is why the National Housing Authority's unilateral modification was improper.

Paragraph 4.21 of the same policy guidelines provides:

Right of Pre-emption - the right of the censused renters of a structure to be given the first option to acquire or purchase the structure from censused structure owner who do not qualify as a beneficiary over all other censused households.

This is the right the Court of Appeals found the respondent had been unable to exercise because he was not informed of the sale to the petitioner.

Ruling

On the first issue, the Court held that the National Housing Authority could not modify the recommendation of the Awards and Arbitration Committee. The petitioner argued that the Executive Committee did not appear to function and that, in practice, it was the National Housing Authority that reviewed the Committee's recommendations. The Court disagreed. The project was not the National Housing Authority's alone: a memorandum of agreement was jointly executed by the Bases Conversion Development Authority, the Department of National Defense, the city government of Pasay and the National Housing Authority for its implementation, and they agreed to create an Executive Committee composed of their respective representatives. The Executive Committee was therefore not equivalent to the National Housing Authority; it was an inter-agency committee. The Court added that the argument from practice lacked merit, because practice cannot take precedence over clear policies and rules agreed upon by the parties themselves; otherwise, the rule of law will be meaningless.

On the second issue, the Court held that since the petitioner was claiming a right under the project, he was bound to comply with the policy guidelines governing the acquisition, enforcement and termination of rights and interests created under it, one of which was the appeal to the Executive Committee en banc under paragraph 11.2. Because the Committee's recommendation was never appealed to the Executive Committee en banc, it became final and executory.

Doctrine

• Where policy guidelines provide that the decisions of an awards committee shall be appealable to a specified body en banc, whose decision shall be final and executory, that body is the exclusive appellate authority; the implementing agency's general manager cannot substitute his or her own judgment for it.
• An inter-agency committee created by a memorandum of agreement among several government entities is distinct from any one of them, and its identity cannot be collapsed into that of the implementing agency.
• Practice cannot take precedence over clear policies and rules agreed upon by the parties themselves; otherwise, the rule of law will be meaningless.
• A person claiming a right under a project is bound by the policy guidelines governing the acquisition, enforcement and termination of rights and interests created under that project.
• Failure to appeal a decision to the body designated in the guidelines renders that decision final and executory.

Disposition

The petition was denied, with costs against the petitioner, and the decision of the Court of Appeals was left standing.

Remember This

Memorize the line that practice cannot take precedence over clear policies and rules agreed upon by the parties themselves, otherwise the rule of law will be meaningless. Examiners use this case to test administrative finality and exhaustion of administrative remedies, and to test whether a candidate will let an agency's actual practice override the written guidelines that created a separate appellate body.