PHILIPPINE BASKETBALL ASSOCIATION, PETITIONER, VS. HONORABLE MANUEL B. GAITE, IN HIS OFFICIAL CAPACITY AS DEPUTY EXECUTIVE SECRETARY FOR LEGAL AFFAIRS OF THE OFFICE OF THE PRESI…

Philippine Basketball Association versus Gaite

The Case

This is a petition for review on certiorari brought by the Philippine Basketball Association, the PBA, against Deputy Executive Secretary Manuel B. Gaite of the Office of the President, acting in his official capacity, and the Games and Amusement Board, the GAB. The PBA asks the Supreme Court to reverse the ruling of the Office of the President, affirmed by the Court of Appeals, that the PBA owes the GAB three percent of its gross receipts and income from the television and radio broadcast of its games for the year 2002, even though its broadcast franchisee had not yet paid those fees. The case matters for two reasons. First, it is a remedial law case on the correct mode of review of decisions of the Office of the President. Second, it illustrates how strictly the Court treats the extraordinary remedy of certiorari when an ordinary appeal is available.

Procedural History

The dispute began before the Office of the President. The PBA and the GAB could not agree on the interpretation of Section 8 of Presidential Decree No. 871, so they submitted the question to the Office of the President for adjudication. Through Deputy Secretary Gaite, the Office of the President ruled in favor of the GAB and later denied the PBA's motion for reconsideration.

The PBA then went to the Court of Appeals by a petition for certiorari under Rule 65 of the Rules of Court. The Court of Appeals dismissed the petition, holding that certiorari was not the proper remedy to challenge the decision of the Office of the President, and that in any event the Office of the President committed no grave abuse of discretion. The Court of Appeals denied the PBA's motion for reconsideration.

The PBA then elevated the matter to the Supreme Court through the present petition for review on certiorari under Rule 45 of the Rules of Court.

Facts

The PBA is an association of basketball clubs owned by business companies. It conducts basketball games that the public may watch live upon purchase of admission tickets, and the games are also broadcast over television and radio by a franchisee that pays the PBA franchise fees based on actual proceeds from advertisements, less airtime costs, production expenses, and sales commissions.

In January 1976, then President Ferdinand Marcos enacted Presidential Decree No. 871, placing professional basketball and other professional games under the control and supervision of the GAB. The law required the PBA and similar associations to remit three percent of their gross receipts and income from television, radio, and motion pictures to the GAB.

In December 1999, the PBA granted Viva Vintage Sports, Inc. the exclusive rights to broadcast the PBA games on television and radio for the 2000 to 2002 seasons. Initially the franchisee paid the franchise fees, and from these the PBA remitted the required three percent to the GAB. Starting November 2001, however, the franchisee began to default, and it again failed to pay in 2002. Because of this, the PBA could not remit the three percent. The GAB insisted that the PBA was obligated to remit three percent of its income from broadcast regardless of whether it had actually received the fees, and assessed the PBA the amount of 3,452,233.32 pesos for the year 2002. The parties executed a memorandum of agreement placing that amount in escrow with a bank, to be released depending on the resolution of the legal issue. The Office of the President ruled for the GAB, and the PBA's subsequent challenge failed in the Court of Appeals.

Issues

• Whether or not the Court of Appeals erred in declaring that a petition for certiorari under Rule 65 of the Rules of Court was not the proper remedy to challenge the decision of the Office of the President.
• Whether or not the Office of the President, through the Deputy Executive Secretary for Legal Affairs, exercised a quasi-judicial function and committed grave abuse of discretion in interpreting Presidential Decree No. 871.
• Whether or not the Court of Appeals failed to resolve the legal issue of the proper interpretation of Section 8 of Presidential Decree No. 871.

Applicable Provisions

Section 8 of Presidential Decree No. 871 provides:

Section 8. Admission receipts and other income. Any person, entity or association conducting professional basketball games or other professional games shall set aside and remit to the Board three percent (3%) of the gross receipts and income from television, radio and motion pictures, if any, which shall be available to defray expenses of the Board assigned to supervise the games and for such other expenses in other activities of the Board. Provided, however, that all professional basketball games conducted by the Philippine Basketball Association shall only be subject to amusement tax of five percent (5%) of the gross tax receipts from the sale of admission tickets.

This is the provision whose interpretation divided the parties, and it is the source of the three percent remittance the GAB assessed against the PBA.

Section 10 of Presidential Decree No. 871 provides:

Section 10. Appeals, orders, rulings and decisions of the Board. Orders, rulings and decisions of the Board on matters connected with or arising out of basketball may be appealed to the Office of the President, whose decision shall be final, within seventy-two (72) hours from receipt of the order, ruling or decision appealed from.

This provision establishes that the Office of the President reviews the rulings of the GAB, which is why the Office of the President acted in a quasi-judicial capacity.

Section 1 of Rule 43 of the Rules of Court provides:

Section 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law.

This provision expressly lists the Office of the President among the quasi-judicial agencies whose final orders are appealed to the Court of Appeals by petition for review.

Section 3 of Rule 43 provides:

Section 3. Where to appeal. An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law.

This provision fixes the Court of Appeals as the proper forum and confirms that the appeal covers questions of law such as the interpretation of the decree.

Ruling

On the first issue, the Court ruled that the Court of Appeals correctly dismissed the petition for certiorari. The proper remedy from a decision of the Office of the President is a petition for review under Rule 43 of the Rules of Court, because the Office of the President is a quasi-judicial agency expressly named in Section 1 of that Rule. Rule 65 itself bars its use as a mode of review when an appeal or any other remedy at law is available. While jurisprudence recognizes exceptions, these must be strictly, not liberally, applied, and the PBA failed to show that its case fell under any of them. Public interest, the Court said, clearly lies with the GAB, and the PBA could not simply cite public interest as though the words were magic incantations. The Court also noted that Rule 43 allows the Court of Appeals to order a stay of execution, and that the PBA could have sought an injunction as a provisional remedy.

On the second and third issues, the Court found it unnecessary to resolve them. Having sustained the dismissal on procedural grounds, and finding no attendant grave abuse of discretion, the Court saw no reason to disturb the decision of the Court of Appeals or to discuss the other issues raised.

Doctrine

A Bar candidate should retain these rules. First, decisions, orders, and rulings of the Office of the President, acting as a quasi-judicial agency, are appealed to the Court of Appeals by a petition for review under Rule 43 of the Rules of Court, within fifteen days from notice. Second, a petition for certiorari under Rule 65 is barred when an appeal or any other remedy at law is available. Third, the recognized exceptions to this rule are applied strictly, not liberally, and the petitioner must show a clear entitlement to them. Fourth, the choice of the wrong mode of review is an error of counsel that the client wholly bears.

Disposition

The Supreme Court denied the petition for lack of merit and fully affirmed the decision of the Court of Appeals and its denial of the motion for reconsideration, so the GAB prevailed.

Remember This

Memorize this line: a decision of the Office of the President is appealed to the Court of Appeals by petition for review under Rule 43, never by certiorari under Rule 65. Examiners use this case to test the correct mode of review of quasi-judicial agencies and the strict application of the exceptions to the rule against substituting certiorari for appeal.