Guerzon v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Pedro Guerzon operated a gasoline service station under lease and dealership agreements with Basic Landoil Energy Corporation, later acquired by Pilipinas Shell Petroleum Corporation (Shell). The Service Station Lease was for five years, from January 15, 1981, to January 14, 1986. The Dealer's Sales Contract, approved by the Bureau of Energy Utilization (BEU), expired on April 12, 1986. A clause in the lease contract stipulated that the termination of the Dealer's Sales Contract would automatically cancel the lease. Procedural History: Shell informed Guerzon in January 1986 that it would not renew the dealership and lease agreements, requesting him to vacate the premises upon expiration. Despite this, Guerzon did not vacate. On April 15, 1986, the BEU, through respondent F.C. Caasi, Jr., issued an order directing Guerzon to immediately vacate the service station and turn it over to Shell, and to show cause why administrative or criminal proceedings should not be filed. Shell, accompanied by law enforcement officers, took possession of the station on April 22, 1986. Guerzon filed a complaint for certiorari, injunction, and damages with the Regional Trial Court, which was dismissed for lack of jurisdiction. Subsequently, Guerzon filed a petition for certiorari with the Court of Appeals, seeking to annul the BEU order and regain possession. The Court of Appeals denied the petition, upholding the validity of the BEU order. The Petition: Petitioner Guerzon seeks review by the Supreme Court, arguing that the Court of Appeals erred in holding that the Bureau of Energy Utilization has the jurisdiction to order his ejection from the leased service station and that notice and hearing were not necessary prior to the issuance of the order. Guerzon contends that the BEU exceeded its authority, as its powers under Presidential Decree No. 1206, as amended, are limited to imposing fines and ordering the suspension, closure, or stoppage of operations, not issuing orders to vacate. He asserts that jurisdiction to order a lessee to vacate leased premises lies with civil courts in unlawful detainer actions. Guerzon also argues that even if the BEU had jurisdiction, the order is void for lack of notice and hearing.
Issue(s)
Whether the Bureau of Energy Utilization has the jurisdiction to order the ejectment of a service station operator-lessee from the leased premises upon the expiration of the dealership and lease agreements. Whether notice and hearing were necessary prior to the issuance of the order by the Bureau of Energy Utilization directing the petitioner to vacate the leased premises.
Ruling
The Supreme Court REVERSED the decision of the Court of Appeals, ANNULLED and SET ASIDE the order dated April 15, 1986, issued by respondent F.C. Caasi, Jr. of the Bureau of Energy Utilization. However, the prayer for the issuance of a writ of mandatory injunction to restore possession to the petitioner was DENIED.
Ratio Decidendi
On the issue of jurisdiction: The Court held that the Bureau of Energy Utilization (BEU) acted beyond its authority in issuing the order to vacate. The Court emphasized that administrative agencies possess only those powers expressly granted by law or necessarily implied. Presidential Decree No. 1206, as amended, outlines the powers of the BEU, which are limited to imposing fines not exceeding P1,000.00 and ordering the suspension, closure, or stoppage of operations in case of violations or non-compliance. The law does not grant the BEU the power to issue an order to vacate, which is a jurisdiction vested in civil courts through actions for unlawful detainer or accion publiciana. The Court found that the assailed order was premised on the contractual dispute between Shell and petitioner, and the BEU has no power to decide such contractual disputes in the absence of express legal grant. On the issue of notice and hearing: Even assuming, arguendo, that the issuance of the order to vacate was within the BEU's authority, the Court found its nullity apparent due to the failure to comply with the requirement of notice and hearing. Presidential Decree No. 1206, as amended, explicitly requires notice and hearing before any administrative penalty, even the imposition of a fine, can be imposed. The order to vacate, being a more severe measure than a fine, would undoubtedly necessitate due process. The Court noted that the order was issued without affording petitioner an opportunity to be heard, rendering it void for lack of due process.
Main Doctrine
An administrative agency, such as the Bureau of Energy Utilization (BEU), possesses only such powers as are expressly granted to it by law or necessarily implied in the exercise thereof. The BEU is not empowered to issue an order to vacate a service station premises in case of violation of laws or regulations; its authority is limited to imposing fines and ordering the suspension, closure, or stoppage of operations. Jurisdiction to order a lessee to vacate leased premises is vested in the civil courts in an appropriate case for unlawful detainer or accion publiciana.