Mercury Group of Companies v. Home Development Mutual Fund
REITERATIONFacts
1. The Antecedents: Petitioner Mercury Group of Companies, Inc. (Petitioner) and its subsidiaries were annually granted waivers from coverage of the Home Development Mutual Fund (HDMF), also known as Pag-IBIG Fund, from 1980 to 1995, based on their retirement or provident plan being superior to the Fund. In 1995, the HDMF Board of Trustees issued an amendment to its Implementing Rules and Regulations (IRR) and Circular No. 124-B, requiring both provident/retirement and housing plans to be superior to qualify for waiver. Petitioner's application for waiver renewal for 1996 was denied on April 26, 1996, for failing to meet this new requirement. Petitioner's appeal was denied by the HDMF Board on February 21, 1997, citing a 1996 amendment that limited waivers only to 'distressed employers.' 2. Procedural History: Petitioner filed a petition for certiorari and prohibition with the RTC of Quezon City, which dismissed it for failure to exhaust administrative remedies and for the amendment being an exercise of legislative/administrative function. This Court denied petitioner's subsequent petition for review on certiorari (G.R. No. 132416) for failure to show reversible error in the RTC's dismissal. In 1999, this Court, in China Banking Corporation v. Home Development Mutual Fund, nullified the 1995 Amendment requiring both plans to be superior. Based on this ruling, Petitioner reapplied for waiver for 1996-2000. However, HDMF denied this, citing the finality of the decision in G.R. No. 132416. Petitioner filed another petition with the RTC, which dismissed it for lack of jurisdiction. Petitioner then filed a petition for certiorari, prohibition, and mandamus with the Court of Appeals (CA). The CA granted in part, directing HDMF to entertain petitioner's applications for waiver for 1997-present, with the obligation to register employees and remit contributions for the same periods. Petitioner's motion for reconsideration was denied, leading to the present petition for review on certiorari. 3. The Petition: Petitioner seeks the nullification of the 1996 amendment to the HDMF's IRR and prays for the entertainment of its application for waiver/exemption from Fund coverage for the year 1996, consistent with the ruling in China Banking. Petitioner argues that the CA erred in applying the law of the case doctrine to deny its 1996 waiver application and in allowing HDMF to enforce an amendment previously declared void.
Issue(s)
Whether the Court of Appeals erred in applying the doctrine of the law of the case to deny petitioner's application for waiver/exemption from Fund coverage for the year 1996. Whether the Court of Appeals erred in allowing respondent HDMF to enforce an implementing rule and regulation which was declared by the Supreme Court in the China Banking case as null and void; and whether the Court of Appeals erred in not declaring null and void the second implementing rules of respondent HDMF ('distressed employer' as the only ground for waiver/exemption) contrary to the China Banking case and the law on the rule-making power of administrative bodies. On the processing of the 1996 waiver application.
Ruling
The Petition for Review on Certiorari is GRANTED. Respondent HDMF is enjoined to process petitioner's application for waiver from Pag-IBIG Fund coverage for the year 1996.
Ratio Decidendi
On the applicability of the law of the case doctrine: The Court of Appeals erred in applying the doctrine of the law of the case to the present petition. The doctrine of the law of the case applies to subsequent proceedings in the same case, whereas the present case is an entirely new one commenced by petitioner's filing of an original petition before the Court of Appeals. Furthermore, even if it were considered a subsequent proceeding, the doctrine would not apply because the prior case (G.R. No. 132416) was not resolved on the merits but was dismissed primarily on a procedural ground – failure to exhaust administrative remedies. The Court emphasized that the doctrine is merely a rule of procedure and will not be adhered to where its application results in an unjust decision. To sustain HDMF's refusal to grant a waiver based on amendments to implementing rules previously declared null and void by this Court would be unjust. On the validity of the implementing rules and the China Banking ruling: The Court reiterated the principle that administrative issuances must not override, supplant, or modify the law they intend to carry out; they must remain consistent with the law. The HDMF Board of Trustees, in amending the rules to require both provident/retirement and housing benefits for exemption, and subsequently abolishing the exemption except for distressed employers, exceeded its delegated power. Such amendments and repeal of Section 19 of P.D. No. 1752 are invalid because only Congress can repeal or amend a law. The ruling in China Banking Corporation v. Home Development Mutual Fund correctly nullified the 1995 Amendment for being inconsistent with P.D. No. 1752. Therefore, the 1996 amendment limiting waivers only to distressed employers is also void. On the processing of the 1996 waiver application: Given that the 1996 amendment was declared void and the law of the case doctrine does not apply, petitioner's application for waiver from Fund coverage for the year 1996 must be processed by respondent HDMF. The Court's prior denial of the petition in G.R. No. 132416 was based on procedural grounds and did not pass upon the merits of the waiver application itself. The subsequent ruling in China Banking clarified the substantive requirements for waiver, which should now be applied to petitioner's 1996 application.
Main Doctrine
Administrative issuances must not override, supplant, or modify the law they intend to carry out; they must remain consistent with the law. Only Congress can repeal or amend a law. The doctrine of the law of the case does not apply when the prior decision was not on the merits or when its application would result in an unjust decision.