G.R. No. 110526 , February 10, 1998.
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner, vs. PHILIPPINE COCONUT AUTHORITY, respondent.

FACTS

The petitioner, Association of Philippine Coconut Desiccators (APCD), filed a suit for certiorari and mandamus against the respondent, Philippine Coconut Authority (PCA). The petition sought to invalidate PCA Board Resolution No. 018-93, dated March 24, 1993, and the certificates of registration issued under it. The resolution declared that PCA would no longer require a license or permit as a condition for establishing or operating coconut processing plants, limiting itself to registration for monitoring production volumes and administering quality standards. Prior to this resolution, on November 5, 1992, seven desiccated coconut processing companies from APCD had filed a case in the Regional Trial Court of Makati to enjoin PCA from issuing permits to new applicants, alleging violation of PCA’s Administrative Order No. 02, series of 1991, regarding congested areas. The trial court issued a preliminary injunction. While that case was pending, PCA issued the contested resolution. Petitioner appealed the resolution to the Office of the President on April 26, 1993, but received no reply despite follow-up letters. PCA proceeded to issue certificates of registration, enabling new mills to operate, prompting this petition.

ISSUE

The primary issue is the validity of PCA Board Resolution No. 018-93, which deregulated the establishment of new coconut processing plants, specifically whether it was issued in excess of PCA’s statutory power and in violation of due process.

RULING

The Supreme Court GRANTED the petition. It declared PCA Resolution No. 018-93 and all certificates of registration issued under it NULL and VOID for having been issued in excess of PCA’s authority. The Court held that the resolution constituted an undue exercise of legislative power by an administrative body. The PCA was created by law (P.D. No. 232, later P.D. No. 1468) to implement a regulatory scheme for the integrated development of the coconut industry. Executive Order No. 826 (1982) had prohibited new desiccated coconut plants unless authorized by PCA upon determination of economic conditions and approval of the President, and Executive Order No. 854 (1982) ordered a phase-out of some existing plants. While a 1988 Presidential Memorandum relaxed regulated capacity, it did so subject to guidelines to be drawn by PCA and did not repeal the existing regulatory laws. By adopting Resolution No. 018-93, PCA abdicated its statutory regulatory function. The Court also found that the resolution was adopted while a case challenging PCA’s permit issuance was pending, effectively rendering the case moot. The Court rejected PCA’s argument on exhaustion of administrative remedies, noting that the doctrine applies to quasi-judicial functions, not legislative rule-making, and that petitioner’s unanswered appeal to the Office of the President justified direct resort to the Court.