G.R. No. L-77707 August 8, 1988
Pedro W. Guerzon, petitioner, vs. Court of Appeals, Bureau of Energy Utilization, F.C. Caasi Jr., and Pilipinas Shell Petroleum Corporation, respondents.

FACTS

Petitioner Pedro Guerzon executed a Service Station Lease and a Dealer’s Sales Contract with Basic Landoil Energy Corporation, later acquired by respondent Pilipinas Shell Petroleum Corporation (Shell). The Bureau of Energy Utilization (BEU) approved the Dealer’s Sales Contract and issued a corresponding certificate of authority. The contracts, which were interlinked, expired on April 12, 1986. Shell informed Guerzon it would not renew the agreements and demanded he vacate the station and surrender company-owned equipment.
Upon Guerzon’s refusal to vacate, respondent F.C. Caasi Jr., Officer-in-Charge of the BEU Mindanao Division Office, issued an order dated April 15, 1986, directing Guerzon to immediately vacate the service station and turn it over to Shell, and to show cause within ten days why no administrative or criminal proceedings should be instituted against him. The order was enforced with law enforcement assistance on April 22, 1986, resulting in Shell retaking possession. Guerzon’s subsequent court actions were dismissed, leading to a petition before the Court of Appeals, which upheld the BEU order’s validity.

ISSUE

Whether the Bureau of Energy Utilization, through its officer, had the jurisdiction and authority to issue an order ejecting the petitioner from the leased service station and compelling turnover to the oil company upon the expiration of their agreements.

RULING

The Supreme Court reversed the Court of Appeals and annulled the BEU order. The Court held that the BEU’s powers under Presidential Decree No. 1206, as amended, are regulatory and do not include the authority to adjudicate possession or issue ejectment orders. The decree empowers the BEU to issue, suspend, or cancel certificates, licenses, or permits, and to impose administrative penalties for violations of its rules. However, ordering a lessee to vacate premises and turn over possession is a judicial function pertaining to the courts, specifically in ejectment cases. The BEU overstepped its statutory authority by issuing what was effectively a summary ejectment order.
Furthermore, the Court ruled that even assuming such power existed, the order was void for violating due process. The BEU’s own law requires notice and hearing before imposing any administrative penalty. The April 15 order commanded immediate vacatur and simultaneous compliance with a show-cause requirement, effectively imposing a penalty without the requisite prior hearing. Consequently, the order was issued without jurisdiction and in violation of procedural due process. Nonetheless, the Court denied Guerzon’s prayer for a writ of mandatory injunction to restore possession, recognizing that his contractual rights to possess the station had legitimately expired, leaving no legal basis for such affirmative relief.