THE DEPARTMENT OF FOREIGN AFFAIRS, REPRESENTED BY UNDERSECRE It would be legally impossible for the COA, the BIR, and

y impossible for the COA, the BIR, and the BOC to comply
TARY RAFAEL E. SEGUIS, FRANKLIN M. EBDALIN, MA. CORAZON YAP- with the said Orders because it is beyond the mandates of these government
BAHJIN, EVA G. BETITA, JOCELYN BATOON-GARCIA, AND LEO HERRERA- agencies to examine the books of accounts of the Big 3. Under the law, it is the DOE-
LIM, FOR THEMSELVES AND IN BEHALF OF OTHER DFA PERSONNEL WITH DOJ Joint Task Force which has the power and authority to monitor or investigate oil
WHOM THEY SHARE A COMMON AND GENERAL INTEREST, PETITIONERS, V. companies, and initiate the filing of a complaint, if necessary. In this case, considering
THE COMMISSION ON AUDIT, RESPONDENT. that public respondent RTC already referred the case to the DOE-DOJ Joint Task
G.R. No. 194530, July 07, 2020 Force for investigation, there was no need for public respondent RTC to issue said
orders as it is bound by the task force's finding that no violation was committed by the
Facts: Big 3 under the doctrine of conclusive finality
The COA Resident Auditor in the DFA issued 19 Notices of Disallowance
(ND) on the payment of terminal leave benefits for retired DFA employees in the total Shell:
amount of P33M. The disallowances pertained to the payment of unused leave RTC committed grave abuse of discretion in ordering the opening of the
credits in excess of the maximum 360 days, and overpayment resulting from books of accounts of the Big 3 as this is beyond the scope of a petition for declaratory
deducting leave credits used prior to January 1, 1978 from leaves currently earned relief, which is only limited to the declaration of legal rights. Shell claims that it is
instead of deducting the same from the corresponding leave credits earned prior to beyond the mandates and statutory powers of the COA, the BIR, and the BOC to
January 1, 1978, in violation of the Foreign Service Act. examine the books of accounts of the Big 3 and that such order is a violation of the
Big 3's right to due process.

RTC’s Ruling: Petron:

RTC denied the MTD, granted the motion to open and examine the books of Petron posits that a petition for declaratory relief is not available in the
accounts of the Big 3, and order the Commission on Audit (COA), Bureau of Internal instant case because the requisites for an action for declaratory relief are not present,
Revenue (BIR), and the Bureau of Customs (BOC) to open and examine the books of specifically there is no justiciable controversy, and that a reading of the petition
accounts of the Big 3. readily shows that private respondents are merely asking for an advisory opinion,
RTC issued an Order directing the Chairman of COA and the which courts are proscribed from rendering. Also, public respondent RTC exceeded
Commissioners of the BIR and the BOC to form a panel of examiners to conduct an its authority when it ordered the COA, the BIR, and the BOC to inspect and examine
examination of the books of accounts of the Big 3 and to submit a report thereon. the books of accounts of the Big 3 because under RA 8479, it is the DOE-DOJ Joint
COA, BIR, and BOC were constrained to file a MR on the ground that the Task Force which has the primary jurisdiction to monitor, investigate, and file the
order of examination is unwarranted and beyond their respective jurisdictions. MR necessary cases in court against any person or entity in the oil industry. Moreover,
denied. public respondent RTC cannot use the doctrine of parens patriae to justify its order
Due to their non-compliance with the Order, the RTC ordered to explain because the doctrine only refers to the inherent power of the State to provide
within 72 hours from notice why they should not be cited in contempt for failure to protection to those who lack the legal capacity to act on their own behalf.
comply. After the lapse of the 72-hour period, private respondents moved for the
issuance of a warrant of arrest against the Chairman of COA and the Commissioners Private respondents:
of the BIR and BOC for their refusal to obey the orders of the RTC. RTC issued an They assert that they availed of the proper recourse and that all the
Order giving them time to file a comment or opposition to the motion for the issuance requisites for a declaratory relief are present. They maintain that the RTC has
of a warrant of arrest against them. The RTC also ordered that private respondent jurisdiction over their Petition and that the rule on primary jurisdiction invoked by the
Cabigao be part of the "panel of examiners” and allowed Pasang Masda to intervene Big 3 is not a hard-and-fast rule. They insist that the jurisdiction of the DOE-DOJ Joint
in the case. Task Force is not exclusive and that its findings are not conclusive. As regards the
Left with no other recourse, the Chairman of COA, and Commissioners of order of public respondent RTC to open and examine the books of accounts of the
BIR and BOC filed this petition for certiorari with application for TRO before the SC. Big 3, private respondents opine that this is in accordance with the principles of social
Shell filed with the CA a petition for certiorari with application for TRO justice and Article 24 of the Civil Code, which grants power to the court to issue such
assailing the RTC orders. Finding grave abuse of discretion on the part of public order to protect the consuming public.
respondent RTC, the CA reversed and set aside the RTC Orders and ordered the
dismissal of the case for declaratory relief for lack of cause of action. The appellate Pasang Masda:
court, in essence, opined that the issues raised by private respondents cannot be It posits that the creation of the DOE-DOJ Joint Task Force cannot divest the court of
made subject of an action for declaratory relief. MR by private respondent denied. its judicial power over the instant case and that its findings are merely
recommendatory. Regarding its intervention, Pasang Masda claims that there had
OSG: been cases where the court allowed a party to intervene despite the fact that the
parties have already submitted a compromise agreement as long as the intervenor DOJ Joint Task Force that there was no violation committed by the Big 3, the RTC,
had an interest in the case. In this case, it insists that it has an interest in the outcome instead of dismissing the case, ordered the COA, the BIR, and the BOC to open and
of the case as consumers of oil products. examine the books of accounts of the Big 3 and even allowed private respondent
Cabigao to be part of the panel of examiners. In doing so, the trial court divested the
Issues: DOE-DOJ Joint Task Force of its power and authority and vested the same to the
1. Whether public respondent RTC committed grave abuse of discretion in not COA, the BIR, the BOC and private respondent Cabigao.
dismissing the Amended Petition for Declaratory Relief; To justify its orders, the public respondent trial court invokes the doctrine of
2. Whether public respondent RTC committed grave abuse of discretion in ordering parens patriae.
the COA, the BIR, and the BOC to examine the books of accounts of the Big 3 and in Under the doctrine of parens patriae (father of his country), the judiciary,
including private respondent Cabigao as part of the "panel of examiners;" and as an agency of the State, has the supreme power and authority to intervene and to
3. Whether public respondent RTC committed grave abuse of discretion in allowing provide protection to persons non sui juris - those who because of their age or
Pasang Masda to intervene in the case. incapacity are unable to care and fend for themselves. This doctrine, however, cannot
be applied in this case considering that Congress by enacting RA 8479 has already
Ruling: provided for the mechanism to protect the interest of the Filipino consumers. Public
1. YES. An action for declaratory relief is not the proper remedy. respondent RTC, therefore, cannot create a new panel of examiners to replace the
A petition for declaratory relief is an action instituted by a person interested DOE-DOJ Joint Task Force as this goes against RA 8479.
in a deed, will, contract or other written instrument, executive order or resolution, to It is beyond the mandates of the COA, the BIR, and the BOC to open
determine any question of construction or validity arising from the instrument, and examine the books of accounts of the Big 3 in the instant case.
executive order or regulation, or statute and for a declaration of his rights and duties The COA's audit jurisdiction generally covers public entities. However, its
thereunder. It must be filed before the breach or violation of the statute, deed or authority to audit extends even to non-governmental entities insofar as the latter
contract to which it refers; otherwise, the court can no longer assume receives financial aid from the government. Thus, it is clear that the determination of
jurisdiction over the action. Thus, "[t]he only issue that may be raised in such [an COA's jurisdiction over a specific entity does not merely require an examination of the
action] is the question of construction or validity of provisions in an instrument or nature of the entity. Should the entity be found to be non-governmental, further
statute." determination must be had as to the source of its funds or the nature of the account
In the instant case, the core issue raised in the petition is whether the sought to be audited by the COA.
business practice of the Big 3 violates the RPC and Downstream Oil Industry With respect to the BIR, its Commissioner is authorized to examine books,
Deregulation Act. This, however, cannot be made the subject matter of a declaratory paper, record, or other data of taxpayers but only to ascertain the correctness of any
relief. return, or in making a return when none was made, or in determining the liability of
It appears therefore that the filing of the Amended Petition was done on the any person for any internal revenue tax, or in collecting such liability, or evaluating the
assumption that there was already a breach or violation on the part of the Big 3, person's tax compliance.[90] The BOC, on the other hand, is authorized to audit or
which cannot be the subject of a declaratory relief. It must be stressed that an action examine all books, records, and documents of importers necessary or relevant for the
for declaratory relief presupposes that there has been no actual breach as such purpose of collecting the proper duties and taxes.[91] Since there are no taxes or
action is filed only for the purpose of securing an authoritative statement of the duties involved in this case, the BIR and the BOC likewise have no power and
rights and obligations of the parties under a contract, deed or statute. It cannot authority to open and examine the books of accounts of the Big 3.
be availed of if the statute, deed or contract has been breached or violated because, The DOE-DOJ Joint Task Force has the sole power and authority to
in such a case, the remedy is for the aggrieved party to file the appropriate ordinary monitor, investigate, and endorse the filing of complaints, if necessary, against
civil action in court. Thus, the Court has consistently ruled that "[i]f adequate relief is oil companies. And considering that the remedy against cartelization is already
available through another form or action or proceeding, the other action must be provided by law, the public respondent trial court exceeded its jurisdiction and gravely
preferred over an action for declaratory relief." abused its discretion when it ordered the COA, the BIR, and the BOC to open and
examine the books of account of the Big 3 and allowed private respondent Cabigao, a
2. YES. certified public accountant, to become part of the panel of examiners. Clearly, the
The DOE-DOJ Joint Task Force is duly authorized by law to investigate RTC not only failed to uphold the law but worse, he contravened the law.
and to order the prosecution of cartelization. The DOE-DOJ Joint Task Force
has the sole power and authority to monitor, investigate, and endorse the filing 3. YES. Pasang Masda failed to satisfy all the requirements for
of complaints, if necessary, against oil companies intervention.
Here, the RTC initially resolved to refer the instant case to the DOE-DOJ As regards the issue of intervention, Section 1,[92] Rule 19 of the Rules of
Joint Task Force for investigation and determination of whether the Big 3 were in Court requires that: (1) the movant must have a legal interest in the matter being
violation of Section 11 of RA 8479. However, upon receipt of the report of the DOE- litigated; (2) the intervention must not unduly delay or prejudice the adjudication of the
rights of the parties; and (3) the claim of the intervenor must not be capable of being
properly decided in a separate proceeding. The right to intervene, however, is not an
absolute right as the granting of a motion to intervene is addressed to the sound
discretion of the court and may only be allowed if the movant is able to satisfy all the
requirements.
In this case, Pasang Masda's allegation that its members consume
petroleum products is not sufficient to show that they have legal interest in the matter
being litigated considering that there are other oil players in the market aside from the
Big 3. Jurisprudence mandates that legal interest must be actual, substantial,
material, direct and immediate, and not simply contingent or expectant.[94] Such is
not the situation in this case. In fact, there is no showing that Pasang Masda has
something to gain or lose in the outcome of the case. Thus, it was grave abuse of
discretion on the part of public respondent RTC in allowing Pasang Masda to
intervene despite its failure to comply with the first requirement.
Besides, even if the Court relaxes the definition of "legal interest" in the
instant case, the granting of the motion to intervene would still be improper because
the subject matter of the petition-in-intervention, just like the petition, cannot be the
subject of an action for declaratory relief Since an intervention is not an independent
action but is ancillary and supplement to the main case, the dismissal of the main
case would necessarily include the dismissal of the ancillary case.

Fallo:
WHEREFORE, the Consolidated Petitions are hereby GRANTED.