Hierarchy
of Evidentiary Rules
Digest: Energy Regulatory Board v. Court of
Appeals (357 SCRA 30, 2001)
G.R. No. 113079 - April 20, 2001
YNARES-SANTIAGO, J.:
Facts:
Petitioner Pilipinas Shell Petroleum Corporation
(Shell) is engaged in the business of importing crude oil, refining the same
and selling various petroleum products through a network of service stations
throughout the country.
Private respondent Petroleum Distributors and Service
Corporation (PDSC) owns and operates a Caltex service station at the corner of
the MIA and Domestic Roads in Pasay City.
On June 30,1983, Shell filed with the quondam Bureau
of Energy Utilization (BEU) an application for authority to relocate its Shell
Service Station at Tambo, Parañaque, Metro Manila, to Imelda Marcos Avenue of
the same municipality.
PDSC filed an opposition to the application.
BEU dismissed the application on jurisdictional grounds
and for lack of "full title" of the lessor over the proposed site. However, on May 7, 1984, the BEU reinstated
the same application and thereafter conducted a hearing thereon.
BEU rendered a decision denying
Shell's application
Executive Order No. 172 was issued
creating the Energy Regulatory Board (ERB) and transferring to it the
regulatory and adjudicatory functions of the BEU.
EA rendered a decision denying the appeal
of Shell and affirming the BEU decision. Shell moved for reconsideration and
prayed for a new hearing or the remand of the case for further proceedings. In
a supplement to said motion, Shell submitted a new feasibility study to justify
its application.
the ERB rendered a Decision allowing
Shell to establish the service station
PDSC filed a motion for
reconsideration of the foregoing Decision. Denied
Aggrieved, PDSC elevated to the Court
of Appeals.
Issue:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING FINDINGS OF FACTS
CONTRARY TO THOSE OF THE ENERGY REGULATORY BOARD WHOSE FINDINGS WERE BASED ON
SUBSTANTIAL EVIDENCE.
Ruling:
The interpretation of an administrative government
agency like the ERB, which is tasked to implement a statute, is accorded great
respect and ordinarily controls the construction of the courts.8 A
long line of cases establish the basic rule that the courts will not interfere
in matters which are addressed to the sound discretion of government agencies
entrusted with the regulation of activities coming under the special technical
knowledge and training of such agencies.9 More explicitly -
Generally, the interpretation of an administrative
government agency, which is tasked to implement a statute, is accorded great
respect and ordinarily controls the construction of the courts.10 The
reason behind this rule was explained in Nestle Philippines, Inc. vs.
Court of Appeals,11 in this wise:
'The
rationale for this rule relates not only to the emergence of the multifarious
needs of a modern or modernizing society and the establishment of diverse
administrative agencies for addressing and satisfying those needs; it also
relates to the accumulation of experience and growth of specialized
capabilities by the administrative agency charged with implementing a
particular statute. In Asturias Sugar Central, Inc. v. Commissioner of
Customs, 12 the Court stressed that executive officials
are presumed to have familiarized themselves with all the considerations
pertinent to the meaning and purpose of the law, and to have formed an
independent, conscientious and competent expert opinion thereon. The courts
give much weight to the government agency or officials charged with the
implementation of the law, their competence, expertness, experience and
informed judgment, and the fact that they frequently are drafters of the law
they interpret."
As a general rule, contemporaneous construction is
resorted to for certainty and predictability in the laws,13 especially
those involving specific terms having technical meanings.
However, courts will not hesitate to set aside such
executive interpretation when it is clearly erroneous, or when there is no
ambiguity in the rule,14 or when the language or words used are
clear and plain or readily understandable to any ordinary reader.15
Stated differently, when an administrative agency
renders an opinion or issues a statement of policy, it merely interprets a
pre-existing law and the administrative interpretation is at best advisory for
it is the courts that finally determine what the law means.16 Thus,
an action by an administrative agency may be set aside by the judicial
department if there is an error of law, abuse of power, lack of jurisdiction or
grave abuse of discretion clearly conflicting with the letter and spirit of the
law.17
However, there is no cogent reason to depart from the
general rule because the findings of the ERB conform to, rather than conflict
with, the governing statutes and controlling case law on the matter.
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Time and again this Court has ruled that in reviewing administrative decisions, the findings of fact made therein must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant; that it is not for the reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses or otherwise substitute its own judgment for that of the administrative agency on the sufficiency of evidence; that the administrative decision in matters within the executive jurisdiction can only be set aside on proof of grave abuse of discretion, fraud or error of law.26 Petitioner ERB is in a better position to resolve petitioner Shell's application, being primarily the agency possessing the necessary expertise on the matter. The power to determine whether the building of a gasoline retail outlet in a trading area would benefit public interest and the oil industry lies with the ERB not the appellate courts.
In the hierarchy of evidentiary values, proof beyond reasonable doubt is at the highest level, followed by clear and convincing evidence, preponderance of evidence and substantial evidence, in that order. A litany of cases has consistently held that substantial evidence is all that is needed to support an administrative finding of fact.It means such relevant evidence as a reasonable mind might accept to support a conclusion.
Suffice it to state in this regard that the factual landscape, measured within the context of such an evidentiary matrix, is strewn with well-nigh overwhelming proof of the necessity to build such a gasoline retail outlet in the vicinity subject of the application.
In denying Shell's application, the Court of Appeals
next pointed to the alleged 'staleness' of Shell's feasibility study because it
was submitted in evidence about two (2) years after it was prepared in early
1988.
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