American Inter-Fashion Corporation vs. Office of the President, Garments and Textile Export Board and Glorious Sun Fashion Garments Manufacturing Co. (G.R. No. 92422)

Facts:

Glorious Sun Fashion was found guilty by GTEB of dollar salting and mis-declaration of importations. As a result, its export quotas were cancelled. After GTEB rendered its decision, Glorious filed with the Court a petition for certiorari and prohibition contending that its right to due process of law was violated and that GTEB decision was not supported by substantial evidence. The Court then issued a resolution ordering GTEB to conduct further proceedings. However, on July 25, 1984, Glorious filed a manifestation of its intention to withdraw the petition. The Court granted the motion for withdrawal. Glorious filed another motion to dismiss with prejudice which the Court duly noted.

After two years, Glorious filed with GTEB a petition for restitution of its export quota allocation and requested for a reconsideration of the GTEB decision dated April 27, 1984. Glorious once again alleged that the charges against them were not supported by evidence. Moreover, it alleged that the GTEB decision cancelling its export quota was rendered as a result of duress, threats, intimidation and undue influence exercised by former Minister Roberto V. Ongpin in order to transfer Glorious export quotas to “Marcos crony-owned” corporations. Glorious further alleged that it was coerced by Mr. Roberto Ongpin to withdraw its petition in G.R. No. 67180 and to enter into joint venture agreements paving the way for the creation of De Soleil Apparel and AIFC. 

On Sept. 4, 1987, GTEB denied the petition of Glorious. An appeal was then taken on Oct. 5, 1987 to the Office of the President. AIFC filed its opposition to Glorious’ appeal claiming that the GTEB decision dated April 27, 1984 has long been final. The Office of the President ruled in favor of Glorious and remanded the case to GTEB for further proceedings. The motion for reconsideration of AIFC was subsequently denied. Hence, this petition.

Issue:

1. W/N the previous GTEB decision constituted res judicata to the instant case on the ground that the former decision was a final judgment on the merits. – NO

2. W/N Glorious was accorded due process in relation to the 1984 GTEB decision. – NO

Held:

The petitioner contends that in entertaining the appeal of private respondent Glorious, the Office of the President “had unwittingly made itself a tool in a cunning move to resurrect a decision which had become final and executory more than three years earlier. The petitioner asseverates  resolution dismissing G.R. No. 67180 was res judicata on the matter.

The Supreme Court said that one of the requirements for a judgment to be a bar to a subsequent case is that the it must be a judgment on the merits. A judgment is upon the merits when it amounts to a declaration of the law as to the respective rights and duties of the parties, based upon the ultimate fact or state of facts disclosed by the pleadings and evidence, and upon which the right of recovery depends, irrespective of formal, technical or dilatory objection or contentions. Certainly, the dismissal of G.R. No. 67180 cannot be categorized as a judgment on the merits. The action in 1984 did not resolve anything. In fact, when the court heard the parties during the oral arguments, GTEB was not able to present any showing of mis-declaration if imports. The motion to withdraw te petition arose from the fears of Mr. Nemesio Co that not only Glorious Sun but his other businesses would be destroyed by the martial law regime. The resolution dismissing G.R. No. 67180 was based solely on the notice of withdrawal by the private respondent. The dismissal of the petition was clearly based on a technical matter rather than on the merits of the petition. Hence, it cannot constitute res judicata.

With regards to the second issue, the Petitioner contend that Glorious Sun was not denied due process. Although AIFC admits that the 1984 GTEB decision failed to disclose to Glorious vital evidence used by GTEB in arriving at its conclusion that Glorious was guilty of dollar-salting, it contends that the subsequent disclosure in 1987, where relevant documents were given to Glorious and that the latter was given an opportunity to comment thereon, cured the defect. This contention by AIFC, the court holds, is MISLEADING. The SC recognized that the instant petition involves the 1984 resolution of the GTEB. AIFC cannot use as an excuse the subsequent disclosure of the evidence used by the GTEB to Glorious in 1987 to justify the 1984 GTEB resolution. The glaring fact is that Glorious was denied due process when GTEB failed to disclose evidence used by it in rendering a resolution against Glorious. Moreover, the documents disclosed to Glorious by GTEB in 1987 enhanced the charge that the former was denied due process.

Attention was also brought to the Puno affidavit, wherein Puno, the Chairman of the Investigating Panel created by the Ministry of Trade and Industry admitted that he was pressured by Minister Ongpin to look for ways and means to remove the quotas from Glorious. AIFC claims that it is an inconsequential matter in that the GTEB Board did not give credence to it and also, none of the members of the committee would agree that there was any pressure or instruction from Minister Ongpin.

The Supreme Court said that the fact that the other members would not agree that there was pressure from Ongpin does not mean that Puno was not telling the truth. Mr. Puno stated that he was pressured. He did not state that the members of the investigating panel were pressured. Mr. Puno was the Chairman of the Investigating Panel. Hence, it is plausible that in view of his position he was the one pressured by Minister Ongpin. There is every reason to suspect that even before Glorious Sun was investigated, a decision to strip it of its quotas and to award them to friends of their administration had already been made.

The Supreme Court also held that although factual findings of administrative agencies are generally accorded respect, such factual findings may be disregarded if they are not supported by evidence; where the findings are initiated by fraud, imposition or collusion; where the procedures which lead to the factual findings are irregular; when palpable errors are committed; or when grave abuse of discretion arbitrariness or capriciousness is manifest.

Contrary to the petitioners posture, the record clearly manifests that in cancelling the export quotas of the private respondent GTEB violated the private respondent’s constitutional right to due process. Before the cancellation in 1984, Glorious had been enjoying export quotas granted to it since 1977. In effect the private respondent’s export quota allocation which initially was a privilege evolved into some form of property right which should not be removed from it arbitrarily and without due process only to hurriedly confer it on another.

The motion for reconsideration was GRANTED. The instant petition is DISMISSED.