*

G.R. No. 139583. May 31, 2000.

CRUSADERS BROADCASTING SYSTEM, INC., petitioner, vs.

NATIONAL TELECOMMUNICATIONS COMMISSION and
COURT OF APPEALS, respondents.

Public Utilities; Mass Media; National Telecommunications

Commission (NTC); By virtue of E.O. No. 546, the regulation of radio
communications is a function assigned to, and being performed by, the NTC.
—It should be noted that by virtue of Executive Order (E.O) No. 546,
creating the Ministry of Public Works and Ministry of Transportation and
Communications, the regulation of radio communications is a function
assigned to, and being performed by, the NTC.

Same; Same; Radio Law; It is the clear mandate of the Radio Law that
only holders of a legislative franchise can operate and manage a radio
station.—The said compromise agreement speaks for itself. Conamor has
been given the right to operate and manage a radio station despite the clear
mandate of the Radio Law that only holders of a legislative franchise can do
so. Even on this ground alone, Crusaders can be prevented by the NTC from
broadcasting. That the said ground was not reflected in the show-cause order
does not mean that the same cannot be raised thereafter by the NTC, as it
has done in the present case, when it gleaned a basis therefor during the
administrative proceedings, from the evidence presented by the petitioner
itself the substance of the agreement between petitioner and Conamor. The
said findings were not rebutted by petitioner which kept on harping only on
the alleged unfairness of NTC in the application of its procedures as well as
on the existence

_______________

* THIRD DIVISION.

820

820 SUPREME COURT REPORTS ANNOTATED

Crusaders Broadcasting System, Inc. vs. National Telecommunications

 Commission

of the said civil case against it and on the refusal of NTC to approve its
application for the acquisition of a new transmitter.

Evidence; Substantial Evidence; Words and Phrases; Substantial

evidence is such relevant evidence which a reasonable mind might accept as
adequate to support a conclusion.—On the matter of factual findings by the
NTC as to the inoperativeness of subject radio station, the Court agrees with
the Court of Appeals that the said findings are supported by substantial
evidence. Substantial evidence is such relevant evidence which a reasonable
mind might accept as adequate to support a conclusion.

Administrative Law; Doctrine of Primary Jurisdiction; Courts cannot

and will not resolve a controversy involving a question which is within the
jurisdiction of an administrative tribunal, especially where the question
demands the exercise of sound administrative discretion requiring the
special knowledge, experience and services to determine technical and
intricate matters of fact.—The Court upholds the primary jurisdiction
exercised by the NTC and quotes with approval the following opinion of the
Court of Appeals, to wit: “Moreover, the doctrine of primary jurisdiction
prevents this Court from “arrogating unto itself the authority to resolve a
controversy which falls under the jurisdiction of a tribunal possessed of a
special competence. (Paat v. Court of Appeals, 266 SCRA 167 [1997]). As
held in Villaflor v. Court of Appeals, 280 SCRA 297 [1997], which reiterates
the rulings in Ismael, Jr. and Co. v. Deputy Executive Secretary, 90 SCRA
673 [1990] and Concerned Officials of MWSS v. Vasquez, 240 SCRA 502
[1995]: ‘Courts cannot and will not resolve a controversy involving a
question which is within the jurisdiction of an administrative tribunal,
especially where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience and services to
determine technical and intricate matters of fact.’ ”

PETITION for review on certiorari of a decision of the Court of

Appeals.

The facts are stated in the opinion of the Court.

     Felino M. Ganal for petitioner.
     The Solicitor General for respondent NTC.

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VOL. 332, MAY 31, 2000 821

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

PURISIMA, J.:
At bar is a petition for review under
1
Rule 45 of the Rules of Court
seeking to nullify the Decision of the Court of Appeals which
affirmed the decision of the National Telecommunications
Commission (NTC, for brevity) denying petitioner’s request for
renewal of its temporary permit to operate DWCD-FM, and
recalling its assigned frequency.
Undisputed are the pertinent facts, to wit:
The petitioner, Crusaders Broadcasting System, Inc. (Crusaders,
for short), was the grantee of Temporary Permit No. BSD-0459-92
to operate 10-KW DWCD-FM at a frequency of 97.9 Mhz.
On July 12, 1994, Mr. Cesar A. Dumlao, Chairman of Crusaders,
sent to the Commission a letter (Exh. “A”) requesting permission to
stop the broadcast of DWCD-FM for around a month starting July
12, 1994, so as to renovate its 20-year old Broadcast Booth and the
entire facilities of the station.
Subsequently, upon application of Crusaders, NTC renewed
Temporary Permit No. BSD-0814-94, dated December 14, 1994,
covering the period from January 1, 1995 to December 31, 1996.
Again, on December 12, 1996, Crusaders applied for another
renewal of its Temporary Permit.
Acting on subject application, the NTC caused the inspection of
the radio station of Crusaders and per report of NTC-National
Capital Region, which conducted such ocular inspection on
February 21, 1997, the station of Crusaders was inoperative. Acting
upon such finding, the Broadcast Service Division of the NTC
recommended the cancellation and revocation of the permit of
Crusaders and the recall of its frequency 97.9 Mhz.
Thus, on April 25, 1997 the Commission wrote Chairman Cesar
A. Dumlao of Crusaders, informing the latter of the

_______________

1 Penned by Associate Justice H. L. Hofileña, and concurred in by Associate

Justices R. Reyes and O. Amin.

822

822 SUPREME COURT REPORTS ANNOTATED

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

denial of his application for the renewal of Crusaders’ Temporary

Permit.
Crusaders presented a motion for reconsideration, thru its
counsel, Atty. Felino Ganal, explaining that Crusaders was not able
to resume its operations because of the institution of Civil Case No.
64739 before the Regional Trial Court of Pasig, Branch 163, by
Conamor Broadcasting Corporation (Conamor, for brevity), against
Crusaders Broadcasting System, Inc. and of the issuance of an order
of injunction by the said Court enjoining Crusaders from operating
its radio station.
On July 14, 1997, the Commission issued a show-cause Order
directing Crusaders to explain: (1) Why its application for renewal
of Temporary Permit for station DWCD-FM should not be denied;
(2) Why its station, DWCD-FM, should not be ordered closed; and
(3) Why its station DWCD-FM assigned frequency should not be
recalled.
On August 5, 1997, Atty. Felino Ganal filed an “Urgent Motion
For Extension” for the filing of Crusaders’ answer/explanation. Such
motion was followed by a second “Urgent Motion For Extension,”
dated August 15, 1997, and a third motion for extension, dated
August 22, 1997.
On August 28, 1997, for failure of Crusaders to submit a
responsive pleading, the Commission issued an order declaring
Crusaders in default, and, thereafter, handed down its decision
recalling the assigned frequency of Crusaders.
The following day, or on February 29, 1997, to be precise, Atty.
Ganal filed an Answer, averring that the show-cause order was
served upon him and not upon his client Crusaders and therefore, it
was only upon the filing of its answer that Crusaders should be
deemed to have voluntarily submitted itself to the jurisdiction of the
Commission. It was further alleged that Crusaders is a grantee of a
congressional franchise (RA No. 8091) but it could not yet resume
its operation because its transmitter was taken by Conamor by virtue
of an order of injunction issued by the Regional Trial Court of Pasig
City in Civil Case No. 64739; that it has already applied with the
Commission for authority to acquire an additional trans-

823

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Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

mitter; that the said injunction was already lifted and set aside by the
same trial court, in an Order dated August 27, 1997; that it has
mobilized its resources towards the operation of its radio station and
that it has, in fact, made a test broadcast.
On September 22, 1997, Crusaders filed an “urgent Motion for
New Trial and/or Reconsideration” praying for the lifting of the
order of default, setting aside of the decision, and for the reopening
of the case.
After hearing, the Commission granted the motion for new trial
and/or reconsideration and declared the case reopened for reception
of evidence by Crusaders in order to afford it ample opportunity to
be heard and to substantiate its defense as regards the show-cause
order issued by the Commission. The initial evidence presented in
support of the motion for new trial and/or reconsideration was later
adopted as Crusaders evidence in the main case.
Then, the Commission came out with its assailed decision,
disposing thus:

“WHEREFORE, in light of all the foregoing, the Commission believes and

so holds that respondent’s request for renewal of its temporary permit to
operate DWCD-FM should be, as it is, hereby DENIED.
Consequently, respondent’s assigned frequency, 97.9 Mhz, is hereby
withdrawn and recalled, the same to be assigned without reasonable delay to
the best qualified applicant.
2
SO ORDERED.”

Crusaders’ next step was to go to the Court of Appeals, which

dismissed its petition for lack of merit.
Undaunted, Crusaders found its way to this Court via the present
petition for review.
It is petitioner’s submission that the NTC committed a grave
reversible error in considering as untenable the tempo-

_______________

2 Rollo, p. 260.

824

824 SUPREME COURT REPORTS ANNOTATED

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

rary stoppage of Crusaders’ broadcast. Petitioner insists that were it

not for the order of injunction issued by the Regional Trial Court of
Pasig City, which prohibited it from broadcasting, and caused the
seizure of its transmitter, antenna, and other equipment, its station
could have resumed operations.
Petitioner contends further that had the NTC approved its
application, dated December 12, 1995, for the acquisition of a new
transmitter, it could have re-started to operate DWCD-FM despite
the Court’s injunction order. In short, petitioner maintains that its
failure to operate is not unjustified because the stoppage of its
broadcasting was not due to its own fault or negligence.
It is likewise petitioner’s stance that the Court of Appeals erred:

1. In upholding the finding of NTC that the “Programming

and Marketing Agreement” with Conamor Broadcasting
 Corporation “to be one for a joint venture, which is a
flagrant violation of Radio laws in that it would allow a
non-franchise grantee to operate a public utility;”
2. In finding, in general terms, that “the findings of the
respondent NTC are supported by substantial evidence and,
therefore, should be “accorded respect and finality”; and
3. In upholding the NTC decision under the so-called
“doctrine of primary jurisdiction.”

Crusaders likewise assigned some substantive and procedural errors

on the part of the NTC but the same were affirmed by the Court of
Appeals.
Petitioner theorizes that the Court of Appeals gravely erred in
affirming the decision of NTC, which denied the renewal of its
temporary permit to operate DWCD-FM and caused the withdrawal
of its assigned frequency.
On the other hand, respondent NTC, through the Office of
Solicitor General (OSG), countered that the NTC was justified

825

VOL. 332, MAY 31, 2000 825

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

in denying petitioner’s application for renewal of temporary permit

and in recalling its assigned frequency. Anent the issue of the
shifting of burden of proof, it alleges that the show-cause order
dated July 14, 1997 was based on the inspection reports, dated
February 21, 1997 and July 11, 1997, respectively, which indicated
that petitioner failed to rehabilitate its broadcast booth and other
facilities. Consequently, the burden of proof shifted to the petitioner.
Respondent also contends that subject inspection reports need not
be authenticated and identified by competent witnesses, the same
being public documents; citing Section 23, Rule 132 of the Rules of
Court, which provides that “Documents consisting of entries in
public records made in the performance of a duty by a public officer
are prima facie evidence of the facts therein stated.”
Indeed, it appears decisively clear that the assailed NTC decision
is anchored on substantial evidence.
The issue at bar may be encapsulated thus: Whether or not the
NTC properly denied the application for renewal of Crusaders’
temporary permit to operate DWCD-FM, and validly ordered the
withdrawal of the latter’s assigned frequency.
3
Section 1 of Act No. 3846 reads:
Section 1. No person, firm, company, association or corporation shall
construct, install, establish, or operate a radio transmitting station, or a radio
receiving station used for commercial purposes, or a radio broadcasting
station, without having first obtained a franchise therefore from the
Congress of the Philippines: x x x

While Section 3 of the same Act provides:

Section 3. The Secretary of Public Works and Communications is hereby

empowered, to regulate the construction or manufacture, possession,
control, sale and transfer of radio transmitters or transceivers (combination
transmitter-receiver) and the establish-

_______________

3 An Act Providing for the Regulation of Public and Radio Communications in the
Philippines and for Other Purposes.

826

826 SUPREME COURT REPORTS ANNOTATED

Crusaders Broadcasting System, Inc. vs. National Telecommunications
Commission

ment, use, the operation of all radio stations and of all form of radio
communications and transmissions within the Philippines. In addition to the
above he shall have the following specific powers and duties:

(1) He may approve or disapprove any application for renewal of station or operator
license: Provided, however, That no application for renewal shall be disapproved
without giving the licensee a hearing.

x x x.

It should be noted that by virtue of Executive Order (E.O) No. 546,

creating the Ministry of Public Works and Ministry of
Transportation and Communications, the regulation of radio
communications is a function assigned to, and being performed by,
the NTC.
Petitioner does not deny and in fact, uses it as the reason for the
stoppage of its broadcast that it was the filing of the aforementioned
civil case against it (petitioner) which grounded DWCD-FM’s
broadcasting. It is not disputed, either, that what prompted Conamor
to bring a complaint against petitioner was the latter’s rescission of a
“Programming and Marketing Agreement,” which gave Conamor
the following rights and privileges akin to those of an owner, among
others, to wit:
 (a) The sole discretion to determine and implement whatever
programs are deemed suitable to make the station
competitive;
(b) The full discretion to change the station call letters, name,
slogan or tagline and such other services that bear upon the
station’s identity to improve the station’s market position;
(c) The acquisition, at its expense, of a new transmitter, studio,
broadcast equipment recording booth, including cost of
construction; and
(d) A share in the net profit at the rate of 65%, leaving only
35% to respondent, when the new facilities of Conamor
became operational. (Exhibits “E-2” and “E-2-a”)

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VOL. 332, MAY 31, 2000 827

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

It is uncontested as well, that under the said Agreement, Conamor

was free from any claim arising from employer-employee
relationship.
In order to settle the civil case, Crusaders and Conamor later
entered into a “Compromise Agreement” which superseded the
programming and marketing agreement. The Court approved
compromise containing the following conditions:

“1. Upon execution hereof, the parties hereby agree to jointly

operate DWCD-FM at its original office and Broadcasting
Station at No. 209 Dela Paz Street, Mandaluyong City,
Metro Manila;
2. The parties shall equally share in the expenses as well as in
the profits or losses, as the case may be, while they are
jointly operating the radio station;
3. The plaintiff shall immediately return the radio station’s
official transmitter, antenna system and other available
equipment of DWCD-FM from the Strata 200 Building,
Emerald Avenue, Pasig City, Metro Manila to the above
Mandaluyong City office of defendant;
4. The parties further agree that in the event the subject
DWCD-FM would be sold or assigned to a third part, the
written consent of the plaintiff shall be indispensably
necessary to give effect and validity to any such sale,
assignment or disposition of the said radio station;
 5. In case of sale, assignment or any disposition of the subject
radio station to any third party, 78.94% of the proceeds
thereof shall go to the defendant (3.57% of which shall be
paid to Atty. Felino Ganal a s (sic) his attorney’s fees) while
the remaining 21.06% shall belong to the plaintiff.”
(Exhibit “J”)

The said compromise agreement speaks for itself. Conamor has been
given the right to operate and manage a radio station despite the
clear mandate of the Radio Law that only holders of a legislative
franchise can do so. Even on this ground alone, Crusaders can be
prevented by the NTC from broadcasting. That the said ground was
not reflected in the show-cause order does not mean that the same
cannot be raised thereafter by the NTC, as it has done in the present
case, when it gleaned a basis therefor during the administra-

828

828 SUPREME COURT REPORTS ANNOTATED

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

tive proceedings, from the evidence presented by the petitioner itself

the substance of the agreement between petitioner and Conamor.
The said findings were not rebutted by petitioner which kept on
harping only on the alleged unfairness of NTC in the application of
its procedures as well as on the existence of the said civil case
against it and on the refusal of NTC to approve its application for
the acquisition of a new transmitter.
On the matter of factual findings by the NTC as to the
inoperativeness of subject radio station, the Court agrees with the
Court of Appeals that the said findings are supported by substantial
evidence. Substantial evidence is such relevant evidence which a
reasonable mind might accept as adequate to support a conclusion.
As aptly stressed upon and ratiocinated by the Court of Appeals:

“In the main, therefore, the findings of the respondent NTC are supported by
substantial evidence. As to whether or not it should have adopted a policy of
leniency is a matter that is addressed solely to its discretion.
As in the case of other administrative agencies, the technical matters
involved are entrusted to NTC’s expertise. In the matter of issuance of
licenses to operate radio stations, it is in a better position than the courts to
determine to whom such privilege should be granted in order that public
interest will be served. As long as its decisions are supported by substantial
evidence, they are entitled to respect from the courts.
The National Telecommunications Commission (NTC) numbers among
those administrative agencies discharging specialized functions, in this case,
the regulation of the nation’s airwaves. As in the case of other
administrative tribunals, its findings of fact will be accorded respect, and on
occasion, even finality, by reason of their acquired expertise on specific
matters within their particular jurisdiction. (Bataan Shipyard and
Engineering Corporation v. National Labor Relations Commission, 269
SCRA 199 [1997]; Malonzo v. Commission on Elections, 269 SCRA 380
[1987] (sic); Naguiat v. National Labor Relations Commission, 269 SCRA
564 [1997]). The only requirement is that its decisions must be supported by
substantial evidence, which need be neither overwhelming nor preponderant

829

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Crusaders Broadcasting System, Inc. vs. National Telecommunications
Commission

(Manila Central Line Corporation v. Manila Central Line Free Workers

4
Union-National Federation of Labor, 290 SCRA 690 [1998]).”

Neither can the Court find merit in the submission by petitioner that
the stoppage of its broadcast would not have happened were it not
for the case for injunction filed against it. In the first place, the said
case could not have been instituted had petitioner not entered into a
programming and marketing agreement with Conamor. What is
more, it does not dispute the finding of NTC that it (petitioner) could
have resumed broadcasting had it complied with the Order of RTC-
Pasig to observe the formal requirements for a motion to lift the
order of injunction on the basis of a counterbond. Such a simple step
petitioner failed to take, and its failure to put up a counter-bond
engendered the stoppage of its operations for three years and
rendered the stoppage of its operation justified.
The Court upholds the primary jurisdiction exercised by the NTC
and quotes with approval the following opinion of the Court of
Appeals, to wit:

“Moreover, the doctrine of primary jurisdiction prevents this Court from

“arrogating unto itself” the authority to resolve a controversy which falls
under the jurisdiction of a tribunal possessed of a special competence. (Paat
v. Court of Appeals, 266 SCRA 167 [1997]). As held in Villaflor v. Court of
Appeals, 280 SCRA 297 [1997], which reiterates the rulings in Ismael, Jr.
and Co. v. Deputy Executive Secretary, 90 SCRA 673 [1990] and
Concerned Officials of MWSS v. Vasquez, 240 SCRA 502 [1995]:

‘Courts cannot and will not resolve a controversy involving a question which is
within the jurisdiction of an administrative tribunal, especially where the question
demands the exercise of sound administrative discretion requiring the special
knowledge, experience and services to determine technical and intricate matters of
5
fact.’ ”
 _______________

4 Rollo, p. 380.
5 Rollo, p. 381.

830

830 SUPREME COURT REPORTS ANNOTATED

Crusaders Broadcasting System, Inc. vs. National
Telecommunications Commission

WHEREFORE, the assailed decision of the Court of Appeals is

AFFIRMED and the petition for review under consideration is
DENIED for lack of merit. No pronouncement as to costs.
SO ORDERED.

     Melo (Chairman), Vitug and Gonzaga-Reyes, JJ., concur.

     Panganiban, J., On leave.

Petition denied, judgment affirmed.

Notes.—The freedom of television and radio broadcasting is

somewhat lesser in scope than the freedom accorded to newspapers
and print media. (Eastern Broadcasting Corp. (DYRE) vs. Dans, Jr.,
137 SCRA 628 [1985])
Unlimited expenditure for political advertising in the mass media
skews the political process and subverts democratic self-
government. (Osmeña vs. Commission on Elections, 288 SCRA 447
[1998])

——o0o——

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