G.R. No. 167109 - Amor-Catalan vs. Court of Appeals

Key Individuals and Context

Petitioner: Department of Education (DepEd)
Respondent: Rizal Teachers Kilusang Bayan for Credit, Inc. (RTKBCI), represented by Tomas L. Odullo
Liaison Officer/Witness: William G. Hernandez
DepEd Officials: Secretary Raul Roco, Undersecretary Ernesto S. Pangan (later replaced)

Petitioner’s Scheme and Respondent’s Accreditation

DepEd implemented an automatic payroll deduction system (APDS) for public school teachers’ loans from accredited private lenders.
RTKBCI was accredited under Deduction Codes 209 and 219; DepEd received a 2% administrative fee.

Suspension of Deductions and Complaints

By Memorandum (July 4, 2001), Undersecretary Pangan ordered suspension of remittances (February–June 2001) and halted new deductions pending resolution of teachers’ complaints.
Complaints alleged excessive, unauthorized deductions and collusion between RTKBCI and certain DepEd personnel.

Demand and Refusal to Remit

RTKBCI demanded release of withheld collections; Undersecretary Pangan refused (September 12, 2001), citing the need to protect teachers.

RTC Proceedings and Writ of Mandamus

RTKBCI filed a petition for mandamus (November 29, 2001) to compel DepEd to release ₱111,989,006.98 and continue payroll deductions until full loan repayment; sought damages and attorney’s fees.
RTC Branch 19 granted the writ (January 23, 2008) and awarded ₱5,000,000 damages plus ₱500,000 attorney’s fees.

Court of Appeals Ruling

On DepEd’s appeal, CA affirmed the writ (May 30, 2012) but deleted actual damages, ordering:
• Release of ₱111,989,006.98 to RTKBCI
• Continuation of payroll deductions under APDS until full loan payment
• Payment of ₱500,000 attorney’s fees

Petitioner’s Supreme Court Arguments

APDS exceeded DepEd’s statutory duties and contravened laws protecting teachers’ welfare.
Accreditation and prior deductions did not create a vested property right or clear legal duty.
DepEd refunded collections to teachers; mandamus improper against a discretionary act.

Respondent’s Supreme Court Arguments

Section 36, RA 8760 and RA 4670 authorized continuation of existing deductions until loans are paid.
DepEd’s accreditation and practice estoppel barred withdrawal of APDS privileges.
Grave abuse of discretion exception justified mandamus to protect RTKBCI’s property right in collected funds.

Applicable Law

1987 Constitution: Article XIV, Sec. 5(4)–(5) (teachers’ welfare and highest budgetary priority for education)
RA 4670 Sec. 21 (Magna Carta for Public School Teachers)
RA 8760 Sec. 36 (GAA FY 2000)
PD 807 Sec. 54 (Civil Service Decree)
COA Manual Vol. I Sec. 262 (authorized deductions)
DepEd Memoranda and Orders on APDS accreditation and limits

Core Legal Issue
May DepEd be compelled by writ of mandamus to collect and remit public school teachers’ loan payments to RTKBCI?

Supreme Court Ruling

Mandamus requires a clear legal duty and a corresponding clear legal right.
DepEd’s role as APDS agent is a privilege, not a ministerial duty under its core

The Department of Education (DepEd) established a payroll-deduction scheme to facilitate loan repayment by public school teachers from accredited private lenders.
Rizal Teachers Kilusang Bayan for Credit, Inc. (RTKBCI) was accredited by DepEd and assigned Deduction Codes 209 and 219 under this scheme; DepEd collected two percent of monthly deductions as administrative fees.
Beginning February 2001, numerous teachers filed complaints alleging excessive, unauthorized deductions and collusion between RTKBCI and DepEd personnel.
By Memorandum dated July 4, 2001, Undersecretary Ernesto S. Pangan ordered suspension of RTKBCI remittances for February–June 2001 and halted further salary deductions pending investigation.
RTKBCI formally protested the suspension; Undersecretary Pangan denied their demand by letter dated September 12, 2001, justifying the suspension as protective of teacher welfare.

On November 29, 2001, RTKBCI filed a petition for writ of mandamus and damages (actual P5,000,000; attorney’s fees P500,000) before the Regional Trial Court (RTC), Branch 19, Manila, to compel DepEd to remit P111,989,006.98 and resume deductions until full loan repayment.
The RTC granted RTKBCI’s petition by Decision dated January 23, 2008, ordering DepEd to pay P111,989,006.98, award actual damages of P5,000,000, and attorney’s fees of P500,000.
DepEd appealed to the Court of Appeals (CA). By Decision dated May 30, 2012, the CA affirmed the writ and remittance order, deleted the award of actual damages, and maintained attorney’s fees of P500,000.
DepEd filed a petition for review on certiorari with the Supreme Court, challenging the CA’s affirmation of mandamus relief.

Whether DepEd can be compelled by writ of mandamus to collect, via salary deductions, loan payments of public school teachers and remit them to RTKBCI.

DepEd contended that:
• Its payroll-deduction scheme is discretionary, not mandated by law, and intended