Admin Law Notes.pdf

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ADMINISTRATIVE LAW

NATURE AND SCOPE OF ADMINISTRATIVE LAW

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DEFINITION ! !

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Embraces all the law that controls, or is intended to control, the administrative operations of the government It includes the law that governs the structure of the government and prescribes the procedure but not the substantive law which administration is supposed to apply Part of the public law which fixes the organization and determines the competence of the administrative authorities, and indicates to the individual the remedies for the violation of his rights Branch of the modern law which the executive department of the government, acting in a quasi-judicial or quasilegislative capacity, interferes with the conduct of the individual for the purpose of promoting the well-being of the community Study of the exercise of administrative power

ORIGIN AND DEVELOPMENT ! !

Origin of administrative law is in legislation and it proceeds from the increased functions of government It became customary to delegate to the particular administrative agencies the power to formulate their regulations in implementing the statute enacted3

SUBJECT MATTER 1.

The body of statutes which sets up administrative agencies and endows them with powers and duties

The body of rules, regulations, and orders issued by administrative agencies The body of determinations, decisions, and orders of such administrative authorities made in the settlement of controversies arising in their respective fields The body of doctrines and decisions dealing with the creation, operation and effect of determinations, and regulations of such administrative agencies

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Statutes setting up administrative authorities either by creating boards and commissions or administrative offices or by confiding the powers and duties to existing boards, commissions, or officers, to amplify, apply, execute, and supervise the operation of and determine controversies arising under particular laws in the enactment of which the legislature decided for matters of convenience or for quicker or more efficient administration to withhold the controversies, at least in the first instance, from the courts of law Rules, regulations, or orders of such administrative authorities enacted and promulgated in pursuance of the purposes for which they were created or endowed The determinations, decisions, and orders of such administrative authorities made in the settlement of controversies arising in their particular fields The body of doctrines and decisions dealing with the creation, operation and effect of determinations and regulations of such administrative authorities

DISTINGUISHED FROM OTHER BRANCHES OF LAW From the law of public administration—

MA. ANGELA LEONOR C. AGUINALDO ATENEO LAW 2D BATCH 2010

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Where the emphasis is on the different branches of the government and on their relations, this pertains to public administration Where the emphasis is shifted to the problems of administrative regulation rather than those of administrative management, then this is the field of administrative law

Constitutional law— ! Constitutional law lays down the general rules of government which are fundamental and without which no governmental organization can hope to stand on its feet Administrative law on the o ther h and lays do wn secondary ! rules which limit and equalify, expand and amplify the general precepts of governmental organization Penal laws— Penal laws consist really of a body of penal sanctions which ! are applied to all the branches of the law ! Bu a rule of law protected or enforced by a penal sanction may be really administrative in character for indeed one of the most common and efficient means of enforcing a rule of administrative law is to give it a penal sanction and the mere fixing of a penalty to a violation of a rule of administrative law doesn't deprive such rule of its administrative character International law— ! This law cannot be regarded as binding upon the officers of any government considered in their relation to their own government except insofar as it has been adopted into the administrative law of the state

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REPUBLIC V. CA

200 SCRA 226 FACTS: Republic Planters Bank together with other sugar producers instituted an action for collection of sum of money and preliminary injunction against the Philippine Sugar Commission. Before an answer was filed, a compromise agreement was filed but to the move of its execution, petitioners were opposed. The CA ruled in this case that the SRA doesn't have the authority to represent the government in any suit against and for it. HELD: The Court of Appeals correctly ruled that petitioner Sugar Regulatory Administration may not lawfully bring an action on behalf of the Republic of the Philippines and that the Office of the Government Corporate Counsel does not have the authority to represent said petitioner in this case. Executive Order No. 18, enacted on 28 May 1986 and which took effect immediately, abolished the Philippine Sugar Commission (PHILSUCOM) and created the Sugar Regulatory Administration (SRA) which shall be under the Office of the President. However, under the third paragraph of Section 13 thereof, the PHILSUCOM was allowed to continue as a juridical entity for three (3) years for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the functions for which it was established, under the supervision of the SRA. Section 3 of said Executive Order enumerates the powers and functions of the SRA; but it does not specifically include the power to represent the Republic of the Philippines in suits filed by or against it, nor the power to sue and be sued although it has the


NOTES: ADMINISTRATIVE LAW PAGE - 3 power to "enter, make and execute routinary contracts as may be necessary for or incidental to the attainment of its purposes between any persons, firms, public or private, and the Government of the Philippines" and "[t]o do all such other things, transact such other businesses and perform such functions directly or indirectly incidental or conducive to the attainment of the purposes of the Sugar Regulatory Administration."

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METHODS OF RE-ORGANIZATION AND ABOLITION !

It is apparent that its charter does not grant the SRA the power to represent the Republic of the Philippines in suits filed by or against the latter.

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It is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law and those that are necessarily implied in the exercise thereof.

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The SRA no doubt, is an administrative agency or body. An administrative agency is defined as "[a] government body charged with administering and implementing par ticular legislation.

CREATION, ORGANIZATION ADMINISTRATIVE AGENCIES

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LEGAL BASES FOR CREATION 1. Constitutional provisions 2. Legislative enactments 3. Authority of law

To regulate certain public callings or business affected with public interest To promote the general welfare through police regulations To determine rights of individuals in certain cases where a strong social policy is involved

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Experimentation is frequent in the field of administration The powers of departments, boards, and administrative agencies are subject to expansion, contraction, or abolition at the will of the legislative and executive branches of the government With respect to administrative agencies created by constitutional provisions, they cannot be abolished by statute But with respect to those created by legislative enactments, or authority of the same, the legislature may validly abolish and reorganize them

CARIÑO V. CHR 204 SCRA 483

FACTS: This is the classic case of the public school teachers being dismissed from service after concerting mass actions during a school day. They instituted a complaint before the Commission on Human Rights against petitioner among others. The Commission contends to adjudicate the matter.

FORMS AND PURPOSES 1. 2. 3.

To dispense certain privileges accorded by the government To carry on governmental business or functions To carry on or undertake some business service for the public

HELD: The threshold question is whether or not the Commission on Human Rights has the power under the Constitution to do so; whether or not, like a court of justice, 19 or even a quasi-judicial agency, 20 it has jurisdiction or adjudicatory powers over, or the


NOTES: ADMINISTRATIVE LAW PAGE - 4 power to try and decide, or hear and determine, certain specific type of cases, like alleged human rights violations involving civil or political rights. The Court declares the Commission on Human Rights to have no such power; and that it was not meant by the fundamental law to be another court or quasi-judicial agency in this country, or duplicate much less take over the functions of the latter. The most that may be conceded to the Commission in the way of adjudicative power is that it may investigate, i.e., receive evidence and make findings of fact as regards claimed human rights violations in volving civil and political righ ts. But fact find ing is not adjudication, and cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or official. The

investigation conducted by it or under its authority, it may grant immunity from prosecution to any person whose testimony or whose possession of documents or other evidence is necessary or convenient to determine the truth. It may also request the assistance of any department, bureau, office, or agency in the performance of its functions, in the conduct of its investigation or in extending such remedy as may be required by its findings. 26 But it cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial bodies do. To investigate is not to adjudicate or adjudge. Whether in the popular or the technical sense, these terms have well understood and quite distinct meanings. The legal meaning of "investigate" is essentially the same: "(t)o

function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function, properly speaking. To be considered such, the faculty of receiving evidence and making factual conclusions in a controversy must be accompanied by the authority of applying the law to those factual conclusions to the end that the controversy may be decided or determined authoritatively, finally and definitively, subject to such appeals or modes of review as may be provided by law. This function, to repeat, the Commission does not have.

follow up step by step by patient inquiry or observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn describe as "(a)n administrative function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; . . . an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a certain matter or matters."

As should at once be observed, only the first of the enumerated powers and functions bears any resemblance to adjudication or adjudgment. The Constitution clearly and categorically grants to the Commission the power to investigate all forms of human rights violations involving civil and political rights. It can exercise that power on its own initiative or on complaint of any person. It may exercise that power pursuant to such rules of procedure as it may adopt and, in cases of violations of said rules, cite for contempt in accordance with the Rules of Court. In the course of any

In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymou s with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or condemn. . . . Implies a judicial determination of a fact, and the entry of a judgment." Hence it is that the Commission on Human Rights, having merely the power "to investigate," cannot and should not "try and resolve on the merits" (adjudicate) the matters.


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An administrative agency must be created by law—either by the Constitution or by statute. The organic act is important because it is the basis of the importance of the agency. For example, if it is the Constitution that sets forth the creation of the agency, then only the amendment or revision of the Constitution can affect the creation of the agency.

HELD: The question is whether or not the Presidential Anti-Dollar Salting Task Force is, in the first place, a quasi-judicial body, and one whose decisions may not be challenged before the regular courts, other than the higher tribunals the Court of Appeals and this Court.

The powers of the agency must be set forth in the organic act or the Constitution.

A quasi-judicial body has been defined as "an organ of government

In the case of Cariño, the powers of the agency are defined in the organic act. The reading of the powers of CHR show that it doesn't have the power to adjudicate but only to investigate or recommendatory in nature.

common types of such bodies have been listed as follows:

How would we recognize the administrative agency? The name usually gives off the idea if the office is an administrative agency or not.

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PRESIDENTIAL ANTI-DOLLAR V. CA 171 SCRA 348 (DEFINITION OF QUASI-JUDICIAL BODY)

FACTS: State Prosecutor Jose B. Rosales, who is assigned with the Presidential Anti-Dollar Salting Task Force hereinafter referred to as PADS Task Force for purposes of convenience, issued search warrants against many companies allegedly engaged in the dollar salting industry. The application for the issuance of said search warrants was filed by Atty. Napoleon Gatmaytan of the Bureau of Customs who is a deputized member of the PADS Task Force. The companies then sought to declare the warrants null and void.

other than a court and other than a legislature, which affects the rights of private parties through either adjudication or rule making." The most

(1) Agencies created to function in situations wherein the government is offering some gratuity, grant, or special privilege, like the defunct Philippine Veterans Board, Board on Pensions for Veterans, and NARRA, and Philippine Veterans Administration. (2) Agencies set up to function in situations wherein the government is seeking to carry on certain government functions, like the Bureau of Immigration, the Bureau of Internal Revenue, the Board of Special Inquiry and Board of Commissioners, the Civil Service Commission, the Central Bank of the Philippines. (3) Agencies set up to function in situations wherein the government is performing some business service for the public, like the Bureau of Posts, the Postal Savings Bank, Metropolitan Waterworks & Sewerage Authority, Philippine National Railways, the Civil Aeronautics Admin istration. (4) Agencies set up to function in situations wherein the government is seeking to regulate business affected with public interest, like the Fiber Inspections Board, the Philippine Patent Office, Office of the Insurance Commissioner.



(5) Agencies set up to function in situations wherein the government is

seeking under the police power to regulate private business and individuals , like the Securities & Exchange Commission, Board of Food Inspectors, the Board of Review for Moving Pictures, and the Professional Regulation Commission. (6) Agencies set up to function in situations wherein the government is seeking to adjust individual controversies because of some strong social policy involved , such as the National Labor Relations Commission, the Court of Agrarian Relations, the Regional Offices of the Ministry of Labor, the Social Security Commission, Bureau of Labor Standards, Women and Minors Bureau.

operate additional buses. When it was authorized given new conditions, it wasn't amenable to the same, prompting it to file an action against the Commission and to declare the pertinent provision of CA 454 unconstitutiona l. It averred that the said provision is an unlawful abdication of the legislature of its power to the Commission, giving it unbridled discretion in implementing the law. The subject provision says that no public service shall operate in the Philippines without possessing a valid and subsisting certificate of public convenience from the Public Service Commission, to the effect that the operation of said service and the authorization to do business will promote the public interests in a proper and suitable manner. There is an additional condition that the government may acquire the business upon payment of proper costs as well as amend the certifications, etc.

As may be seen, it is the basic function of these bodies to adjudicate claims and/or to determine rights, and unless its decision are seasonably appealed to the proper reviewing authorities, the same attain finality and become executory. A perusal of the Presidential Anti-Dollar Salting Task Force's organic act, Presidential Decree No. 1936, as amended by Presidential Decree No. 2002, convinces the Court that the Task Force was not meant to exercise quasi-judicial functions, that is, to try and decide claims and execute its judgments. As the President's arm called upon to combat the vice of "dollar salting" or the blackmarketing and salting of foreign exchange, it is tasked alone by the Decree to handle the prosecution of such activities, but nothing more.

HELD: There was a valid delegation of powers to the Commission in inserting conditions in the issuance of certificates of public convenience and necessity. The standards set forth in the law giving it authority has expressly allowed for such discretion. However, the imposition of the condition upon petitioner should be remanded back to the Commiss ion. The act of the Commission to outright impose the condition without affording due process to petitioner is uncalled for. The Commission took advantage of the need to augment petitioner’s equipment in its business to impose the 25-year limitation.

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PANGASINAN TRANSPORTATION V. PSC 70 PHIL. 221

FACTS: Petitioner has been engaged in the transportation business using what is kno wn to b e TPU b uses, in a ccordance to the ce rtificates of public convenience issued to it. It later applied for authorization to

PEO. V. MACEREN 79 SCRA 450

FACTS: Accused were charged of violating a Fisheries Administrative Order, specifically on violating provisions on electro fishing. The trial court dismissed the complaint and this was affirmed by the



CFI on the ground that there electro fishing cannot be penalized as electric current is not one of those contemplated as obnoxious or poisonous substance as contemplated in the old Fisheries law.

The most common of the constitutional limitations is the separation of powers, with the concomitant non-delegation of powers

HELD: The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute as an offense. It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing their Administrative Orders, providing for the punishment for those who practice electro fishing. There is nothing provided in the Fisheries law that defines and punishes electro fishing. To declare what shall constitute a crime and how it shall be punished is a power vested exclusively in

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the legislature, and it may not be delegated to any other body or agency.

steam or moved by other adequate power.

CONSTITUTIONAL CONSIDERATIONS SEPARATION OF POWERS !

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In general, administrative law may be divided into three broad segments— The transfer of power from the legislature to o administrative agencies The exercise of such delegated powers by these o agencies The review of such administrative actions by the o courts Laws enacted prescribing the powers and functions of administrative agencies should respect constitutional limitations

US V. BARRIAS 11 PHIL. 327

FACTS: The defendant has been charged of violating the circular duly published in the Official Gazette of the Insular Collector of Customs, for being the captain of the boat Maude, and moving and directing her movement, when heavily laden, in the Pasig river, by bamboo poles in the hands of the crew and without steam, sail, or other external power. A paragraph in the said circular prohibits the movement of any craft in the Pasig river without being towed by

HELD: By certain sections of Act 1136, the Collector of Customs is authorized to license craft engaged in the lighterage (loading, carrying or unloading in a lighter or barge for cargo) or other exclusively harbor business of the ports of the islands, and with certain exceptions, all vessels engaged in lightering are required to be so licensed. The Act also provides that any violation of the law or any rule and regulation promulgated by the Collector shall be guilty of a misdemeanor and be punished upon conviction of imprisonment and a fine. Pertaining to the abovementioned law, the regulation of the Collector should be sustained as coming within the terms of the Act. Furthermore, the complaint in this instance was framed in accordance also with the Philippine Customs Administrative Act. The collector is not only authorized to promulgate regulations but also fix penalties for the violation thereof.



The power conferred upon the legislature to make laws cannot be delegated by the department to any other body or authority. Where the sovereign power of the State has located the authority, there is must remain; and by the constitutional agency alone the laws must be made until the constitution itself is changed. This is based on the ethical principle that a delegated power constitutes not only a right but also a duty to be performed by the delegate in the instrumentality of his own judgment acting immediately upon the matter of legislation and not through the intervening mind of another.

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SUNVILLE TIMBER V. ABAD 206 SCRA 482

FACTS: Petitioner was granted a TLA for the cutting of timber in Zamboanga del Sur. Private respondents then filed a complaint for injunction against it. Petitioner moved for the dismissal of the case for allegedly violating the doctrine on exhaustion of administrative agencies. This was denied by the judge, averring such doctrine admits of exemptions and the present case comes within the purview of the same. HELD: The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. Nonobservance of the doctrine results in lack of a cause of action, which is o ne of the grounds allowed in the Rules of Court for the dismissal of the complaint. The deficiency is not jurisdictional. Failure to invoke it operates as a waiver of the objection as a

ground for a motion to dismiss and the court may then proceed with the case as if the do ctrine had been o bserved. One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is that the administrative authorities are in a better position to resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution may be rectified by their superiors if given a chance to do so. A no less important consideration is that administrative decisions are usually questioned in the special civil actions of certiorari, prohibition and mandamus, which are allowed only when there is no other plain, speedy and adequate remedy available to the petitioner. It may be added that strict enforcement of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their heavily loaded d ockets. There are a number of instances when the doctrine may be dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are: 1) when the question raised is purely legal; 2) when the administrative body is in estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need for judicial intervention; 5) when the claim involved is small; 6) when irreparable damage will be suffered; 7) when there is no other plain, speedy and adequate remedy; 8) when strong public interest is involved; 9) when the subject of the controversy is private land; and 10) in quo warranto proceedings. The court rules in favor of the petitioner. Even if it be assumed that the forestry laws do not expressly require prior resort to administrative remedies, the reasons for the doctrine


NOTES: ADMINISTRATIVE LAW PAGE - 9 above given, if nothing else, would suffice to still require its observance. Even if such reasons were disregarded, there would still be the explicit language of pertinent laws vesting in the DENR the power and function "to regulate the development, disposition, extraction, exploration and use of the country's forests" and "to exercise exclusive jurisdiction" in the "management and disposition of all lands of the public domain," and in the Forest Management Bureau (formerly the Bureau of Forest Development) the responsibility for the enforcement of the forestry laws aid regulations here claimed to have been violated. This comprehensive conferment clearly implies at the very least that the DENR should be allowed to rule in the first instance on any controversy coming under its express powers before the courts of justice may intervene.

asking him to explain himself for the alleged approval of subdivision plans among others. He then apprised Teehankee that he enjoyed the privileges as of a district judge and thus, could only be suspended and investigated in the same manner as a Judge of the Courts of First Instance, and, therefore, the papers relative to his case should be submitted to the Supreme Court, for action thereon conformably to section 67 of the Judiciary Act (R. A. No. 296) and Revised Rule 140 of the Rules of Court.

The argument that the questions raised in the petition are purely legal is also not acceptable. The private respondents have charged, both in the administrative case before the DENR and in the civil case before the Regional Trial Court of Pagadian City, that the petitioner has violated the terms and conditions of the TLA and the provisions of forestry laws and regulations. The charge involves factual issues calling for the presentation of supporting evidence. Such evidence is best evaluated first by the administrative authorities, employing their specialized knowledge of the agreement and the rules allegedly violated, before the courts may step in to exercise their powers of review.

only by the Supreme Court and to be suspended or removed upon its recommendation, would necessarily result in the same right being possessed by a variety of executive officials upon whom the Legislature had indiscriminately conferred the same privileges.

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NOBLEJAS V. TEEHANKEE 23 SCRA 405

FACTS: Noblejas was appointed as the Commissioner of Land Registration. He enjoyed the same rank and privileges of a district judge. During his tenure as Commissioner, a letter was sent to him by Teehankee,

He then was suspended by order of the President upon finding of a prima case against him. HELD: The petitioner's theory that the grant of "privileges of a Judge of First Instance" includes by implication the right to be investigated

To adopt petitioner's theory, therefore, would mean placing upon the Supreme Court the duty of investigating and disciplining all these officials, whose functions are plainly executive, and the consequent curtailment by mere implication from the Legislative grant, of the President's power to discipline and remove administrative officials who are presidential appointees, and which the Constitution expressly placed under the President's supervision and control (Constitution, Art. VII, sec. 10[i]). Incidentally, petitioner's stand would also lead to the conclusion that the Solicitor General, another appointee of the President, could not be removed by the latter, since the Appropriation Acts confer upon the Solicitor General the rank and privileges of a


NOTES: ADMINISTRATIVE LAW PAGE - 10 Justice of the Court of Appeals, and these Justices are only removable by the Legislature, through the process of impeachment. The more fundamental objection to the stand of petitioner Noblejas is that, if the Legislature had really intended to include in the general grant of "privileges" or "rank and privileges of Judges of the Court of First Instance" the right to be investigated by the Supreme Court, and to be suspended or removed only upon recommendation of that Court, then such grant of privileges would be unconstitutional, since it would violate the fundamental doctrine of separation of powers, by charging this court with the administrative function of supervisory control over executive officials, and simultaneously reducing pro tanto the control of the Chief Executive over such officials. Petitioner seeks to be differentiated with the other executive officials by averring that he exercises a judicial function, that is, resolution of a consulta by the Register of Deeds. Serious doubt may well be entertained as to whether the resolution of a consulta by a Register of Deeds is a judicial function, as contrasted with administrative process. It will be noted that by specific provision of the section, the decision of the Land Registration Commissioner "shall be conclusive and binding upon all Registers of Deeds" alone, and not upon other parties. This limitation in effect identifies the resolutions of the Land Registration Commissioner with those of any other bureau director, whose resolutions or orders bind his subordinates alone. That the Commissioner's resolutions are appealable does not prove that they are not administrative; any bureau director's ruling is likewise appealable to the corresponding department head. But even granting that the resolution of consultas by the Register of Deeds should constitute a judicial (or more properly quasi judicial) function, analysis of the powers and duties of the Land Registration

Commissioner under Republic Act No. 1151, sections 3 and 4, will show that the resolution of consultas are but a minimal portion of his administrative or executive functions and merely incidental to the latter.

NON-DELEGATION OF POWERS !

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No department of the government, except when authorized by the constitution, can abdicate authority or escape responsibility by delegating any of its power to another body Any attempt at su ch delegation of power is v oid under the maxim potestas delegari no n potest delegari This principle rests on the ethical principle that a delegated power constitutes not only a right but also a duty to be performed by the delegated body and through the intervening mind of another While the rule of non-delegation is applicable to all three departments of the government, the doctrine has found greater and persistent application to the prohibition against the delegation of legislative power Take note however that this rule isn’t absolute—any power not legislative in character, which the legislature may exercise, it may delegate. What the rule precludes is the delegation of those powers which are strictly or inherently and exclusively legislative and the abdication of the legislation of its own power and conferring such power upon an administrative agency to be exercised in its uncontrolled discretion

US V. ANG TANG HO 43 PHIL. 1

FACTS:


NOTES: ADMINISTRATIVE LAW PAGE - 11 The Philippine legislature enacted a law entitled “An Act penalizing the monopoly and hoarding of, and speculation in, palay, rice, and corn under extraordinary circumstances, regulating the distribution and sale thereof, and authorizing the GovernorGeneral, with the consent of the Council of State, to issue the necessary rules and regulations therefore, and making an appropriation for this purpose”. Under the said law, the governorgeneral is authorized whenever, for any cause, conditions arise resulting in the extraordinary rise in the price of palay, rice or corn, to issue and promulgate, with the consent of the Council of State, temporary rules and emergency measures for carrying out the purposes of the Act. The governor-general, in pursuance of this law, fixed the price at which rice should be sold. A few days after, the accused is charged for violation of such proclamation, charging him of selling rice at a higher price. He was found guilty and sentenced to imprisonment and payment of a fine.

enforcement or administration of a law, it is essential to forestall a violation of the principle of separation of p owers, that said law: 1. Be complete in itself—it must set forth therein the policy to be executed, carried out or implemented by the delegate 2. Fix a standard—the limits of which are sufficiently determined or determinable—to which the delegate must conform in performance of his functions. Without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and without the appropriate standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority.

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PANAMA REFINING CO. V. RYAN 293 U.S. 288 (1935)

HELD: By looking at the first section of the subject law, the promulgation of temporary rules and emergency measures is left at the discretion of the governor-gen eral. The legislature doesn’t undertake to specify or define under what conditions or for what reasons the governor-general shall issue the proclamation, but says it may be issued “for any cause” and leaves the question as to what is “any cause” to the discretion of the governor-gen eral. There is also no definition to what the phrase “extraordinary rise” means. It doesn’t specify what is a temporary rule or an emergency measure or how long these shall remain in force and effect and when they shall be in effect.

FACTS: One of the economic problems caused by the Great Depression was faltering oil prices. This was due to overproduction and a general economic slowdown. The oil industry sought Congressional intervention to control the situation. The President issued Executive Order 6199 on July 11, 1933, banning interstate oil shipments if the oil was produced in excess of state quotas. Basis for this EO was section 9(c) of title 1 of the National Industrial Recovery Act, which authorizes the President to prohibit transportation of excess oil and prescribes punishment of a fine, imprisonment, or both. President then issued Executive Order 6204 on July 14, 1933, authorizing the Secretary of the Interior to exercise authority as vested in the President in enforcing section 9(c) and EO 6199.

Although the Congress may delegate to another branch of government the power to fill in the details in the execution,

Secretary of the Interior issued regulations to carry out EO 6199 and 6204 on July 15, 1933.



Regulation IV: Every producer of petroleum should file a monthly statement giving information on the company and oil production. Regulation V: Every purchaser/shipper/refiner of petroleum should file a monthly statement giving information on the company and oil production. Regulation VII: Aforementioned should keep adequate books and records of all transactions involving the production and transportation of petroleum and petroleum products.

requirement, no definition of circumstances and conditions in which the transpo rtation is to be allowed o r prohibited.”

Further EOs were issued: President issued “Petroleum Code” (Code of Fair ! Competition for the Petroleum Industry) on August 19, 1933 regulating the production of petroleum as deemed

This “hot oil” provision was seen as an unconstitutional delegation of legislative powers to the executive branch, thus violating the doctrine of separation of powers.

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necessary by each state’s requirement. President issued an EO on August 28, 1933 designating the Sec. of the Interior as the Administrator and the Department of the Interior as the federal agency, to exercise on behalf of the President all powers vested in him under that Act and Code.

The Panama Refining Co. and the Amazon Petroleum Corp. pressed suits on October 1933 to restrain the defendants (federal officials) from enforcing the restrictions on the production and disposition of oil. HELD: EO 6199, 6204 and the regulations issued by the Sec. of the Interior are without constitutional authority. In trying to regulate the transportation of oil production in excess of state permission, “the Congress has declared no policy, has established no standard, has laid down no rule. There is no

Congress had failed to provide a “primary standard” to guide the executive branch. This oversight allowed the president to act as he pleased rather than within an administrative role. This gives the President “unlimited authority to determine the policy… as he may see fit. And disobedience to his order is made a crime punishable by fine and imprisonment.”

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YNOT V. IAC 148 SCRA 659

FACTS: An Execu tive Order was issued by the then Pre sident Marcos. The said Executive Order prohibited the interprovincial movement of carabaos and the slaughtering of carabaos not complying with the requirements of another Executive Order. Violation of said EO is punished by confiscation. Petitioner was found guilty of violating said order when he transported his carabaos from Masbate to Iloilo, and his carabaos were subsequently confiscated. HELD: It is marked that the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through


NOTES: ADMINISTRATIVE LAW PAGE - 13 dispersal as the Director of Animal Industry may see fit, in the case of carabaos." The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and therefore invalid delegation of legislative powers.

EXCEPTIONS: PERMISSIBLE DELEGATION 1.

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3.

4.

When permitted b y the Constitution itself a. Example is the emergency powers granted to the President In case of delegation of legislative power to local governments a. Creation of municipalities exercising local selfgovernment b. Following are usually delegated to the local governments—police power, eminent domain, and taxation Delegation of power to fill in the details a. Matters of detail may be left by the legislature to the discretion of the administrative agencies by filling it with rules and regulations Delegation of rule-making and adjudicatory powers to administrative bodies, provided ascertainable standards are set

a.

5.

6.

7.

The legislature is not always in session and its members can agree only on general policies but not matters of detail. Even if they could agree on details, there is the danger of being too detailed control and regulation may hamper the efficiency of the administrative agencies Delegation of the power to ascertain facts, contingencies or events upon which the applicability or non-applicability of a law is made to depend a. Congress may enact a law the taking effect of which is made to depend upon the happening of future specified contingencies to be determined by the executive or administrative agencies or officers Delegation of power to people at large, when such has been reserved by the Constitution a. Referendum is an example Delegation of power to the executive in the field of international and diplomatic relations

ADVANTAGES OF DELEGATION ADMINISTRATIVE AGENCIES 1.

2.

3. 4.

OF

POWER

TO

It relieves the legislature of great burden of work in respect to which it has no special competence, and thus, enables it more largely to direct its attention to matters of general import It entrusts the drafting of detailed provisions, which are usually of highly technical character to the agencies most familiar with the conditions to be met and which will have responsibility for its enforcement It permits great flexibility in adopting the regulations to the different classes of individuals or interests affected It makes possible the prompt modification of a provision as soon as experience dictates that it is unsatisfactory


NOTES: ADMINISTRATIVE LAW PAGE - 14 12

EDU V. ERICTA 35 SCRA 481

FACTS: Edu is the Land Transportation Commissioner. He issued an Administrative Order to implement the Reflector Law. Galo filed for preliminary injunction for the execution of said law and challenged its constitutionality. The judge issued the injunction against the execution of the Administrative Order and the subject law. Such administrative order, which took effect on April 17, 1970, has a provision on reflectors in effect reproducing what was set forth in the Act. Thus: "No motor vehicles of whatever style, kind, make, class or denomination shall be registered if not equipped with reflectors. Such reflectors shall either be factory built-in-reflector commercial glass reflectors, reflection tape or luminous paint. The luminosity shall have an intensity to be maintained visible and clean at all times such that if struck by a beam of light shall be visible 100 meters away at night." Then came a section on dimensions, placement and color. As to dimensions the following is provided for: "Glass reflectors Not less than 3 inches in diameter or not less than 3 inches square; Reflectorized Tape At least 3 inches wide an d 1 2 inches long. T he painted or ta ped area may b e big ger at the discretion of the vehicle owner." Provision is then made as to how such reflectors are to be "placed, installed, pasted or painted." There is the further requirement that in addition to such reflectors there shall be installed, pasted or painted four reflectors on each side of the motor vehicle parallel to those installed, pasted or painted in front and those in the rear end of the body thereof. The color required of each reflectors, whether built-in, commercial glass, reflectorized tape or reflectorized paint placed in the front part of any motor vehicle shall be amber or yellow and those placed

on the sides and in the rear shall all be red. Penalties resulting from a violation thereof could be imposed. HELD: It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not delegate its legislative power to the two other branches of the government, subject to the exception that local governments may over local affairs participate in its exercise. What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them; the test is the completeness of the statute in all its term and provisions when it leaves the hands of the legislature. To determine whether or not there is an undue delegation of legislative power the inquiry must be directed to the scope and definiteness of the measure enacted. The legislature does not abdicate its functions when it describes what job mu st be done , who is to do it, and what is the scope of his authority. For a complex economy, that may indeed be the only way in which the legislative process can go forward. A distinction has rightfully been made between delegation of power to make the laws which ne cessarily involv es a d iscretion as to what it shall b e, which constitutionally may not be done, and delegation of authority or discretion as to its execution to exercised under and in pursuance of the law, to which no valid objection call be made. The Constitution is thus not to be regarded as denying the legislature the necessary resources of flexibility and practicability. To avoid the taint of unlawful delegation, there must be a standard, which implies at the ver y least that the legislature itse lf determin es matters of principle and lay down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus defines legislative policy, marks its limits, its maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be effected. It is the criterion by which legislative purpose may be


NOTES: ADMINISTRATIVE LAW PAGE - 15 carried out. Thereafter, the executive or administrative office designated may in pursuance of the above guidelines promulgate supplemental rules and regulations. The standard may be either express or implied. If the former, the non-delegation objection is easily met. The standard though does not have to be spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole. In the Reflector Law, clearly the legislative objective is public safety. This is to adhere to the recognition given expression by Justice Laurel in a decision announced not long after the Constitution came into force and effect that the principle of non-delegation "has been made to adapt itself the complexities of modern governments, giving rise to the adoption, within certain limits, of the principle of "subordinate legislation" not only in the United States and England but in practically all modern governments." He continued: "Accordingly, with the growing complexity of modern life, the multiplication of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a constantly growing tendency toward the delegation of greater powers by the legislature and toward the approval of the practice by the courts." 45 Consistency with the conceptual approach requires the reminder that what is delegated is authority non-legislative in character, the completeness of the statute when it leaves the hands of Congress being assumed. Our later decisions speak to the same effect. Thus from, Justice J. B. L. Reyes in People vs. Exconde: 46 "It is well establish in this jurisdiction that, while the making of laws is a non-delegab le activity that corresponds exclusively to Congress, nevertheless the latter may constitutionally delegate authority to promulgate rules and regulations to implement a given legislation and effectuate its policies, for the reason that the legislature often finds it

impracticable (if not impossible) to anticipate and proved for the multifarious and complex situations that may be met in carrying the law in effect. All that is required is that the regulation should germane to the objects and purposes of the law; that the regulation be not in contradiction with it; but conform to the standards that the law prescribes ... " It bears repeating that the Reflector Law construed together with the Land Transportation Code. Republic Act No. 4136, of which it is an amendment, leaves no doubt as to the stress and emphasis on public safety which is the prime consideration in statutes of this character. There is likewise a categorical affirmation Of the power of petitioner as Land Transportation Commissioner to promulgate rules and regulations to give life to and translate into actuality such fundamental purpose. His power is clear. There has been no abuse. His Administrative Order No. 2 can easily survive the attack, farfrom-formidable, launched against it by respondent Galo.

13

CRUZ V. YOUNGBERG 56 PHIL. 234

FACTS: An action was brought against Youngbe rg who was then the Director of Bureau of Animal Industry. The action was against the refusal of Youngberg to issue a permit for the landing and subsequent slaughtering of large cattle imported by Cruz. Cruz averred that the law on which Youngberg was basing his refusal is unconstitutiona l. The subject law’s purpose was to prevent the spread of cattle diseases in the country. HELD: In his third assignment of error the petitioner claims that "The lower court erred in not holding that the power given by Act No.


NOTES: ADMINISTRATIVE LAW PAGE - 16 3155 to the Governor-General to suspend or not, at his discretion, the prohibition provided in the act constitutes an unlawful delegation of the legislative powers." This contention is bereft of any merit. The true distinction, therefore, is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.

14

SOLICITOR GENENRAL V. MMA 204 SCRA 837

acts of these agents must reflect and conform to the will of their principal. To test the validity of such acts in the specific case now before us, we apply the particular requisites of a valid ordinance as laid down by the accepted principles governing municipal corporations. According to Elliot, a municipal ordinan ce, to be valid: 1) must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public policy. The measures under consideration do not pass the first criterion

FACTS: In an earlier case, it was held that the confiscation of license plates and driver’s licenses were not part of the sanctions to be imposed in case of traffic violations. But subsequen t developments occurred, wherein there were many incidents of confiscation. An ordinance was then enacted for the confiscation of license plates in case of violations. The court acted on such ordinance. MMA defends itself by saying that the ordinance it promulgated was in pursuance of an executive order. The solicitor general on the other hand contended that the ordinance was null and void for being an unlawful delegation of legislative power. HELD: The problem before us is not the validity of the delegation of legislative power. The question we must resolve is the validity of the exercise of such delegated power.

because they do not conform to existing law. The pertinent law is PD 1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver's licenses for traffic violations committed in Metropolitan Manila. There is nothing in the following provisions of the decree authorizing the Metropolitan Manila Commission (and now the Metropolitan Manila Authority) to impose such sanctions. In fact, the above provisions prohibit the imposition of such sanctions in Metropolitan Manila. The Commission was allowed to "impose fines and otherwise discipline" traffic violators only "in such amounts and under such penalties as are herein prescribed," that is, by the decree itself. Nowhere is the removal of license plates directly imposed by the decree or at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly provides that "in case of traffic violations, the driver's license shall not be confiscated."

The measures in question are enactments of local governments acting only as agents of the national legislature. Necessarily, the


NOTES: ADMINISTRATIVE LAW PAGE - 17 The requirement that the municipal enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all times the will of their principal. In the case before us, the enactments in question, which are merely local in srcin, cannot prevail against the decree, which has the force and effect of a statute. The measures in question do not merely add to the requirement of PD 1605 but, worse, impose sanctions the decree does not allow and in fact actually prohibits. In so doing, the ordinances disregard and violate and in effect partially repeal the law.

15

ALLEGRE V. COLLECTOR 53 PHILS. 394

FACTS: The petitioner for a number of years has been and is now engaged in the production of abaca and its exportation to foreign markets. He applied to the respondent for a permit to export one hundred bales of abaca to England, which was denied, and advised that he would not be permitted to export the abaca in question without a certificate of the Fiber Standardization Board. It be noted that the purpose and intent of the srcinal law, wherein the respondent based his denial, was to provide in detail for the inspection grading and baling of abaca , maguey, sisal and other fibers, and for a uniform scale for grading, and to issue official certificates as to the kind and quality of the hemp, so that an

intending purchaser from an examination of the certificates might be assured and know the grade and quality of the hemp offered for sale. HELD: The question here is whether or not the law in question delegates to the Fiber Board legislative powers or administrative functions to carry out the purpose and intent of the law for its more efficient administration. It must be conceded that the details, spirit and intent of the law could only be carried into effect through a board of commission. It will be noted that section 1772 of the Administrative Code, as amended, provides: The Fiber Standardization Board shall determine the official standards for the various commercial grades of Philippine fibers that are or may hereafter be produced in the Philippine Islands for shipment abroad. Each grade shall have its proper name and designation which, together with the basis upon which the several grades are determined, shall be defined by the said Board in a general order. Such order shall have the approval of the Secretary of Agriculture and Natural Resources; and for the dissemination of information, copies of the same shall be supplied gratis to the foreign markets, provincial governors, municipal presidents, and to such other persons and agencies as shall make request therefor. If it is considered expedient to change these standards at any time, notice shall be given in the local and foreign markets for a period of at least six months before the new standard shall go into effect. That is to say, the Legislature has specifically provided for the creation of "official standards for commercial grades of fibers," and that "the Fiber Standardization Board shall determine the official


NOTES: ADMINISTRATIVE LAW PAGE - 18 36 PHIL. 547

standards for the various commercial grades of Philippine fibers," and that: All fibers within the purview of this law which are intended for export shall be pressed in uniform bales. The approximate volume and net weight of each bale, together with the manner of binding, marking, wrapping, and stamping of the same, shall be defined in a general order by the Fiber Standardization Board. And section 1788, as amended, provides that no fiber shall be exported in quality greater than the amount sufficient to make one bale, without being graded, baled, inspected, and certified as in this law provided. That is to say, the law provides in detail for the inspection, grading and bailing of hemp the Fiber Board with the power and authority to devise ways and means for its execution. In legal effect, the Legislature has said that before any hemp is exported from the Philippine Islands it must be inspected, graded and baled, and has created a board or that purpose and vested it with the power and authority to do the actual work. That is not a delegation o legislative power. It is nothing more than a delegation of administrative power in the Fiber Board, to carry out the purpose and intent of the law. In the very nature of things, the Legislature could not inspect, grade and bale the hemp, and from necessity, the power to do that would have to be vested in a board of commission.

FACTS: The plaintiff still insists with great vigor that section 1 of Act No. 1748; entitled "An Act authorizing the adjustment of provincial and municipal boundaries and authorizing the change of capitals of provinces and subprovinces, as may be necessary from time to time to serve the public convenience and interest," is in violation of the Act of Congress of July 1, 1902, in that it delegates legislative powers to the Governor-General, whereas the Act of Congress referred to lodges those powers in the Philippine Legislature. Section 1 of the Act referred to provides in substance that, whenever in the judgment of the Governor-Gene ral the public welfare requires, he may, by executive order, enlarge, contract, or

The petitioner's contention would leave the law, which provides for the inspection, grading and baling of hemp, without any means of its enforcement. If the law cannot be enforced by such a board or commission, how and by whom could it be enforced? The criticism that there is partiality or even fraud in the administration of the law is not an argument against its constitutionality.

otherwise change the boundary of any province, subprovince, municipality, or township or other political subdivision, or separate any such subdivision into such portions as may be requires, merge any of such subdivisions with another, divide, any province into one or more subdivisions as may be required, name any new subdivision so created, change the seat of government within any subdivision existing or created thereunder, to such place therein as the public interests require, and shall fix in such executive order the date when the change, merger, separation or other action shall take effect. The section also provides that whenever the GovernorGeneral creates a new political subdivision he shall appoint such officers for the new subdivision with such powers and duties as may be required by the existing provisions of law applicable to the case and fix their salaries; and that such appointees shall hold office until their successors are appointed or elected and qualify. Successors to the elective offices shall be elected at the next general election following such appointment.

16

HELD:

MUN. OF CARDONA V. MUN. OF BINANGONAN


NOTES: ADMINISTRATIVE LAW PAGE - 19 The contention of the plaintiff is not well founded. The delegation of the power referred to on the Governor-General does not involve an abdication of legislative functions on the part of the legislature with regard to the pa rticular subject-matter with which it authorizes the Governor-General to deal. It is simply a transference of certain details with respect to provinces, municipalities, and townships, many of them newly created, and all of them subject to more or less rapid change both in development and centers of population, the proper regulation of which might require not only prompt action but action of such a detailed character as not to permit the legislative body, as such, to take it efficiently.

17

CALALANG V. WILLIAMS 70 PHIL. 726

FACTS: Calalang filed an action against Williams and several others for prohibiting animal-drawn vehicles from passing particular roads. He alleged that the law granting the Director of Public Works from implementing rules and regulations is unconstitutional as it an undue delegation of legislative power. HELD: This is untenable. The true distinction therefore is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. Section 1 of Commonwealth Act No. 548 reads as follows: “SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads by acts of the

National Assembly or by executive orders of the President of the Philippines, the Director of Public Works, with the approval of the Secretary of Public Works and Communications, shall promulgate the necessary rules and regulations to regulate and control the use of and traffic on such roads and streets. Such rules and regulations, with the approval of the President, may contain provisions controlling or regulating the construction of buildings or other structures within a reasonable distance from along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of Public Works and his duly authorized representatives whenever the condition of the road or the traffic thereon makes such action necessary or advisable in the public convenience and interest, or for a specified period, with the approval of the Secretary of Public Works and Communications.” The above provisions of law do not confer legislative power upon the Director of Public Works and the Secretary of Public Works and Communications. The authority therein conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, “to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines” and to close them temporarily to any or all classes of traffic “whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest.” The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated.

18

EASTERN SHIPPING V. POEA 166 SCRA 533



FACTS: Victoriano Saco was the employee of a vessel wh o wa s killed in an accident. Pursuant to a Memorandum Circular, his widow filed with the POEA an action against the vessel owner for the burial and funeral expenses of her deceased husband. The vessel owner averred that the husband wasn't an overseas contract worker and thus, the claim must have been filed somewhere else. Nonetheless, the POEA acted on the action and ordered that damages be paid to the widow. Part of what was appealed was that the Memorandum Circular by the POEA was an undue delegation of legislative power. HELD: The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No. 797, reading as follows: ... The governing Board of the Administration (POEA), as hereunder provided shall promulgate the necessary rules and regulations to govern the exercise of the adjudicatory functions of the Administration (POEA). Similar authorization had been granted the National Seamen Board, which, as earlier observed, had itself prescribed a standard shipping contract substantially the same as the format adopted by the POEA. The second challenge is more serious as it is true that legislative discretion as to the substantive contents of the law cannot be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the

legislature to the delegate. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court held: We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabaos.' (Italics supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a 'roving commission a wide and sweeping authority that is not canalized within banks that keep it from overflowing,' in short a clearly profligate and therefore invalid delegation of legislative powers. There are two accepted tests to determine whether or not there is a valid d elegation of legislativ e powe r, viz , the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot.


NOTES: ADMINISTRATIVE LAW PAGE - 21 Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative. The principle of non-delegation of powers is applicable to all the three major powers of the Government but is especially important in the case of the legislative power because of the many instances when its delegation is permitted. The occasions are rare when executive or judicial powers have to be delegated by the authorities to which they legally certain. In the case of the legislative power, however, such occasions have become more and more frequent, if not necessary. This had led to the observation that the delegation of legislative power has become the rule and its non-delegation the exception. The reasons given above for the delegation of legislative powers in general are particularly applicable to administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrative agencies the authority to issue rules to carry out the general provisions of the statute. This is called the "power of subordinate legislation." With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in' the details which the Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what are known as supplementary regulations, such as the implementing rules issued by the Department of Labor on the new Labor Code. These regulations have the force and effect of law. Memorandum Circular No. 2 is one such administrative regulation.

19

OSMEÑA V. ORBOS

220 SCRA 703 FACTS: Petitioner seeks to assail the unconstitutionality of a provision of a PD with respect to an unlawful delegation of legislative power to the Energy Regulatory Board. This is related to the implementation of the OPSF. Petitioner premises his arguments that what the OPSF entailed was taxation power which should have been lodged with the State and not to the ERB. HELD: Hence, it seems clear that while the funds collected may be referred to as taxes, they are exacted in the exercise of the police power of the State. Moreover, that the OPSF is a special fund is plain from the special treatment given it by E.O. 137. It is segregated from the general fund; and while it is placed in what the law refers to as a "trust liability account," the fund nonetheless remains subject to the scrutiny and review of the COA. The Court is satisfied that these measures comply with the constitutional description of a "special fund." Indeed, the practice is not without precedent. With regard to the alleged undue delegation of legislative power, the Court finds that the provision conferring the authority upon the ERB to impose additional amounts on petroleum products provides a sufficient standard by which the authority must be exercised. In addition to the general policy of the law to protect the local consumer by stabilizing and subsidizing domestic pump rates, Section 8(c) of P.D. 1956 expressly authorizes the ERB to impose additional amounts to augment the resources of the Fund. What petitioner would wish is the fixing of some definite, quantitative restriction, or "a specific limit on how much to tax." The Court is cited to this requirement by the petitioner on the premise that what is involved here is the power of taxation; but as


NOTES: ADMINISTRATIVE LAW PAGE - 22 already discussed, this is not the case. What is here involved is not so much the power of taxation as police power. Although the provision authorizing the ERB to impose additional amounts could be construed to refer to the power of taxation, it cannot be overlooked that the overriding consideration is to enable the delegate to act with expediency in carrying out the objectives of the law which are embraced by the police power of the State. The interplay and constant fluctuation of the various factors involved in the determination of the price of oil and petroleum products, and the frequently shifting need to either augment or exhaust the Fund, do not conveniently permit the setting of fixed or rigid parameters in the law as proposed by the petitioner. To do so would render the ERB unable to respond effectively so as to mitigate or avoid the undesirable consequences of such fluidity. As such, the standard as it is expressed, suffices to guide the delegate in the exercise of the delegated power, taking account of the circumstances under which it is to be exercised. For a valid delegation of power, it is essential that the law delegating the power must be (1) complete in itself, that is it must set forth the policy to be executed by the delegate and (2) it must fix a standard limits of which are sufficiently determinate or determinable to which the delegate must conform. The standard, as the Court has already stated, may even be implied. In that light, there can be no ground upon which to sustain the petition, inasmuch as the challenged law sets forth a determinable standard which guides the exercise of the power granted to the ERB. By the same token, the proper exercise of the delegated power may be tested with ease. It seems obvious that what the law intended was to permit the additional imposts for as long as there exists a need to protect the general public and the petroleum industry from the adverse consequences of pump rate fluctuations.

"Where the standards set up for the guidance of an administrative officer and the action taken are in fact recorded in the orders of such officer, so that Congress, the courts and the public are assured that the orders in the judgment of such officer conform to the legislative standard, there is no failure in the performance of the legislative functions." This Court thus finds no serious impediment to sustaining the validity of the legislation; the express purpose for which the imposts are permitted and the general objectives and purposes of the fund are readily discernible, and they constitute a sufficient standard upon which the delegation of power may be justified.

20

GUINGONA V. CARAGUE 196 SCRA 221

FACTS: Senators are questioning the constitutionality of the automatic appropriation for debt service in the 1990 budget. Petitioners argue that the said automatic appropriations under the aforesaid decrees of then President Marcos became functus oficio when h e was ousted in Feb ruary, 1 986; tha t upon the exp iration o f the one-man legislature in the person of President Marcos, the legislative power was restored to Congress on February 2, 1987 when the Constitution was ratified by the people; that there is a need for a new legislation by Congress providing for automatic appropriation, but Congress, up to the present, has not approved any such law; and thus the said P86.8 Billion automatic appropriation in the 1990 budget is an administrative act that rests on no law, and thus, it cannot be enforced.


NOTES: ADMINISTRATIVE LAW PAGE - 23 Moreover, petitioners contend that assuming arguendo that P.D. No. 81, P.D. No. 1177 and P.D. No. 1967 did not expire with the ouster of President Marcos, after the adoption of the 1987 Constitution, the said decrees are inoperative under Section 3, Article XVIII.

The automatic appropriation provides the flexibility for the effective execution of debt management policies.

HELD: The Court is not persuaded.

Ideally, the law must be complete in all its essential terms and conditions when it leaves the legislature so that there will be nothing left for the delegate to do when it reaches him except enforce it. If there are gaps in the law that will prevent its enforcement unless they are first filled, the delegate will then have been given the opportunity to step in the shoes of the legislature and exercise a discretion essentially legislative in order to repair the omissions. This is invalid delegation.

Section 3, Article XVIII of the Constitution recognizes that "All existing laws, decrees, executive orders, proclamations, letters of

Although the subject presidential decrees do not state specific amounts to be paid, necessitated by the very nature of the problem

instructions and other executive issuances not inconsistent with the Constitution shall remain operative until amended, repealed or

being addressed, the amounts nevertheless are made certain by the legislative parameters provided in the decrees. The Executive is not of unlimited discretion as to the amounts to be disbursed for debt servicing. The mandate is to pay only the principal, interest, taxes and other normal banking charges on the loans, credits or indebtedness, or on the bonds, debentures or security or other evidences of indebtedness sold in international markets incurred by virtue of the law, as and when they shall become due. No uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the books of the Treasury.

They assert that there must be definiteness, certainty and exactness in an appropriation, 11 otherwise it is an undue delegation of legislative power to the President who determines in advance the amount appropriated for the debt service.

revoked." This transitory provision of the Constitution has precisely been adopted by its framers to preserve the social order so that legislation by the then President Marcos may be recognized. Such laws are to remain in force and effect unless they are inconsistent with the Constitution or, are otherwise amended, repealed or revoked. An examination of the aforecited presidential decrees show the clear intent that the amounts needed to cover the payment of the principal and interest on all foreign loans, including those guaranteed by the national government, should be made available when they shall become due precisely without the necessity of periodic enactments of separate laws appropriating funds therefor, since both the periods and necessities are incapable of determination in advance.

REQUISITES FOR VALID DELEGATION 21

PELAEZ V. AUDITOR GENERAL 15 SCRA 569

FACTS: In accordance with the Revised Administrative Code, the President of the Philippines issued Executive Orders ordering the creation of


NOTES: ADMINISTRATIVE LAW PAGE - 24 new municipalities. This prompted the petitioner, who was then the vice-president of the country to file a special civil action for a writ of prohibition and preliminary injunction against the auditorgeneral, to restrain him of passing into audit any expenditure of public funds in implementation of said executive orders and/or any disbursement of said municipalities. Petitioner alleges that the said executive orders are null and void as they constitute undue delegation of legislative power. HELD: The legislature cannot delegate to the President the power to create municipalities. Whereas the power to fix such common boundary, in order to avoid or settle disputes of jurisdiction between adjoining municipalities, may partake of an administrative nature— involving the adoption of ways and means to carry into effect the law creating such municipalities—the authority to create municipal corporations is essentially legislative in nature. It is strictly a legislative function. Although the Congress may delegate to another branch of government the power to fill in the details in the execution, enforcement or administration of a law, it is essential to forestall a violation of the princip le of separation of po wers, that said law: 1. Be complete in itself—it must set forth therein the policy to be executed, carried out or implemented by the delegate 2. Fix a standard—the limits of which are sufficiently determined or determinable—to which the delegate must conform in performance of his functions. Without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and without the appropriate standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority.

COMPLETENESS ! !

22

The law gives the delegated body what to do Usually found in the text of the law

U.S. V. ANG TANG HO 43 PHIL. 1

FACTS: The legislature passed a law called “An Act penalizing the monopoly and holding of, and speculation in, palay, rice, and corn under extraordinary circumstances, regulating the distribution and sale thereof, and authorizing the Governor-General, with the consent of the Council of State, to issue the necessary rules and regulations therefor, and making an appropriation for this purpose.” Subsequen tly, the governor-gen eral ruled on the price and as consequence thereof, defendant was charged with overcharging. He was convicted and imprisoned. He now assails the validity of the statute for which he was found guilty of violating. The question here involves an analysis and construction of Act No. 2868, in so far as it authorizes the Governor-General to fix the price at which rice should be sold. It will be noted that section 1 authorizes the Governor-General, with the consent of the Council of State, for any cause resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgate temporary rules and emergency measures for carrying out the purposes of the Act. By its very terms, the promulgation of temporary rules and emergency measures is left to the discretion of the Governor-General. The Legislature does not undertake to specify or define under what conditions or for what reasons the Governor-General shall issue the proclamation, but says that it may be issued "for any cause," and leaves the question as to what is "any cause" to the discretion of the Governor-General.



HELD: By the organic law of the Philippine Islands and the Constitution of the United States all powers are vested in the Legislative, Executive and Judiciary. It is the duty of the Legislature to make the law; of the Executive to execute the law; and of the Judiciary to construe the law. The Legislature has no authority to execute or construe the law, the Executive has no authority to make or construe the law, and the Judiciary has no power to make or execute the law. A law must be complete, in all its terms and provisions, when it leaves the legislative branch of the government, and nothing must be left to the judgment of the electors or other appointee or delegate of the legislature, so that, in form and substance, it is a law in all its details in presenti, but which may be left to take effect in futuro, if necessary, upon the ascertainment of any prescribed fact or event. The line of cleavage between what is and what is not a delegation of legislative power is pointed out and clearly defined. As the Supreme Court of Wisconsin says: That no part of the legislative power can be delegated by the legislature to any other department of the government, executive or judicial, is a fundamental principle in constitutional law, essential to the integrity and maintenance of the system of government established by the constitution. Where an act is cloth ed with a ll the forms of law, an d is complete in and of itself, it may be provided that it shall become operative only upon some certain act or event, or, in like manner, that its operation shall be suspended.

The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action to depend. When Act No. 2868 is analyzed, it is the violation of the proclamation of the Governor-General which constitutes the crime. Without th at proclamatio n, it was no crime to sell rice at any price. In other words, the Legislature left it to the sole discretion of the Governor-General to say what was and what was not "any cause" for enforcing the act, and what was and what was not "an extraordinary rise in the price of palay, rice or corn," and under certain undefined conditions to fix the price at which rice should be sold, without regard to grade or quality, also to say whether a proclamation should be issued, if so, when, and whether or not the law should be enforced, how long it should be enforced, and when the law should be suspended. The Legislature did not specify or define what was "any cause," or what was "an extraordinary rise in the price of rice, palay or corn," Neither did it specify or define the conditions upon which the proclamation should be issued. In the absence of the proclamation no crime was committed. The alleged sale was made a crime, if at all, because the Governor-General issued the proclamation. Act No. 2 868, in so far as it u ndertakes to authorized the Govern orGeneral in his discretion to issue a proclamation, fixing the price of rice, and to make the sale of rice in violation of the price of rice, and to make the sale of rice in violation of the proclamation a crime, is unconstitutional and void.

STANDARDS ! !

Provides the quality that the body must follow the instruction Usually found in the whereas clauses of the law



23

PEO. V. ROSENTHAL 68 PHIL. 328

FACTS: Accused were charged of viola tions of the B lue Sky Law . The same has the following provision— Under section 2 of Act No. 2581, every person, partnership, association, or corporation attempting to offer to sell in the Philippines speculative securities of any kind or character whatsoever, is under obligation to file previously with the Insular Treasurer the various documents and papers enumerated therein and to pay the required tax of twenty pesos. Certain securities listed in section 3 are exempted from the operation of the Act. Section 5 imposes upon the Insular Treasurer the mandatory duty to examine the statements and documents thus filed and the additional duty to make or cause to be made, if deemed advisable by him, a detailed examination of the affairs of the applicant. Section 5 also provides that "whatever the said Treasurer of the Philippine Islands is satisfied, either with or without the examination herein provided, that any person, partnership, association or corporation is entitled to the right to offer its securities as above defined and provided for sale in the Philippine Islands, he shall issue to such person, partnership, association or corporation a certificate or permit reciting that such person, partnership, association or corporation has complied with the provisions of this Act, and that such person, partnership, association or corporation, its brokers or agents are entitled to offer the securities named in said certificate or permit for sale"; that "said Treasurer shall furthermore have authority, whenever in his judgment it is in the pu blic interest, to cancel said certificate or permit", and that "an appeal from the decision of the Insular Treasurer may be had within the period of thirty days to the Secretary of Finance."

HELD: Besides it is certainly apparent that if the conditions are within the power of the State to impose, they can only be ascertained by an executive officer. Reputation and character are quite tangible attributes, but there can be no legislative definition of them that can automatically attach to or identify individuals possessing them, and necessarily the aid of some executive agency must be invoked. The contention of appellees would take from government one of its most essential instrumentalities, of which the various national and state commissions are instances.

24

CERVANTES V. AUDITOR GENERAL 91 PHIL. 359

FACTS: This action commenced from the denial of the Auditor General of petitioner’s quarters allowance pursuant to being the manager of the National Abaca and Other Fibers Corporation (NAFCO). NAFCO was created through special charter and subsequently, a law was passed granting the President authority to effect reforms and changes in government-controlled and owned corporations. He then issued an executive order pursuant to this and formed a General Enterprises Council, one of the members composing this is the President himself, among others. Thereafter, pursuant to the authority of the General Enterprises Council and the objective of reforming and improving government-owned and controlled corporations, the GES cancelled the resolution issued in allowing the quarters allowance. One ground for its cancellation is the illegal increase in salaries. HELD:


NOTES: ADMINISTRATIVE LAW PAGE - 27 So long as the Legislature "lays down a policy and a standard is established by the statute" there is no undue delegation. (11 Am. Jur. 957). Republic Act No. 51 in authorizing the President of the Philippines, among others, to make reforms and changes in government-controlled corporations, lays down a standard and policy that the purpose shall be to meet the exigencies attendant upon the establishment of the free and independent government of the Philippines and to promote simplicity, economy and efficiency in their operations. The standard was set and the policy fixed. The President had to carry the mandate. This he did by promulgating the executive order in question which, tested by the rule above cited, does not constitute an undue delegation of legislative power.

25

PEO. V. JOLIFFE 105 PHIL. 677

FACTS: HELD:

26

BALBUNA V. SEC. OF EDUCATION 110 PHIL. 150

FACTS: An action seeking to enjoin the enforcement of the Compulsory Flag Ceremony law, wherein petitioners aver as one of the grounds against its validity is the violation of delegation of legislative powers for its failure to lay down any specific and definite standard by which the S ecretary of E ducation ma y be guide d in the preparation of those rules and regulations which he has been authorized to promulgate." HELD:

In our opinion, the requirements above-quoted constitute an adequate standard, to wit, simplicity and dignity of the flag ceremony and the singing of the National Anthem specially when contrasted with other standards heretofore upheld by the Courts: "public interest"; "public welfare”; Interest of law and order"; justice and equity and the substantial merits of the case"; or "adequate and efficient instruction". That the Legislature did not specify the details of the flag ceremony is no objection to the validity of the statute, for all tha t is required of it is the layin g down of standards and policy that will limit the discretion of the regulatory agency. To require the statute to establish in detail the manner of exercise of the delegated power would be to destroy the administrative flexibility that the delegation is intended to achieve.

27

A.L.A. SCHECTER POULTRY V. U.S. 295 U.S. 495

FACTS: Live poultry code was enacted pursuant to the National Industrial Recovery Act. The law gave the President unbridled discretion with respe ct to regulations and r ules that could b e impleme nted in preventing unfair competition. Note that there was no standards specifically set in defining what unfair competition is. HELD: To summarize and conclude upon this point: Section 3 of the Recovery Act is without precedent. It supplies no standards for any trade, industry, or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of codes to prescribe them. For that legislative undertaking, section 3 sets up no standards, aside from the statement of the general aims of rehabilitation, correction, and expansion described in section 1. In view of the


NOTES: ADMINISTRATIVE LAW PAGE - 28 scope of that broad declaration and of the *542 nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. We think that the code-making authority thus conferred is an unconstitutional delegation of legislative power.

POWERS AND FUNCTIONS OF ADMINISTRATIVE AGENCIES SOURCES AND SCOPE !

!

The powers and functions of administrative agencies are defined either in the Constitution or in legislation or in both Where created by statute or where their powers are left to be defined by legislation, the powers of administrative agencies are limited by the statutes creating them to those conferred expressly or by necessary or fair implication

28

GUERZON V. COURT OF APPEALS 164 SCRA 182

FACTS: Guerzon entered into a service station lease contract with Basic Landoil Energy Corporation, which was later acquired by Pilipinas Shell. The said contract contained a provision stating that the contract would end at a certain date. Further, respondent wrote Guerzon that upon the expiration of the contract, it would not be renewed. The date came and Guerzon still didn't vacate the premises. Shell wrote him a letter, furnishing the Bureau of Energy Utilization a copy thereof. The bureau on the other hand issued an order against Guerzon to vacate the premises as soon as possible.

HELD: Court has no recourse but to rule against the legality of the order, the Bureau of Energy Utilization not being empowered to issue it. Section 7 of P.D. No. 1206, as amended, is very clear as to the courses of action that the Bureau of Energy Utilization may take in case of a violation or non- compliance with any term or condition of any certificate, license or permit issued by the Bureau or any of its orders, decisions, rules or regulations. The Bureau may: (1) impose a fine not exceeding P1,000.00; and (2) in case of failure to pay the fine imposed or to cease and discontinue the violation or non-compliance, order the suspension, closure or stoppage of operations of the establishment of the guilty party. Its authority is limited to these two (2) options. It can do no more, as there is nothing in P.D. No. 1206, as amended, which empowers the Bureau to issue an order to vacate in case of a violation. As it is, jurisd iction to ord er a lessee to va cate th e lease d pr emises is vested in the civil courts in an appropriate case for unlawful detainer or accion publiciana [Secs. 19(2) and 33(2), B.P. Blg. 129, as amended.] There is nothing in P.D. No. 1206, as amended, that would suggest that the same or similar jurisdiction has been granted to the Bureau of Energy Utilization. It is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law and those that are necessarily implied in the exercise thereof.

CONSTRUCTION OF GRANT OF POWERS !

!

General language describing the powers and functions of an administrative body may be construed to extend no further than the specific duties and powers conferred in the same statute In determining whether a board or commission has a certain power, the authority given should be liberally


NOTES: ADMINISTRATIVE LAW PAGE - 29 construed in the light of the purposes for which it was created, and that which is incidentally necessary to a full exploitation of the legislative intent should be upheld as being germane to the law

28

LASTIMOSA V. VASQUEZ 243 SCRA 497

FACTS: A complaint for attempted rape was filed against the municipal mayor by the public health nurse. This was referred to an investigator who didn't find any prima facie case against the mayor and recommended the dismissal of the complaint. The Ombudsman disagreed with the findings and ordered for the corresponding charges to be filed against the mayor. The case was

In the existence of his power, the Ombudsman is authorized to call on prosecutors for assistance. It does not matter that the Office of the Provincial Prosecutor had already conducted the preliminary investigation and all that remained to be done was for the Office of the Provincial Prosecutor to file the corresponding case in court. Even if the preliminary investigation had been given over to the Provincial Prosecutor to conduct, his determination of the nature of the offense to be charged would still be subject to the approval of the Office of the Ombudsman.

29

MATIENZO V. ABELLERA 162 SCRA 1

FACTS: Respondents sought the licensing of their excess taxicab units

referred to the prosecutors who after conducting preliminary investigation, found no probable cause to file a case against the mayor. This prompted the Ombudsman to preventively suspend the prosecutors and filed administrative complaints against them.

pursuant to PD101, which was enacted to prevent the unlawful operations of clandestine taxicabs, etc. Petitioners sought the annulment of the provisional licenses granted to the respondents for the operation of their excess taxicab units.

HELD: he office of the Ombudsman has the power to "investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient." 14 This power has been held to include the investigation and prosecution of any crime committed by a public official regardless of whether the acts or omissions complained of are related to, or connected with, or arise from, the performance of his official duty 15 It is enough that the act or omission was committed by a public official. Hence, the crime of rape, when committed by a public official like a municipal mayor, is within the power of the Ombudsman to investigate and prosecute.

HELD: Indeed, a reading of Section 1, PD 101, shows a grant of powers to the respondent Board to issue provisional permits as a step towards the legalization of colorum taxicab operations without the alleged time limitation. There is nothing in Section 4, cited by the petitioners, to suggest the expiration of such powers six (6) months after promulgation of the Decree. Rather, it merely provides for the withdrawal of the State's waive r of its right to pun ish said colorum operators for their illegal acts. In other words, the cited section declares when the period of moratorium suspending the relentless drive to eliminate illegal operators shall end. Clearly, there is no impediment to the Board's exercise of jurisdiction under its broad powers under the Public Service Act to issue certificates of public


NOTES: ADMINISTRATIVE LAW PAGE - 30 convenience to achieve the avowed purpose of PD 101 (Sec. 16a, Public Service Act, Nov. 7, 1936). It is a settled principle of law that in determining whether a board or commission has a certain power, the authority given should be liberally construed in the light of the purposes for which it was created, and that which is incidentally necessary to a full implementation of the legislative intent should be upheld as being germane to the law. Necessarily, too, where the end is required, the appropriate means are deemed given

30

PASEI V. TORRES 212 SCRA 298

FACTS: Due to the numerous stories of Filipino workers being abused in Hong Kong, the DOLE suspended the recruitment by private employment agencies of OFW’s for Hong Kong. Pursuant to this department order, the POEA issued a memorandum circular laying down guidelines for government processing and deployment of workers. Petitioner sought the annulment of the orders, on the ground that they are unlawful and oppressive and in excess of the rule-making authority of the POEA and DOLE. HELD: The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice" (Ibid.).

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218). Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and filing. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties.

31

REALTY EXCHANGE VENTURE CORP. V. SENDINO 233 SCRA 665

FACTS: Sendino entered into a reservation agreement with REVI for a parcel of land in a subdivision. She was able to complete payment


NOTES: ADMINISTRATIVE LAW PAGE - 31 for reservation but REVI wrote to her that the agreement was cancelled due to non-compliance by Sendino with the submission of some requirements. This prompted the respondent to file a complaint for specific performance with the HLURB, which decided in favor of Sandino. HELD: There is no question that a statute may vest exclusive srcinal jurisdiction in an administrative agency over certain disputes and controversies falling within the agency's special expertise. In fine, the HLURB-OAALA acted within the scope of its authority in ordering petitioners to comply and continue with the sale of the house and lot subject of the contract between the srcinal parties. It cannot be gainsaid that the quasi-judicial functions exercised by the body are necessary incidents to the proper exercise of its powers and functions under E.O. 90 and the laws enacted delineating the scope of authority of its Board of Commissioners. Denying the body those functions so necessary in carrying out its power to regulate housing and land use results in its effective emasculation as an important regulatory body in an area vital to the national economy. The acute housing shortage problem has prompted thousands of middle and lower class buyers of houses and lots and condominium units to enter into all sorts of agreements with private housing developers involving all manner of installment schemes under contracts drawn exclusively by these developers. Many of these virtual contracts of adhesion entrap innocent buyers by requiring cash deposits under reservation agreements which include, sometimes in the fine print, default clauses guaranteeing huge monetary windfalls for the developers in the event that their buyers (oftentimes for the flimsiest of reasons) default by failing to come up with certain requirements. While the Court can take judicial

notice of this pernicious practice, it can only hope that future legislation would address the need to protect the innocent middle or lower class home purchaser. In the case of the individual victim, this Court can only go to the extent of awarding such damages as may be proper under the peculiar circumstances of the cases brought before it.

32

MKSE V. SECRETARY 14 SCRA 620

FACTS: Petitioner is denied authority to operate until it lists and trades stocks not yet traded in the Manila Stock Exchange. The petitioner averred that such is tantamount to prohibition since it is impossible to do such condition given that Manila Stock Exchange has long been the primary stock exchange in the country. HELD: It is fundamental that an administrative officer has only such powers as are expressly granted to him by the statute, and those necessarily implied in the exercise thereof. In its brief and its resolution now subject to review, the Commission cites no provision expressly supporting its rule. Nevertheless, it suggests that the power is "necessary for the execution of the functions vested in it"; but it makes no explanation, perhaps relying on the reasons advanced in support of its position that trading of the same securities in two or more stock exchanges, fails to give protection to the investors, besides contravening public interest. (Of this, we shall treat later).

EXECUTIVE)/ADMINISTRATIVE FUNCTIONS !

The powers and functions usually granted to and exercised by administrative agencies are the following—rule making,


NOTES: ADMINISTRATIVE LAW PAGE - 32 adjudication, and such incidental powers such as investigating, supervising, prosecuting, advising, declaring, and informally adjudicating

ADMINISTRATIVE RULE-MAKING LEGISLATIVE POWER !

OR

QUASI-

It is the power to promulgate rules and regulations or general orders which are legally binding and receive statutory force upon going into effect and the formulation of interpretative rulings or regulations which don't receive statutory force but are accorded great weight when questioned

TESTS DETERMINING NATURE OF POWER !

! !

The test as to whether a power is strictly legislative or whether it is administrative is to determine its exercise involves a discretion as to what law shall be or merely the authority to fix, the details in the execution or enforcement of a policy set out in the law itself The first is legislative The second is administrative

GENERAL KINDS OF ADMINISTRATIVE RULES AND REGULATIONS 1. 2. 3.

33

Supplementary or detailed legislation—rules and regulations by reason of particular delegation of authority Interpretative rules and regulations—rules and regulations constructing or interpreting the statutes being administered Contingent legislation—rules and regulations involving determination under a delegated power whether a statute shall go into effect

PICOP V. DEPUTY EXEC. SECRETARY 184 SCRA 606

FACTS: Petitioner was granted a timber license agreement. On a subsequent act, the boundary covered by the license was established. Thereafter, a timber license agreement was also granted to respondent, which was adjacent to the land covered by petitioner. Petitioner then complained because of the alleged encroachmen t of the area by respondent. Because of this, it was found out that it was actually petitioner who was depriving the other a certain area of land. The amendment done to the TLA was found to be erroneous. To this judgment, the petitioner seeks a reversal. HELD: In reviewing administrative decisions of the Executive branch of the Government, . . . the findings of fact made therein must be respected, so long as they are supported by substantial evidence, even if not overwhelming or prepondera nt. It is not for the reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses, or otherwise substitute its own judgment fo r that of the administrativ e agency on the sufficiency o f the evidence. It is a well-recognized principle that purely administrative and discretionary functions may not be interfered with by the courts. In general, courts have no supervising power over the proceedings and actions of the administrative departments of the government. This is generally true with respect to acts involving the exercise of judgment or discr etion, and findings of facts. Public respondents Minister of Natural Resources and Deputy Executive Secretary, the latter acting for and in behalf and with the authority of the President, did not abuse their discretion when they ordered the amendment or correction of petitioner's TLA No. 43-3.


NOTES: ADMINISTRATIVE LAW PAGE - 33 After finding that there was an authorized increase in the concession area of PICOP, the correction of its license was a necessary consequence.

including the power to summon witnesses by subpoena or subpoena duces tecum, administer oaths, take testimony or evidence relevant to the investigation.

34

Pursuant to this, a subpoena was issued for the Acting Public Service Officer Of Manila to assist in the investigation of a case filed with the agency. Instead of following the subpoena, the officer filed with the court for prohibition among other reliefs.

EVANGELISTA V. JARENCIO 68 SCRA 99

FACTS: Pursuant to his special powers and duties under Section 64 of the Revised Administrative Code, 1 the President of the Philippines created the Presidential Agency on Reforms and Government Operations (PARGO) under Executive Order No. 4 of January 7, 1966. 2 Purposedly, he charged the Agency with the following functions and responsibilities: b. To investigate all activities involving or affecting immoral practices, graft and corruptions, smuggling (physical or technical), lawlessness, subversion, and all other activities which are prejudicial to the government and the public interests, and to submit proper recommendations to the President of the Philippines. c. To investigate cases of graft and corruption and violations of Republic Acts Nos. 1379 and 3019, and gather necessary evidence to establish prima facie, acts of graft and acquisition of unlawfully amassed wealth ... . h. To receive and evaluate, and to conduct fact-finding investigations of sworn complaints against the acts, conduct or behavior of any public official or employee and to file and prosecute the proper charges with the appropriate agency. For a realistic performance of these functions, the President vested in the Agency all the powers of an investigating committee

HELD: It has been essayed that the life blood of the administrative process is the flow of fact, the gathering, the organization and the analysis of evidence. 7 Investigations are useful for all administrative functions, not only for rule making, adjudication, and licensing, but also for prosecuting, for supervising and directing, for determining general policy, for recommending, legislation, and for purposes no more specific than illuminating obscure areas to find out what if anything should be done. 8 An administrative agency may be authorized to make investigations, not only in proceedings of a legislative or judicial nature, but also in proceedings whose sole purpose is to obtain information upon which future action of a legislative or judicial nature may be taken 9 and may require the attendance of witnesses in proceedings of a purely investigatory nature. It may conduct general inquiries into evils calling for correction, and to report findings to appropriate bodies and make recommendatio ns for actions. 10 We recognize that in the case before Us, petitioner Agency draws its subpoena power from Executive Order No. 4, para. 5 which, in an effectuating mood, empowered it to "summon witness, administer oaths, and take testimony relevant to the investigation" 11 with the authority "to require the production of documents under a subpoena duces tecum or otherwise, subject in all respects to the same restrictions and qualifications as apply in judicial


NOTES: ADMINISTRATIVE LAW PAGE - 34 proceedings of a similar character." 12 Such subpoena power operates in extenso to all the functions of the Agency as laid out in the aforequoted sub-paragraphs (b),(e), and (h). It is not bordered by nor is it merely exercisable, as respondents would have it, in quasi-judicial or adjudicatory function under sub-paragraph (b). The functions enumerated in all these sub-paragraphs (b), (e), and (h) interlink or intertwine with one another with the principal aim of meeting the very purpose of the creation of the Agency, which is to forestall and erode nefarious activities and anomalies in the civil service. To hold that the subpoena power of the Agency is confined to mere quasi-judicial or adjudicatory functions would therefore imperil or inactiviate the Agency in its investigatory functions under sub-paragraphs (e) and (h). More than that, the enabling authority itself (Executive Order No. 4, para. 5) fixes no distinction when and in what function should the subpoena power be

subpoena. Clearly, what the Rules speaks of is a judicial subpoena, one procurable from and issuable by a competent court, and not an administrative subpoena. To an extent, therefore, the "restrictions and qualifications" referred to in Section 580 of the Revised Administrative Code could mean the restraints against infringement of constitutional rights or when the subpoena is unreasonable or oppressive and when the relevancy of the books, documents or things does not appear. 15

exercised. Similarly, We see no reason to depart from the established rule that forbids differentiation when the law itself makes none.

enough that the investigation be for a lawfully authorized purpose. 18 The purpose of the subpoena is to discover evidence, not to prove a pending charge, but upon which to make one if the discovered evidence so justifies. 19 Its obligation cannot rest on a trial of the value of testimony sought; it is enough that the proposed investigation be for a lawfully authorized purpose, and that the proposed witness be claimed to have information that might shed some helpful light. 20 Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues on litigations it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of srcinal inquiry. The administrative agency has the power of inquisition which is not dependent upon a case or controversy in order to get evidence, but can investigate merely on suspicion that the law is being violated or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too may take steps to inform itself as to whether the re is prob able violation of the law. 21 In su m, it may be

Nor could We impress upon this subpoena power the alleged strictures of a subpoena issued under the Rules of Court 13 to abridge its application. The seeming proviso in Section 580 of the Revised Administrative Code that the right to summon witnesses and the authority to require the production of documents under a subpoena duces tecum or otherwise shall be "subject in all respects to the same restrictions and qualifications as apply in judicial proceedings of a similar character" cannot be validly seized upon to require, in respondents' formulation, that, as in a subpoena under the Rules, a specific case must be pending before a court for hearing or trial and that the hearing or trial must be in connection with the exercise of the court's judicial or adjudicato ry functions 14 before a non-judicial subpoena can be issued by an administrative agency like petitioner Agency. It must be emphasized, however, that an administrative subpoena differs in essence from a judicial

Rightly, administrative agencies may enforce subpoenas issued in the course of investigations, whether or not adjudication is involved, and whether or not probable cause is shown 16 and even before the issuance of a complaint. 17 It is not necessary, as in the case of a warrant, that a specific charge or complaint of violation of law be pending or that the order be made pursuant to one. It is


NOTES: ADMINISTRATIVE LAW PAGE - 35 stated that a subpoena meets the requirements for enforcement if the inquiry is (1) within the authority of the agency; (2) the demand is not too indefinite; and (3) the information is reasonably relevant.

ADMINISTRATIVE INTERPRETATION !

!

!

!

!

35

CONSTRUCTION

AND

This provides a practical guide as to how the agency will seek to apply the law and as experienced and informed judgment to which courts and litigan ts may properly resort for guidance One who chooses to rely upon an interpretative regulation does so at his own peril and stands the risk of its not being followed by the courts An erroneou s constructio n of a statute by an administrativ e agency cannot operate to confer a legal right in accordance with such construction The administrative construction doesn't and cannot control the court’s decision as to the proper construction of a statute but generally or in particular circumstances it is given great weight and has a very persuasive influence and may actually be regarded by the courts as the controlling factor A construction is not binding on them or th eir successors if thereafter they become satisfied that a different construction should be given

ESPAÑOL V. CHAIRMAN, PVA, 137 SCRA 314

FACTS: Petitioner was a widow of a military personnel who served during World War 2. Her application for pension from the PVA was approved but subsequently, it was cancelled due to the administrative policy of the PVA not to grant anymore monthly

pensions to those already receiving from the USVA. After 22 years from this cancellation, petitioner files for mandamus. HELD: The contention of appellant PVA that the action of appellee Maria U. Español to compel the restoration of her monthly pension and that of her children, effective from the date of cancellation on November 1, 1951, has already prescribed, inasmuch as the same was filed more than 10 years from the date of cancellation, is without merit. Article 1144 of the New Civil Code provides that actions based on an obligation created by law shall be brought within 10 years from the time the right of action accrues. It is important to reckon the date, when the right of action accrues, as the same is the beginning for counting the 10-year prescriptive period. The right of action accrues when there exists a cause of action, which consists of 3 elements, namely: a) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; b) an obligation on the part of defendant to respect such right; and c) an act or omission on the part of such defendant violative of the righ t of th e plaintiff (Cole vs. Vda. d e Gregorio, 116 SCRA 670 [1982]; Mathay vs. Consolidated Bank & Trust Co., 58 SCRA 559 [1974]; Vda. de Enriquez vs. De la Cruz, 54 SCRA 1 [1973]). It is only when the last element occurs or takes place that it can be said in law that a cause of action has arisen (Cole vs. Vda. de Gregorio, supra). The appellee cannot be said to have a cause of action, in compelling appellant to continue paying her monthly pension on November 1, 1951, because appellant's act of cancellation, being pursuant to an administrative policy, cannot be considered a violation of appellee 's right to receive her mo nthly pension.



It is elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, are entitled to great respect (Sierra Madre Trust vs. Secretary of Agriculture and Natural Resources, 121 SCRA 384 [1983]; Asturias Sugar Central Inc. vs. Commissioner of Customs, 29 SCRA 617 [1969]; Antique Sawmill Inc. vs. Zayco, et al., 17 SCRA 316 [1966]), and have in their favor a presumption of legality. Thus, appellant's act of cancelling appellee's monthly pension being presumed legal and valid, cannot be taken as a violation of appellee's right to receive her monthly pension under R.A. No. 65. In the case of Del Mar vs. The Philippine Veterans Administration (51 SCRA 340 [1973]), this Court did not consider prescription in favor of PVA, even though the action of Del Mar was filed on June 20, 1964 or more than 10 years from the cancellation of his monthly pension in March, 1950; because the action of Del Mar was basically to declare the questioned administrative policy invalid, which action does not prescribe. It is only when this Court declared invalid the questioned administrative policy in the case of Del Mar vs. The Philippine Veterans Administration, supra, promulgated on June 27, 1973, can the appellee be said to have a cause of action to compel appellant to resume her monthly pension; because it is at that point in time, when the presumption of legality of the questioned administrative policy had been rebutted and thus it can be said with certainty that appellant's act was in violation of appellee's right to receive her monthly pension. The 10-year prescriptive period, therefore, should be counted from June 27, 1973 when the case of Del Mar vs. The Philippine Veterans Administration, supra, was promulgated, and not from

November 1, 1951, the date of cancellation by appellant of appellee's pension. The action of appellee, which was brought on February 25, 1974, is therefore well within the 10-year prescriptive period.

36

VICTORIAS MILLING V. SOCIAL SECURITY SYSTEM 4 SCRA 627

FACTS: HELD: A rule is binding on the courts so lon g as the procedu re fixed for its promulgation is followed and its scope is within the statute granted by the legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom ...." On the other hand, "administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means." Indeed, it cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be faithfully executed. No lesser administrative, executive office, or agency then can, contrary to the express language of the Constitution, assert for itself a more extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict compliance with the legislative enactment.

37

HILADO V. CIR 100 PHIL. 288

FACTS: Emilio Hilado filed his income tax return for 1951 with the treasurer of Bacolod City, claiming a deductible item of P12,837.65 from his gross income pursuant to General Circular V-123 issued by the Collector of Internal Revenue. The Secretary of Finance,



through the Collector, issued General Circular V-139 which revoked and declared void Circular V-123; and laid down the rule[s] that losses of property which occurred in World War II from fires, storms, shipwreck or other casualty, or from robbery, theft, or embezzlement are deductible in the year of actual loss or destruction of said property. The deductions were disallowed.

! !

HELD: Philippines Internal Revenue Laws are not political in nature and as such were continued in force during the period of enemy occupation and in effect were actually enforced by the occupation government. Such tax laws are deemed to be laws of the occupied territory and not of the occupying enemy. As of the end of 1945, there was no law which Hilado could claim for the destruction of his properties during the battle for the liberation of the Philippines. Under the Philippine Rehabilitation Act of 1948, the payment of claims by the War Damage Commission depended upon its discretions non-payment of which does not give rise to any enforceable right. Assuming that the loss (deductible item) represents a portion of the 75% of his war damage claim, the amount would be at most a proper deduction of his 1950 gross income (not on his 1951 gross income) as the last installment and notice of discontinuation of payment by the War Damage Commission was made in 1950.

38

CO V. CA 227 SCRA 444

FACTS: HELD:

PROMULGATION OF RULES

!

!

39

There is no constitutional necessity for a hearing as a prerequisite to the promulgation of a general regulation by an administrative body hence in the absence of any a statutory restriction an administrative agency may ascertain in any manner It sees fit what rules what rules should be made When the rule is p rocedural, no no tice is required Notice is also not required in the preparation of substantive rules affecting the class at large and the questions to be resolved involve the use of wide discretion which has been committed to the rule-making agency But if the rule or order is directed specifically to a party or of a compact group and the administrative agency exercises only a limited degree of discretion, actual notice and opportunity for hearing may be required

TAXICAB OPERATORS V. BOT 117 SCRA 597

FACTS: The Board of Transportation issued a memorandum circular prohibiting the operation as taxis of cars, which were more than 6 years old. P ursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. HELD: Presidential Decree No. 101 grants to the Board of Transportation the power


NOTES: ADMINISTRATIVE LAW PAGE - 38 4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by operators of public utility motor vehicles. Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers: Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board shag proceed promptly along the method of legislative inquiry. Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol Group, the support agencies within the Department of Public Works, Transportation and Communications, or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy, plan or program in the implementation of this Decree. The Board may also can conferences, require the submission of position papers or other documents, information, or data by operators or other persons that may be affected by the implementation of this Decree, or employ any other suitable means of inquiry. In support of their submission that they were denied procedural due process, petitioners contend that they were not caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular.

It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT. Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972): Pevious notice and hearing as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis supplied) Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore, their actual physical condition should be taken into consideration at the time of


NOTES: ADMINISTRATIVE LAW PAGE - 39 registration. As public contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. With th at stan dard of reaso nableness and absence of arb itrariness, the requirement of due process has been met.

40

TAÑADA V. TUVERA 146 SCRA 446

general applicability” is a mandated by law, and is a requirement of due process. Presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise impose a burden on the people, such as tax and revenue measures fall within this category. Before a person may be bound by law, he must be first be officially and specifically informed of its contents. When not published, such shall have no force and effect. However, the implementation/enforcement of the presidential decrees prior to their publication in the Gazette is an operative facts, which may have consequences which cannot be justly ignored.

RATE-FIXING POWERS !

! !

FACTS: Invoking the people’s right to be informed on matters of public concern as well as the principle that laws to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated, Tañada, et.al. seek a writ of mandamus to compel public officials to publish presidential decrees, letters of instructions, general orders, proclamation, executive orders, letter of implementation and administrative orders.

HELD: The publication in the Official Gazette is required to give the general public adequate notice of the various laws which are to regulate their actins and conduct as citizens. Publication is necessary to apprise the public of the contents of regulations and make penalties binding on the person affected thereby. The publication of all presidential issuances of a “public nature” or “of

The power to fix or limit the rates or charges exacted by public service corporations may be conferred upon administrative agencies without involving an unlawful delegation of legislative power This also applies to the regulation of prices The only standard which the legislature must prescribe for the guidance of the administrative authorities is that the rate must be reasonable and just

RATE-FIXING JUDICIAL !

! !

WHEN

LEGISLATIVE;

WHEN

QUASI-

When rules and/or rates laid down by an administrative agency are meant to apply to all enterprises of a given kind throughout the Philippines, they may partake of a legislative character If its quasi-judicial in character, then a valid exercise would need notice and hearing Dean Roy: on the question of whether it is quasi-judicial or quasi-legislative, it depends on the circumstances. If the rates are to be applied industry-wide, then it might be held as quasi-legislative but when the consumers assert their right to be heard, then it may be held as quasi-judicial.



!

Following the latest rebate on electrical costs of MERALCO, it would depend on your present consumption. If you would still look on the history of every consumption, then it would never end. Provisional increase may be withdrawn and doesn't repose any right—this is subject to return. This is the morale of the story of the MERALCO cases.

REVIEW ON THE TYPES OF RULES AND THE CRITERIA FOR THE RULES IMPLEMENTING THE LEGISLATION ! ! !

Internal rules Rules of procedure Rules implementing the legislation Authority o Scope o o

41

Reasonableness

PHIL. CONSUMERS V . SEC. OF EDUCATION 153 SCRA 622

FACTS: Pursuant to the recommendation of a special task force created for the purpose of assessing tuition fee increases in private higher education institutions, the DECS issued an order authorizing the increase of tuition fees by 15-20%. Upon opposition from petitioner, the margin was deducted to 10-15%. Despite this however, the petitioner questioned the authorization of this increase by the DECS. HELD: The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative function. If it were a legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process. As regards

rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity of such rates. Wh en the rules an d/or rates laid do wn by an administrative agency are meant to apply to all enterprises of a given kind throughout the country, they may partake of a legislative character. Where the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function is quasi-judicial in character. 9a Is Department Order No. 37 issued by the DECS in the exercise of its legislative function? We believe so. The assailed Department Order prescribes the maximum school fees that may be charged by all private schools in the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are not essential to the validity of its issuance. This observation notwithstanding, there is a failure on the part of the petitioner to show clear and convincing evidence of such arbitrariness. As the record of the case discloses, the DECS is not without any justification for the issuance of the questioned Department Order. It would be reasonable to assume that the report of the Task Force created by the DECS, on which it based its decision to allow an increase in school fees, was made judiciously. Moreover, upon the instance of the petitioner, as it so admits in its Petition, the DECS had actually reduced the srcinal rates of 15% to 20% down to 10% to 15%, accordingly. Under the circumstances peculiar to this case, We cannot consider the assailed Department Order arbitrary. Under the Rules of Court, it is presumed that official duty has been regularly performed. 10 In the absence of proof to the contrary, that presumption prevails. This being so, the burden of proof is on the party assailing the regularity of official proceedings. In the case


NOTES: ADMINISTRATIVE LAW PAGE - 41 at bar, the presumption.

42

petitioner

has

not

successfully

disputed

PHILCOMSAT V. ALCUAZ 180 SCRA 218

FACTS: Petitioner was a holder of franchise allowing it to operate stations and equipment for international satellite communications. It is also authorized to construct facilities for the delivery of telecommunication services. Under the franchise afforded it, it was exempt from the jurisdiction of the Public Service Commission, now the NTC. However, in pursuant to a later Executive Order, Petitioner was placed under its jurisdiction. NTC allowed it to continue its operations but was ordered to reduce its present authorized rates by 15%. HELD: In performance of such act, the respondent performed a function, which partook of a quasi-judicial character, the valid exercise of which demands previous notice and hearing. Aside from statute, the necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the circumstances involved. In so far as generalization is possible in view of the great variety of a dministrative proceedings, it may b e sta ted as a general rule that notice and hearing are not essential to the validity of administrative action where the administrative body acts in the exercise of executive, administrative, legislative functions; but where a public administrative body acts in a judicial or quasijudicial matter, and its acts are particular and immediate rather than general and prospective, the person whose rights and property may be affected by the action is entitled to notice and hearing.

43

184 SCRA 517

the

FACTS: PLDT filed an application with respondent for the approval of rates for Digital Transmission Services. Responden t issued a notice of hearing and petitioners were not able to receive any notice and they weren’t included in the list of affected parties. HELD: As to the required notice, it is impossib le for the respond ent to give personal notice to all parties affected, not all of them being known to it. More than that, there is no dispute that the notice of hearing was published. Petitioners have timely opportunity to oppose the petition in question so that the lack of notice is cured. Under the circumstances, respondent can be deemed to have substantially complied with the requirements. In any event, the provisional nature of the authority and the fact that the primary application shall be given a full hearing are the safeguards against its abuse.

44

REPUBLIC V. MEDINA 41 SCRA 643

FACTS: MERALCO filed an application with the Public Service Commission seeking approval of revised rate schedules, with increased charges, claiming that the floating exchange rate and economic conditions resulting therefrom increased its operating and maintenance expenses by more than 40%, and likewise increased the peso cost of servicing its foreign debts, causing it to incur an operational deficit and net loss of over one million pesos a month. Embodied in the application was a motion "for immediate provision approval of proposed rates," which, over the opposition of many was granted by the respondent Commission with a

RCPI V. NTC MA. ANGELA LEONOR C. AGUINALDO ATENEO LAW 2D BATCH 2010

NOTES: ADMINISTRATIVE LAW PAGE - 42 condition that if after hearing, the application may still be disapproved.

rise to speculation, rumours and gossip by hasty or ill-considered action.

The commissioner ordered the books of accounts of MERALCO to be examined and after hearing on the application, the Commission approved the same with minimal modifications.

REQUISITES FOR VALIDITY OF RULES 1. 2.

HELD: It is concluded that the claim of denial of due process is unfounded and must be overruled. It is well to note here that the trial and hearings were not continuous, and intervals of several days, sometimes of a week or more, took place. The main outlines of the case for respondent Meralco (the adverse effect of the floating rate on the cost of operation) appeared from the testimony in chief of applicant's witness Antonio Ozaeta, whose cross examination was lengthy, occupying over 130 pages of the transcript. Hearings were held morning and afternoon, but only once did they proceed beyond 5 p.m., and most afternoon sessions starting at 2:00 p.m. ended at 4 or earlier. No undue restrictions were placed on oppositors until the Public Service Commission, apparently realizing that its policy to allow even individual consumers to cross examine independently applicant's witnesses was unworkable and would lead only to confusion, decided to limit the nu mber of cross examiners. This lay within the trier's discretion and should not be interfered with in the absence of abuse, which is not here shown. The foregoing consider and should not, however, be understood as an approval of the practice of unnecessarily curtailing the opportunities of parties litigant, barring exceptional circumstances. Otherwise, suspicion is aroused, and the public confidence eroded, to the detriment of the administration of justice. It is the duty of tribunals, judicial or quasi-judicial, not only to be just but to appear to be actually so. It is equally their task to sedulously avoid giving

3.

That the rules and regulations must have been issued on the authority of law (AUTHORITY) That the rules and regulations must be within the scope and purview of the laws (SCOPE) That said rules and regulations must be reasonable (REASONABLENESS)

ISSUED ON AUTHORITY OF LAW !

45

The authority should essentially be based upon some legislative act

VDA. DE PIÑEDA V. PEÑA 187 SCRA 22

FACTS: The "Ped" mining claim was located by Pedro Sibayan. After his death, his heirs Miguela and Aleja Sibayan executed a Deed of Extra-Judicial Settlement wherein they waived their rights and interest over the "Ped" claim, among others, in favor of co-heir Feliza Sibayan. Feliza then transferred said claims to Sofia Reyes. The "Ullmann" mining claim was located by Elvira Carmelo and was subsequen tly transferred to Jose ph Palengaoan . Thereafter, the Reyes, KM. 21 Mining Association was formed but was later converted into the KM. 21 Exploration Corporation, to which the members conveyed their respective mining claims, including the "Ped" and "Ullmann" claims. Ultimately, the claims were assigned to th e Baguio Gold Min ing Company fo r operation.


NOTES: ADMINISTRATIVE LAW PAGE - 43 A civil action was filed by the petitioners against Feliza on the ground that the deed of extrajudicial settlement executed before was falsified, wherein an amicable settlement was entered into by the parties. The Ped claim was returned to the petitioners. Thereafter, a law was passed ordering that existing mining claims should file an application. Petitioners failed to comply. HELD: On the issue of jurisdiction…. On the issue of jurisdiction, petitioners contend that public respondents may not validly and legally take cognizance of an issue not raised in the complaint, i.e., the issue of the validity of the "Ped" mining claim. This assertion is mistaken. Petitioners had filed the protest case pursuant to Pres. Decree No. 463 which vests the Bureau of Mines with jurisdictio n over protests involving mining claims [Section 48, Pres. Decree No. 463]. Under the same Decree, Section 90 confers upon the Secretary of Natural Resources, upon recommendation of the Director of Mines, the authority to issue rules, regulations and orders necessary to carry out the provisions and purposes of the Decree. In accordance with the statutory grant of rule-making power, the Department Secretary on May 17, 1975 issued the Consolidated Mines Administrative Order Implementing Pres. Decree No. 463, which was published in th e Official Gazette on June 16, 1975. One such implementing rule is Section 128, which respondent Minister of Natural Resources relied upon in his decision to dispose of the jurisdictional issue raise d by petitioners. Section 128 provides:

Sec. 128. Issues Joined . . . The Director, or the Secretary, in case of appeals, may motu proprio look into the validity of mining claims, whether raised as an issue or not. It is established in jurisprudence that Congress may validly delegate to administrative agencies the authority to promulgate rules and regulations to implement a given legislation and effectuate its policies [People v. Exconde, 101 Phil. 1125 (1957); Director of Forestry v. Munoz, G.R. No. L-24796, June 28, 1968, 23 SCRA 1183]. In order to be valid, the administrative regulation must be germane to the objects and purposes of the law, conform to the standards that the law prescribes and must relate solely to carrying into effect the general provisions of the law. With these guidelines, Section 128 of the implementing rules invoked by public respondents as basis for their jurisdiction cannot be tainted with invalidity. First, it was issued by the Department Head pursuant to validly delegated rule-making powers. Second, it does not contravene the provisions of Pres. Decree No. 463, nor does it expand the coverage of the Decree. Section 128 merely prescribes a procedural rule to implement the general provisions of the enabling law. It does not amend or extend the provisions of the statute. Neither can it be maintained that such an implementing rule results in a denial of procedural due process, for it is axiomatic in administrative law that what the law prohibits is not the absence of previous notice, but the absolute absence thereof and lack of opportunity to be heard [Catura v. Court of Industrial Relations, G.R. No. L-27392, January 30,1971, 37 SCRA 303, citing De Borja v. Tan, 93 Phil. 167 (1953)]. In this case, petitioners were afforded the



opportunity to be heard on the validity of the "Ped" mining claim when they submitte d rebuttal evidence on appeal. Section 128, being a valid implementing rule, has the force and effect of law. Thus, public respondents were duly empowered to inquire into the validity of the mining claims involved in the protest case, even if not raised in issue. On the issue of due process… As a rule, the courts will not interfere with purely administrative matters involving the exercise of judgment and discretion, and findings of fact, of the administrative agency. The exception is when there is a clear showing that the agency acted arbitrarily or with grave abuse of discretion or when it acted in a capricious manner such that its action may amount to an excess or lack of jurisdiction. In this case, the findings of the director was solely based on the evidence of the private respondents and denied the evidence presented in rebuttal by petitioners. There was grave abuse of discretion.

WITHIN SCOPE OF LAW !

!

!

For administrative rules and regulations to be valid, must be within the authority conferred upon the administrative agency The regulations adopted under legislative authority must be in execution of or supplementary to, but not in conflict with, the law itself Such delegated power cannot extend to amending or adding to the requirements of the statute itself, but it is to be presumed that the recognitions adopted were to carry out only the provisions of the statute and not to embrace matters not covered, nor intended to be covered

46

It must be germane to the law and conform to the standards that the law prescribes

LUZON POLYMERS V. CLAVE 209 SCRA 711

FACTS: The emergency allowance of employees in the private sector has its srcin in Presidential Decree No. 390, granting said allowance to government employees. Marcos issued an LOI directing the Minister of Labor to do necessary implementations for the private sector. Under this statutory backdrop, petitioner, a corporation with an authorized capital stock of P1 million and total assets of P2,656,793.45 as of December 31, 1974, was named a respondent in a complaint for underpayment of emergency allowance filed before Regional Office No. 4 of the Department of Labor in 1976 by the Luzon Polymers Labor Union (FFW) on behalf of 185 of its members. Alleging that since February 1974, regular employees of petitioner corporation who were members of the union had been receiving P1.15 daily or P30.00 monthly emergency allowance, complainant-union contended that its members were entitled to P50.00 monthly emergency allowance in as much as their employer's total assets were over and above P1 million. For its part, petitioner claimed that since it had fully complied with LOI No. 174, it had not underpaid its employees. HELD: To start with, paragraph 3 of LOI No. 174 mandates the grant of P50 a month emergency allowance for employees of "enterprises capitalized at P1 million to P4 million or more" and P30 for employees of "enterprises capitalized at P100,000 to P1 million." While the determinative factor for the amount of emergency allowance is simply the capitalization of the employer concerned,


NOTES: ADMINISTRATIVE LAW PAGE - 45 the problem lies in the fact that the same provision of LOI No. 174 categorizes an enterprise capitalized at P1 million as under both the P50 and the P30 brackets of emergency allowance. This grey area, however, was clarified by the Interpretative Bulletin on LOI No. 174 issued by the Department of Labor. Sec. 5 thereof which is qu oted above states th at an employer has to pa y the fiftypesos allowance "where the authorized capital stock of the corporation, or the total assets in the case of other undertakings, exceeds P1 million or thirty pesos" where the authorized capital stock of the corporation, or the total assets in the case of other undertakings, is not less than P100,000 but not more than P1 million." Clearly then, the petitioner falls under the bracket of employers required to give a thirty-peso monthly emergency allowance under LOI No. 174 in view of the undisputed fact that it is a "domestic corporation duly organized and existing under Philippine laws" with an authorized capital stock of one million pesos. What se ems to have muddled the matter are the provisions of Se c. 7 of the Rules and Regulations Implementing P.D. No. 525. Under that section, petitioner appears to have been covered by the fiftypeso bracket for it states that a monthly emergency allowance of fifty pesos is required "where the authorized capital stock or total assets, whichever is applicable and higher, is P1 million or more." It should be observed that this provision not only injects a new determinative factor, i.e., the total assets of the employer, but also provides a choice for the determinative factor: whichever is higher between the employer's authorized capital stock and its total assets. An examination of the issuances of the Department of Labor, however, reveals that said option is more apparent than real. In its Interpretative Bulletin aforementioned, the Department uses as a basis for granting the emergency allowance the "authorized capital

stock, or the total assets in the case of other undertakings." The phrase "authorized capital stock" clearly refers to employers which are incorporated by law and therefore have authorized capital stocks to speak of. Total assets as a determinative factor should only refer to "other undertakings." Sec. 7 of the Rules and Regulations, therefore, introduced a matter which is not germane to the provisions of P.D. No. 525 by considering total assets as a criterion. Moreover, it further complicated the law by the addition of the phrase "whichever is applicable and higher." In practice, the exercise of the option expressed in such phrase may lead to absurd situations. As demonstrated in this case, that which is higher, meaning petitioner's total assets, may not also be applicable because petitioner is not an "undertaking" within the purview of the Interpretative Bulletin and Implementing P.D. No. 525.

the

Rules

and

Regulations

Sec. 7 of the Rules has not conformed with the standards that P.D. No. 525 prescribes. Having been based on an erroneous decision of the Office of the President, it is further rendered obnoxious by the principle that an administrative agency like the Department of Labor cannot amend the law it seeks to implement.

47

LINA V. CARIÑO 221 SCRA 515

FACTS: The Secretary issued an order fixing the allowed percentage increases in tuition fees of private schools. This was assailed by the petitioner on the grounds that the Secretary didn't have any authority to order such parameters. He averred that the amending laws withdrew the power from the Secretary.


NOTES: ADMINISTRATIVE LAW PAGE - 46 HELD: The power to fix the prescribed rates for tuition fee increases of the Secretary of Education should be sustained. Under the relevant law, the private schools are authorized to fix at first instance the increase in fees. Nonetheless it should be in accordance with the rules and regulations promulgated. There is nothing in the subsequent laws that withdrew this. In case of the SAC, which is said to be the one authorized to fix the rates of allowable increase, its power is limited to the granting of government assistance to teachers and students.

REASONABLENESS !

!

!

! ! !

48

Administrative authorities may not act arbitrarily and capriciously in the enactment of rules and regulations in the exercise of their delegated powers and whether required by statute or judicial decisions, their regulations to be valid must be reasonable They must be reasonably adapted to secure the end in view and are invalid if shown to bear no reasonable relation to the purposes for which they are authorized to be made The reasonableness of rules and regulations and exemptions therein is determined by their relationship to the statutory scheme they are designed to supplement, protect and enforce Reasonableness under the law is different as it has a technical meaning Reasonableness under the law is within the law or within its limits Reasonableness is never beyond the law—interpretation that may extend the law but never exceeds the law

LUPANGCO V. CA 160 SCRA 848

FACTS: PRC issued a resolution, therein was stated that no examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similars institutions during the three days immediately proceeding every examination day including examination day. It was also mentioned that any violation shall warrant a sanction in accordance with the rules. The petitioners were reviewees preparing for the licensure examination in accountancy. They filed with the RTC for prohibition against the commission. HELD: There is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223, creating the Professional Regulation Commission, that orders or resolutions of the Commission are appealable either to the Court of Appeals or to the Supreme Court. Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general jurisdiction of the Court of First Instance, now the Regional Trial Court. What is clear from Presidential Decree No. 223 is that the Professional Regulation Commission is attached to the Office of the President for general direction and coordination. The questioned resolution was adopted for a commendable purpose. However, its good aim cannot be a cloak to conceal its


NOTES: ADMINISTRATIVE LAW PAGE - 47 constitutional infirmities. On its face, it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing, conference or the like, or receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor, official or employee of any of the aforementioned or similar institutions. The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period.

The three-flunk rule is intended to insulate the medical schools and ultimately the medical profession from the intrusion of those not qualified to be doctors. While every person is entitled to aspire as a doctor, he doesn’t have the constitutional right to be a doctor. This is true of any other calling in which the public interest is involved; and the closer the link, the longer the bridge to one’s ambition. The State has the responsibility to harness its human resources and to see to it that they are not dissipated or, no less worse, not used at all. These resources must be applied in a manner that will best promote the common good while also giving the individual a sense of satisfaction.

ADMINISTRATIVE RULES WITH PENAL SANCTIONS It is an axio m in administrative law that adm inistrative authorities sh ould not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in view. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be held to be invalid. Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution as well as the school’s academic freedom.

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DECS V. DIEGO 180 SCRA 533

FACTS: San Diego was prohibited from taking the NMAT again after failing the said exam thrice already. He assails the constitutionality of the said rule. HELD:

Administrative authorities may be empowered to enact rules and regulations having the force and effect of law, but any criminal or penal sanction for the violation of rules and regulations must come from the legislature itself Executive Order 200 was enacted referring to publication in newspapers of general circulation. But what constitutes newspapers of general circulation? The enactments of administrative agencies must also be deposited in the UP Law Center. Failure to do may not render invalid the law but it may be questioned for efficacy. Previously, the publication in the Official Gazette would be sufficient but the EO200 added the requirement of publication in the newspapers of general circulation

REQUISITES FOR THE VALIDITY OF ADMINISTRATIVE REGULATIONS WITH PENAL SANCTIONS 1. The law authorizing administrative authorities to issue rules 2.

and regulations must itself declare as punishable the violation of rules and regulations issued under its authority The law should define or fix the penalty for the violation of rules and regulations


NOTES: ADMINISTRATIVE LAW PAGE - 48 3. Publication in the official gazette should be made 50

PESIGAN V. ANGELES 129 SCRA 174

FACTS: At issue in this case is the enforceability, before publication in th e Official Gazette of June 14, 1982, of Presidential Executive Order No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by the government of carabaos transported from one province to another. Petitioners were carabao dealers transporting carabaos. They had with them not only health certificates but also the permit to transport as well as certifications of inspection. Despite this however, while passing an inspection point, the carabaos were confiscated pursuant to an executive order. This provided "that henceforth, no carabao, regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabaos or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government to be distributed ... to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos" HELD: The said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already noted, it is a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section 11 of the Revised Administrative Code.

The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations, which prescribe penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said penalties binding on the persons affected thereby.

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PEO. V. VERIDIANO II 132 SCRA 523

FACTS: Go Bio was charged with violating BP22. He moved for the quashing of the information on the ground that when he issued the check, the law wasn't in effect yet. This was opposed by the petitioners saying that the date material is the dishonor of the check, which happened after the effectivity of the law. The judge granted the motion to quash and hence, this case. It was Go Bio’s contention that although Batas Pambansa Bilang 22 was published in the Official Gazette issue of April 9, 1979, nevertheless, the same was released only on June 14, 1979 and, considering that the questioned check was issued about the second week of May 1979 , then he could not have violated Ba tas Pamban sa Bilang 22 because it was not yet released for circulation at the time. HELD: The dismissal of the case was upheld. It is therefore, certain that the penal statute in question was made public only on June 14, 1979 and not on the printed date April 9, 1979. Differently stated, June 14, 1979 was the date of publication of Batas Pambansa Bilang 22. Before the public may be bound by its contents especially its penal provisions, the law must be published and the people officially informed of its contents and/or its penalties. For, if a statute had not been published before its


NOTES: ADMINISTRATIVE LAW PAGE - 49 violation, then in the eyes of the law there was no such law to be violated and, consequen tly, the accused could not have committed the alleged crime.

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The effectivity clause of Batas Pambansa Bilang 22 specifically states that "This Act shall take effect fifteen days after publication in the Official Gazette." The term "publication" in such clause should be given the ordinary accepted meaning, that is, to make known to the people in general. If the Batasang Pambansa had intended to make the printed date of issue of the Gazette as the point of reference in determining the effectivity of the statute in question, then it could have so stated in the special effectivity provision of Batas Pambansa Bilang 22.

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When

private respondent

With respect to the allegation of petitioner that the offense was committed on September 26, 1979 when the check was presented for encashment and was dishonored by the bank, suffice it to say that the law penalizes the act of making or drawing and issuance of a bouncing check and not only the fact of its dishonor.

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D. M. CONSUNJI V. COA 199 SCRA 549

Go Bio, Jr. committed the act,

complained of in the Information as criminal, in May 1979, there was then no law penalizing such act. Following the special provision of Batas Pambansa Bilang 22, it became effective only on June 29, 1979. As a matter of fact, in May 1979, there was no law to be violated and, consequently, respondent Go Bio, Jr. did not commit any violation thereof.

CONSTRUCTION REGULATIONS

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The rule should be construed and applied to make it conform to the powers conferred upon the administrative body, rather than as being an assumption of power not so conferred A regulation cannot be construed to operate retroactively unless intention to have it to operate clearly appears Dean Roy: administrative rules and regulations may be regarded to be at the bottom of the totem pole. You may be guided by the rules on amendment. The rules of procedures of administrative agencies may also be respected in adjudicating claims of a person

ADMINISTRATIVE

RULES

AND

Rules in the exercise of a power delegated by statute should be construed together with the statute to make If possible, an effectual piece of legislation in harmony with common sense and sound reason

FACTS: MWSS made an advertisement for public bidding with respect to a Contract for Pump/Lift Stations and Rehabilitation: Tondo Pump Station" or "Contract No. PS-1." The project was partly financed through a loan from the Asian Development Bank. The bidding was held and the contract was granted to Erectors. The contract was finalized and w as sent to the Pre sident for appro val. Before the approval however, Erectors backed out from the contract and was later substituted with petitioner. The contract was made and duly approved. The project was finished earlier and pursuant to this, there was demand for an incentive bonus and also the escalation clause payment. MWSS paid the petitioner but later demanded for reimbursement because of notice of disallowance by the Commission on Audit due to overpayment. Petitioner alleges that the reckoning date for escalation should be the date for bidding and not otherwise. It mentioned that the contract was a bid contract and not a negotiated contract. A contrary stance was adopted by the respondent.


NOTES: ADMINISTRATIVE LAW PAGE - 50 HELD: No less than the Constitution has ordained that the COA shall have exclusive authority to define the scope of its audit and examination, establish the techniques and methods required therefore, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or use of government funds and properties. Even so, this auditing procedure is not of absolute discretion since it should be done within legal constraints. Parenthetically, P.D. 1594 and its implementing rules are clear to the effect that infrastructure projects are awarded in the order of priority as follows: First, by public bidding and second by a negotiated contract. However, resort to negotiated contract is only after a failure of public bidding. Furthermore, the implementing rules are clear as to when there is a failure of public bidding after which a negotiated contract may be availed of. Thus, if no bid is acceptable in accordance with the implementing rules during the first bidding, the project should again be advertised for a second bidding and in the event the second bidding fails anew, a negotiated contract may be under-taken. It follows from the law and the rules that the subject Contract PS-1 No. 1 was a bidded contract. The petitioner was one of the three bidders in the initial bidding of the Contract for Pump/Lift Station and Rehabilitation: Tondo Pump Station. Although the petitioner was the highest bidder, it got the contract after the lowest bidder A.L. Sarmiento was disqualified and the second lowest bidder Erectors Inc. withdrew its contract before it could be approved by the President. A suggestion from the Solicitor General that there was failure of the first public bidding when the second lowest bidder withdrew its contract paving the way for an award of a negotiated contract to the petitioner is without basis.

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PHIL. PETROLEUM V. MUN. OF PILILIA 198 SCRA 82

FACTS: Under the NIRC, manufactured oils and other fuels was subject to specific tax. PPC was engaged in such business and was holding operations in respondent municipality. The local tax code provides for the taxing power of the municipalities, provinces, and cities. It is provided in Sections 19 and 19 (a) thereof, provide among others, that the municipality may impose taxes on business, except on those for which fixed taxes are provided on manufacturers, importers or producers of any article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule listed therein. This was further bolstered by the Circulars of the Secretary of Finance directed to all provincial, city and municipal treasurers to refrain from collecting any local tax imposed in old or new tax ordinances in the business of manufacturing, wholesaling, retailing, or dealing in petroleum products subject to the specific tax under the National Internal Revenue Code and to refrain from collecting any local tax imposed in tax ordinances enacted before or after the effectivity of the Local Tax Code on July 1, 1973, on the businesses of manufacturing, wholesaling, retailing, or dealing in, petroleum products subject to the specific tax under the National Internal Revenue Code. The municipality enacted its own tax code through an ordinance and in its relevant sections provided for the imposition of a tax on business, except for those for which fixed taxes are provided in the Local Tax Code on manufacturers, importers, or producers of any article of commerce of whatever kind or nature, including brewers,


NOTES: ADMINISTRATIVE LAW PAGE - 51 distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule found in the Local Tax Code, as well as mayor's permit, sanitary inspection fee and storage permit fee for flammable, combustible or explosive substances. Thereafter, was an amendatory PD on the tax code increasing the amount of specific tax on lubricating oils, diesel oils, and the like. The NIRC was then enacted and it stated that a specific tax was imposable on the manufacture of mineral oils and motor fuels. HELD: The crucial issue in this case is whether or not petitioner PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay (a) tax on business and (b) storage fees, considering Provincial Circular No. 6-77; and mayor's permit and sanitary inspection fee unto the respondent Municipality of Pililla, Rizal, based on Municipal Ordinance No. 1. PC No. 26-73 and PC No. 26 A-73 suspended the effectivity of local tax ordinances imposing a tax on business under Section 19 (a) of the Local Tax Code (P.D. No. 231), with regard to manufacturers, retailers, wholesalers or dealers in petroleum products subject to the specific tax under the National Internal Revenue Code NIRC, in view of Section 22 (b) of the Code regarding non-imposition by municipalities of taxes on articles, subject to specific tax under the provisions of the NIRC. There is no question that Pililla's Municipal Tax Ordinance No. 1 imposing the assailed taxes, fees and charges is valid especially Section 9 (A) which according to the trial court "was lifted in toto and/or is a literal reproduction of Section 19 (a) of the Local Tax

Code as amended by P.D. No. 426." It conforms with the mandate of said law. But P.D. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. 26-73 and 26 A-73 issued by the Secretary of Finance when Sections 19 and 19 (a), were carried over into P.D. No. 426 and no exemptions were given to manufacturers, wholesalers, retailers, or d ealers in petroleum p roducts. Well-settled is the rule that administrative regulations must be in harmony with the provisions of the law. In case of discrepancy between the basic law and an implementing rule or regulation, the former prevails. Furthermore, while Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products, said decree did not amend Sections 19 and 19 (a) of P.D. 231 as amended by P.D. 426, wherein the municipality is granted the right to levy taxes on business of manufacturers, importers, producers of any article of commerce of whatever kin d or n ature. A ta x on b usiness is distinct from a tax o n the article itself. Thus, if the imposition of tax on business of manufacturers, etc. in petroleum products contravenes a declared national policy, it should have been expressly stated in P.D. No. 436. Provincial Circular No. 6-77 enjoining all city and municipal treasurers to refrain from collecting the so-called storage fee on flammable or combustible materials imposed in the local tax ordinance of their respective locality frees petitioner PPC from the payment of storage permit fee. The storage permit fee being imposed by Pililla's tax ordinance is a fee for the installation and keeping in storage of any flammable, combustible or explosive substances. Inasmuch as said storage makes use of tanks owned not by the municipality of Pililla, but by


NOTES: ADMINISTRATIVE LAW PAGE - 52 petitioner PPC, same is obviously not a charge for any service rendered by the municipality as what is envisioned in Section 37 of the same Code.

questions raised in this petition are questions of law. Hence, the failure to exhaust administrative remedies cannot be considered fatal to this petition.

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As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which prohibits the employer from crediting the anniversary wage increases provided in collective bargaining agreements, it is a fundamental rule that implementing rules

CEBU OXYGEN AND ACETYLENE CORP. V. DRILON 176 SCRA 24

FACTS: Petitioner and its employee’s union entered into a collective bargaining agreement. One of the provisions in said agreement was the increase in the employee’s salaries every certain period. Thereafter, a law was passed amending the Labor Code with respect to salary increases. The minister issued rules implementing the same. Section 8 of the implementing rules prohibits the employer from crediting anniversary wage increases negotiated under a collective bargaining agreement against such wage increases mandated by Republic Act No. 6640. Petitioner accordingly credited the first year increase of P200.00 under the CBA and added the difference of P61.66 (rounded to P62.00) and P31.00 to the monthly salary and the 13th month pay, respectively, of its employees from the effectivity of Republic Act No. 6640. Nonetheless, upon inspection, it was found that petitioner committed underpayments of basic salaries and 13th month pays. It was ordered to pay th e deficiency. HELD: Public respondents aver that petitioner should have first appealed to the Secretary of Labor before going to court. It is fundamental that in a case where only pure questions of law are raised, the doctrine of exhaustion of administrative remedies cannot apply because issues of law cannot be resolved with finality by the administrative officer. Appeal to the administrative officer of orders involving questions of law would be an exercise in futility since administrative officers cannot decide such issues with finality. The

cannot add or detract from the provisions of law it is designed to implement. The provisions of Republic Act No. 6640, do not prohibit the crediting of CBA anniversary wage increases for purposes of compliance with Republic Act No. 6640. The implementing rules

cannot provide for such a prohibition not contemplated by the law. Administrative regulations adopted under legislative authority by a particular department mu st be in harmon y with the provision s of the law, and should be for the sole purpose of carrying into effect its general provisions. The law itself cannot be expanded by such regulations. An administrative agency cannot amend an act of Congress. Thus petitioner's contention that the salary increases granted by it pursuant to the existing CBA including anniversary wage increases should be considered in determining compliance with the wage increase mandated by Republic Act No. 6640, is correct. However, the amount that should only be credited to petitioner is the wage increase for 1987 under the CBA when the law took effect. The wage increase for 1986 had already accrued in favor of the employees even before the said law was enacted. Petitioner therefor correctly credited its employees P62.00 for the differential of two (2) months increase and P31.00 each for the differential in 13th month pay, after deducting the P200.00 anniversary wage increase for 1987 under the CBA. Indeed, it is stipulated in the CBA that in case any wage adjustment or allowance increase decreed by law, legislation or presidential edict in any particular year shall be higher than the foregoing increase in that particular year, then the company (petitioner) shall pay the difference.



REPEAL OF ADMINISTRATIVE RULES AND REGULATIONS !

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An administrative body doe sn't as a general rule exhaust its power to make rules and regulations by having made a particular regulation doesn't revoke an earlier one by implication, if there is nothing in the second one inconsistent with the continuance of the first Where the commission has made an order having a dual aspect as legislative in one respect and judicial in another, it may not in subsequent proceedings act in its quasilegislative capacity and retroactively repeal its own enactment This follows the rules on repeals of statutes Express repeal is favored while otherwise for implied repeal Even if there is apparent inconsistency, no repeal will be regarded to have taken place if they can still co-exist An administrative agency may not repeal its rules and regulations using another of its powers. Ergo, a rule in exercise of quasi-judicial powers may not be repealed in the exercise of quasi-legislative powers Note that a quasi-judicial decision is not a subject of repeal

destroyed by fire, storm, shipwreck or other casualty, robbery, theft or embezzlement during the World War 2 were deductible in the year of actual loss or destruction of said property. As a consequence of this, Hilado was disallowed the deduction and was demanded to pay the deficiency. To this he appealed but was denied. HELD: In this case, the regulation was just an interpretation rendered and it doesn't create a binding right. This is different from filing a claim and a decision is reach which subsequently becomes final. As the regulation or interpretative opinion is concerned, it wasn't final in adjudicating what the rights of the claimant was and thus, it could be legally revoked or changed by the administrative agency.

EXTENT OF THE ACTS OF ADMINISTRATIVE AGENCY !

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HILADO V. CIR 100 PHIL. 288 (TAKEN WITH CO V. CA)

The duly executed acts of an administrative body can have legal effects even beyond the lifespan of that body Rules and regulations issued under a law expressly providing that they shall be in full force and effect until the Congress of the Philippines shall otherwise provides, are good only up to the life of the law itself

ADMINISTRATIVE ADJUDICATION FACTS: Hilado filed his income tax return wherein from other things, he deducted from his total gross income an amount pursuant to a General Circular issued by the Collector of Internal Revenue, which was GC 123. This deducted amount was pursuant to a war damage claim duly approved by the War Damage Commission. He was assessed for a d eficiency in his paymen t of inco me tax late r on. Thereafter, the Collector issued a Circular declaring null and void his previous circular and declared that property which were

DEFINITION OF QUASI-JUDICIAL POWER !

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Power to hear and determine, or ascertain facts and decide by the application of rules of law to the ascertained facts in the enforcement and administration of law Any power of the administrative agency aside from rulemaking but including licensing



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The thought process is the same as of a judge’s except that the administrative agency has limited type of classes being adjudicated

LUPANGCO V. CA 160 SCRA 848

FACTS: The PRC issued a resolution regarding the taking of handouts, reviewers, and attending review classes 3 days before the licensure exam. (Same case as above) HELD:

In order to invoke the exclusive appellate jurisdiction of the Court of Appeals, there has to be a final order or ruling which resulted from proceedings wherein the admin istrative body involved exercised its quasijudicial functions . In Black's Law Dictionary, quasi-judicial is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasi-

judicial adjudication would mean a determination of rights, privileges and duties resulting in a decision or order which applies to a specific situation . This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations. In the subject resolution, it was issued not in the PRC’s quasijudicial function but merely as an incident to its administrative functions. Thus, appeal was properly made to the RTC.

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TORRES V. HIBIONADA 191 SCRA 268

FACTS: The petitioner as agent of private respondent Pleasantville Development Corporation sold a subdivision lot on installment to private respondent. The installment payments having been completed, Diongon demanded the delivery of the certificate of title to the subject land. When neither the petitioner nor Pleasantville complied, he filed a complaint against them for specific performance and damages in the Regional Trial Court of Negros Occidental. It was then that C.T. Torres Enterprises filed a motion to dismiss for lack of jurisdiction, contending that the competent body to hear and decide the case was the Housing and Land Use Regulatory Board. HELD: P.D. No. 1344 empowered the National Housing Authority to issue writs of execution in the enforcement of its decisions under P.D. No. 957, specified the quasi-judicial jurisdiction of the agency as follows: In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: 1. Unsound real estate business practices; 2. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner developer, dealer, broker or salesman; and 3. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or


NOTES: ADMINISTRATIVE LAW PAGE - 55 condominium units against the owner, developer, dealer, broker or salesman. Under a subsequent law, the regulatory functions conferred on the National Housing Authority were transferred to the Human Settlements Regulatory Commission, which was renamed Housing and Land Use Regulatory Board. It is clear that the complaint for specific performance with damages filed by Diongon with the Regional Trial Court of Negros Occidental comes under the jurisdiction of the Housing and Land Use Regulatory Board. Diongon is a buyer of a subdivision lot seeking specific performance of the seller's obligation to deliver to him the corresponding certificate of title.

QUASI-JUDICIAL POWER JUDICIAL POWER Quasi-judicial power Where the function of an officer or body is primarily administrative and the power to hear and determine controversies is granted as an incident to the administrative duty

DISTINGUISHED

FROM

Judicial power Primarily to decide questions of legal rights between private parties, such decision being the primary object and not merely incidental to regulation on some other administrative function

incidental only when the class is affexted

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FACTS: The CHR issued a cease and desist order against petitioner for issuing a return-to-work order to public teachers who abandoned their classes to do mass concerted actions. HELD: The CHR doesn’t have any jurisdiction on adjudicatory powers over certain types of cases like alleged human rights violations involving civil and political rights. The most that may be conceded to the Commission in the way of adjudicative power is that it may investigate. It cannot try and decide cases as courts of justice or even quasi-judicial bodies do.

CONFERMENT OF QUASI-JUDICIAL POWERS !

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QUASI-JUDICIAL COMPARED WITH QUASI-LEGISLATIVE POWER Quasi-judicial Quasi-legislative Exercise needs the requirements of due process—notice and hearing Binding on the parties and it is

CARIÑO V. CHR 204 SCRA 483

No need for notices and hearing when making rules

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The legislature may confer on administrative bodies quasijudicial powers involving the exercise of judgment and discretion as incident to the performance of administrative functions But in so doing, the legislature must state its intention in express terms that would leave no doubt, as even such quasi-judicial prerogatives must be limited if they are to be valid, up to those incidental or in connection with the performance of administrative duties, which don't amount to conferment of jurisdiction over a matter exclusively vested in the cou rts

MAGPALE V. CSC


NOTES: ADMINISTRATIVE LAW PAGE - 56 215 SCRA 398 FACTS: Magpale was charged with failing to account for equipment and liquidate cash advances given to him. He was charged with dishonesty, pursuit of private business, among others. The case remained unacted upon for 4 years but he was consequently found guilty.

notice of appeal to the appellate authority within fifteen days from filing of the notice of appeal, with its comments, if any. Under Section 47 of the same Code, the CSC shall decide on appeal all administrative disciplinary cases involving the imposition of: (a) a penalty of suspension for more than thirty days; or

HELD: While it is true, as contended by respondent Civil Service Commission that under Section 12 (par. 11), Chapter 3, Subtitle A, Book V of Executive Order 292, the CSC does have the power to hear and decide administrative cases instituted by or brought before it directly or on appeal, including contested appointments,

(b) fine in an amount exceeding thirty days salary; or

and review decisions and actions of its offices and of the agencies attached to it, the exercise of the power is qualified by and should be read together with the other sections of the same sub-title and book of Executive Order 292, particularly Section 49 which prescribes the following requisites for the exercise of the power of appeal, to wit:

The February 5, 1990 decision of the MSPB did not involve dismissal or separation from office, rather, the decision exonerated petitioner and ordered him reinstated to his former position. Consequently, the MSPB decision was not a proper subject of appeal to the CSC.

(a) the decision must be appealable; (b) the appeal must be made by the party adversely affected by the decision; (c) the appeal must be made within fifteen days from receipt of the decision, unless a petition for the reconsideration is seasonably filed; and (d) the notice of appeal must be filed with the disciplining office, which shall forward the records of the case, together with the

c) demotion in rank or salary or transfer; or (d) removal or dismissal from office.

Settled is the rule that a tribunal, board, or officer exercising judicial functions acts without jurisdiction if no authority has been conferred by law to hear and decide the case.

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ANTIPOLO REALTY V. NHA 153 SCRA 399

FACTS: Through a contract to sell, Hernando acquired prospective and beneficial ownership over a subdivision lot. With the consent of the petitioner, he transferred his rights to Yuson. However, petitioner wasn't able to develop the subdivision project in accordance with the contract to sell. It later was able construct the


NOTES: ADMINISTRATIVE LAW PAGE - 57 improvements in the subdivision and through a letter, informed Yuson ab out it and was asking fo r resume in payment b ut the latter refused to do so. After another notice with no payment from Yuson, the contract was rescinded. Yuson filed then a complaint with the NHA and the petitioner was ordered to reinstate the contract. HELD: It is by now commonplace learning that many administrative agencies exercise and perform adjudicatory powers and functions, though to a limited extent only. Limited delegation of judicial or quasi-judicial authority to administrative agencies (e.g., the Securities and Exchange Commission and the National Labor Relations Commission) is well recognized in our jurisdiction, basically because the need for special competence and experience has been recognized as essential in the resolution of questions of complex or specialized character and because of a companion recognition that the dockets of our regular courts have remained crowded and clogged.

In general the quantum of judicial or quasi-judicial powers which an administrative agency may exercise is defined in the enabling act of such agency. In other words, the extent to which an administrative entity may exercise such powers depends largely, if not wholly, on the provisions of the statute creating or empowering such agency. In the exercise of such powers, the agency concerned must commonly interpret and apply contracts and determine the rights of private parties under such contracts. One thrust of the multiplication of administrative agencies is that the interpretation of contracts and the determination of private rights thereunder is no longer a uniquely judicial function, exercisable only by our regular courts. Having failed to comply with its contractual obligation to complete certain specified improvements in the subdivision within the

specified period of two years from the date of the execution of the Contract to Sell, petitioner was not entitled to exercise its options under Clause 7 of the Contract. Hence, petitioner could neither rescind the Contract to Sell nor treat the installment payments made by the private respondent as forfeited in its favor. Indeed, under the general Civil Law, in view of petitioner's breach of its contract with private respondent, it is the latter who is vested with the option either to rescind the contract and receive reimbursement of an installment payments (with legal interest) made for the purchase of the subdivision lot in question, or to suspend payment of further purchase installments until such time as the petitioner had fulfilled its obligations to the buyer. The NHA was therefore correct in holding that private respondent's prior installment payments could not be forfeited in favor of petitioner. Neither did the NHA commit any abuse, let alone a grave abuse of discretion or act in excess of its jurisdiction when it ordered the reinstatement of the Contract to Sell between the parties. Such reinstatement is no more than a logical consequence of the NHA's correct ruling, just noted, that the petitioner was not entitled to rescind the Contract to Sell. There is, in any case, no question that under Presidential Decree No. 957, the NHA was legally empowered to determine and protect the rights of contracting parties under the law administered by it and under the respective agreements, as well as to ensure that their obligations thereunder are faithfully performed.

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MILLER V. MARDO 2 SCRA 898

FACTS: This case involves one identical question of law, namely, the validity o f the Reorganization Plan, prepared and submitted by the Government Survey and Reorganization Commission presumably


NOTES: ADMINISTRATIVE LAW PAGE - 58 under the authority of Republic Act 997, insofar as it confers exclusive and srcinal jurisdiction to a regional office to decide the claims of laborers for wages, backwages, underpayment of wages, overtime and separation pay, etc. HELD: It is true that in Republic Act No. 1241, amending Section 4 of Republic Act 997, which created the Government Survey and Reorganization Commission, the latter was empowered

If a statute itself actually passed by the Congress m ust be cle ar in its terms when clothing administrative bodies with quasi-judicial functions, then certainly such conferment can not be implied from a mere grant of power to a body such as the Government Survey and Reorganization Commission to create "functions" in connection with the reorganization of the Executive Bran ch of the Govern ment.

CLASSIFICATION OF ADJUDICATING POWERS 63

(2) To abolish departments, offices, agencies, or functions which may not be necessary, or create those which way be necessary for the efficient conduct of the government service, activities, and functions. But these "functions" which could thus be created, obviously refer merely to administrative, not judicial functions. For the Government Survey and Reorganization Commission was created to carry out the reorganization of the Executive Branch of the National Government, which plainly did not include the creation of courts. And the Constitution expressly provides that "the Judicial power shall be vested in one Supreme Court and in such inferior courts as may be established by law. Thus, judicial power rests exclusively in the judiciary. It may be conceded that the legislature may confer on administrative boards or bodies quasi-judicial powers involving the exercise of judgment and discretion, as incident to the performance of administrative functions. But in so doing, the legislature must state its intention in express terms that would leave no d oubt, as even such quasi-judicial pre rogatives must be limited, if they are to be valid, only to those incidental to or in connection with the performance of jurisdiction over a matter exclusively vested in the courts.

SALAZAR V. ACHACOSO 183 SCRA 145

FACTS: A complaint was lodged with the POEA for alleged illegal recruitment activities of petitioner. In connection with this, Administrator Achacoso issued a clo sure and seizure order against petitioner. HELD: For the guidance of the bench and the bar, we reaffirm the following principles: 1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no o ther, who may issue wa rrants of arrest and se arch: 2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President or the Commissioner of Immigration may order arrested, following a final order of deportation, for the purpose of deportation.

64

RCPI V. NTC 215 SCRA 455

FACTS:


NOTES: ADMINISTRATIVE LAW PAGE - 59 The wife of private respondent sent two rush telegrams to his sister and brother-in-law through petitioner’s facilities but such didn't reach the supposed to be recipients. This prompted the private respondent to file a complaint with the NTC against RCPI for poor service. Accordingly, NTC ordered RCPI to answer the complaint and set the case for hearing. HELD: E. O. 546, it will be observed, is couched in general terms. The NTC stepped "into the shoes" of the Board of Communications which exercised powers pursuant to the Public Service Act. The power to impose fines should therefore be read in the light of the Francisco Santiago case because subsequent legislation did not grant additional powers to the Board of Communications. The Board in other words, did not possess the power to impose administrative fines on public services rendering deficient service to customers, ergo its successor cannot arrogate unto itself such power, in the absence of legislation. It is true that the decision in RCPI vs. Board of Communications seems to have modified the Santiago ruling in that the later case held that the Board of Communications can impose fines if the public service entity violates or fails to comply with the terms and conditions of any certificate or any order, decision or regulation of the Commission. But can private respondent's complaint be similarly treated when the complaint seeks redress of a grievance against the company? 8 NTC has no jurisdiction to impose a fine. No substantial change has been brought about by Executive Order No. 546 invoked by the Solicitor General's Office to bolster NTC's jurisdiction. The Executive Order is no t an explicit grant of p ower to impose administrative fines on public service utilities, including telegraphic agencies, which have failed to render adequate service to consumers. Neither has it expanded the coverage of the supervisory and regulatory power of the agency. There appears to

be no alternative but to reiterate the settled doctrine in administrative law that: Too basic in administrative law to need citation of jurisprudence is the rule that jurisdiction and powers of administrative agencies, like

respondent Commission, are limited to those expressly granted or necessarily implied from those granted in the legislation creating such body; and any order without or beyond such jurisdiction is void and ineffective.

65

BOISER V. CA 122 SCRA 945

FACTS: The petitioner has been operating a telephone system in Tagbilaran City and other municipalities in the province of Bohol. Sometime later, the petitioner and private respondent Philippine Long Distance Telephone Company (PLDT) entered into a contract denominated as "Interconnecting Agreement" whereby PLDT bound itself to provide Premiere with long distance and overseas facilities through the use of the PLDT relay station in Mandaue City, Province of Cebu. The arrangement enabled subscribers of Premiere in Bohol to make or receive long distance and overseas calls to and from any part of the Philippines and other countries of the world. Petitioner on the other hand had the obligation to preserve and maintain the facilities provided by respondent PLDT, provide relay switching services and qualified radio operators, and otherwise maintain the required standards in the operation of facilities under the agreement. Later, without any prior notice to the petitioner, respondent PLDT issued a "circuit authorization order" to its co- respondents, PLDT employees Roman Juezan and Wilson Morrell to terminate the connection of PLDT's relay station with the facilities of the


NOTES: ADMINISTRATIVE LAW PAGE - 60 petitioner's telephone system in the province of Bohol. Petitioner avers that this order was in gross violation of the aforecited " Interconnecting Agreement." To avert serious consequences to the public and private hours resulting from any disruption of the petitioner's telephone network and, of course, to the long distance and overseas aspects of its business, the petitioner was compelled to seek judicial relief. HELD: The case before the trial court is for injunction arising from breach of contract. Premiere asks for compliance with the terms of the contract and for the payment of P100,000.00 exemplary and moral damages in addition to attorney's fees.

66

DEIPARINE V. CA 221 SCRA 503

FACTS: Spouses Carungay entered into an agreement with Deiparine to construct a three-story dormitory. On a report of the civil engineer, Deiparine was deviating from the specifications and plans, thus impairing the strength and safety of the building. The spouses sent a memorandum to petitioner, complaining that the building was being done haphazardly and they suggested core testing. Consequently, it was found out that the building was structurally defective. This prompted the spouses to file an action for rescission and damages.

PLDT has cited in full the authority and powers given to the Board of Communications, now National Telecommunications Commission. There is nothing in the Commission's powers which authorizes it to adjudicate breach of contract cases, much less to award moral and exemplary damages. The two authorities cited by the private respondents in the bid to dissolve the CFI restraining order do not appear adequate to disregard the thirty (30) day prior notice provided by the Interconnecting Agreement. But even if they were, this questio n is one wh ich should be clarified in th e civil case for breach of contract. Clearly, therefore, what the petitioner is questioning is an order which does not merely involve "a purely internal transaction of a telecommunications company" but one which would necessary affect rights guaranteed it by the contract allegedly violated. The Board of Communications has been renamed National Telecommunications Commission. The NTC has no jurisdiction, and the PLDT has made no showing of any, not even by necessary implication, to decide an issue involving breach of contract.

HELD: PD 176 created the Construction Industry Authority of the Philippines as the umbrella organization which shall exercise jurisdiction and supervision over certain administrative bodies acting as its implementing branches. The body in this case is the Philippine Domestic Construction Board and not the Philippine Construction Development Board. However, the wording of the law is clear that the jurisdiction of the Philippine Domestic Construction Board are meant to apply only to public construction contracts. It power over private construction contracts is limited to the formulation and recommendation of rules and procedure for the adjudication and settlement of disputes involving such private contracts.

SOURCES OF JURISDICTION ESTOPPEL


NOTES: ADMINISTRATIVE LAW PAGE - 61 67

TIJAM V. SIBONGHANOY 23 SCRA 29

FACTS: On July 19, 1948—barely one month after the effectivity of Republic Act 296 known as the Judiciary Act of 1948, Section 88 of which placed within the srcinal exclusive jurisdiction of inferior courts all civil actions where the value of the subject-matter or the amount of demand does not exceed P2,000.00, exclusive of interest and cost—the Spouses Serafin Tijam and Felicitas Tagalog commenced Civil Case No. R-660 in the Court of First Instance of Cebu against Spouses Magdaleno Sibonghanoy and Lucia Baguio to recover from them the sum of P1,908.00 with legal interest plus costs. As prayed for in the complaint, a writ of attachment was issued by the court against defendants’ properties, but the same was soon dissolve d upon the filing of a counter -bond by de fendants and the Manila Surety and Fidelity Co., Inc., hereinafter referred to as the Surety. After trial upon th e issues, the C ourt rendere d judgment in favor of the plaintiffs and, after the same had become final and executory, upon motion of the latter, the court issued a writ of execution against the defendants. The writ having been returned unsatisfied, the plaintiffs moved for the issuance of a writ of execution against the Surety’s bond, against which the Surety filed a written opposition upon two grounds, namely (1) Failure to prosecute, and (2) Absence of a demand upon the Surety for the payment of the amount due under the judgment. The Surety prayed the Court not only to deny the motion for execution against its counter-bond but also to relieve the company of its liability, under the bond in question. The Court denied this motion on the ground solely that no previous demand had been made on the Surety for the satisfaction of the judgment. After the necessary demand was made, and upon failure of the Surety to satisfy the judgment, the

plaintiffs, filed a second motion for execution of counter-bond, such motion was eventually granted and the corresponding writ was issued. Subsequently, the Surety appealed to the Court of Appeals raising the following assignment of errors and not one of the assignment of errors raises the question of lack of jurisdiction, neither directly nor indirectly. Although the appellees failed to file their brief, the Court of Appeals, decided the case affirming the orders appealed from. The Surety filed a Motion for Reconsideration and thereafter filed a pleading entitled MOTION TO DISMISS, alleging substantially the appellees action was filed in the Court of First Instance of Cebu on July 19, 1948 for the recovery of the sum of P1,908.00 only; that a month before that said date, Republic Act 292, has already become effective, section 88 of which placed within the srcinal exclusive jurisdiction of inferior courts all civil actions where the value of the subject matter or the amount of the demand does not exceed P2,000.00; that the Court of First Instance had no jurisdiction to try and decide the case. The Court of Appeals resolved to set aside its decision and certified the case to the Supreme Court. HELD: It is undisputed fact that the action commenced by appellees in the Court of First Instance of Cebu against the Sibonghanoy was for recovery of sum of P1,908.00 only – an amount within the srcinal exclusive jurisdiction of the inferior courts. True also is the rule that jurisdiction over the subject matter is conferred upon the court exclusively by law, and as the lack of it affects the very authority of the court to take cognizance of the case, the objection may be raised at any stage of the proceedings. However, considering the facts and circumstances of the present case, the Supreme Court is of the opinion that the Surety is now barred by laches from invoking this plea at this late hour for the purpose of annulling


NOTES: ADMINISTRATIVE LAW PAGE - 62 everything done in the case with its active participation. As already stated, the action was commenced almost fifteen years before the Surety filed its motion to dismiss raising the question of lack of jurisdiction for the first time. Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time , to do that which, by exercising due diligence , could or should have been done earlier; it is negligence or omision to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it e ither has abandoned it or declined to assert it. The doctrine of laches or of stale demands is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims, and unlike the statue of limitations, is not a mere question of time but is principally a question of inequity or unfairness of permitting a right or claim to be enforced or asserted. It has been held that a party can not invoke the jurisdiction of the court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question the same jurisdiction.

EFFECT OF EXPIRATION OF LAW 68 ROXAS V. SAYOC 100 PHIL. 448 FACTS: Roxas was issued an import control license to import cotton counterpanes. With this, she imported from Japan bales of cotton counterpanes. However, the license was issued in violation of the Import Control Law. She tried to recover the cotton counterpane s but the Collector of Customs decided to forfeit said merchandise for being imported in violation of the law.

HELD: The decision of the collerctor was appealed in due time and the case reached the office of the Commissioner of Customs also in due time while RA 650 was still in force. The commissioner acquired jurisdiction over the case and he was duty bound to act thereon. Petitioner contends that at the expiration of the law, the commissioner loss his jurisdiction. This is untenable because it is a settled rule that a court, be it judicial or administrative, that has acquired jurisdiction over a case, retains it after the expiration of the law governing the case. Herein, once the Commissioner has acquired jurisdiction over the case, the mere expiration of the law doesn't divest him of his jurisdiction thereon duly acquired while the law was still in force. He retained jurisdiction and should continue to take cognizance of the case until final determination thereof.

DUE PROCESS 69 RIVERA V. CSC 240 SCRA 43 FACTS: Rivera was the manager of the corporate banking unit of Landbank. He was charged with many things—dishon esty among others. He was alleged to acting as fixer and financia l consultant to some of the clients of the bank. Upon the complaint, he was placed under preventive suspension. He was found guilty for grave misconduct, acting prejudicial to the interest of the service, and violations of the Anti-Graft and Corrupt Practices act. Upon appeal to the MPSB, he was exonerated for the rest and was only found guilty for acting prejudicial to the interest of the service. Rivera filed a motion for reconsideration of the Court's dismissal of the petition, now strongly asserting that he was denied due process when Hon. Thelma P. Gaminde, who earlier participated in her


NOTES: ADMINISTRATIVE LAW PAGE - 63 capacity as the Board Chairman of the MSPB when the latter had taken action on LBP's motion for reconsideration, also took part, this time as a CSC Commissioner, in the resolution of petitioner's motion for reconsideration with the CSC. The Court, in its resolution of 05 July 1994, resolved to grant the motion, to reinstate the petition and to require respondents to comment thereon. HELD: In order that the review of the decision of a subordinate officer might not turn out to be a farce, then reviewing officer must perforce be other than the officer whose decision is under review; otherwise, there could be no different view or there would be no real review of the case. The decision of the reviewing officer would be a biased view; inevitably, it would be the same view since being human, he would not admit that he was mistaken in his first view of

ruled that the doctrine that employees of government-owned and/or con controlled corporations, whether created by special law or formed as subsidiaries under the General Corporation law are governed by the Civil Service Law and not by the Labor Code, has been supplanted by the present Constitution. "Thus, under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law are the manner of its creation, such that government corporations created by special charter are subject to its provisions while those incorporated under the General Corporation Law are not within its coverage." Specifically, the PNOC-EDC having been incorporated under the General Corporation Law was held to be a government owned or controlled corporation whose employees are subject to the

the case.

provisions of the Labor Code.

70

The fact that the case arose at the time when the 1973 Constitution was still in effect, does not deprive the NLR C of ju risdiction on the premise that it is the 1987 Constitution that governs because it is the Constitution in place at the time of the decision.

PNOC V. NLRC 201 SCRA 487

FACTS: Private respondent Danilo Mercado was first employed by herein petitioner Philippine National Oil Company-Energy Development Corporation (PNOC-EDC for brevity) on August 13, 1979. He held various positions ranging from clerk , general clerk to shipping clerk during his employment at its Cebu office until his transfer to its establishment at Palimpinon, Dumaguete, Oriental Negros. The grounds for the dismissal of Mercado are allegedly serious acts of dishonesty. HELD: This issue has already been laid to rest in a previous case of involving the same petitioner and the same issue, where this Court

On the issue of due process, indisputably, the requirements of due process are satisfied when the parties are given an opportunity to submit position papers. What the fundamental law abhors is not the absence of previous notice but rather the absolute lack of opportunity to ventilate a party's side. There is no denial of due process where the party submitted its position paper and flied its motion for reconsideration. Petitioner's subsequent Motion for Reconsideration and/or Appeal has the effect of curing whatever irregularity might have been committed in the proceedings below. Furthermore, it has been consistently held that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are accorded not


NOTES: ADMINISTRATIVE LAW PAGE - 64 only respect but even finality. Judicial review by this Court does not go so far as to evaluate the sufficiency of the evidence but is limited to issues of jurisdiction or grave abuse of discretion. A careful study of the records shows no substantive reason to depart from these established principles.

71

NERA V. AUDITOR-GENERAL 164 SCRA 1

counsel except in writing and in the presence of counsel and during the trial of the accused, who has the right "to be heard by himself and counsel, either retained by him or provided for him by the government at its expense. These guarantees are embodied in the Constitution, along with the other rights of the person facing criminal prosecution, because of the odds he must contend with to defend his liberty (and before even his life) against the awesome authority of the State.

FACTS: The petitioner was retired on January 4, 1951, with the rank of lieutenant colonel in the Armed Forces of the Philippines. He applied for retirement gratuity under R.A. No. 340, otherwise known as the Armed Forces Retirement Act, but in the computation of the total amount due him, he was not credited with

In other proceedings, however, the need for the assistance of counsel is not as urgent nor is it deemed essential to their validity. There is nothing in the Constitution that says a party in a noncriminal proceeding is entitled to be represented by counsel and that without such representation he will not be bound by such proceedings. The assistance of lawyers, while desirable, is not

the sums of P 12,324.41 and P 983.01 which he claimed represented his longevity pay under a later enacted law. His claims were denied on the ground that the law cannot be applied retroactively to him.

indispensable. The legal profession was not engrafted in the due process clause such that without the participation of its members the safeguard is deemed ignored or violated. The ordinary citizen is not that helpless that he cannot validly act at all except only with a lawyer at his side.

HELD: Under the petitioner's theory, even the rulings he sought to have reconsidered would have to be disregarded because they were rendered when he was acting on his own and therefore, as he contends, acting invalidly. In effect, following this logic, all proceedings where a person is not represented by counsel are null and void ab initio for violation of due process because he could not legally act by himself alone. Yet, magically, they become valid and may be reconsidered the moment and provided such person retains the services of a lawyer and starts acting through such counsel. The right to the assistance of counsel is not indispensable to due process unless required by the Constitution or a law. Exception is made in the charter only during the custodial investigation of a person suspected of a crime, who may not waive his right to

In the case at bar, the petitioner acted for and by himself quite ably, arguing knowledgeably on what he considered the applicable laws to justify his claim.

72

DIZON V. PSC 50 SCRA 500

FACTS: HELD:

73

DORMITORIO V. FERNANDEZ 72 SCRA 388 MA. ANGELA LEONOR C. AGUINALDO ATENEO LAW 2D BATCH 2010


FACTS: In a case involving petitioner as plaintiff and Lazatina as defendant, judgment was render ed in favor of the former but execu tion wasn't pursued in furtherance of an agreement between the parties that Lazatina should be reimbursed for incurred expenses in transferring her house to another lot. The court rendering judgment was then misled by the petitioners by averring fraudulently that the judgment was still in place and execution of the judgment was proper. However, after knowledge that there was a compromise agreement between the parties, the court took no delay in setting aside the issued writ of execution and thereafter, stayed the compromise agreement. HELD: There is no merit to the point raised by petitioners that they were not informed by respondent Judge of the petition by private respondent to set aside the writ of execution. The order granting such petition was the subject of a motion for reconsideration. 16 The motion for reconsideration was thereafter denied. 17 Under the circumstances, the failure to give notice to petitioners had been cured. That is a well-settled doctrine. 18 Their complaint was that they were not heard. They were given the opportunity to file a motion for reconsideration. So they did. That was to free the order from the alleged infirmity. Petitioners then cannot be heard to claim that they were denied procedural due process.

74

SAVORY V. LAKAS NG MANGGAGAWA 62 SCRA 258

FACTS: Savory filed an action for unfair labor practice against Lakas Pilipino. It averred that latter has committed strikes and mass action, in contravention of the collective bargaining agreement.

one of the witnesses presented by the company was their counsel. Defense lawyer has failed three times to cross-examine the witness however. Alas, the lawyer-witness succumbed to a heart attack. The defense then moved that his testimony be stricken out for failure to rebut. This was subsequently granted by the court. HELD: The right of a party to confront and cross-examine opposing witnesses in a judicial litigation, be it criminal or civil in nature , or in proceedings before administrative tribunals with quasi-judicial powers, is a fundamental right which is part of due process. However, the right is a personal one which may be waived expressly or impliedly by conduct amounting to a renunciation of the right of cross-examination . Thus, where a Party has had the opportunity to cross-examine a witness but failed to avail himself of it, he necessarily forfeits the rights to cross-examine and the testimony given on direct examination of the witness will be received or allowed to remain in the record. The conduct of a party which may be construed as an implied waiver of the right to cro ss-examine may tak e various forms. But th e common basic principle underlying the application of the rule on implied waiver is that the party was given the opportunity to confront and cross-examine an opposing witness but failed to take advantage of it for reasons attributable to himself alone. Private respondents through their counsel, Atty. Amante, were given not only one but five opportunities to cross-examine the witness, Atty . Morabe , but despite the warn ing an d admonitions of respondent court for Atty. Amante to conduct the crossexamination or else it will be deemed waived and despite the readiness, willingness, and insistence or the witness that he be cross-examined, said counsel by his repeated absence and/or unpreparedness failed to do so until death sealed the witness's lips


NOTES: ADMINISTRATIVE LAW PAGE - 66 forever. By such repeated absence and lack of preparation on the part of the counsel of private respondents, the latter lost their right to examine the witness, Atty. Morabe, and they alone must stiffer the consequences. The mere fact that the witness died after giving his testimony is no ground in itself for excluding his from the record so long as the adverse party was afforded an adequate opportunity for cross-examination but through fault of his own failed to cross-examine the witness.

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DUE PROCESS IN QUASI-CRIMINAL PROCEEDINGS

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75

ASPREC V. ITCHON 16 SCRA 921

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76

While the power to decide resides solely in the administrative agency, this doesn't preclude a delegation of power to hold a hearing The rule that requires an administrative officer to exercise his own judgment and discretion doesn't preclude him from utilizing as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts on the basis of which the officer makes his decisions. It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law

AMERICAN CYANAMID V. DIR. OF PATENT 76 SCRA 568

FACTS: Petitioner claims among others that he was denied his day in court by the board of examiners for surveyors which found him guilty as charged for unprofessional conduct and ordered the revocation of his certificate of resignation as a private land surveyor. From the records it appears that the board proceeded in petitioner’s and his counsel’s absence as he and counsel didn't appear at the last and stipulated date of hearing without cause or reason, without any excuse at all. This, is in spite of the fact that petitioner had notice of trial. Will the petitioner be sustained? HELD: Presence of a party is not always of the essence of due process. All that the law requires to satisfy adherence to the constitutional precepts is that the parties are given notice of the trial. The petitioner cannot charge now that he received less than a fair treatment. He has forfeited his right to be heard.

DELEGATION OF AUTHORITY TO HEAR AND RECEIVE EVIDENCE

FACTS: Petitioner filed a complaint with the Philippine Patent Office to cancel the certificate of registration of Tiu Chian’s Sulmetine on the ground that it is confusingly similar to its own trademark Sulmet on a veterinary product used for the same purpose, a trademark it has long been using both in the US and the Philippines. The Director denied the petition. Petitioner appealed from the said decision and among others, assigned as error the delegation made by the Director of the authority to hear and receive the evidence in the said case to a hearing officer. HELD: The director has the authority to designate a ranking official of the patent’s office to hear inter partes proceedings in the registration of trademarks and tradenames. It is well settled that while the power to decide resides solely in the administrative agency vested by law, this doesn't preclude a


NOTES: ADMINISTRATIVE LAW PAGE - 67 delegation of the power to hold a hearing on the bsiss of which the decision of the administrative agency will be made. This rule that requires an administrative officer to exercise his own judgment and discretion doesn't preclude him from utilizing as a matter of practical administrative procedure the aid of subordinates to investigate and report to him the facts, on the basis of which the officer makes his decision. It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law.

77

SKYWORLD V. SEC 211 SCRA 565

FACTS: Inter Realty obtained a loan from the CBC as security for which it mortgaged three (3) parcels of land and the improvements thereon. Inter-Realty eventually failed to pay its debt and thus, the condo project was foreclosed and CBC was the highest bidder for the project. A compromise agreement was then forged between the two and the redemption period was extended. Meanwhile, InterRealty made a written authorization in favor of Bautista to buy or sell the condominium units to buyers. CBC was notified by petitioner SCOAI through Angel Bautista, who was the latter's president, of the organization and official incorporation of the SCOAI. Ultimately, there was failure to redeem the foreclosed properties. As the new owner and with the aim of recovering the unpaid debt, it authorized Bautista to sell the unsold condo units but this was revoked later on for discovering the latter’s violation of his fiduciary obligations as an agent. Two petitions were filed against the petitioner SCOAI, one of them contesting the existence of the petitioner as an entity, and the other, for a writ of preliminary injunction praying that the petitioner be stopped from exercising the prerogatives of a condominium corporation

HELD: The petitioner essentially questions the authority of Mr. Ruiz to decide. It was Mr. Ruiz who was assigned the case of PED No. 880418 for investigation and prosecution. Accordingly, Mr. Ruiz filed a petition (SEC No. 3601) before the Securities Investigation and Clearance Department (SICD) of the SEC. It is argued that Mr. Ruiz acted as prosecutor and judge over the case, hence, he issued the resolution without authority and with grave abuse of discretion. He allegedly went beyond the duties required of a member of the PED which are limited to investigation and prosecution of civil and criminal cases as well as other actions involving violation of laws, rules and regulations enforced by the SEC. The petitioner adds that the presentation for approval of the resolution of Mr. Ruiz to the Commission, en banc was irregular, null and void for being done without the knowledge of the petitioner. Thus, the petitioner was allegedly deprived of the benefit of an appeal from the resolution to the Commission, en banc. The contentions are without merit. Pres. Decree No. 902-A vests on the Commission the srcinal and exclusive jurisdiction to hear and decide cases involving, among others, disputes between the corporation and the state regarding its legal right to exist, and the power to hear and decide on the suspension or revocation of a certificate of registration of a corporation. The Commission can validly delegate the authority to exercise the specific powers assigned to it by law. In the consolidated cases, the Commission empowered the PED to conduct the hearing and to decide on the revocation of a certificate of registration. The task was assigned to Mr. R uiz for and in beha lf of the Commission . It is true that Mr. Ruiz signed a petition with the BSCC as a relator prior to the consolidation of the two cases. However, that petition was apparently disregarded. Mr. Ruiz was validly authorized to


NOTES: ADMINISTRATIVE LAW PAGE - 68 handle the two cases simultaneously filed by the private parties themselves against each other. It must be recalled that in PED No. 88-0418, BSCC pursued its case by itself and not as a mere relator suing through the help of the PED. A private entity is not prohibited from prosecuting its action for revocation of registration by itself. Otherwise, the petition of SCOAI against the BSCC also seeking the revocation of the latter's registration would not have been taken cognizance of by the SEC on the ground that the case should have been prosecuted by the Commission upon the relation of SCOAI. In judging the merits of the case at the instance of the Commission, Mr. Ruiz acted only as a trier of the facts presented to him and not as a prosecutor at the same time. The resolution arrived at was adopted by the Commission, en banc as its own decision, upon its approval.

ADMINISTRATIVE DETERMINATIONS WITHOUT NOTICE AND HEARING !

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Notice and hearing are only necessary in order to comply with due process of law only when some constitutional right is claimed to be invaded Where the purpose of the administrative agency is to decide whether a right or privilege which an applicant doesn't possess shall be granted to him or withheld, or where the power ex ercised is either legislative or execu tive, notice and hearing is not necessary in the absence of an express or implied statutory provision therefor, and a statute may provide for such determination without requiring notice and hearing Even though the power exercised is quasi-judicial, notice and hearing may not be essential to due process of law if no personal or property rights are involved

78

SUNTAY V. PEOPLE 101 PHIL. 833

FACTS: The first charge of seduction filed against the accused was made by the victim’s father but this was dismissed for lack of merit. Another charge was filed but this time by the victim herself. The NBI and the Department of Foreign Affairs were notified to take proper steps to bring back the accused so that he can be dealt with in accordance with law. His passport was then cancelled without notice and hearing. HELD: True, the discretion granted, to the Secretary for Foreign Affairs to withdraw or cancel a p assport already issued may not b e e xercised at whim. But here the petitioner was hailed to Court to answer a criminal charge for seduction and although at first all Assistant City Attorney recommended the dismissal of the complaint previously subscribed and sworn to by the father of the offended girl, yet the petitioner knew that no final action had been taken by the City Attorney of Quezon City as the case was still under study. And as the Solicitor General puts it, "His suddenly leaving the country in such a convenient time, can reasonably be interpreted to mean as a deliberate attempt on his part to flee from justice, and, therefore, he cannot now be heard to complain if the strong arm of the law should join together to bring him back to justice." In issuing the order in question, the respondent Secretary was convinced that a miscarriage of justice would result by his inaction and as he issued it in the exercise of his sound discretion, he cannot be enjoined from carrying it out. Counsel for the petitioner insists that his client should have been granted a "quasi-judicial hearing" by the respondent Secretary before withdrawing or cancelling the passport issued to him.


NOTES: ADMINISTRATIVE LAW PAGE - 69 Hearing would have been proper and necessary if the reason for the withdrawal or cancellation of the passport were not clear but doubtful. But where the holder of a passport is facing a criminal a charge in our courts and left the country to evade criminal prosecution, the Secretary for Foreign Affairs, in the exercise of his discretion to revoke a passport already issued, cannot be held to have acted whimsically or capriciously in withdrawing and cancelling such passport. Due process does not necessarily mean or require a hearing. When discretion is exercised by an officer vested with it upon an undisputed fact, such as the filing of a serious criminal charge against the passport holder, hearing maybe dispensed with by such officer as a prerequisite to the cancellation of his passport; lack of such hearing does not violate the due process of law clause of the Constitution; and the exercise of the discretion vested in him cannot be deemed whimsical and

As to the first issue, we agree with the CSC that petitioner was afforded due process and opportunity to be heard.

capricious of because of the absence of such hearing. If hearing should always be held in order to comply with the due process of clause of the Constitution, then a writ of preliminary injunction issued ex parte would be violative of the said clause.

In his motion for reconsideration, petitioner did not question the failure of respondent Mayor to serve him the letter-complaint. Instead, he claimed that while the letter-complaint directed him "to answer the adverse allegations contained therein," it did not apprise him of his right to counsel and therefore was constitutionally defective. Another telling point in his motion for reconsideration is his admission therein that he may be deemed to have waived his right to answer the complaint.

RULES OF PROCEDURE 79 MENDOZA V. CSC 233 SCRA 657 FACTS: Petitioner, was a Senior Revenue Inspector serving under a permanent appointment in the Office of the Treasurer of Tarlac, Tarlac. On a relevant date, the city mayor sent him a notice asking for explanation regarding his falsification of real estate tax receipts and for unlawful collection of taxes. Failing to render an answer, he was dismissed from his position. HELD:

Petitioner insists that he was never furnished a copy of the lettercomplaint of March 10, 1989, which directed him to answer the charges contained therein within 72 hours from receipt thereof. The CSC believed otherwise, relying on the evidence on record showing that the letter-complaint was sent by registered mail to petitioner's address at the Office of the Municipal Treasurer of Tarlac as shown by the Tarlac Post Office Registry Receipt No. 5151 and was received by someone in that office on March 17, 1989 as shown by the registry return card. It is a common practice that letters addressed to an official or employee in a government office are received by an employee assigned to handle mail matters.

80

MANGUBAT V. DE CASTRO 163 SCRA 608

FACTS: The mayor filed with the provincial board a complaint against the petitioner for misconduct and dishonesty. The board conducted its investigation and accordingly submitted the case for decision. No memorandum was ever submitted by the petitioner even though he was required to d o s o. Before the decision, the charter of th e city


NOTES: ADMINISTRATIVE LAW PAGE - 70 came into being. It was the legal opinion of the fiscal that he should take cognizance of the case and thus records were transmitted to him. Again, investigation was done and he later recommended the dismissal of the complaint. Somewhere down the line, the case was remanded to the board of investigators who did not conduct additional evidence gathering or the like. The board found the petitioner guilty. HELD: Petitioner contends that the absorption or taking over by the Police Commissioner of pending cases should take place only after the publication of the Manual as explicitly and clearly provided by Section 26 of the Police Act of 1966. Petitioner insists that the action of the Police Commission was highly irregular when it took over the case and thereafter made its own findings, contrary to the findings of the City Fiscal acquitting petitioner of the charges, apart from the fact that its decision was based on the records which were forwarded by the Board of Investigators without the latter making its own investigation, and its own findings and recommendation. This argument misconceives the meaning of due process. The proceeding provided for is merely administrative and summary in character, in line with the principle that "administrative rules of procedure should be construed liberally in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of their respective claims and defenses." Otherwise stated, where due process is present, the administrative decision is generally sustained. The records show that the case at bar was exhaustively heard both in the Municipal Board and in the Fiscal's Office, with both parties afforded ample opportunity to adduce their evidence and argue

their causes. But as earlier stated, the findings of the Fiscal that there was no prima facie case were not finalized with the requested brief statement of materials and relevant facts on which a conclusion could be based. Without the requested resolution, the City Mayor was unable to issue the corresponding administrative order. Verily, the respondent Commission can not be bound by the findings of the City Fiscal, much less was it prohibited from making findings of its own on the basis of the records which both the Commission and the Board of Investigators considered sufficient for purposes of rendering a decision. Neither was the Board's discretion not to conduct a new investigation foreclosed by such findings. Furthermore, apart from the fact that the uniform requirements of due process were all complied with under Republic Act No. 557, Republic Act No. 3857 (the Revised Charter of Cebu City) and Republic Act No. 4864 by the investigating officials, there is nothing in the records indicative of any act on the part of subject administrative bodies amounting to a deprivation of petitioner's right to administrative process. At this juncture, the oft-repeated rule that findings of administrative agencies are generally accorded not only respect but also finality where the decision and the order of execution issued by public respondents are not tainted with unfairness or arbitrariness that would amount to abuse of discretion or lack of jurisdiction deserves reiteration. The findings of fact must be respected, so long as they are supported by substantial evidence even if not overwhelming or preponderant. Indeed, if the Police Commission were to accede to the suggestion of petitioner that the Board of Investigators be directed to conduct its own investigation and give the parties a chance to present their evidence and not merely rely on the result of the investigation


NOTES: ADMINISTRATIVE LAW PAGE - 71 conducted by the Municipal Board and by the City Fiscal's Office, this would be favoring technicalities over substantial justice. Clearly, petitioner was given his "day in court" and there is no occasion to impute deprivation of due process. On the contrary, the rendition of the questioned decision by the Police Commission actually promoted and served the interests of justice. In addition, there is no denial of due process if the decision was rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected.

EVIDENCE IN ADMINISTRATIVE PROCEEDINGS 81 RABAGO V. NLRC 200 SCRA 158 FACTS: Ace Building Care and the Philippin e Tubercu losis Society entered into a contract under which the former would provide the latter with janitorial and allied services for a stipulated consideration, subject to such adjustment as might be subsequently required by law. The contract was renewed yearly until 1985, when the services were place d unde r public bidding and a new co ntract was awarded to another company, which then took over from ABC. On a relevant date, 41 janitors ABC had earlier detailed to PTS filed a complaint with the National Labor Relations Commission against both ABC and PTS for unpaid wage differentials under Wage Order Nos. 5 and 6, holiday premium pay, damages and attorney's fees, reimbursement of cash bond, incentive leave pay and bonus and separation pay. ABC filed a cross-claim against PTS, contending that the latter was liable for the statutory increases, while PT S moved to dismiss on the gro und that it belonged to th e public sector and was not covered by the Labor Code.

The Labor Arbiter held that they are not entitled to the reimbursement of cash bond and were not entitled to the holiday pay except for the five complainants. HELD: As the Court sees it, the wage orders do not apply to the direct employees of PTS who in fact are members of the Government Service Insurance System. The complainants in G.R. No. 82868 unquestionably belong to the private sector and for this reason are covered by the Social Security System. They are the indirect employees of the PTS and as such are entitled to hold it liable, solidarity with their direct employer, for their unpaid wage differentials. In this sense, the PTS is correctly classified as an employer coming under the private sector. The reference to it as belonging to the public sector relates only to its direct employees "for purposes of coverage under the Employees' Compensation Commission," not to its indirect employees coming from the private sector. The issues regarding the separation pay and the service incentive leave pay are factual. It is often enough said that the findings of fact of quasi-judicial agencies which have acquired expertise on the specific matters entrusted to their jurisdiction are accorded by this Court not only respect but even finality if they are supported by substantial evidence. We are satisfied that the complainants were able to establish by Exhibit "B" their length of service to entitle them to service incentive leave with pay. The argument that the affidavit is hearsay because the affiants were not presented for cross-examination is not persuasive because the rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC, where decisions may be reached on the basis of position


NOTES: ADMINISTRATIVE LAW PAGE - 72 papers only. It is also worth noting that ABC has not presented any evidence of its own to disprove the complainant's claim. As the Solicitor General correctly points out, it would have been so easy to submit the complainants' employment records, which were in the custody of ABC, to show that they had served for less than one year. A sligh t mod ification must be made, though, in th e ca se o f No rma Moreno Mangabat, who was denied the service incentive leave with pay, possibly through an oversight. Exhibit "B" shows that her employment was from "7/79 to 12/81 and 3/84 to 7/84." Section 3 of Rule V, Book III of the Omnibus Rules Implementing the Labor Code, provides that the term "at least one year service" shall mean service within 12 months, whether continuous or broken, reckoned from the date the employee started working. The submission that the five complainants awarded separation pay were not entitled thereto because their terms expired it with the contract with PTS is also not acceptable. ABC never offered any evidence that the employment of the claimants was co-terminal with the janitorial contract. We agree that th e termination o f ABC's contract with PTS resulted in a partial closure or cessation of operations of ABC that called for the application (if only by analogy) of Article 283 of the Labor Code providing in part as follows: ... In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. Our conclusion is that Ace Building Care and the Philippine Tuberculosis Society are solidarily liable to the complainants for

their differential pay under Wage Orders Nos. 5 and 6, PTS being considered in the circumstances of this case to be the indirect employer of workers in the private sector. ABC is liable for the payment of the separation pay and incentive leave pay of the complainants mentioned in the challenged decisions, with the modification only that Norma Moreno Mangabat shall also be entitled to service incentive leave with pay: In view of the above findings, it is no longer necessary to resolve the motion of the complainants that the supersedeas bond fixed by the Court for the issuance of the temporary restraining order on May 11, 1988, be increased to P500,000.00.

82

MACEDA V. ERB 199 SCRA 454

FACTS: Due to the Persian war conflict, the oil companies have filed their respective applications for oil price increase. The ERB granted provisional increases. Maceda assailed this preliminarily on the ground that no hearing was held in granting provisional increases. Hearing was conducted and during the proceedings, the ERB ordered that testimonies shall be in affidavit-form, among other changes in the trial proper. This was assailed once again on the allegation of denial of due process by not being able to finish crossexamination. HELD: The Solicitor General has pointed out that aside from the increase in crude oil prices, all the applications of the respondent oil companies filed with the ERB covered claims from the OPSF. We shall thus respect the ERB's Order of December 5, 1990 granting a provisional price increase on petroleum products


NOTES: ADMINISTRATIVE LAW PAGE - 73 premised on the oil companies' OPSF claims, crude cost peso differentials, forex risk for a subsidy on sale to NPC, since the oil companies are "entitled to as much relief as the fact alleged constituting the course of action may warrant." Nonetheless, it is relevant to point out that on December 10, 1990, the ERB, in response to the President's appeal, brought back the increases in Premium and Regular gasoline to the levels mandated by the December 5, 1990 Order (P6.9600 and P6.3900, respectively).

FORM OF ADMINISTRATIVE DETERMINATIONS 83 DADUBO V. CSC 223 SCRA 747 FACTS: Dadubo, Senior Accounts Analyst and Cidro, Cash Supervisor, of the DBP were administratively charged with conduct prejudicial to the best interest of the service. The charges were based on reports on the unposted withdrawal of P60,000.00 from a certain Savings Account. Veloso, an authorized representative of the Tius, presented an undated withdrawal slip for P60,000.00. Dadubo, as acting teller, prepared the needed preliminaries and the money was subsequently released to Veloso. The Received payment portion of the withdrawal slip was signed Veloso but Cidro, who disbursed the amount, failed to initial the passbook. After banking hours, another withdrawal slip was presented by another employee of the Tius. This was the second P60,000.00 withdrawal. V eloso d id not know about it. The withdrawal s lip was processed and approved on the same day. It was indicated in the slip that it was posted but it wasn't actually made, absent presentation of passbook.

The following day, prior to the payment of the ABH withdrawal, Veloso presented another undated withdrawal slip for P60,000.00. This was the third P60,000.00 withdrawal. The withdrawal slip was received by Dorado, who handed it to Dadubo. At that time, Cidro was encashing the check at PNB to satisfy the ABH withdrawal. When she returned from the bank, she paid this withdrawal to Veloso, who thought that what she was collecting was the P60,000.00 corresponding to the withdrawal slip she presented that morning. When Dadubo informed Cidro about the third withdrawal, till money of P100,000.00 was made to service it. Prior to the payment of the third P60,000.00 withdrawal, Veloso came back and presented another withdrawal slip for P40,000.00. The petitioner claimed she disbursed P100,000.00 to Veloso, covering the third P60,000.00 and the P40,000.00 withdrawals. On the other hand, Veloso testified that she received only P40,000.00 from the petitioner. She acknowledged receipt of the amount by signing the withdrawal slip and indicating opposite her signature the amount of P40,000.00. That left the balance of P60,000.00 unaccounted for and directly imputable to Dadubo. She was then charged and subsequently found guilty for embezzlement of bank funds. HELD: Appreciation of the evidence submitted by the parties was, to repeat, the prerogative of the administrative body, subject to reversal only upon a clear showing of arbitrariness. The rejection of the affidavit of Ballicud, for example, was not improper because there was nothing in that document showing that the petitioner did not embezzle the P60,000.00.


NOTES: ADMINISTRATIVE LAW PAGE - 74 It is true that the petitioner was formally charged with conduct prejudicial to the best interest of the bank and not specifically with embezzlement. Nevertheless, the allegations and the evidence presented sufficiently proved her guilt of embezzlement of bank funds, which in unquestionably prejudicial to the best interest of the bank. The charge against the respondent in an administrative case need not be drafted with the precision of an information in a criminal prosecution. It is sufficient that he is apprised of the substance of the charge against him; what is controlling is the allegation of the acts complained of, not the designation of the offense. The petitioner's complaint was rightfully dismissed, when it averred that CSC Resolution No. 92-878 failed to comply with the constitutional requirement to state clearly and distinctly the facts and the law on which a decision is based. This provision applies only to courts of justice and not to administrative bodies like the Civil Service Commission. In any event, there was an earlier statement of the facts and the law involved in the decision rendered by the MSPB dated February 28, 1990, which affirmed DBP's decision to dismiss the petitioner. In both decisions, the facts and the law on which they were based were clearly and distinctly stated.

ADMINISTRATIVE APPEAL AND REVIEW 84 CORONA V. CA 214 SCRA 378 FACTS: President Aquino issued an AO creating a President Committee on Public Ethics and Accountability, which vested also powers to the department secretary to discipline offices, agencies, and others attached to its department. Pursuant to this, the Secretary created the AAB to act and decide on cases of administrative malfeasance,

irregularities, grafts and acts of corruption in the department. Therafter, complaints were filed against numerous officers with the AAB. These officers eventually questioned the jurisdiction over them. HELD: Management of personnel, an attached agency is to a certain extent free from departmental interference and control. Although the pertinent provisions don't expressly provide for a mechanism for an administrative investigation of personnel, by vesting power to remove erring employees on the general manager, with the approval of the board of directors, the law impliedly grants said officials the power to investigate its personnel below the rank of assistant general manager who may be charged with an administrative offense. During such investigation, the PPA general manager may subject the employee concerned to preventive suspension. The investigation should be conducted in accordance with the procedure set by law. Only after gathering sufficient facts may the PPA general manager impose the proper penalty in accordance with law. It is the latter action which requires the approval of the PPA board of directors. The DOTC secretary as an alter ego has jurisdiction over PPA personnel like the private respondents herein, is correct only to a certain extent. What is p rescribed by the law is that all co mplaints against a PPA official or employee below the rank of assistant general manager shall be filed before the PPA general manager by the proper officials. The aggrieved party shouldn't however be one and the same official upon whose lap the complaint the has filed may eventually fall on appeal.

85

DEL CASTILLO V. CSC


NOTES: ADMINISTRATIVE LAW PAGE - 75 241 SCRA 317 FACTS: Professor del Castillo was an employee of the PRC. He was assigned as a watcher in the Optometry Licensure Examination. A report was filed by his fellow watchers that saw him answering the test papers of an examiner. He was dismissed from the service because of this. He appealed this to the MPSB and it reversed the decision of the PRC. This was reversed by the CSC.

company and this prompted them to file for illegal dismissal. The labor arbiter noted the previous decision and dismissed the complaint. But the NLRC reversed this, averred that there was no res judicata. HELD: Decisions and orders of administrative agencies, rendered pursuant to their quasi-judicial authority, have upon their finality the force and binding effect of a final judgment within the purview of the doctrine of res judicata.

Petitioner averred that the CSC didn't have jurisdiction in reversing his acquittal. Upon the grant of his appeal by the MPSB, he averred that the same became final and executory.

It is undisputed that the finding of the non-existence of employeremployee relationship is with finality.

HELD:

NOTE:

It is axiomatic that the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law and the same contemplates that a review of decisions exonerating officers or employees from administrative charges.

There was vested right because the ruling affected their status as employees.

RES JUDICATA AND REOPENING OF CASES 86 VDA FISH BROKER V. NLRC 228 SCRA 681

87

FACTS: VDA is a licen sed fish broker. It enga ged th e service s of Bula an d Salac, among others as batilyos to arrange the fish in the banera. On a relevant date, a complaint against VDA was filed for nonpayment of service incentive pay, emergency cost of living allowance, thirteenth month pay, legal holiday and premium pay for rest day and holiday was filed against VDA. The labor arbiter dismissed the case and ruled that there was no employer-employee relationship. The two employees were eventually dismissed by the

Res judicata is applicable only when there is exercise of quasijudicial powers.

SY HONG V. COMM. OF IMMIGRATION L-10224, 11 MAY 1957

FACTS: Prior to February 1940, petitioners were permanent residents in this country. Sometime in February 1940, they went to China for a temporary sojourn. They were unable to return to the Philippines within the period of validity of their special return certificate, and the Pacific War had caught up with them in China. They were admitted to this temporary visitors expired on January 20, 1950. After proper investigation, petitioners were ordered deported for violation of Philippine Immigration Act, as amended, on April 19, 1950. Petitioners requested for the correction of their status from


NOTES: ADMINISTRATIVE LAW PAGE - 76 temporary visitors to returning residents, and the first deputy commissioner, who was then acting commissioner of Immigration, ordered the correction of their status into returning residents. On a later date however, the Commissioner of Immigration set aside the aforesaid order and proceeded to enforce the warrants of deportation issued against petitioners as overstaying temporary visitors. On the basis of these facts, the Court below held that petitioners, having accepted the status of temporary visitors in entering this country, must first abandon the Philippines before seeking permanent admission thereto, and denied the petitioner for certiorari. HELD: The petitioners having lost their right of re-entry as permanent residents, and having been admitted as temporary visitors or non-

sanction is the force of public opinion invoked by the fairness of a full hearing

METHODS OF ENFORCEMENT 1. 2. 3. 4.

INVESTIGATION !

!

immigrants and the period allowed for their temporary sojourn in these islands having already expired, they are under the law, subject to deportation by the Commissioner of Immigration. NOTE: There was no vested right because the subject matter was a privilege. It was the correction of a status by the Commissioner of Immigration.

!

ADMINISTRATIVE ENFORCEMENT AND SANCTIONS ENFORCEMENT OF ADMINISTRATIVE DETERMINATIONS ! ! !

Administrative determinations are enforceable only in the manner provided by statute If the state has failed to provide a remedy for their enforcement, they are unenforceable Some determinations are not to be enforced at all, in the ordinary sense of the term—in such cases, their only

Investigation Summary action Imposition of administrative sanctions Judicial action

!

!

The life blood of the administrative process is the flow of fact, the gathering, the organization and analysis of evidence Investigations are useful for all administrative functions, not only for rule-making, adjudication and licensing, but also for prosecuting, for supervising and directing for determining general policy, for recommending legislation, and for purposes no more specific than illuminating obscure areas to find out what if anything should be done. An administrative agency may be authorized to make investigations, not only in proceedings of a legislative and judicial natu re, but a lso in p roceedings whose sole purpose is to obtain information upon which future action of a legislative and judicial nature may be taken and may require the attendance of witnesses in proceedings of a purely investigatory nature Investigatory or inquisitorial powers—power to inspect or to secure or to require the disclosure of information by means of accounts, records or otherwise This power may include the following— Of subpoena o Of swearing witnesses o Of interrogating of witnesses before them o



o

o

o o o o

88

Of calling the production of books, records and papers Of requiring books, records and papers to be made available for inspection Of inspecting premises Of requiring written answers to questionnaires Of requiring reports, periodic or special Of requiring the filing of statements

MASANKAY V. COMELEC 6 SCRA 27

FACTS: Masangcay was being punished with contempt by the COMELEC for violating its resolution prohibiting the opening of ballot boxes without the presence of the required authorized officers. Masangcay questions the constitutionality of the pertinent statutory provision, questioning the exercise of the COMELEC of the power to punish acts of contempt against said body under the same procedure and with the same penalties provided for in Rule 64 of the Rules of Court in that the portion of said section which grants to the Commission and members the power to punish for contempt is unconstitutional for it infringes the principle underlying the separation of powers that exists among the three departments of our constitutional form of government. HELD: Commission on Elections has only the duty to enforce and administer all laws to the conduct of elections, but also the power to try, hear and decide any controversy that may be submitted to it in connection with the elections. In this sense, said, the Commission, although it cannot be classified a court of justice within the meaning of the Constitution (Section 30, Article VIII), for it is merely an administrative body, may however exercise quasi-

judicial fun ctions ins ofar as controversies that by express provision law come under its jurisdiction. The difficulty lies in drawing the demarcation line between the duty which inherently is administrative in character and a function which calls for the exercise of the quasi-judicial function of the Commission. In the instant case, the resolutions which the Commission tried to enforce and for whose violation the charge for contempt was filed against petitioner Masangcay merely call for the exercise of an administrative or ministerial function for they merely concern the procedure to be followed in the distribution of ballots and other election paraphernalia among the different municipalities. In fact, Masangcay, who as provincial treasurer of Aklan was the one designated to take charge of the receipt, custody and distribution of election supplies in that province, was charged with having opened three boxes containing official ballots for distribution among several municipalities in violation of the instructions of the Commission which enjoin that the same cannot be opened except in the presence of the division superintendent of schools, the provincial auditor, and the authorized representatives of the Nacionalista Party, the Liberal Party, and the Citizens' Party, for he ordered their opening and distribution not in accordance with the manner and procedure laid down in said resolutions. And because of such violation he was dealt as for contempt of the Commission and was sentenced accordingly. In this sense, the Commission has exceeded its jurisdiction in punishing him for contempt, and so its decision is null and void.

JUDICIAL REVIEW JUDICIAL REVIEW OF ADMINISTRATIVE ACTIONS 89

OR

RELIEF

AGAINST

FIRST LEPANTO V. CA MA. ANGELA LEONOR C. AGUINALDO ATENEO LAW 2D BATCH 2010

NOTES: ADMINISTRATIVE LAW PAGE - 78 231 SCRA 30

92

MACAILING V. ANDRADA 31 SCRA 126

respondents. Petitioners sat as directors and officers of the subject corporation. Private respondents averred that these petitioners violate their duties of loyalty and diligence by unlawfully refusing the private respondents from participating in the management of the corporation. Meanwhile, the US court issued a temporary restraining order prohibiting the private respondents from being proxies for the American corporation. This order was unheeded. They were elected as the new directors in an annual stockholders’ meeting and yet they averred that they were prohibited unlawfully by the sitting directors from assuming office. They sought thereby a temporary restraining order against the petitioners. Hence, these petition by the petitioners against it.

93

DABUET V. ROCHE PHARMACEUTICALS 149 SCRA 386

HELD: The petitioners do not question the jurisdiction of the SEC over

94

LUPANGCO V. CA 160 SCRA 848 (JURISDICTIONAL ISSUE ONLY)

95

BOARD OF MEDICAL EDUCATION V. ALFONSO 176 SCRA 304

96

ALMINE V. CA 177 SCRA 796

90

FIRST LEPANTO V. CA 237 SCRA 519

91

LIBORO V. CA 218 SCRA 193

WHERE REVIEW IS NOT GRANTED BY STATUTE

FINALITY OF ADMINISTRATIVE ACTION FOR PURPOSES OF REVIEW 97 AGUINALDO V. SEC 163 SCRA 262 FACTS: NAMECOR was a corporation with shares owned by a foreign corporation which in turn has some of its shares owned by private

the case between them and the private respondents. What they challenge is the continuance of the temporary restraining order issued by the respondent SEC and the apparent delay of the latter's en banc division in resolving their main and supplemental petitions which also pray for th e lifting of the question ed restraining ord er. The SEC "in order to effectively exercise such jurisdiction," is conferred the power, inter alia, "to issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply." Since the SEC is at least a co-equal body of the Regional Trial Court when it adjudicates controversies over which it has jurisdiction, it follows that the temporary restraining order issued by SEC must have the same life-span as that issued by the trial court. It is a well-settled rule that a temporary restraining order issued by a trial court has a life of only twenty (20) days—under Section 5, Batas Pambansa Blg. 224, a judge may issue a temporary


NOTES: ADMINISTRATIVE LAW PAGE - 79 restraining order with a limited life of twenty (20) days from date of issue. If before the expiration of the 20-day period the application for preliminary injunction is denied, the temporarily restraining order would thereby be deemed automatically vacated. If no action is taken by the judge on the application for preliminary injunction within the said 20 days, the temporary restraining order would automatically expire on the 20th day by the sheer force of law, no judicial declaration to that effect being necessary. A temporary restraining order can no longer exist indefinitely for it has become truly temporary. To the extent, therefore, that the enforcement of the temporary restraining order issued by the respondent SEC exceeded twenty (20) days, this Court rules that the said respondent committed grave abuse of discretion. However, although the questioned order no longer has any force and effect, the respondent SEC still has the jurisdiction and obligation to p roceed with th e h earing of th e cas e on the merits and to issue the appropriate orders pursuant thereto subject to review by the Court of Appeals and eventually this Court.

EXCEPTIONS TO DOCTRINE OF FINALITY 98 PT & T V. COA 146 SCRA 190 FACTS: Petitioner was granted a franchise whereby he was given a preferential tax rate. A subsequent law was passed whereby it was ruled that any grant of a similar franchise which extends benefits to another not mentioned with the franchise of petitioner shall likewise be given to petitioner. Thereafter, a franchise was granted to another provider and had a smaller tax rate. The COA conducted an audit and found out the deficiency tax payment of petitioner. It then sought exception averring that it applied the tax rate given to DOMSAT.

HELD: A curs ory ex amination of the two (2) letters in question shows that the same are not a "final award, order or decision" within the meaning of the aforequoted provisions. Respondent Commission in the said letters did not decide the issue. It did not render a decision, order or final award. It merely expressed an opinion. Even assuming that the "opinion" of respondent Commission expressed in its two (2) letters is proper subject for review, the same is in accordance with the law. In construing the "most favored treatment clause" of Republic Act No. 5048, it has been held that the principle behind such provision is that of "fair play" ! "to place both competing groups or entities on equal footing and not to give one an advantage over the other." (Davao Light and Power Co., Inc. vs. The Commissioner of Customs, 44 SCRA 127). An examination of the franchises of petitioner PT & T and DOMSAT discloses that while they are both engaged in telecommunication activities, they are not necessarily in competition with each other. DOMSAT is a "carrier's carrier". It is a communications outfit that provides services to other communication petitions outfits. It was formed for the exploitation of the benefits of the communications satellite system. It is principally a "middleman" between the operators of the communications satellite system and the domestic carriers such as petitioner. Thus, its franchise states that petitioner shall have "the right and authority ... to construct, maintain and operate such ground and other facilities, as needed to deliver telecommunications services to and from the communications satellite system and the telephone, telegraph, telex and other networks and terminals of specialized telecommunications network of government and/or private persons and/or corporations such as


NOTES: ADMINISTRATIVE LAW PAGE - 80 computer-data communications systems and point-to-point or switched voice networks. On the other hand, petitioner was granted a franchise to render communications services to end users. It was not licensed to operate as a "carrier's carrier." Thus, its franchise states that it has authority to install and operate facilities for "international and domestic public communications." Therefore, since DOMSAT caters to other carriers while petitioner caters to end users, they are not competitors. Stated otherwise, there can be no business rivalry between the two firms inasmuch as the customers of one are not the customers of the other and vice-versa. Another reason why DOMSAT and petitioner cannot be considered competing firms is the fact that the former principally provides communications services through the communicationssatellite system, while the latter-does so principally through its own facilities. Since petitioner and DOMSAT are not competitors, petitioner cannot avail itself of the privilege of paying its franchise tax at the rate of 1/2% instead of 1-1/2% as provided in its franchise. Moreover, what petitioner is claiming in effect, is a reduction of its taxes due the Government. The rule is that, as the power of taxation is a high prerogative of sovereignty, its relinquishment is never presumed and any reduction or dimunition thereof with respect to its mode or its rate must be strictly construed and the same must be couched in clear and unmistakable terms in order that it may be applied.

DOCTRINE OF PRIOR RESORT/PRIMARY JURISDICTION 99 INDUSTRIAL ENTERPRISES V. CA 184 SCRA 426

FACTS: Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through the Bureau of Energy Development (BED) for the exploration of two coal blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for another coal operating contract for the exploration of three additional coal blocks which, together with the srcinal two blocks, comprised the so-called "Giporlos Area." IEI was later on advised that in line with the objective of rationalizing the country's over-all coal supply-demand balance . . . the logical coal operator in the area should be the Marinduque Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to MMIC. Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the subject of IEI's coal operating contract. Subsequently, IEC sought the rescission of the memorandum of agreement due to several raised issues and strangely enough, the president of the IEC and MMIC is one and the same person. Anyway, the trial court th rough a summary jud gment held th at the rescission was valid but this was reversed by the appellate court. HELD: The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decide the suit for rescission of the Memorandum of Agreement concerning a coal operating contract over coal blocks. A corollary question is whether or not respondent Court of Appeals erred in holding that it is the Bureau of Energy


NOTES: ADMINISTRATIVE LAW PAGE - 81 Development (BED) which has jurisdiction over said action and not the civil court. While the action filed by IEI sought the resciss ion of what app ears to be an ordinary civil contract cognizable by a civil court, the fact is that the Memorandum of Agreement sought to be rescinded is derived from a coal-operating contract and is inextricably tied up with the right to develop coal-bearing lands and the de termination of whether or not the reversion of the coal operating contract over the subject coal blocks to IEI would be in line with the integrated national program for coal-development and with the objective of rationalizing the country's over-all coal-supply-demand balance, IEI's cause of action was not merely the rescission of a contract but the reversion or return to it of the operation of the coal blocks. Thus it was that in its Decision ordering the rescission of the Agreement, the Trial Court, inter alia, declared the continued efficacy of the coal-operating contract in IEI's favor and directed the BED to give due course to IEI's application for three (3) IEI more coal blocks. These are matters properly falling within the domain of the BED. For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D. No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive and integrated national program for the exploration, exploitation, and development and extraction of fossil fuels, such as the country's coal resources; adopting a coal development program; regulating all activities relative thereto; and undertaking by itself or through service contracts such exploitation and development, all in the interest of an effective and coordinated development of extracted resources.

100

RCPI V. NTC 184 SCRA 517

FACTS: PLDT filed an application with respondent Commission for the Approval of Rates for Digital Transmission Service F acilities und er NTC Case No. 84-003. The respondent Commission provisionally approved and set the case for hearing within the prescribed 30-day period allowed by law. The petitioners except PT&T were informed of the hearing. They moved to oppose and file a reply to the application of PLDT but was denied. HELD: The Public Service Commission found that the application involved in the present petition is actually an application for approval of rates for digital transmission service facilities which it may approve provisionally and without the necessity of any notice and hearing as provided in the above-quoted provision of law. Well-settled is the rule tha t the Public Service Commission now is empowered to approve provisionally rates of utilities without the necessity of a prior hearing. Under the Public Service Act, as amended (CA No. 146), the Board of Communications then, now the NTC, can fix a provisional amount for the subscriber's investment to be effective immediately, without hearing makes no distinction between initial or revised rates. These rates are necessarily proposed merely, until the Commission approves them. Moreover, the Commission can hear and approve revised rates without published notices or hearing. The reason is easily discerned from the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved after final hearing (Republic v. Medina, supra; Cordero v. Energy Regulatory Board, G.R. No. 83931, November 3, 1988, En Banc, Minute Resolution) and it was so stated in the case at bar, in the National Telecommunications Commission's order of January 25, 1984.



The Commission did not grant the PLDT any authority to engage in new communication service, but merely in any new proved provisionally PLDT's proposed revision of its then authorized schedule of rates for the lease on availment by endusers of the digital full period leased lines or channels for data transmission which said company acquired, installed, and presently maintain in serviceable condition, a relief well within its power to grant. Undoubtedly, a public utility is entitled to a just compensation and a fair return upon the value of its property while it is being used in public service. Finally, there is a legal presumption that the rates are reasonable and it must be conceded that the fixing of rates by the government through its authorized agent, involves the exercise of reasonable discretion, and unless there is an abuse of that discretion, the courts will not interfere. Likewise, as a rule, the court does not interfere with administrative action prior to its completion on finality. A doctrine long recognized is that where the law confines in an administrative office the power to determine particular questions or matters upon the facts presented, the jurisdiction of such office shall prevail over the courts. Hence, findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence.

101

VIDAD V. RTC 227 SCRA 271

A group of public school teachers held a strike against the nonpayment of their salaries by the Department of Budget as well as against the corruption allegedly existing in the DECS. This prompted a return-to-work order and following circumstances. Afterwards, the teache rs filed a petition for proh ibition. HELD: It should be conceded that the various complaints against the DECS officials have prescinded from the administrative actions taken, and contemplated to be yet taken, against public school teachers, the plaintiffs in the cases pending with the court a quo. The said complaints charge the defendants, all government officials, with having illegally withheld their salaries, having wrongfully filed administrative cha rges against the plaintiffs, having unjustifiably refused to inform the latter of the nature and accuse of accusation upon which the charges were initiated, having inexcusably violated elemental due process, and having erroneously applied the law. The school teachers pray for actual and moral damages, plus attorney's fees, as well as for an order restraining the defendants from further proceeding with the administrative investigations. The contention of the school teachers that the DECS officials are being sued solely in their private capacity certainly is not borne out by their above allegations and prayers. The root of the cases filed below deals, in fact, on the performance of official functions by the DECS officials. Whether the actions they have taken were proper or improper, or whether they have acted in good faith or bad faith, cannot, pending a full hearing that would aptly afford all parties an opportunity to ventilate their respective contentions, be yet determined. Until then, we must presume that official duties have been regularly performed.

FACTS:


NOTES: ADMINISTRATIVE LAW PAGE - 83 We accordingly hold that the Solicitor General did not act improperly in deciding to represent the DECS officials in the above cases.

in the verification that he is the president of the PPI. A complaint for perjury was filed against him. Probable cause was found to exist for perjury. Petitioner sought the reversal of this finding.

The defendants' motion to dismiss the complaints have likewise been precipitately sought, and we see no reversible error in the denial thereof by the lower court. The various complaints filed by the public school teachers allege bad faith on the part of the DECS officials. It cannot be pretended this early that the same could be impossible of proof. On the assumption that the plaintiffs are able to establish their allegations of bad faith, a judgment for damages can be warranted. Public officials are certainly not immune from damages in their personal capacities arising from the acts done in bad faith; in these and similar cases, the public officials may not be said to have acted within the scope of their official authority, and

HELD: Under the doctrine of primary jurisdiction, courts cannot and will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal having been so placed within its special competence under a regulatory scheme. In such instances the judicial process is suspended pending referral to the administrative body for its view on the matter in dispute. 13

no longer are they protected by the mantle of immunity for official actions. 12

where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative agency to ascertain technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered, 14 much less can the Provincial Prosecutor arrogate to himself the jurisdiction vested so lely with the SEC.

It was, nonetheless, inopportune for the lower court to issue the restraining orders. The authority of the DECS Regional Director to issue the return to work memorandum, to initiate the administrative charges and to constitute the investigating panel can hardly be disputed.

102

SAAVEDRA V. DOJ 226 SCRA 438

FACTS: The owners of shares of stock of PPI sold the same to petitioner. A memorandum of agreement and deed of assignment was drafted to evidence the transaction. There was however non-payment of balance by petitioner and that is why the private respondents filed with the SEC for rescission. The petitioner in turn filed a complaint for damages against the private respondents. He alleged

Consequently, if the courts cannot resolve a question which is within the leg al co mpetence of an administrative body prior to the resolution of that question by the administrative tribunal, especially

In the case at bar, the applicable regulatory statute is P.D. No. 902A conferring upon the SEC the legal competence to rule on intracorporate disputes, which competence had already been upheld by us in a number of cases. 15 Considering that it was definitely settled in Saavedra, Jr. v. SEC that the issues of ownership and automatic rescission are intracorporate in nature, then the Provincial Prosecutor, clearly, has no authority whatsoever to rule on the same. In fact, if we were to uphold the validity of the DOJ Resolutions brought before us, as respondents suggest, we would be sanctioning a flagrant usurpation or preemption of that primary and exclusive jurisdiction which SEC already enjoys.


NOTES: ADMINISTRATIVE LAW PAGE - 84 Obviously, it cannot be done. Thus, the Provincial Prosecutor upon being confronted with the issue of whether the sale of stocks to petitioner was automatically cancelled while in the course of determining probable cause for perjury, should have withheld filing any information against the accused. Public respondent DOJ in attempting to justify the action of the Provincial Prosecutor avers that the latter is empowered to make a preliminary ruling on the matter for the purpose of finding probable cause against petitioner, and that petitioner may raise the pendency of the issue before the SEC as his defense at the trial proper. We are not p ersuaded. Th e duty of a prosecutor du ring preliminary investigation is not only to find evidence to warrant continuation of the criminal process against an accused. Of equal importance, and it has been repeated often enough, is his duty to protect the innocent from hasty, expensive and useless trials. 16 This duty, in addition to the "primary and exclusive" jurisdiction of the SEC, demands the outright termination of the criminal prosecution of petitioner which, at the very outset, was already bereft of factual and legal bases. Indeed, the prosecution of petitioner cannot be based on a mere Secretary's Certificate which cannot attest to the validity of the automatic rescission, hence, cannot likewise settle the question as to who between petitioner and private respondent is the lawful President of PPI. Be that as it may, the outcome of SEC Case No. 3257 is not determinative of whether or not the charge for perjury against petitioner can prosper. Even if private respondent Ramos succeeds in proving the validity of the automatic rescission of the sale before the SEC, it does not necessarily mean that the criminal prosecution has basis. There are four (4) elements of the crime of perjury to be taken into account in determining whether there is a prima facie

case, to wit: (a) that the accused made a statement under oath or executed an affidavit upon a material matter; (b) that the statement or affidavit was made before a competent officer, authorized to receive and administer oath; (c) that in that statement or affidavit, the accused made a willful and deliberate assertion of a falsehood; and, (d) that the sworn statement or affidavit containing the falsity is required by law or made for a legal purpose. 17 Clearly, mere assertion of a falsehood is not enough to amount to perjury. The assertion must be deliberate and willful. While there may have been a falsehood asserted, which we are not prepared to accept, no evidence exists to show that the same was done deliberately and wilfully. On the contrary, the records tend to show that the assertion was done in good faith, in the belief that the nonpayment of the last installment price was justified by the sellers' non-compliance with their warranties. Besides, petitioner alleges that he has deposited the balance in escrow, which is not disputed. Consequently, a finding of probable cause does not follow as a matter of course even if SEC decides adversely against petitioner, for an essential element of the crime appears to be wanting in the case before us, i.e., that the falsehood is willful and deliberate. Moreover, as a rule, pleadings need not be verified unless otherwise required by the Rules of Court, and no rule requires complaints for damages, as in the case before us, to be under oath. Since the complaint filed by petitioner against private respondent is not required to be verified, another essential element of the crime of perjury is absent, i.e., that the sworn statement containing the falsity is required by law. Consequently, petitioner cannot be prosecuted on the basis of an alleged falsehood made in a verified pleading which is not mandated by law to be verified.

103

FREEMAN V. SEC 233 SCRA 735



FACTS: Corporation secured loans from Equitable Bank and these was evinced by promissory notes. Due to the failure to pay, the bank instituted collection suits against the corporation. The minority shareholders moved to intervene but was denied by the court. The collection suit was later terminated due to a compromise agreement, wherein properties were conveyed to be sold in public auction for the corporation to pay its debts. Later, the minority shareholders moved the dissolution of the corporation and liquidation of its properties. They were denied once again. HELD: We sustain petitioners. The pre sent petition seeks to annul an d set aside the order of the SEC for want of jurisdiction to issue the writ of injunction, a provisional remedy to the principal action pending in the SEC for the dissolution of petitioner FREEMAN. Hence, the petition is not an appeal from a final order of the SEC but a special civil action questioning the legal competence of the latter to issue such interlocutory order. It is covered by Sec. 1, Rule 65, of the Rules of Court which allow a person aggrieved to file a verified petition in the proper court praying that judgment be rendered annulling or modifying the proceedings, as the law requires, of the tribunal, board or officer when the latter, exercising judicial functions, has acted without or in excess of its or his jurisdiction or with grave abuse o f discretion and there is no appe al, nor any plain, speedy and adequate remedy in the ordinary course of law. We have consistently ruled that petitions for certiorari must be filed within a reasonable time. In the instant case, the records show that the petition at bench was filed on 4 June 1993, or two (2) months and nineteen (19) days from 17 March 1993, which was the date when petitioners received copy of the order of the SEC

denying their motion for reconsideration. There is no doubt that this petition was seasonably filed. SEC Case No. 3577 arose from the action filed by private respondents as minority shareholders of petitioner FREEMAN for the dissolution of the corporation and reconveyance of the properties conveyed to another petitioner FREEMAN MANAGEMENT in a public auction. The SEC maintained that it had jurisdiction to issue the writ of injunction preventing the consolidation of ownership in FREEMAN MANAGEMENT on the basis of our ruling in Saw v. Court of Appeals. We denied the intervention of private respondents in the trial court in Civil Case No. 88-44404 which had already been terminated. As we stated therein, even with the denial of herein private respondents' motion to intervene nothing could really be lost to them as their rights were being litigated before the SEC and would be fully asserted and protected in that separate proceeding. Our ruling in Saw v. Court of Appeals should be understood in the light of two(2) basic legal principles. First, that administrative agencies like the SEC are tribunals of limited jurisdiction and as such can exercise only those powers which are specifically granted to them by their enabling statutes. 14 Section 5 of P.D. No. 902-A, as amended, provides the cases over which the SEC has srcinal and exclusive jurisdiction to hear and decide. These include controversies arising out of intra-corporate or partnership relations between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and, between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity. Section 6 of the same decree empowers the SEC to issue preliminary or permanent injunction, whether prohibitory or mandatory, in all cases in which it has jurisdiction.



The action for dissolution of FREEMAN filed by its minority stockholders is well within the jurisdiction of the SEC to resolve in accordance with P.D. No. 902-A. However, the inclusion in the SEC case of FREEMAN MANAGEMENT of which private respondents are not stockholders for the purpose of compelling it to reconvey to FREEMAN the properties srcinally owned by the latter but were levied upon and sold to FREEMAN MANAGEMENT in a public auction is a matter outside of the limited jurisdiction of the SEC. The petition for reconveyance of properties against FREEMAN MANAGEMENT is not an intracorporate controversy since private respondents have no shares or interests whatsoever in FREEMAN MANAGEMENT, a corporation separate and distinct from FREEMAN, which is undergoing dissolution proceedings in the SEC. The second basic principle is the doctrine of non-interference which should be regarded as highly important in judicial stability and in the administration of justice whereby the judgment of a court of competent jurisdiction may not be opened, modified or vacated by a ny co urt or tribunal of con current jurisdiction. 15 T he SEC is at the very least co-equal with the Regional Trial Court. As such, one would have no power to control the other. 16 Moreover, in the instant case, judgment was rendered by the trial court in Civil Case No. 88-44404 approving the compromise agreement between EQUITABLE on one hand, and FREEMAN and Saw Chiao Lian on the other. A writ of execution was issued against the defendants to enforce the judgment and two (2) properties of FREEMAN were levied upon and sold to FREEMAN MANAGEMENT as highest bidder in the public auction. Finally, the judgment was fully satisfied and a certificate of sale was issued to FREEMAN MANAGEMENT. It is axiomatic that after a judgment has been fully satisfied, the case is deemed terminated

once and for all. 17 It cannot be modified or altered. Hence, the properties sold to FREEMAN MANAGEMENT are now considered excluded from the corporate assets of FREEMAN and can no longer be the subject of the proceedings in the SEC for the dissolution of the latter. Therefore SEC exceeded its jurisdiction when it issued a writ of injunction enjoining FREEMAN MANAGEMENT from consolidating its ownership over the two (2) parcels of land it acquired as highest bidder in the execution sale.

DOCTRINE OF EXHAUSTION OF REMEDIES 104 FERNANDO V. STO. TOMAS 234 SCRA 546

ADMINISTRATIVE

FACTS: Petitioners were mediation arbiters and discharging their duties as such. A memorandu m circular was issued causing the reassignment of officers and some of those affected were the petitioners. They didn't follow the said circular given that it was allegedly a transfer and was made without their consent. The Secretary clarified in a subsequent circular that such wasn't a transfer and again made the reassignment clear. Again, they didn't comply which caused a complaint for gross insubordination to be filed against them. HELD: Finally, we do not deem it appropriate to rule on the merits of the order issued on July 26, 1993 by respondent Secretary preventively suspending petitioners for ninety (90) days, as well as her subsequent order dated October 25, 1993 finding petitioners guilty of insubordination and imposing on them the penalty of suspension of one (1) year. Evidently, herein petitioners, in asking us to resolve the issues thereon in their present recourse, have


NOTES: ADMINISTRATIVE LAW PAGE - 87 overlooked or deliberately ignored the fact that the same are clearly dismissible for non-exhaustion of administrative remedies. On the first aspect, petitioners allowed the 90-day period of preventive suspension to lapse without appealing from the Order of July 26, 1993. In fact, the investigation which necessitated such suspension has long since been concluded and thereafter resulted in the condemnatory Order of October 25, 1993. Hence, they are now clearly estopped from invoking the certiorari jurisdiction of this Court in a belated attempt to seek redress from the first Order. Secondly, as stated earlier, the Order dated October 25, 1993 imposing a punitive suspension of one year on herein petitioners cannot be the proper subject of a petition for certiorari for their failure to exhaust administrative remedies. Presidential Decree No. 807 and Executive Order No. 292 explicitly provide that administrative disciplinary cases involving the imposition of a penalty of suspension for more than thirty (30) days are appealable to the Civil Service Commission. 13 Not having fully exhausted the remedy available to them, petitioners cannot resort to their present judicial action which is both premature at this juncture and proscribed by R ule 65 of the Rules of Court. Neither do we find any of the exceptions to the doctrine of exhaustion of administrative remedies which could be applicable to the instant case, nor have petitioners essayed any submission on that score.

105

BAGUIORO V. BASA 214 SCRA 437

FACTS: Petitioner and private respondent were the elementary teacher head and elementary principal respectively. They both sought the promotion as division head. The petitioner was subsequen tly chosen for the position but through a motion for reconsideration of

private respondent, he reversed himself and chose private respondent. Petitioner opposed this. The Secretary found the reversal irregular and thus, held the affirmance of the earlier decision. The District Superintend ent was then ordered to prepare the necessary documents for the appointment of petitioner. Private respondent then after defeat with the court, sought an action for quo warranto against the DECS Regional Director of Region VI, the Civil Service Commission Regional Director of Region VI, the Schools Division Superintendent of San Carlos City (Negros Occidental), the Administrative Officer of DECS, Region VII and the petitioner. Private respondent prayed for judgment (a) annulling the 17 April 1985 Memorandum-Report of the Complaints Committee of DECS, the letter of Minister Laya of the same date expressing concurrence with the findings and recommendation therein and the letter of the MECS Regional Director of 17 September 1985 directing the Schools Division Superintendent to issue to the private respondent an appointment back to his former position as Elementary School Principal I and (b) ordering defendants therein to pay him P10,000.00 as attorney's fees, litigation expenses and costs of the suit. He also sought the issuance of a restraining order or preliminary injunction to prevent the enforcement of the abovestated rulings and directives. The case was d ocketed as C ivil Ca se N o. 16 2 and was a ssigned to B ranch 57 of the court below. HELD: It is equally clear that private respondent had not exhausted the administrative remedies provided by law to set aside the promotion extended to the petitioner. In this regard, therefore, the complaint in Civil Case No. 162 fails to state a cause of action. A dismissal on the ground of failure to exhaust administrative remedies is tantamount to a dismissal based on lack of cause of action. 12 What private respondent should have done was to appeal the 17 April 1985 decision of the then MECS Minister Jaime Laya to the


NOTES: ADMINISTRATIVE LAW PAGE - 88 Merit Systems Board (now Merit System Protection Board). Under present procedure, a next-in-rank employee who is competent and qualified and feels aggrieved by the promotion of another may filed a protest with the department or agency head who shall render a decision thereon within thirty (30) days from receipt of the protest. Such decision may be appealed by an aggrieved party within fifteen (15) days from receipt thereof to the Merit Systems Protection Board which, in turn, shall render its decision thereon within sixty (60) days from the time the case is submitted for decision. The decision of the Board is final unless it involves a division chief or an official of higher rank; in such a situation, the decision may be appealed to the Civil Service Commission. On the other hand, decisions involving positions below division chief may be reviewed by the Commission.

106

ROSARIO V. CA 211 SCRA 384

FACTS: Pursuant to the Land for the Landless program of the city government, Cruz and Rosario sought the conveyance of particular lands to them. Previously, Cruz built a residential house and rented it out to Rosario. Upon their application, the two lots were given to them. Averring that Rosario was merely a lessee of the lots, Cruz sought reconsideration and was granted such. Rosario then filed a complaint with the trial court but it was sought to be dismissed since there was no exhaustion of administrative remedies. HELD: The main issue raised by the petitioner is whether or not being the sublessee and "actual occupant" of Lot 3-A, he has the preferential right to buy said lot.

Unfortunately, both the trial court and the Court of Appeals skirted that legal issue and simply dismissed Rosario's petition for review of the Resolution of the City Tenants' Security Commission on the grounds of non-exhaustion of administrative remedies and tardiness. Failure to exhaust administrative remedies is not, however, necessarily fatal to an action. Failure to observe the doctrine of exhaustion of administrative remedies does not affect the jurisdiction o f the co urt. We have repe atedly stressed this in a long line of decisions. The only effect of non-compliance with this rule is that it will deprive the complainant of a cause of action, which is a ground for a motion to dismiss. If not invoked at the proper time, this ground is deemed waived and the court can then take cognizance of the case and try it. It does not appear in this case that a motion to dismiss based on non-exhaustion of administrative remedies had been filed. We therefore feel, as we did in a number of cases before this, that "where the equities warrant such extraordinary recourse," the petition may be given due course.

107

ROSALES V. CA 165 SCRA 344

FACTS: A list of honor students were released in an elementary school. Rosales was a candidate for valedictorian and yet his name wasn't reflected in the list. This prompted his parents to question such and ask for a recomputation . It is said that the action was belated, having the commencement exercises to be held the next day. On April 20, 1972, the Chief of the Legal Division of the Bureau of Private Schools sent a copy of the complaint by first indorsement to the Rector of herein respondent school. Said comment was made


NOTES: ADMINISTRATIVE LAW PAGE - 89 on April 21, 1972, stating, among others, that the complaint had lost its validity because the same was filed on the eve of the commencement exercises of the school, in violation of the provision of paragraph 176, Section XI of the Manual of Regulation for Private Schools requiring complaints of the kind to be filed not later than ten (10) days before commencement exercises. However, defendant Rector indicated that he would welcome an investigation in order to erase any doubt as to the selection of the honor students of the grade school concerned. On May 5, 1972, the Director of Private Schools rendered a decision holding that Rommel Rosales was the rightful valedictorian. On November 29, 1972, Rosales filed a complaint for damages itemized as follows: P25,000.00 for moral damages; P15,000.00 for correctional damages and P5,000.00 for attorney's fees, in view of the failure of the school to graduate Rommel Rosales as valedictorian of his class . In its answer, respondent school prayed that the complaint be dismissed on the ground that the Director of Private Schools acting on its motion dated May 11, 1972 reconsidered and set aside his decision of May 5, 1972 and instead "approved and/or confirmed the selection and award of honors to the students concerned for the school year 1971-1972 as effected by the school." (p. 14, Rollo [R.A., p. 31]) Petitioners, in their reply, averred that said motion for reconsideration was mysteriously filed, there being no srcinal copies of the same in the Office of the Director of Private Schools which would show the date of filing thereof and their corresponding receipt of a copy thereof by the petitioners.

HELD: Subject complaint, Civil Case No. 16998, was filed with the trial court on November 29,1972, showing beyond dispute that the request for reconsideration judicially admitted to have been filed by the petitioners on February 7, 1973 with the Secretary of Education and Culture had not yet been resolved at the time of the filing of Civil Case No. 16998. Hence, the said civil case which is an action for damages is premature. The finality of the administrative case which gives life to petitioners' cause of action has not yet been reached. This was still pending as evidenced in the certificate issued by the agency trying the same (Record on Appeal, pp. 53-54; Rollo, p. 14). The court a quo was thus correct in acting upon the motion to dismiss filed by the respondents on the ground that plaintiffs failed to exhaust administrative remedies. Under the doctrine of exhaustion of administrative remedies, recourse through court action, as a general rule, cannot prosper until all the remedies have been exhausted at the administrative level. When an adequate remedy may be had within the Executive Department of the government, but nevertheless, a litigant fails or refuses to avail himself of the same, the judiciary shall decline to interfere. This traditional attitude of the courts is based not only on convenience but likewise on respect; convenience of the party litigants and respect for a co-equal office in the government. If a remedy is available within the administrative machinery, this should be resorted to before resort can be made to (the) court.

APPEAL TO THE PRESIDENT 108 FEDERATION OF FREE WORKERS V. INCIONG 161 SCRA 295 FACTS:


NOTES: ADMINISTRATIVE LAW PAGE - 90 Federation of Free Workers is a labor organization registered with the Department of Labor and Employment. It is the certified collective bargaining agent of all the rank and file employees of the herein private respondent, the Allied Sugar Centrals Company, a registered partnership. Presidential Decree No. 1123 was promulgated requiring all employers in the private sector to pay their employees an acrossthe-board increase of P60.00 in their existing monthly emergency allowance as provided for in an earlier law, Presidential Decree No. 525. The increase was to take effect on May 1, 1977. The Decree also authorizes the Secretary of Labor to issue the appropriate rules necessary to implement the provisions of the said law, including such regulations to govern the procedure through which financially distressed employers may be exempted from the requirements of the same. Sometime in May, 1977, the private respondent was about to pay the increase in emergency living allowance mandated by the Decree. Preparations were made in order to effectuate the payment but the attempt to do so was short-lived. The private respondent decided against the payment and the plan was, therefore, aborted. Meanwhile, on August 2, 1977, the petitioner wrote to the Secretary of Labor inquiring if the private respondent filed an application for exemption in accordance with the abovecited Section 6. The petitioner also requested that it be furnished a copy of such application if one had indeed been filed by the private respondent. On August 30,1977, the herein respondent Chairman of the Wage Commission of the Department of Labor Rachel Fidelino sent her reply to the petitioner stating therein that there was no application in the name of the private respondent in the records of their office.

Sometime thereafter, the respondent Chairman of the Wage Commission submitted her report to the Secretary of Labor recommending the approval of the said application. 3 On November 21, 1977, the herein respondent Acting Secretary of Labor Amado Inciong wrote to the private respondent informing it that its application was approved for a period of one year, effective May 1, 1977. The letter of approval recited therein that the same is final and unappealable. 4 A notice of the order of approval was sent to both the president of the petitioner labor organization and the private respondent. On December 2, 1977, Chairman Fidelino received a letter from the petitioner dated November 17, 1977 again inquiring on the existence of any application on the part of the private respondent. Chairman Fidelino did not send any reply. On December 15, 1977, the petitioner filed with the Office of the Secretary a motion for reconsideration seeking a reversal of the approval of the said application on the grounds that the exemption granted to the private respondent is discriminatory and that the firm is not in unsound financial condition. 5 On March 3, 1978, the private respondent filed another application for exemption, this time for the year 1978. In a letter addressed to the Secretary of Labor dated May 31, 1978, the petitioner opposed the application and reiterated its objection to the exemption granted to the firm for 1977 for the same reasons earlier mentioned. 6 On June 5,1978, Chairman Fidelino overruled the opposition and motion for reconsideration which stressed that the private respondent does not appear to be in distressed financial condition as observed by a financial analyst of the Commission. 7 Thus, on June 9, 1 978, Acting Secretary Inciong issued an order approving


NOTES: ADMINISTRATIVE LAW PAGE - 91 the second application for exemption covering 1978, for a period of one year effective May 1 thereof. The approval also recited therein that the same is final and unappealable.

Inasmuch as no grave abuse of discretion appears to have been committed by the herein public respondents, the writ of certiorari sought by the petitioner cannot issue,

HELD: For their part, the respondents argue that the petitioner did not exhaust all administrative remedies available before it sought judicial review. They are of the view that the rulings of the respondent Acting Secretary of Labor can still be elevated to the President of the Philippines for review. This view is traversed by the fact that, as stated by the respondent Acting Secretary in approving both applications, such approval is final and unappealable. Moreover, in the absence of a constituttional provision or a statute to the contrary, the official acts of a Department Secretary are deemed the acts of the President himself

109

unless disapproved or reprobated by the latter. This is the doctrine of qualified political agency, to wit—under the presidential type of government which we have adopted and considering the departmental organization established and continued in force by ... our Constitution, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or the law ta act in person or the agencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive. ...

the BOE provided for the remedy of appeal to the office of the President within a certain period. It will be noted that the petitioners belatedly filed their motion for reconsideration, after the decision has become long final and executory. Nonetheless, while there was an error in the remedy sought, the court has numerously given due course to a petition for certiorari in the interest of justice, although the proper remedy is appeal especially where the equities warrant such recourse and considering that dismissals on technicalities are viewed with disapproval.

TESORERO V. MATHAY 185 SCRA 124

FACTS: DALIGHT sought the appraisal of its properties. At first application, it was held to be disqualified. On the second application, it was granted the appraisal. The petitioners sought reconsideration of this decision. HELD: Certiorari is not the proper remedy to be sought. The law creating

EXCEPTIONS TO THE DOCTRINE OF EXHAUSTION 110 AQUINO-SARMIENTO V. MORATO 203 SCRA 515 (QUESTION OF LAW) FACTS: In February 1989, petitioner, herself a member of respondent Movie and Television Review and Classification Board (MTRCB), wrote its records officer re questing that sh e be allowed to exa mine


NOTES: ADMINISTRATIVE LAW PAGE - 92 the board's records pertaining to the voting slips accomplished by the individual board members after a review of the movies and television productions. It is on the basis of said slips that films are either banned, cut or classified accordingly. Acting on the said request, the records officer informed petitioner that she has to secure prior clearance from respondent Manuel Morato, as chairman of MTRCB, to gain access to the records sought to be examined. Petitioner's request was eventually denied by respondent Morato on the ground that whenever the members of the board sit in judgment over a film, th eir decisions as reflected in th e individual voting slips partake th e nature of conscie nce votes and as such, ar e purely and completely private and personal. It is the submission of respondents that the individual voting slips is the exclusive property of the member concerned and anybody who wants access thereto must first secure his (the member's) consent, otherwise, a request therefor may be legally denied.

courts, he is required to comply with all administrative remedies available under the law (Rosales v. Court of Appeals, 165 SCRA 344 [1988]). The rationale behind this salutory principle is that for reasons of practical considerations, comity and convenience, the courts of law will not entertain a case until all the available administrative remedies provided by law have been resorted to and the appropriate authorities have been given ample opportunity to act and to correct the errors committed in the administrative level. If the error is rectified, judicial intervention would then be unnecessary. Nonetheless, the doctrine of exhaustion of administrative remedies is not absolute. The applicability of the principle admits of certain exceptions, such as: 1) when no administrative review is provided by law; 2) when the only question involved is one of law (Valmonte

HELD: Respondents argue at the outset that the instant petition should be dismissed outright for having failed to comply with the doctrine of exhaustion of administrative remedies.

v. Valmonte, 170 SCRA 256 [1989], citing Aguilar v. Valencia, 40 SCRA 210 [1971]; Malabanan v. Ramento, 129 SCRA 359 [1984]; Bagatsing v. Ramirez, 74 SCRA 306; Del Mar v. Philippine Veterans Administration, 51 SCRA 340 [1973]; Pascual v. Provincial Board, 106 Phil. 466 [1959]; 3) where the party invoking the doctrine is guilty of estoppel (Vda. de Tan v. Veterans' Backpay Commission [1969]; 4) where the challenged administrative action is patently illegal, arbitrary and oppressive (Azur v. Provincial Board, 27 SCRA 50 [1969]; National Development Co. v. Collector of Customs of Manila, 9 SCRA 429 [1963]; 5) where there is unreasonable delay or official inaction that would greatly prejudice the complainant (Gravador v. Mamigo, 20 SCRA 742 [1967]; Azuelo v. Arnaldo, 108 Phil. 293 [1960]; 6) where to exhaust administrative review is impractical and unreasonable (Cipriano v. Marcelino, 43 SCRA 291); and 7) where the rule of qualified political agency applies (Demaisip v. Court of Appeals, 106 Phil. 237 [1906]).

We disagree. The doctrine of exhaustion of administrate remedies simply provides that before a party litigant is allowed resort to the

The issue raised in the instant petition is one of law, hence the doctrine of non-exhaustion of administrative remedy relied upon by

Petitioner argues, on the other hand, that the records she wishes to examine are public in character and other than providing for reasonable conditions regulating the manner and hours of examination, respondents Morato and the classification board have no authority to deny any citizen seeking examination of the board's records.


NOTES: ADMINISTRATIVE LAW PAGE - 93 respondents is inapplicable and cannot be given any effect. At any rate, records are replete with events pointing to the fact that petitioner adhered to the administrative processes in the disposition of the assailed resolutions of public respondents prior to filing the instant petition by, among others, writing the Executive Secretary and bringing the matter to the attention of the Office of the President (Rollo, pp. 145-147). Respondents' claim that petitioner failed to exhaust administrative remedies must therefore fail.

111

MADRIGAL V. LECAROZ 191 SCRA 20 (QUESTION OF LAW)

FACTS: Governor Aristeo M. Lecaroz, Vice-Governor Celso Zoleta, Jr., Provincial Board of Marinduque members Domingo Riego and Marcial Principe abolished petitioner-appellat Joventino Madrigal's position as a permanent construction capataz in the office of the Provincial Engineer from the annual Roads Bridges Fund Budget for fiscal year 1971-1972 (p.2, Records) by virtue of Resolution No. 204. The abolition was allegedly due to the poor financial condition of the province and it appearing that his position was not essential (p. 6, Records). On April 22, 1972, Madrigal appealed to the Civil Service Commission. On August 7, 1973, he transmitted a follow-up letter to the Commission regarding his appela. On January 7, 1974, the Commission in its 1st Indorsement declared the removal of Madrigal from the service illegal (pp. 7-8, Records). On April 26, 1974, public respondent Governor Aristeo M. Lecaroz moved for a reconsideration of said resolution. On February 10, 1975, the Commission denied the motion for reconsideration (pp. 9-10, Records).

On August 4, 1975, Madrigal sent a letter to the Provincial Board requesting implementation of the resolution of the Commission and consequently, reinstatement to his former posistion. On August 18, 1975, the Provincial Board, through Resolution No. 93, denied Madrigal's request for reinstatement because his former posistion no longer exists. In the same resolution, it ordered the appropriation of the amount of P4,200.00 as his back salaries covering the preiod December 1, 1971 up to June 30, 1973 (p. 47, Records). On December 15, 1975, Madrigal filed a petition before the Court of First Instance (now Regional Trial Court) of Marinduque against public respondents Governor Aristeo M. Lecaroz, Vice-Governor Celso Zoleta, Jr., Provincial Board Members Domingo Riego and Marcial Principe, Provincial Engineer Enrique M. Isidro, Abraham I. Taduran and the Province of Marinduque for mandamus and damages seeking, inter alia, (1) restoration of his abolished position in the Roads and Bridges Fund Budget of the Province; (2) reinstatement to such position; and (3) payment of his back salaries plus damages (pp. 1-5, Records). On March 16, 1976, the trial court issued an order dismissing the petition on the ground that Madrigal's cause of action was barred by laches. HELD: The unbending jurisprudence in this jurisdiction is to the effect that a petition for quo warranto and mandamus affecting titles to public office must be filed within one (1) year from the date the petitioner is ousted from his position.


NOTES: ADMINISTRATIVE LAW PAGE - 94 [W]e note that in actions of quo warranto involving right to an office, the action must be instituted within the period of one year. This has been the law in the island since 1901, the period having been srcinally fixed in Section 216 of the Code of Civil Procedure (Act No. 190). We find this provision to be an expression of policy on the part of the State that persons claiming a right to an office of which they are illegally dispossessed should immediately ta ke steps to recover said office and that if they do not do so within a period of one year, they shall be considered as having lost their right thereto by abandonment. There are weighty reasons of public policy and convenience that demand the adoption of a similar period for persons claiming rights to positions in the civil service. There must be stability in the service so that public business may (sic) be unduly retarded; delays in the statement of the right to positions in the service must be discouraged. And this one (1) year period is not interrupted by the prosecution of any administrative remedy. Actually, the recourse by Madrigal to the Commission was unwarranted. It is fundamental that in a case where pure questions of law are raised, the doctrine of exhaustion of administrative remedies cannot apply because issues of law cannot be resolved with finality by the administrative officer. Appeal to the a dministrative officer o f orders involvin g questions o f law would be an exercise in futility since administrative officers cannot decide such issues with finalitY. In the present case, only a legal question is to be resolved, that is, whether or not the abolition of Madrigal's position was in accordance with law.

thereon situated at Sitio Igbolo, Barangay Cabiawan, San Remigio, Antique with an area of 60,000 square meters more o r less. He has since then been in possession thereof. On or about April 21, 1977, private respondent, claiming that the northern portion of said parcel of land is included in his Original Certificate of Title No. N-1889 (Free Patent No. 319059), caused a technical survey of said portion over the vehement opposition and objection of petitioner. Petitioner thereafter filed with the District Officer, Bureau of Lands, San Jose, Antique a protest under oath, praying that the srcinal certificate of title issued in private respondent's favor be annulled on the ground of fraud. An investigation was forthwith commenced by the District Land Officer. In the meantime, on September 20, 1978, petitioner filed before the then Court of First Instance (now Regional Trial Court) of Capiz an action for Injunction with Preliminary Prohibitory Injunction with Damages.

PAINAGA V. CORTES 202 SCRA 245 (DIFFERENT ISSUE INVOLVED)

HELD: We grant the petition. The court a quo misapplied the rule on exhaustion of administrative remedies. This misapplication stemmed primarily from its characterization of petitioner's action as one for annulment of private respondent's srcinal certificate of title which included the area in dispute. Since a protest aimed precisely at this relief had been previously filed by petitioner in the Bureau of Lands District Office, the trial court readily concluded that the action in court was premature, following the pronouncement in Pestanas vs. Dyogi, supra.

FACTS: On December 29, 1962, petitioner purchased from Bonifacio Merendad a parcel of corn and pasture land with improvements

A reading of the complaint in Civil Case No. 1539 however shows that the same is, as its caption states, an srcinal action for injunction brought to protect and preserve petitioner's right of

112


NOTES: ADMINISTRATIVE LAW PAGE - 95 possession over the subject land in accordance with the provision of the New Civil Code which recognizes a possessor's right to be respected in his possession, thus: Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein he shall be protected in or restored to said possession by the means established by the laws and the Rules of Court. In the very recent case of Maximo Solis, et al. vs. Hon. Intermediate Appellate Court, et al., G.R. No. 72486, June 19, 1991, this Court ruled that the "power and authority given to the Director of Lands to alienate and dispose of public lands does not divest the regular courts of their jurisdiction over possessory actions instituted by occupants or applicants against others to protect their respective possessions and occupations. While the jurisdiction of the Bureau of Lands is confined to the determination of the respective rights of rival claimants to public lands or to cases which involve disposition of public lands, the power to determine who has the actual, physical possession or occupation or the better right of possession over public lands remains with the courts." The rationale for this ruling was given, thus: The rationale is evident. The Bureau of Lands does not have the wherewithal to po lice pu blic lan ds. Ne ither do es it have the me ans to prevent disorders or breaches of peace among the occupants. Its power is clearly limited to disposition and alienation and while it may decide disputes over possession, this is but in aid of making the proper awards. The ultimate power to resolve conflicts of possession is recognized to be within the legal competence of the civil courts and its purpose is to extend protection to the actual possessors and occupants with a view to quell social unrest.

The protest filed by petitioner before the Bureau of Lands seeking the cancellation of private respondent's srcinal certificate of title on the ground of fraud differs from Civil Case No. 1549 in terms of their nature, the causes of action upon which they rest as well as in the reliefs sought. The administrative protest boils down to the question of ownership of the area in controversy, while the court action is concerned merely with possession. That ownership and possession are two entirely different legal concepts is illustrated in the case of German Management Services, Inc. vs. Court of Appeals, 4 in this wise: ... It must be stated that regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror. Thus, a party who can prove prior possession can recover (or retain) such possession even against the owner himself. Whatever may be the character of his prior possession, if he had in his favor priority in time, he has the security that entitles him to remain on the property until he is lawfully ejected by a person having a better light by accion publiciana or accion reivindicatoria. Whatever de cision the trial co urt may rend er in Civil Cas e No. 1539 will not encroach on the primary jurisdiction of the Bureau of Lands over the question of who between petitioner and private respondent is entitled to the ownership of the land in question. Thus, the principle of exhaustion of administrative remedies does not find application in the case at bar. Indeed, the case at bar is easily distinguishable from Pestanas vs. Dyogi, supra, so heavily relied upon by the trial court. There is no doubt that the principle of exhaustion of administrative remedies obtained in that case as the plaintiffs-appellants therein, after filing with the Bureau of L ands a petition for cancellation of fre e p atent No. V-166124 issued to Josefa Dyogi, filed with the Court of First


NOTES: ADMINISTRATIVE LAW PAGE - 96 Instance of Quezon a complaint to have the identical free patent No. V-166124 declared null and void, praying that they be declared the owners of the portions of land possessed by them and/or that they be declared as having the preferential right to acquire the said land. In the case at bar, the action in court brought by petitioner did not seek that the title of private respondent be annulled, which issue was already before the administrative agency, but merely asked that petitioner be respected in his prior possession of the piece of land in controversy.

with. If the reorganization plan results in abolishin g the p osition of the plaintiff and in putting in his place another one, with substantially the same duties, not to say qualifications, in the name of leadership, it will surely be considered a device to unseat the incumbent and to circumvent the constitutional and statutory prohibition of removal from office of a civil service officer even without cause provided by law. Plaintiffs position should not therefore be deemed abolished by mere implication.

FACTS: The principal issue in this case is whether or not respondent Dr.

HELD: Anent the issue regarding responden t Estrella's failure to exhaust all administrative remedies, We hold that this case has special circumstances that made it fall under the jurisprudentially accepted exceptions to the rule. As the facts show, respondent Dr. Estrella was about to be replaced by the Nomination Committee. He must

Felipe A. Estrella who holds the position of Director of the Philippine General Hospital (PGH) can invoke security of tenure during his term of office notwithstanding the abolition of the said position by the University of the Philippines Board of Regents.

have believed that airing his protest with the Board of Regents would only be fruitless and that unless he goes to the courts, irreparable damage or injury on his part will be caused by the implementation of the proposed reorganization.

Estrella was appointed as the director of the PGH. After the new president of the PGH assumed office, he recommended the reorganization of the whole UP Manila and PGH, which included the position of Estrella. The Board of Regents acted on this proposal and formed a nomination committee to replace Estrella. To this, Estrella sought injunction.

114

113

U.P. V. RASUL 200 SCRA 685 (IRREPARABLE DAMAGE)

The trial court held that aside from some changes and combinations of functionaries, the structure remains substantially the same. The leadership element, which the defendant Abueva wants to impress upon this Court, encourages reorganization and justifies ab olition o f positio ns. Bu t the whole reorganization set-up under our law cannot or should not have the effect of abolishing the position of the plaintiff unless legal requirements are complied

QUISUMBING V. GUMBAN 193 SCRA 520 (WHIMSICAL USE OF POWER)

FACTS: On or before 1979, private respondent Esther B. Yap was appointed District Supervisor of the Bureau of Public Schools and assigned to the District of Glan, South Cotabato (Rollo, p. 2). On February 11, 1987, in view of the agitation of teachers and concerned citizens of Glan, then Secretary Lourdes Quisumbing issued a Memorandum Order, directing Regional Director Teofilo E. Gomez to reassign or transfer Esther B. Yap to another district (Rollo, p. 24), which was effected by Director Teofilo E. Gomez in his Memorandum Order dated February 12, 1987, ordering the


NOTES: ADMINISTRATIVE LAW PAGE - 97 transfer of private respondent Esther B. Yap as a public school district supervisor from Glan District to Malapatan District and for Crisanto B. Delamin, another public school district supervisor, to assume that of respondent's position at Glan (Rollo p. 25). The latter in turn issued a Memorandum Order to the principals and headteachers of different public schools at Glan informing them of his assumption of office (Rollo, p. 26). However, private respondent Esther B. Yap defied the orders of her superiors and she continued to perform the functions of public school district supervisor of Glan. HELD: After a careful scrutiny of th e re cords, it is to be underscored that the appointment of private respondent Yap is simply that of a District Supervisor of the Bureau of Public Schools which does not indicate a specific station (Rollo, p. 13). As such, she could be assigned to any station and she is not entitled to stay permanently at any specific station (Bongbong v. Parado, 57 SCRA 623 [1974]; Department of Education Culture and Sports v. Court of Appeals (G.R. 81032, March 22,1990), citing Brillantes v. Guevarra (27 SCRA 138 [1969]). Finally, the lower court did not err in taking cognizance of the case. The doctrine of exhaustion of administrative remedies is not a hard and fact rule. It has been repeatedly held that the requiring previous exhaustion of administrative remedies is not applicable where the question in dispute is purely a legal one: where the controverted act is patently illegal or was performed without jurisdiction or in excess of jurisdiction; where the respondent is a department secretary, whose acts as an alter ego of the President, bear the implied or assumed approval of the latter; where there are circumstances indicating the urgency of judicial intervention; or where the responden t h as acted in utter disregard of due process.

The rule does not apply where insistence on its observance would result in nullification of the claim being asserted; and when the rule does not provide a plain, speedy and adequate remedy

115

ESTUERTE V. CA 193 SCRA 541 (NO REMEDY AVAILABLE)

FACTS: Tan, a Junior Resident Physician of Corazon Locsin-Montelibano Memorial Hospital, Bacolod City, without any justifiable reason shouted at, humiliated and insulted the petitioner, Patria Esuerte, Head Nurse, Medicare Department of the said hospital and as a result of the said incident, said petitioner complained to the Chief of the Hospital, Dr. Teodoro P. Motus, in writing. The other petitioner, Herminia Jayme, who was one of those who were present at the time of the incident also sent a letter to the Chief of the Hospital, Dr. Teodoro Motus, informing the latter of what she had witnessed. As a result thereof, private respondent was advised to explain in writing by the Chief of the Hospital, but private respondent instead of explaining only her side of the incident also complained against the petitioners. The Discipline and Grievance Committee, Corazon Locsin-Montelibano Memorial Hospital, conducted a fact-finding investigation and later, the Chief of the Hospital, Dr. Teodoro P. Motus, issued a resolution dated November 8, 1978, transmitting the records of the case to the Regional Health Office, No. 6, Jaro, Iloilo City for appropriate action. The opposite parties sought the dismissal of the complaint for not exhausting administrative remedies. HELD: The second ground raised by petitioners is devoid of merit. The alleged need by private respondent Tan to exhaust administrative remedies before filing the complaint for damages does not apply to the instant case. Private respondent as plaintiff in the civil Case for


NOTES: ADMINISTRATIVE LAW PAGE - 98 damages has no administrative remedy available to her. It is true that the same incident complained of in the administrative case filed by petitioners against Tan is the subject of the action for damages filed by Tan against the petitioners in the trial court. However, the cause of action in the administrative case is different from that of the civil case for damages. While the complainant in the administrative case may be a private person, it is the government who is the aggrieved party and no award for damages may be granted in favor of private persons. In the civil action for damages, the trial court's concern is whether or not damages, personal to the plaintiff, were caused by the acts of the defendants. The civil action for damages can proceed notwithstanding the pendency of the administrative action.

116

About the middle o f 1973, petitioner-les see filed a complaint for "Injunction with Writ of Possession with Preliminary and Prohibitory Injunction, with Damages" before the Court of First Instance (now Regional Trial Court) of Zamboanga del Sur, and docketed as Civil Case No. 1389, against herein private respondents Jesus Deypalubos and Daniel Cabdieza. 3 Said court action was alleged to have been resorted to after the vehement refusal of the respondents to obey the orders of the then Philippine Fisheries Commission and Bureau of Fisheries 4 (now Bureau of Fisheries and Aquatic Resources) to vacate that portion of the area covered by FLA No. 1902 which they (private respondents) were occupying without a fishpond permit and the kn owledge and con sent of petitioner.

BRETT V. IAC 191 SCRA 687 (PATENTLY ILLEGAL)

FACTS:

To the accusation of their unlawful entry, private respondents set up the defense of good faith at the time of their entry and occupation of the land which they described as forested and uncultivated.

HELD:

117

DATILES V. SUCALDITO 186 SCRA 704 (NO ORDER)

FACTS: Petitioner Datiles and Company has in its favor a fishpond lease agreement 1 whereby the Republic of the Philippines, thru the Secretary of Agriculture and Natural Resources, agreed to lease to the company one hundred seventy five hectares, ninety nine ares and fifty-nine centares (175.9959 has.) of public land located in Batu, Siay, Zamboanga del Sur, for fishpond purposes. Fishpond Lease Agreement (FLA) No. 1902 was executed on 16 June 1971, with an srcinal period of ten (10) years, later extended to twenty five (25) years, or up to year 2002. 2

Thereafter, or on 2 June 1974, the Barrio Council of Batu, Slay, Zamboanga del Sur prepared and submitted to the Bureau of Fisheries a resolution 9 which attests that the 49 hectare controverted fishpond area was never occupied by the Datiles family (herein petitioner company's predecessor) and that it was Mr. Deypalubos (herein private co-respondent) who cleared the same and constructed all the improvements therein. HELD: It is a well-settled rule that, for prohibition to lie against an executive officer, the petitioner must first exhaust administrative remedies. This doctrine rests upon the assumption that the administrative body, board or officer, if given the chance to correct its/his mistake or error, may amend its/his decision on a given


NOTES: ADMINISTRATIVE LAW PAGE - 99 matter. 20 It follows therefore that there has to be some sort of a decision, order or act, more or less final in character, that is ripe for review and properly the subject of an appeal to a higher administrative body or officer, for the principle of exhaustion of administrative remedies to operate. In the present case, however, there is no administrative order or act as above described, that can be appealed from. The respondent Regional Director has not rendered any decision, or made any final finding of any sort, and is in fact just about to conduct an investigation which happens to be the very act sought to be prevented. Consequently, administrative remedies that must be exhausted, although available, cannot be resorted to. There being urgency in stopping public respondent Guieb's investigation but no plain, speedy and adequate remedy in the ordinary course of law, petitioner's recourse to the respondent court for relief by way of a petition for prohibition was proper. We now lo ok into PD No. 605. Its evident purp ose is to prevent the substitution of judicial judgments for those of public administrative officials in disputes involving the disposition or utilization of natural resources of the country. The decree seeks to leave to administrative agencies the authority to decide controversies involving licenses, permits, patents or public grants in connection with natural resources, obviously because of the expertise of such administrative officials in dealing with such problems. The issuance of said decree (No. 605) does not, however, mean that courts cannot exercise jurisdiction where questions of law are involved, as in the case at bar. Here, what was assailed before respondent judge is Regional Director Guieb's move to conduct an investigation on Deypalubos' formal protest, the petitioner's theory being that to investigate the matter is to go beyond what the Director of the Bureau of Fisheries had authorized in his 3 January 1975 Memorandum, which is "to cause an immediate formal investigation of those issues involved in the foregoing resolution

and the protest ... and not touched upon in Civil Case No. 1389. 21 (Emphasis supplied) The situation, therefore, called for a determination of whether or not the proposed investigation was indeed an over-exercise of authority by respondent Regional Director as claimed by the petitioner; and if this was resolved in the negative, the investigation would have been allowed to proceed. The respondent court was called upon to look only into the propriety of the investigation regardless of the fact that the investigation could result in the issuance and/or revocation of fishpond lease permits of the contending parties. As to the pro hibition dictated by PD No. 60 5, the same pertains to the issuance by courts of injunctions or restraining orders against administrative acts on controversies which involve facts or exercise of discretion in technical cases, because to allow courts to judge these matters could disturb the smooth functioning of the administrative machinery. But on issues definitely outside of this dimension and involving questions of law, courts are not prevented by PD No. 605 from exercising their power to restrain or prohibit administrative acts.

118

AQUINO V. LUNTOK 184 SCRA 177 (URGENCY)

FACTS: Reduced to its essential terms, the present petition raises a question, apparently of first impression, concerning the validity of a writ of preliminary injunction issued beyond the 20-day period of the effectivity of a restraining order and during the extended efficacy of such order. Indeed, in the cases treating on the matter of TROs, it appears that only the propriety of orders extending the efficacy of the initial TRO, or the issuance of another TRO after the


NOTES: ADMINISTRATIVE LAW PAGE - 100 first had automatically expired after the twentieth day of its issuance, have been squarely ruled upon, but not the question of the validity of a writ of preliminary injunction issued to restrain the same act complained of after the lapse of the 20-day period of the TRO. The records show that petitioners, in their capacity as Provincial Auditor of Camarines Sur, State Auditor I of the Provincial Auditor's Office and State Examiner of the Provincial Auditor's Office, respectively, conducted an audit of private respondent's accounts as Municipal Treasurer of Libmanan, Camarines Sur and found a cash shortage of P274,011.17 under his accountability. 3 Allegedly pursuant to Section 157, Batas Pambansa Blg. 337, petitioners seized private respondent's cash, books, papers and accounts and the latter was suspended from office. As a consequence, private respondent requested reinvestigation by the Commission on Audit. 4 Pending action on the request, private respondent filed a petition dated August 26, 1987 with the trial court, presided over by respondent judge, for prohibition with injunction and with a prayer for a restraining order and damages. 5 Forthwith, respondent judge issued the TRO of August 27, 1987, enjoining all respondents therein, their agents and/or representatives, for a period of twenty (20) days from date thereof, to desist from proceeding or taking action against private respondent based on petitioner Yumang's report and from exercising such derivative powers and functions. 6 On September 16, 1987, which was the last day of effectivity of the TRO, respondent judge, on motion filed by private respondent, issued an order extending the efficacy of the TRO for another period of twenty (20) days, or until October 6, 1987. 7

On September 24, 1987, likewise upon motion of private respondent, respondent judge issued an order directing petitioners to return to private respondent the cash, books and other papers they had seized. Thereupon, petitioner Aquino filed a motion for the reconsideration of said order, to which private respondent filed his opposition. Under date of October 5, 1987, petitioners also filed their answer to the petition, with an opposition to the application for preliminary injunction. 8 On October 6, 1987, the last day of the extended effectivity of the TRO, private respondent filed another motion for extension of the efficacy of the restraining order. On the same date, respondent judge issued an order directing petitioners to refrain from taking any action against private respondent until the motion is resolved. 9 HELD: Petitioners asseverate that the questioned writ of preliminary injunction is null and void, it being in reality a fourth restraining order issued beyond the 20-day effectivity of the preceeding TRO. 15 Further, petitioners claim that the injunction was issued in utter disregard of the doctrine of exhaustion of administrative remedies, private respondent having brought the action below pending his request for reinvestigation with the Commission on Audit. 16 On the charge of non-exhaustion of administrative remedies, although it is well-settled in our jurisdiction that, unless otherwise provided by law or required by public interest, before bringing an action in or resorting to the courts of justice all remedies of administrative character affecting or determinative of the controversy at that level should first be exhausted by the aggrieved party, 17 this doctrine is not a hard and fast rule. In the present case, we are inclined to subscribe to private respondent's invocation of the urgency of judicial intervention, as one of the admitted exceptions to the rule, 18 which likewise would be in


NOTES: ADMINISTRATIVE LAW PAGE - 101 keeping with the court's broad discretion in granting injunctions. Whatever circumstances warranted the grant of injunction in the court below would be no different than the circumstances which created the urgency, and there can ordinarily be no better judge to determine the existence thereof than the trial court itself. Thus, it has been said that the court which is to exercise the discretion of granting an injunction is the court of srcinal jurisdiction and not the appellate court; 19 and a preliminary injunction will usually be granted when it is made to appear that there is a substantial controversy between the parties and one of them is committing an act or threatening the immediate commission of an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can be had on the merits of the case. The only limitations to such discretion would be th at it must hav e been exe rcised upon the groun ds and in the manner provided by law, 20 an inquiry into which is precisely part of the subject of our immediately succeeding discussion on the matter of the status of the injunction in controversy. Contrary to petitioners' position, we are disposed to sustain the validity of the writ of preliminary injunction in question. A temporary restraining order, while being in effect a species of injunction, is in some respects to be distinguished therefrom. It is an interlocutory order or writ issued by the court as a restraint on the defendant until the propriety of granting a preliminary injunction can be determined, thus going no further in its operation than to preserve the status quo until that determination. When such determination is made, the whole force of the order ceases by its own limitations and become functus officio, having by then served its purpose.

119

SABELLO V. DECS, 180 SCRA 623 (POVERTY)

FACTS: Petitioner, was the Elementary School Principal of Talisay and also the Assistant Principal of the Talisay Barangay High School of the Division of Gingoog City. The barangay high school was in deficit at that time due to the fact that the students could hardly pay for their monthly tuition fees. Since at that time also, the President of the Philippines who was earnestly campaining was giving aid in the amount of P 2,000.00 for each barrio, the barrio council through proper resolutions alloted the amount of P 840.00 to cover up for the salaries of the high school teachers, with the honest thought in mind that the barrio high school was a barrio project and as such therefore, was entitled to its share of the RICD fund in question. The only part that the herein petitioner played was his being authorized by the said barrio council to withdraw the above amount and which was subsequently deposited in the City Treasurer's Office in the name of the Talisay Barrio High School. That was a grave error on the part of the herein petitioner as it involves the very intricacie s in the disbursement of govern ment fund s and of its technicalities. Thus, the herein petitioner, together with the barrio captain, were charged of the violation of Republic Act 3019, and both were convicted to suffer a sentence of one year and disqualification to hold public office. The herein petitioner appealed his case to the Court of appeals, Manila. The Court of appeals modified the decision by eliminating the subsidiary imprisonment in case of insolvency in the payment of one-half of the amount being involved. The herein petitioner, being financially battered, could no longer hire a lawyer to proceed to the highest court of the land. Finally, the herein petitioner was granted an ABSOLUTE PARDON by the President of the Republic of the Philippines, restoring him to 'full civil and political rights.' With this instrument on hand, the herein petitioner applied for reinstatement to the


NOTES: ADMINISTRATIVE LAW PAGE - 102 government service, only to be reinstated to the wrong position of a mere classroom teacher and not to his former position as Elementary School Principal I. HELD: This is not a hypothetical or abstract dispute. It is not academic or moot for, to our mind, there is a definite and concrete controversy touching the legal relations of parties having adverse legal relations. This is a real and substantial controversy admitting of specific relief through a court decree that is conclusive in character. The case does not call for a mere opinion or advise, but for affirmative relief . As a general rule, the question of whethe r or not petitio ner sho uld be reappointed to his former position is a matter of discretion of the appointing authority, but under the circumstances of this case, if the petitioner had been unfairly deprived of' what is rightfully his, the discretion is qualified by the requirements of giving justice to the petitioner. It is no longer a matter of discretion on the part of the appointing power, but discretion tempered with fairness and justice. As to th e argumen t that the Department of Education, Culture an d Sports cannot be sued, the only answer is that its officials can be sued for alleged grave errors in their official acts. Again, We ignore technicality by considering this a suit against the officials of this government agency. Taking into consideration that this petition is filed by a non-lawyer, who claims that poverty denies him the services of a lawyer, We also set aside the requirement of exhaustion of administrative remedies and resolved to go direct to the merits of the petition. In Monsanto vs. Factoran, Jr., 3 this Court held that the absolute disqualification from office or ineligibility from public office forms

part of the punishment prescribed under the penal code and that pardon frees the individual from all the penalties and legal disabilities and restores him to all his civil rights. Although such pardon restores his eligibility to a public office it does not entitle him to automatic reinstatement. He should apply for reappointment to said office. In the present case after his absolute pardon, petitioner was reinstated to the service as a classroom teacher by the Department of Education, Culture and Sports. As there are no circumstances that would warrant the diminution in his rank, justice and equity dictate that he be returned to his former position of Elementary School Principal I and not to that of a mere classroom teacher. However, the Court cannot grant his prayer for backwages from September 1, 1971 to November 23, 1982 since in Monsanto 4 this Court said he is not entitled to automatic reinstatement. Petitioner was lawfully separated from the government service upon his conviction for an offense. Thus, although his reinstatement had been duly authorized, it did not thereby entitle him to backwages. Such right is afforded only to those who have been illegally dismissed and were thus ordered reinstated or to those otherwise acquitted of the charge against them. In the same light, the Court cannot decree that his government service be made continuous from September 10, 1948 to the present when it is not. At any rate when he reaches the compulsory age of retirement, he shall get the appropriate retirement benefits as an Elementary School Principal I and not as a mere classroom teacher.

120

ROCAMORA V. RTC


NOTES: ADMINISTRATIVE LAW PAGE - 103 167 SCRA 615 (USELESS) FACTS: In order to impress the Pope, petitioners sought the widening of the road where the Pope would pass. This entailed however the expropriation of private respondent’s properties. HELD: On the second ground, we affirm the salutary rule that decisions of administrative authorities must first be appealed to their superiors in the executive department before resort to judicial review may be permitted; otherwise, the case may be dismissed for lack of a cause of action. 15 This is based on sound public policy and practical grounds. One reason is that the administrative superiors, if given a chance, can and will correct the mistakes of their subordinates, thus rendering judicial intervention unnecessary. Another is that administrative authorities are presumed to be experts in their respective fields of specialization and their decisions should as a rule not be disturbed by the courts of justice, which cannot claim similar knowledgeability. A third justification is that these decisions are usually reviewable only in the special civil actions of certiorari, prohibition and mandamus, which are not accepted except only where there is no plain, speedy and adequate remedy available to the petitioner. No less important is the consideration that by withholding action until the administrative remedies have been exhausted, the judiciary will be observing the doctrine of separation of powers and according deference to the acts of a coordinate department of the government.

illegal, amounting to lack of jurisdiction; 17 where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; 18 where the amount involved is relatively small so as to make the rule impractical and oppressive; 19 and where the question involved is purely legal and will ultimately have to be decided anyway by the courts of justice. 20 At least two of these exceptions are applicable to the case at bar. In the first place, it appears that the administrative officers have sat on this case for as long as nine months, during which as many as eight endorsements were made from office to office in an apparently endless discussion and denial of the complainants' claims for compensation. 21 Even the supposed adjustment of the appraisals to be made by the Ministry of Public Highways was still pending after the complaint was filed and when the defendants submitted their answer. 22 The matter was apparently hibernating in the doldrums of bureaucratic indecision and inaction. In the meantime, the complainants remained unpaid despite their repeated demands. In the second place, the other issue raised was a question of law, to wit, the applicable criterion in the determination of the compensation to be paid the plaintiffs for the loss they had sustained. More specifically, the legal question presented was whether or not P.D. 76 should dictate the amount of the compensation to be paid the owners as against the price they negotiated with the Ministry of Public Highways.

121 But the doctrine of exhaustion of administrative remedies is not an inflexible rule. In fact, it yields to many accepted exceptions. As we have noted in a number of cases, exhaustion is not necessary where inter alia there is estoppel on the part of the party invoking the doctrine; 16 where the challenged administrative act is patently

PALMA V. DE LA PAZ 160 SCRA 751 (SUBSTANTIAL COMPLIANCE)

FACTS: HELD:


NOTES: ADMINISTRATIVE LAW PAGE - 104 The doctrine on exhaustion of administrative remedies does not preclude petitioner from seeking judicial relief This rule is not a hard and fast one but admits of exceptions among which are that (1) the question in dispute is "purely a legal one" and (2) the controverted act is 'patently illegal" (Carino vs. ACCFA, No. L19808, September 29,1966,18 SCRA 183). The questions involved here are purely legal. The subject Hospital Orders violated petitioner's constitutional right to security of in tenure and were, therefore, "patently illegal." Judicial intervention was called for to enjoin the implementation of the controverted acts. There was substantial compliance by petitioner with the requirement of exhaustion of administrative remedies since she had filed a letter-protest With the respondent Secretary of Health, with copies furnished the Commissioner of Civil Service, and the Chairman of the Government Reorganization Commission, but the same remained unacted upon and proved an inadequate remedy. Besides, an action for quo warranto must be filed within one year after the cause of action accrues (Sec. 16, Rule 66, Rules of Court), and the pendency of administrative remedies does not operate to suspend the running of the one-year period (Cornejo vs. Secretary of Justice L-32818, June 24, 1974, 57 SCRA 663).

122

ADRISOLA V. CA 133 SCRA 245 (INTERPRETATION OF CONTRACT)

FACTS: HELD: We sustain the Appella te Court on the second g round ina smuch as the requirement that no recourse to Courts can be had until all administrative remedies have been exhausted, is not absolute. It is subject to certain exceptions. It is not applicable where the question involved is essentially judicial, as in this case where the

controversy revolves around the interpretation of a contractual stipulation. 2 We ag ree with the App ellate Co urt that the stipu lation in the dee d of mortgage that the mortgagee PINOY "is the one to transplant" on the Landholding is tantamount to a prohibition against the institution of a tenant. Although transplanting is merely one of the phases of farming and cultivation, it is evident that what was really meant was that the mortgagee himself was to cultivate the Landholding personally. That such was the intendment is shown by the fact that since 1957 when the verbal mortgage was constituted, it was the mortgagee, PINOY, who had been cultivating the Landholding personally although through hired laborers, one of whom was P ETITIONER . T he re quirement of p ersonal cultivation was documente d in 1975. PETITIONER's alleged institution as tenant by PINOY in 1973, and as agricultural lessee in 1976, was in violation of the mortgage contract, aside from the fact that the institution as agricultural lessee was apparently made in bad faith inasmuch as prior to the execution of the agricultural lease contract on August 18, 1976, and its registration on August 24, 1976, SALAMANQUE had already notified PINOY of his (SALAMANQUE's) intention to redeem the Landholding. The institution of tenancy having been prohibited, PINOY, as the mortgagee, could not be considered as an "agricultural lessor" or a "legal possessor" within the meaning of Section 10 3 and 166(3) 4 of the Code of Agrarian Reforms (RA No. 3844) such that by reason of the redemption, SALAMANQUE would be subro gated to the rights a nd substituted to the obligations of the agricultural lessor. It will have to be held, therefore, that the institution of respondent Sabio as the tenant by the landowner, SALAMANQUE, was valid as within the latter's right.


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