Administrative Law_2002.pdf

General Principles

Administrative Law Review 2002 Edition

ADMINISTRATIVE LAW REVIEW The lectures of

Atty. Rodolfo M. Elman, CESO III MDA, The Australian National University LLB, Ateneo de Davao University AB Econ., Ateneo de Manila University Editors: Jason John Joyce Nuj Dumbrigue Janis Dumama Sheila Resabal Jade Jamora Cam-cam Basa Tommy Veloso Darry Gallego Vanessa Bello Genie Salvaña Kenneth Lim Mortmort

2002 Edition (August 27 – September 10, 2002)

Published by:

Lakas Atenista Ateneo de Davao University College of Law

1

General Principles

Administrative Law Review 2002 Edition

ADMINISTRATIVE LAW

W

e now go to Administrative Law. First, the definition:

Q: Define administrative law. A: Administrative law is a branch of public law which fixes the organization of the government and determines the competence of administrative authorities who execute the law and makes available to the individual the relief against the administrative action. Q: What is the purpose of administrative law? A: The purpose of administrative law is basically the protection of private rights. Thus, the subject matter of administrative law is the nature and mode of powers exercised by administrative bodies and officers. It has for its basic functions the effective and efficient operation of the government machinery. Q: What is the origin of administrative law? A: The origin of administrative law is in legislation and precedes from the increased functions of individuals because of complexities of modern society thus, a new venture the so-called fourth branch of the government. Q: Why the so-called fourth branch of the government of the government? A: Basically because there are administrative bodies created by statutes which are given powers by the Legislature, classified as quasi-legislative and quasijudicial powers. The reason here is because of the multiplication of the activities of man in the outset. There were but few activities that have to be regulated by the State. But subsequently, the State through legislature and courts found it necessary to create agencies in order to declog court dockets. The State found it unable to keep up with the various activities of individuals. Thus, the so-called venture into the 4th branch of the government which is actually a delegation of legislature power to the administrative bodies. The general rule here is that, there should be no delegation of legislative powers. But you have administrative agencies created basically to answer the pressing problems of modern society.

And so, there was this bar question: Q: What are the types of administrative bodies or agencies? A: The following: 1.) Administrative agencies created for the business of the government. E.g. the BIR for the collection of taxes; 2.) Administrative agencies created to perform business services for the people, e.g. Philippine Postal Authority engaged in postal services; 3.) Administrative agencies created to regulate businesses affected with public interest. E.g. power and light facilities; telecommunications (NTC); 4.) Administrative agencies created to regulate the affairs of man in the exercise by the State of police power. E.g. SEC; 5.) Administrative agencies created to answer for the social mandate imposed under the Constitution. Thus, we have administrative bodies clothed with quasi-judicial power such as the NLRC; 6.) Administrative agencies created to provide for some kind of grant or gratuity. E.g. GSIS, SSS; and lastly, 7.) Administrative agencies in the same category with the private individual. (ha??!) So these are the basic classes administrative bodies of the government.

of

“Government Of The Republic Of The Philippines” vs. “National Government” Administrative law deals with the organization of the government. Thus, you have the concept of GRP (Government of the Republic of the Philippines. This term is NOT synonymous with the term “National Government.” Q: Distinguish “Government of the Republic of the Philippines” (GRP) from “National Government.” A: The GRP or Republic of the Philippines refers to the corporate governmental entity through which the functions of government are exercised throughout the Philippine Islands, including, 2

General Principles

Administrative Law Review 2002 Edition

save as the contrary appears from the context, the various arms through which political authority is made effective in said Islands, whether pertaining to the central Government or to the provincial or municipal branches or other form of local government. (Section 2, Administrative Code) Whereas, the “National Government” refers to the central government consisting the three branches or department of the government. BACANI vs. NACOCO FACTS: There was a civil case involving the National Coconut Corporation (NACOCO) as defendant. NACOCO requested for copies of stenographic notes and there was payment for the notes. The Commission On Audit (COA) disallowed such payment. So an action was filed by stenographer Bacani to enjoin the reimbursement of such fees paid to them. ISSUE: Whether or not the NACOCO falls within the scope of GRP in order to be exempt from such fees because under Rule 130 of the Rules of Court, the government should be exempt from payment of such fees. HELD: NO. NACOCO has a corporate personality separate and distinct from the GRP. It is not within the scope of GRP. Thus, it is not exempt under Rule 131.

CENTRAL BANK vs. CA, ABLAZA FACTS: There was an award given by the Central Bank (CB) to ABLAZA, a construction firm for the latter to construct the CB office in La Union. There was no formal contract executed. But nevertheless, the work commenced. One month after the commencement of the construction, the CB terminated such agreement to construct. An action was instituted. The trial court ruled in favor of Ablaza and ordered the CB to pay damages. Note that under the old Administrative Code, Section 607 in relation to Section 68, provides that the National Government cannot dispense fund without the requisite certification of availability of funds. In this case,

there was none aside from the fact that no formal contract was entered into. ISSUE: Whether or not the Central Bank of the Philippines falls within the concept of the “National Government.” HELD: The Central Bank is an entity separate and distinct from the National Government.

Incorporated and Non-Incorporated Government Authorities Q: What are examples of government authorities? A: NHA (National Housing Authority); PPA (Philippine Port Authority); ISA (Iron and Steel Authority)

IRON AND STEEL AUTHORITY vs. CA 249 SCRA 539 FACTS: The Iron And Steel Authority (ISA) has the basic function of promoting and developing the iron and steel industries in the Philippines. It was created for a term of five (5) years from 1973 to 1978. Its statutory term was extended up to 1988. In 1983, the ISA instituted expropriation proceedings covering the properties of Maria Kristina Fertilizers. But while the case was pending, the statutory term of ISA expired in 1988. A motion to dismiss the expropriation proceeding was filed on the ground that under the Rules of Court, only authorized entities may be parties in civil cases and thus, it is no longer have corporate personality. Notwithstanding the position of ISA, the trial court dismissed the case. The decision was affirmed by the CA and was elevated to the SC. ISSUE: Whether or not there can be substitution by the plaintiff – from ISA to GRP. HELD: If the authority was incorporated, then it has a personality separate and distinct from the principal. Therefore, there is no substitution. But not so in this case because ISA is a non-incorporated authority. Upon its expiration of its statutory term, then all its functions, responsibilities and duties including assets and liabilities are 3

Administrative Law Review 2002 Edition

reverted back to or reassumed by the principal which is the GRP. So the SC reversed the decision of the lower courts. It allowed the substitution of parties for the GRP to proceed with the expropriation proceeding.

Doctrine Of Primary Jurisdiction Now, let’s go to the concept of primary jurisdiction. This has been asked several times in the bar. Under the concept of primary jurisdiction, the court cannot and will not take cognizance of a controversy involving a question requiring the technical expertise or skills of an administrative body or officer. Even if such an action is filed in court, but which would require expertise or skills of an administrative officer, courts will defer the matter to the authority of the administrative agency. For example is the Bureau Of Immigration (BOI). You have the case of BOC vs. DELA ROSA (May 31, 1991). The Bureau of Immigration has the exclusive authority to hear and try cases involving alleged aliens. This is a power given to it by law. The court will not and is not empowered to look into this question: whether or not a person is an alleged alien. This is within the competence of the BOI. Of course there is an exception to this rule. Where there is a claim that an individual is indeed a Filipino citizen and there is substantial evidence and reasonable basis to believe in that claim. In such situation, the BOI will defer the case to the authority of the court in far as the issue of citizenship is concerned because the issue of citizenship falls, not within the competence of the administrative agency, but within the jurisdiction of the regular court.

ROYAL CLASS vs. QUALITRANS LIMOUSINE FACTS: The NTC granted a certificate of public convenience (CPC) to the Royal Class Limousine over the objection of another party to operate a tourist car service within the old NAIA from that point to any point outside. The grant of CPC was the subject of a motion for reconsideration before the NTC. Qualitrans filed an action for damages before the court against the

General Principles

Royal Class with a prayer for the issuance of a writ of mandatory injunction. The Royal Class on the other hand, filed a petition for declaratory relief before the NTC which action is ordinarily cognizable by the regular courts. ISSUE: Whether or not the NTC has jurisdiction over petitions for declaratory relief and the power to award to damages. HELD: Applying the doctrine of primary jurisdiction, the NTC has the power to look into the controversy notwithstanding the fact that it is a petition for declaratory relief. What is important is not the nomenclature or the name attached by the parties to their pleadings, but what the petition alleges. Actually, the petition although named as “petition for declaratory relief,” is a petition to declare the rights given by the NTC to the Royal Class. The NTC has the power to modify, revise or set aside the CPC by applying the doctrine of primary jurisdiction. Moreover, the NTC as well as most of the administrative bodies are now empowered to award damages pursuant to the doctrine of primary jurisdiction.

So in situations requiring the expertise of administrative agencies then it is the same who has the power to decide controversy. The presumption here is that, because of the competence and skills of the administrative officer or body, he is adept in ascertaining technical matters needed. You know, because of this increasing reliance on the expertise and training of the administrative agencies, the old view that only the courts which has the power to award damages is already obsolete. There are now hundreds of administrative bodies and most of them are given powers to award damages. Q: What are the reasons for the application of the doctrine of primary jurisdiction? A: The following are the reasons: 1.) to enable the administrative body to make a decision correctly; even if there is an error, the law allows the administrative officer to rectify whatever error has been committed; and

4

General Principles

Administrative Law Review 2002 Edition

2.) for expediency – the need to de-clog court dockets.

Q: How do you determine whether or not an agency or body is judicial or administrative? A: If the principal function of the body is regulatory in nature although in the process of this principal regulatory function it is allowed by law to adjudicate controversy and this latter function is merely an incident to its primary function, it is an administrative body. Otherwise, if the principal purpose in creating such body is to adjudicate and decide given rights, then it is a matter within the ambit of the court. You have the case of SOLID HOMES vs. PAYAWAL (177 SCRA 73 [1989]). The issue here involves the rights of the parties under a contract to sell. Generally, this is under the provisions of the Civil Code but because of a law, the determination of the rights of the parties under a contract to sell subdivision lot now belongs to an administrative agency which is the National Housing Authority (NHA). But pursuant to E.O 846 [1981], the powers and function of the NHA were given to the Human Rights Settlement Regulatory Commission (HRSRC). But in 1986, E.O. 90 transferred the powers and functions of the HRSRC to the Housing and Land Use Regulatory Board (HLURB). You have also the case of CT TORRES vs. HIBIONADA (191 SCRA 269) which was asked in the 2002 Bar exams: CT TORRES, INC. vs. HIBIONADA 191 SCRA 269 FACTS: An action to exact specific performance from the seller of the subdivision lot to transfer title to the property bought by the buyer. HELD: The case should be filed before the HLURB, not before the court. Q: What are the matters within the exclusive jurisdiction of the HLURB? A: The following: 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 lot or condominium unit against the owner, developer, dealer, broker or salesman.

There are two (2) basic powers of administrative bodies: 1.) quasi-judicial power; and 2.) quasi-legislative power. Quasi-Legislative Power We mentioned earlier that this quasilegislative power is a delegation of power from Legislature to the administrative body for the latter to perform powers usually exercised by the State. The usual criticism is that, this is an undue delegation of power. But actually, this is an exception of the rule on nondelegation. As a rule in order to avoid such criticism of undue delegation, the law must be complete as to its term in conferring the powers to the administrative agency. So there must be a sufficient details provided already in the statute. But of course, the Congress cannot define the details precisely. The matter of filling up the details may be left to the administrative agency through rules and regulations. And so, the basis here is to come out with reasonable standards which will guide the administrative officer. Quasi-legislative power simply means rule-making power. So there are three (3) basic elements for a valid issuance of rules and regulations: 1.) the rules and regulation must be germane to the objects and purpose of the statute; 2.) it must conform to the standards of the statute; and 3.) it must relate solely to carrying out into effect the general provisions of the law.

Quasi-Judicial Power The administrative body’s quasi-judicial power refers to the power of the administrative agency or officer to investigate facts or ascertain existence of facts and to make a conclusion from such findings of facts. 5

General Principles

Administrative Law Review 2002 Edition

The rule here is, there must be a conferment by the law of this quasi-judicial power. In the absence of the provision giving the quasi-judicial power to the administrative body, then it is only performing a quasilegislative power. But almost all administrative agency are clothed with both powers – quasi-judicial and quasi-legislative powers. In the case of LUPANGCO vs. CA FACTS: This case pertains to the issuance of the PRC (Professional Regulatory Commission) of an order requiring that the candidates for CPA board exams are not allowed to participate in any review classes or receive materials within 3-day period prior to the examination day. The order was questioned by the students. ISSUE: What kind of power performed in this case by the PRC in issuing such order? HELD: Basically, the PRC performed quasi-legislative power. But the issuance of a quasi-legislative rule must be reasonable. It must not be arbitrary. But in this case, the issuance of order by the PRC violated the rights not only of the students but also the right to academic freedom of the school – how to prepare their students to pass the CPA exam is within the ambit of this right to academic freedom. In the same manner, it is the right of liberty of the students to take whatever measures they deemed proper in order that they successfully hurdle the CPA board exams. In other words, the rule issued by the administrative agency must not be arbitrary. It must be reasonable and consistent with the objective of the law. It is precisely to carry out the object and purpose of the statute creating the administrative agency.

SANZ vs. ABAD SANTOS FACTS: The board of examiners for nursing issued an order requiring a periodic inspection of nursing schools and prohibits the graduates of those schools which do not comply with the

minimum standards imposed by the board. The order was questioned. ISSUE: What kind of power is being performed here by the administrative body? HELD: It is an exercise of quasilegislative power. Is there here a violation of due process in that there was no prior hearing conducted? In the first place, was the issuance of the order valid? It applies to all enterprises similarly situated – all nursing schools. This is a reasonable exercise. In fact, it is an exercise of police power by the State – regulatory in nature. So there was no violation of due process. But where the issuance is made applicable to a particular enterprise only, then definitely this rule violates due process because it is no longer an exercise of quasi-legislative power but more on the exercise of quasi-judicial power (adjudicatory) which requires prior notice and hearing.

CONFEDERATION OF SPANISH PROFESSORS vs. QUISUMBING FACTS: There was a time that Spanish subject was a required and compulsory subject in the 70’s and 80’s. It is a good subject…really! [si senyor!] Now, there was an order issued by then DECS Secretary Quisumbing directing the abolition of the Spanish subject as part of the curriculum and imposing the Arabic subject in an optional basis. Now, the Confederation of Spanish Professors in the Philippines questioned the order of Quisumbing as arbitrary and violative of due process. What kind of power is exercised here? HELD: The issuance of the order is a valid exercise of quasi-legislative power. The order applies to all enterprises of the same character. So there can be no violation of due process here.

REPUBLIC vs. MIGRINO FACTS: This involves the investigation by the new AFP AntiGraft Board created by then chairman of 6

Administrative Law Review 2002 Edition

PCGG Salonga. One of the official acts of Salonga was to create the AFP AntiGraft Board with the power to investigate alleged ill-gotten wealth of the members of the AFP, whether active or retired. E.O.s 1,2,14 and 14-A created the PCGG. The law on PCGG principally authorizes the PCGG to investigate and recover ill-gotten wealth of the Marcoses, their relatives, associates and cronies. ISSUE: Is the issuance made by Salonga as PCGG chairman consistent with the law creating the PCGG? HELD: NO. The issuance of the order creating the Anti-Graft Board as applied to the members of the AFP no longer has relation to the law because the law intends only the PCGG to look into the alleged ill-gotten wealth involving the Marcoses and their cronies. And if the respondent before the PCGG is facing a charge which has nothing to do with alleged association with the Marcoses, then it does not fall within the ambit of the law creating the PCGG.

PHILIPPINE CONSUMERS FOUNDATION vs. DECS FACTS: This involves the issuance of an order by the DECS Secretary on the basis of a fact-finding report by a committee authorizing an increase in tuition fees to be collected by the private schools which is 15% to 20% increase. The Philippine Consumers Foundation questioned the issuance of the order on the ground that it is unreasonable and violative of due process. HELD: It is a valid exercise of quasi-legislative power because it applies to all. There was also no unreasonableness because in fact the DECS upon petition, ordered the reduction of such ceiling(?) and was reduced to 10-15%. This is within the power of DECS authority to issue rules and regulations even the matter of grants of increases in tuition fees. But let us say, if the purpose of increasing a rate is applied only to a particular enterprise,

General Principles

then it is no longer a valid exercise of quasilegislative power. You have the case of FORTUNE TOBACCO years ago during the time of Liwaywasy Chato, then head of the BIR. FORTUNE TOBACCO vs. BIR FACTS: Then BIR head Chato issued a regulation re-classifying the brand of cigarette belonging to the Fortune Tobacco – Champion, More, Hope – from local to foreign. Thus, there was a big reduction. Actually, the first re-classification was made by the predecessor of Chato. But during her time, she changed such classification from local to foreign in order for the government to derive more revenues. This was questioned by the Fortune Tobacco because there was no public hearing conducted. HELD: The order issued by the BIR violated due process – there was a violation of property rights of Fortune Tobacco. The order was issued in the guise of quasi-legislative power but actually it was an exercise of quasijudicial power because the order was made applicable only to Fortune Tobacco. If an administrative body is exercising a quasi-judicial power, there is a need to conduct hearing consistent with the due process clause.

Of course, the quasi-legislative power is subject to the observance of due process. You have the case of UP BOARD REGENTS vs. CA 313 SCRA 404 HELD: The action taken by the UP Board of Regents in withdrawing a degree conferred on the basis of fraud or error is said to be within the power of the administrative agency because the pursuit of the University of academic excellence is in reality an act of selfdefense to preserve any serious threats to the integrity of the University. So there is here a wide leeway and discretion given to the administrative agency. In this case, the UP Board of Regents consistent with its constitutional grant of academic freedom. PHIL. BANK OF COMM. vs. CIR 7

General Principles

Administrative Law Review 2002 Edition

302 SCRA 241 FACTS: The BIR Commissioner issued a Memorandum Circular 7-85 which changed the prescriptive period as provided under the Internal Revenue Code it was only a prescriptive period of two years but pursuant to its rulemaking power the BIR Commissioner changed such prescriptive period from two to ten years in the matter of filing a claim for refund on excess income tax payment. HELD: The Supreme Court ruled that this rule issued by the BIR Commissioner violates the law. It arrogates unto itself the power to legislate. One requirement for a valid issuance of rules and regulations by administrative agencies is that, the rule must be germane to the object and purposes of the law and must at all times be in conformity and within the scope and powers as provided by the statute to the administrative agency. So in this case, there can be no estoppel on the part of the State where the administrative agency acting on behalf of the State has made an error.

Note that the issuance by the administrative agency of rules and regulations, whatever construction made by such administrative officer although the rule is it should be given respect if not finality, but if the same is grounded on plain error therefore, there can be no finality. In fact, this issuance can be the subject of judicial review because it is only the court which has the final authority to rule on the issue on the matter of proper construction and interpretation of law as made by the agency through the issuance of rules and regulations. CONTE vs. COURT OF APPEALS 264 SCRA 20 FACTS: There was this Teves Retirement Law prescribing the provision on retirement and other insurance benefit given to government employees other than that granted under the GSIS act. And so the board of the SSS issued Resolution 56 granting financial package for retiring employees of the SSS. SSS employees Conte et al availing not only of the retirement benefit under existing GSIS law but also under the Resolution 56 of the SSS.

HELD: Resolution 56 contravenes the Teves Retirement Law. Therefore, this is an act arrogating unto itself power solely belonging to Congress. Thus, this rule is inconsistent R.A 4968 which specifically bars the creation of insurance or retirement plan other than the GSIS government law for GSIS government employees. In the case of NASIPIT LUMBER vs. NWPC (289 SCRA 670), we have here another issuance where the Labor Code grants the power to the NWPC (National Wages and Productivity Commission) to prescribe rules and regulations for determining the appropriate wages in the country. Whatever guidelines issued by a subordinate administrative agency such as the RTWPB (Regional Tripartite Wages and Productivity Board) should be with the approval of the NWPC. In other words, rules and regulations issued by the RTWPB which are contrary to those promulgated by NWPC are ineffectual, void and cannot be the source of rights and privileges.

Publication Requirement So there are requirements for a valid issuance of rules apart from the fact that the rules issued must always be consistent and within the scope of the authority granted by statute. If such a rule is of general application, then it follows that there must also be compliance with the publication requirement. But if the rule is simply for the internal guidance of public officers and employees not of general application, then even if such rule is not published, these are binding on the public officers and employees. But if the intention is to have a rule of general application binding on the public, then there is the requirement for publication. There is also the requirement under the Sections 2 and 3, Book 7 of the Revised Administrative Code (EO 292) that such a rule of general application, more so where it provides for penalties, the same must be filed and registered with the UP register. Q: What then is the effect of the nonregistration? A: Such a rule which does not comply with this requirement cannot be made effective on the public because the public have the right 8

General Principles

Administrative Law Review 2002 Edition

to know the contents before they are made to be bound under the provisions of such rules and regulations. They must have knowledge and knowledge is made through the requirement of publication. Of course, if the rules and regulations promulgated by the administrative agencies provide for penalties, necessarily the law which is the source of the power of the administrative agency, must authorize the imposition of penalties pursuant to the rulemaking power of the administrative agency. If the law itself does not sanction imposition of penalty therefore, the issuance of rules providing for penal sanctions cannot be made effective because precisely the source of power of the administrative officer or agency comes from the statute. Q: When do the rules of the administrative agency take effect? A: Note that the rules and regulations are in the nature of laws and thus, Article 2 of the Civil Code applies – No law shall take effect after 15 days following the completion of their publication in the official gazette. So, the provision of the Civil Code likewise applies in the matter of determining the effectivity of rules and regulations of general character and made binding to the public. Q: Rules and regulation were published completely on December 22, 1986, when did such rules take effect? A: Such a rule and regulations take effect on January 7 which is after 15 days following their publication in the official gazette. So there is also the need for prior notice to the public in order that public may be bound by the action taken by the administrative officer. So where the auction sale of delinquent property took place on a date different from that stated in the notice, there is here denial of due process. There must be notice again, should there be a resetting of such auction, given to adverse party and the public. BAR QUESTION: What are the instances when requirement of prior notice and hearing can be dispensed with? A: The following are the instances: 1.) in the restraint of delinquent property; 2.) in the grant of preliminary attachment; 3.) in the removal of an acting officer. The fact of possession of public office is temporary in character. So there is no denial of due process should an

acting capacity is deprived or separated from such position; 4.) in the case of a preventive suspension of a public officer because of the nature of preventive suspension which is not a legal sanction but merely a preliminary measure; 5.) the apprehension of the offender before filing of the case; and lastly, 6.) cancellation of passport of an individual. Why? This is a mere privilege.

A party may be declared in default in administrative proceeding. So if there is a directive but the party respondent did not file the answer within the prescribe period, the administrative officer may consider such party in default. And thus, the complainant may then proceed with the presentation of his evidence ex parte, unless there is waiver likewise of such presentation and that pleading be made clearly on the basis on such submission of a position paper.

Administrative Due Process In proceedings before administrative agencies, the policy is for Congress to authorize the administrative body to promulgate rules and regulations in order to have an effective implementation of the law under which the administrative agency is mandated to comply. So the rules of procedure promulgated by the administrative agencies must be liberally construed. And the reason here is in order to have a more effective and efficient administration and implementation of the objects and purposes of the statute. So in the first instance, it is within the power of the administrative agency or officer to interpret whatever rules and regulations promulgated by it. Of course, this may be the subject of judicial review such as where there is abuse of power by the administrative officer in promulgating rules and regulations. So you have the requirements of due process that must be followed: 1.) One is that, the trier of facts must be an impartial tribunal duly constituted and created to ascertain the rights of the parties; 2.) The procedure followed must be consistent with the principle of fair play or fair trial; 3.) The procedure followed in the conduct of administrative investigation must be 9

General Principles

Administrative Law Review 2002 Edition

one where the court will have the opportunity to determine whether the rule of law and procedure were in fact followed by the Administrative Agencies; 4.) Due notice and hearing or opportunity to be heard.

Cardinal Primary Rights In Administrative Proceedings You have also the cardinal rights of persons appearing before administrative agencies, the time tested cardinal principles enshrined in the ANGTIBAY case. Q: What are these cardinal rights? A: The following: 1. The right to a hearing; 2. The tribunal must consider the evidence presented; 3. The decision must have something to support itself; 4. The evidence on which the decision is based must be substantial; 5. The decision must be rendered on the evidence presented at the hearing, or at least contained in the record disclosed to the parties affected; 6. The board or its judges must act on its or their own independent consideration of the law and the facts of the controversy, and not simply accept the views of the subordinate in arriving at decision; and 7. The decision must be rendered in such a manner that the parties can know the various issues involved the reason for the decision rendered.

Discussions: [1] The right to a hearing simply means the right to present evidence on his behalf and also the right to know the allegations of the other party and the opportunity to controvert these findings; [2] [3] One other right is that, the evidence submitted by the respondent must be considered otherwise it would be an exercise in futility where the administrative officer or agency does not take into consideration the pleadings submitted by the respondents in administrative investigation; [4] You have also the requirement that the evidence to support the decision must be substantial. Substantial evidence simply means

such evidence that a reasonable mind deems sufficient to form a conclusion for the finding by the administrative agency. This is more than mere scintilla of evidence; [6] Of course the requirement that the administrative officer or agency must decide the issues and not simply rely on the findings made by subordinate officers. Q: May this right to conduct a hearing be delegated? A: There is a distinction between the right to decide and the right to hear or to investigate. In the latter situation, the duly authorized officer may delegate the task of investigating the issue to a subordinate officer and who, on the basis of such authority, may come out with his recommendations for approval of the superior officer. The superior officer is the person duly authorized to decide the controversy. So there is here no violation of due process where the investigation is conducted not by the officer duly authorized to render a decision but one who is a subordinate of that duly authorized officer, because the matter of conducting investigations may be delegated by the superior to a subordinate. But there is a violation of due process where on the basis of a complaint, an ocular inspection is conducted in the premises of the company which is subject of the complaint and on the basis of the ocular inspection and interrogation of the witnesses, the laborers thereat, the administrative agency makes a decision. Is the decision valid? A decision based simply on ocular inspection and interrogation of laborers is not the decision contemplated by law as to fall under the concept of observance of due process, because ocular inspection is not the main trial. There is the requirement for the conduct of a formal investigation. There is also a violation of due process where the public officer respondent is adjudged guilty of an offense of which he was not charged. In the case of CSC vs. LUCAS 301 SCRA 560 FACTS: The Department of Agriculture Secretary, after hearing, rendered a decision finding the respondent guilty of simple misconduct and the penalty imposed on this public officer was suspension for one month 10

General Principles

Administrative Law Review 2002 Edition

and one day. And so this case was the subject of an appeal to the Civil Service Commission. On appeal, the CSC set aside the finding imposing the penalty of one month and one day suspension and it imposed a penalty of dismissal from the service. The CSC found the respondent guilty of grave misconduct and not simply of simple misconduct. Note that grave misconduct is a serious offense. The first offense warrants already dismissal from the service. And so this was the subject of petition before the court. HELD: There was a violation of due process because the respondent here was not informed of the charge. The charge as found by the CSC was grave misconduct. But he was investigated for the offense of simple misconduct.

Note that the right to appeal is not a natural right. So, it is really a right conferred by statute. A statutory right may therefore be withdrawn by law and there can here be no denial of due process. Due process in administrative adjudication does not mean that there must be a formal trial type investigation as that conducted in the courts of justice. In fact, the administrative agencies are not strictly bound to observe the rigid technicalities as applied in courts following the Rules of Court. So the administrative officer is given much leeway in the conduct of administrative investigation. I mentioned to you the case FORTUNE TOBACCO vs. BIR where the BIR Commissioner Chato issued Revenue Memorandum Circular 37-93 in reclassifying the Fortune brands of cigarette from local to foreign. And thus on the basis of this reclassification, there was an imposition of ad valorem tax on the Fortune Tobacco company in the amount of 9.6 Million and this was contested. The SC ruled that this rule was issued in the guise of rule-making power (quasi-legislative power). But this violated due process because this penalizes a particular enterprise without prior notice and opportunity on the part of Fortune Tobacco to be heard. This applied only to a specific enterprise and not to firms similarly situated. Apart from this violation of due process, the other finding was, this memorandum circular issued by the BIR violated the principle of uniformity of taxation.

ZAMBALES CHROMITE vs. GUZON FACTS: Guzon, while the then director of Bureau of Mines, rendered a decision in a case filed by Zambales Chromite Mining. Zambales Chromite Mining filed a petition seeking to be declared the rightful and prior locator and possessor of mining claims. But this petition was dismissed by Director Guzon. And so the decision of Director Guzon was appealed to the Secretary of the DENR. On appeal, Director Guzon was promoted as Secretary of DENR. And so here was this public official who is now called upon to review a decision which was rendered by the same person in his capacity as Director. HELD: There was a violation of due process because the Chromite Mining cannot expect fair play in the appealed case.

SINGSON vs. NLRC FACTS: While as Labor Arbiter, Singson rendered a decision adverse to a party and this adverse decision was the subject of an appeal to the NLRC. And this Labor Arbiter was likewise promoted as a Commissioner of the NLRC. HELD: There was violation of due process here. Notwithstanding, the fact that in this case subsequently there was non-participation in the deliberation by the Commissioner. Nonetheless, according to the Supreme Court the resolution of the motion for reconsideration, even without the participation of the Commissioner who rendered the decision in his capacity as Labor Arbiter, violated due process. It did not cure the infirmity.

The requirement of a service of summons is likewise very important and indispensable ingredient of due process. There must be a service of summons on the parties. But in a case involving Civil Service Commission on vandalism, I already gave this in our study of Law on Public officers, likewise the case of

In the case of 11

General Principles

Administrative Law Review 2002 Edition

CODINIELO vs. EXEC. SEC. August 4, 1997 FACTS: A party complained of denial of due process on non-observance of this requirement because there was no participation in the formal hearing or investigation but nonetheless this party was given the opportunity to file and in fact did file a motion for reconsideration. HELD: So there was here a cure of whatever infirmity because there was opportunity given to the adverse party to be heard. So whatever defect in due process was cured by the subsequent act of the party in filing a motion for reconsideration wherein he argued his position where he presented his evidence.

PEPSI COLA vs. NLRC HELD: There is no denial of due process where the affected party is heard through his memorandum of appeal. In the formal hearing, there was nonparticipation but he did participate because he filed his memorandum of appeal. Thus, whatever infirmity made in the course of proceedings by lower body was cured. But where in the motion for reconsideration, only the entry of appearance by counsel and there was only a broad motion to reconsider, the infirmity is not cured because even when he filed his motion for reconsideration but nonetheless there was no opportunity for him to present his evidence. In fact, what was made what was mentioned in the motion for reconsideration was only an entry of appearance by counsel. Thus, this does not comply with the requirement of due process. (Villarosa vs. Comelec, November 29, 1999) Where an order cancels a certificate of public convenience of a franchise holder (a permittee) was entered ex-parte on the basis merely on a petition filed by the oppositor, there is here denial of due process because there was no opportunity given to the franchise holder to oppose this petition of opposition.

process because the notice adverse to him was furnished to his former counsel who failed to inform Lincoln Gerald and failed to file the necessary pleadings. HELD: Such fault on the part of his former counsel is binding on Lincoln Gerald notwithstanding the claim that there was already withdrawal of counsel. The basis here was because there was no formal application for his withdrawal before the administrative agency. In other words. there must be notice and application filed before the administrative agency of such withdrawal as counsel. In the absence of such application and the approval by the administrative agency, the counsel continues to be the counsel of record. Thus, any notice given to the counsel is binding and is a notice on the client. So where a party appears by counsel in an action whether in court or before an administrative agency, all notices required to be given must be served not to the client but to the counsel of record. PNCC vs. REPUBLIC August 20, 1990 ISSUE: In cases of increases in toll fees, is there a need for a prior notice to all persons affected such as the users of this express way? Must there be notice to them before there be an increase in the collection of maintenance fees? HELD: A public hearing is mandatory only in cases of petition for increases in toll rates. The purpose of the public hearing is to give users of the express way who will be adversely affected an opportunity to contest the validity of the increase in the toll rates.

MALINAO vs. REYES 255 SCRA 616 HELD: Where the decision was prepared and signed solely by a member of the Sanggunian, such decision cannot be regarded as the decision of the Sanggunian as whole precisely because of the lack of signatures of the other members of the Sanggunian.

LINCOLN GERALD vs. NLRC July 23, 1990 FACTS: The party (Lincoln Gerald) complained that he was deprived of due

Of course there is also the formal requirement that administrative decisions must be reduced in writing 12

Administrative Law Review 2002 Edition

Right Against Self-incrimination This right against self-incrimination is available in all kinds of proceedings whether civil, administrative or criminal. But note that this right against self-incrimination can only be invoked by natural persons and not by juridical persons. Why is this so? The intention here is, the law wants to insure that there be compliance by administrative authorities of the requirements of law such as the need for the filing of records. So, this right against selfincrimination cannot be invoked by any administrative agency for that matter simply because there must be compliance with the requirements of the law such as those for the filing of public records or statements to ensure, let us say in the case of the SEC which is mandated under the law to ensure that there be periodic filing of corporate records, thus the corporation cannot invoke that it has the right against self-incrimination.

Power Of Contempt Q: What about the power of contempt? Can the administrative bodies exercise this power? A: Yes but not automatic. The power of contempt is inherent in the courts but not in administrative bodies. In other words, in order for the administrative agency to validly exercise the power of contempt, there must be an express conferment by the law to the administrative agency. There must also be a definition of the extent of such power of the agency, the canopy must be provided. Therefore, in the absence of the provision on the power of contempt, contempt can only be upon application with the court by the administrative body.

Doctrine Of Exhaustion Of Administrative Remedies The doctrine of exhaustion of administrative remedies provides that where the law prescribes a remedy against administrative action, relief to court cannot immediately be have without first exhausting the administrative remedies. The reason for this is [1] in order to give the administrative agency the opportunity to correct errors it may have committed; the other reason [2] is to compel the parties to avail of

General Principles

the remedies provided under the law and thus expedite the proceedings and de-clog court dockets. One other reason is [3] separation of powers which enjoins the judiciary to interfere in matters falling within the primary competence of the administrative agencies. DELTAVENTURES vs. CABATO 327 SCRA 522 FACTS: There was a decision rendered by the labor arbiter and the NLRC and which decision was subject of an alias writ of execution. On the basis of that writ, the property of the respondent Mr. Ongpin in the labor case was levied Now, there was this case filed before the RTC for damages, prohibition and injunction against the same party who is the complainant in the labor case. HELD: The action before the court was really in the nature of a labor case incident which should warrant the exhaustion of administrative remedies. In other words, since the relief that the party wants to get from the court was in the nature of a prohibition i.e. one to prohibit the sheriff from executing the decision over the property likewise claimed by Deltaventures, the court should not act on the matter. The body which has the authority to take cognizance of the same issue is the NLRC because this is an incident arising from the labor case and applying the doctrine of primary jurisdiction – where the law has made a remedy, the aggrieved individual must avail of such remedy. The RTC is a co-equal body of NLRC and therefore it has no jurisdiction to issue a restraining order to prevent the NLRC from executing its decision. In other words, this doctrine applies only where there is a provision of law describing the exhaustion of administrative remedies. Supposing if the law does not describe the filing of a motion for reconsideration, this method may be dispensed with by the aggrieved party because there is no provision in the law providing for the exhaustion of administrative remedies. Q: What is the effect of the failure to comply with this doctrine of exhaustion of administrative remedies but immediately filed the case before the court?

13

General Principles

Administrative Law Review 2002 Edition

A: The court will dismiss the case upon motion of the party on the ground of prematurity. But it does not mean that the court has no jurisdiction over such issue. It simply mean that the action is premature – no cause of action yet and so, this is a ground for the dismissal of the case before the court.

Exceptions To The Doctrine Of Exhaustion Of Administrative Remedies Now, the principle requiring exhaustion of administrative remedies has exceptions. [1] One exception to the rule is where the issue is purely legal. It is only the court which has the power to rule with finality such legal issue. If the petition states that the decision of the administrative officer is contrary to law and jurisprudence, then what is being raised here is purely a question of law and this is not with in the competence of the administrative officer.

Department Secretary, the decision of the director was set aside and the Secretary awarded the fish pond in favor of Buenaflor. Dimaisip filed an action not before the administrative agency, not before the office of the president, but before the court. So, the issue is whether or not this was valid. HELD: The SC ruled that this is an exception to the rule on exhaustion of administrative remedies because the decision was one made by the Department Secretary who is an alter ego of the President.

[4] The doctrine of qualified political agency likewise applies in this case. Under this doctrine, the acts of the department secretaries acting as agents or alter egos of the President are considered the acts of the president himself unless the President has disapproved this official act made by the Department Secretary, or when the President is required to act personally on the matter.

[2] or, when the issue is, which law applies. In the case of CALO vs. FUENTES. NAPOCOR vs. MISAMIS PROVINCE FACTS: An action was filed by the province against NAPOCOR for the collection of delinquent real property taxes pursuant to PD 424. It was contested however by the NAPOCOR that in a motion to dismiss, that the court did not acquire jurisdiction because PD 424 requires that the issue where the matter involves a conflict between and among offices and agencies should be settled amicably. HELD: Here, the issue is clearly a legal one i.e. which law applies. Thus, the doctrine of exhaustion of administrative remedies does not apply in the case.

[3] Or, where the decisions is rendered by the Department Secretary, there is no need for complying with requirement of exhaustion of administrative remedies. In the old case of

NOTE: The SC made a reversal of its earlier decision in DIMAISIP. FACTS: This case of CALO involves the award of homestead application of Fuentes. The homestead application of Fuentes was opposed by Calo and this was subject of an appeal. But nonetheless, the Department Secretary sustained the findings of the Director of Lands awarding the homestead in favor of Fuentes. What Calo did was to initially file an appeal before the Office of the President. But even before the Office the President could act on the matter, he withdrew such appeal. What then is the effect of such withdrawal? HELD: The withdrawal of such an appeal before the Office of the President was fatal because it was the last act required of him in compliance with the doctrine of exhaustion of administrative remedies.

DIMAISIP vs. CA FACTS: There was an order by the director in favor of Dimaisip awarding fish pond. But on appeal to the

But in many other cases decided by the court, it went back to its earlier ruling. Thus, you have the case of

14

Administrative Law Review 2002 Edition

QUISUMBING vs. GUMBAN 193 SCRA 523 FACTS: Then DECS Secretary Quisumbing issued an order transferring one Mrs. Yap from one station to another in South Cotabato area. The order was contested not before the Office of the Secretary but before the sala of Judge Gumban. The motion to dismiss filed by the Department Secretary on the ground that there should be exhaustion was denied. And so the matter was raised before the SC. HELD: The Court ruled that there was no need for exhaustion of administrative remedies because the act complained of was one made by the Department Secretary as the alter ego of the President

Q: So how then do you reconcile this apparent contradictory rulings of the Court? A: The first basis is to look into the provisions of the law i.e., where the law itself prescribes remedy, then there must be compliance with this doctrine of exhaustion of administrative remedies. But if the law is silent – there is no such provision requiring exhaustion – there is no need to exhaust administrative remedies. Example: Under PD 1281, the matter of the conflicting mining claims is now within the competence of the Bureau of Mines. The matter of resolving conflicting mining claims is now purely administrative. Thus under PD1281, the authority which has the say on the matter is the Director of the Bureau of Mines. But his decision is appealable to the Department Secretary of Natural Resources and from the decision of the DENR Secretary, if the party is still aggrieved, the same may be elevated to the Office of the President. So, there is here in this case the need to comply with the doctrine of exhaustion administrative remedies. The doctrine of qualified political agency does not apply here because there is a provision in the law requiring that an appeal be taken from the decision of the Department Secretary to the President within a period of 5 days. The law itself even provides that the decision of the President on the matter of conflicting claims is final and executory. Of course, it does not mean that the party has no remedy. Even the law if the provision

General Principles

of the law makes the decision of the Office of the President final and executory but the same has been made in abuse of authority, then it can be the subject of judicial review. [5] Another exception is where the action of the administrative officer is clearly devoid of any color of authority or patently illegal. We know that in the conduct of administrative investigation, there must be observance of procedural due process. One requirement is the need for the service of summons. Supposing there was no service of summons and the decision was rendered and this was the subject of a case filed before court. Q: Is there still need to comply with this doctrine of examination of admin. remedies? A: There is no need to comply precisely because the action here of the administrative officer is clearly and obviously devoid of any authority, patently illegal, contrary to law. [6] The other exception is when the administrative body is in estoppel. If in the course of proceeding before administrative agency, there is representation made by the administrative officer but it is only an action before the court that will resolve the issue and on the basis of this declaration, such court action was taken, the administrative agency is already in estoppel to state that the matter ought to be decided within the administrative level. [7] Or where the application of this doctrine of exhaustion of administrative remedies will only cause grave and irreparable damage or injury to any of the parties. Let us say in a matter involving timber concessions. There is here a dispute as to boundary of the concessionaires. The case was truly and rightfully filed before the administrative agency (DENR). But while the case was pending before the DENR, let us say, the other party continued to make use of the road constructed by the petitioner and no action was taken still by the DENR, then applying the exception, if the application will only cause irreparable damage or injury to any of the parties, then the party may immediately have recourse to the courts. There is no need to comply with the doctrine of exhaustion. [8] Or where the doctrine does not provide for a plain, speedy and adequate remedy. Example: In the matter of the collection of small sum amount and you are being passed 15

General Principles

Administrative Law Review 2002 Edition

from one office to another. The matter is pending before the administrative agency, and even notwithstanding several follow ups, no action has been taken on the matter. So, the action may immediately be filed before the court. [9] If further pendency of the case for the administrative agency will only delay the proceedings and thus you are deprived of your right to file an action before the court. Example: An action involving a contest over public office (quo warranto) and the same must be filed within 1 year. Supposing you are already on the 11th month and the administrative agency has not yet acted on the matter. To await further would only cause further delay and prejudice to the party and thus he will be deprived of his right to file an action for quo warranto within the prescribed period of 1 yr. So there is no need to exhaust administrative remedies. [10] The doctrine of exhaustion of administrative remedies applies only in public lands. It does not apply where the subject of controversy involves a private property. In such situation the body which has the power to take cognizance of the matter is the regular courts. [11] the other exception is, if the exhaustion of administrative remedies will only result in the denial of due process. We mention earlier the case of the CHROMITE MINING where the same public officer is the one making a review of the same said appealed case. So here, there is no need to exhaust administrative remedies.

SABELLO vs. DECS (bar) FACTS: Sabello was accused in a criminal case and convicted. He was actually a school principal in the Talisay Barangay High School in Gingoog City. He was convicted but was reinstated because there was an absolute pardon given to him. But he was reinstated not to his old position as principal but as a mere classroom teacher. He complained, and he did not file his appeal in the DECS. He immediately filed the case in court. Was the action taken by Sabello valid? HELD: The rule on exhaustion of administrative remedies and the application of the exceptions is not a fast and rigid rule. In the case of Sabello, the Court granted the petition of the petitioner here. Sabello claimed that poverty denied him the services of a lawyer. On that basis, the Court set aside this requirement of exhaustion of administrative remedies and looked into the merits of the case and so, he was reinstated to the position of school principal. In this situation, where the interest of justice requires, the Court ruled that there was no need to exhaust administrative remedies because poverty deprived the petitioner access to lawyers. Now, the decision of the administrative agency may be the subject of review. So the aggrieved party may ask for the review of the decision by a superior administrative authority.

LLORENA vs. LACSON FACTS: This case involves the dismissal of a laborer by the mayor of the City of Manila because of the loss of a personal property – a piano. The laborer contested the adverse decision. The law then at that time provided that the action must be taken before the Office of the President. But without complying with this requirement, this laborer claim he barely reached the 4th grade. He was uneducated and therefore there is no need to comply with this doctrines. HELD: Lack of education is not a defense. There must still be compliance with the doctrine of exhaustion of administrative remedies.

Let us say, the bureau director making a finding, such a finding is subject to the administrative review by the Department Secretary because the latter has the power of control over offices, bureaus and other subordinate officers under them. Example: The Bureau of Jail Management is under the DILG. If the Director has rendered a decision, the same is subject to review by the Department Secretary because the latter has the power of control. Note the distinction of the power of control and power of supervision of the President in relation to the Local Government Unit:

16

General Principles

Administrative Law Review 2002 Edition

Power of supervision simply means overseeing that the subordinate officer is observing the laws, acting within the scope of his assigned powers and functions as prescribed by law. On the other hand, the power of control includes the power to set aside, amend, modify the action taken by the subordinate officer. The power of control includes the power of supervision. So, pursuant to the power of control, the Department Secretary has the power to set aside the decision rendered by a bureau director. In the same manner that the Bureau of Immigration Commissioner is subject to the power of control of the Department of Justice. Please take note of that because there are so many decided cases by the SC involving the Bureau of Immigration. It has the exclusive authority and jurisdiction to try and hear cases against alleged aliens. Deportation proceedings are within the competence of the Bureau of Immigration. Q: What about the Collector of Customs decision? A: The decision may be the subject of review by the Commissioner of Customs. Is it possible for the Executive Secretary to set aside the decision of the Department Secretaries? Do they have the same ranks? You know, the Executive Secretary is also known as the “little President.” But all of them are alter egos of the President. Their acts are considered the act of the President. Q: Supposing you have the decision of a bureau director brought on appeal to the Department Secretary, and the Department Secretary set aside the decision of the bureau director and the aggrieved party appeals to the Office of the President and this appeal was taken cognizance of by the Executive Secretary. Is it within the power of the Executive Secretary to set aside the decision of the Department Secretary, thus, reverting to the decision rendered by the bureau director? A: The Executive Secretary acts by the authority of the President. It is erroneous to say that his rank is co-equal to that of a Department Secretary. The Executive Secretary is higher that the Department Secretaries. Thus, it is within the power of the Executive Secretary to set aside, modify, or affirm the decision rendered by the Department Secretary, unless of course the President disapproves such action of the

Executive Secretary because the presumption here is the regularity of the discharge of duties by the officers. Q: What is the basis of the doctrine of exhaustion of administrative remedies? A: (1) Precisely to enable the administrative officer or agency to correct whatever errors committed; and (2) the need to have a recourse to administrative agencies and not to the courts, thus de-clog the court dockets. Consistent with this doctrine, the review by the DOJ Secretary of the decision of the Provincial or City Prosecutor is justified under this doctrine of exhaustion of administrative remedies. Thus, he may even set aside, modify or alter the previous ruling of the subordinate prosecutor. The power of the DILG Secretary to conduct investigation is likewise consistent with the doctrine of exhaustion of administrative remedies. Why? There is an appeal authorized by law to the Office of the President, and the Department Secretary acts as the alter ego of the President. Thus, it is within his (Dept. Secretary’s) power to order the conduct of investigation against local elective officials pursuant to the provisions of the Local Government Code.

Review Of Administrative Decisions By The Courts The review of administrative decisions by the courts is limited to evidence already submitted to the administrative officer or agency. The court is not authorized to receive additional evidence nor is it authorized to waive conflicting testimonies of witnesses. Neither is it empowered to substitute its own judgment for that of the administrative officer. Why? The simple reason for this is that, the findings of facts by the administrative agencies must be respected, if not accorded with finality by the courts. So the presumption here is that there is regularity in the discharge of duties by the administrative officer and that the administrative officer, acting within the scope of his assigned powers, has impartially rendered a decision in the administrative case brought before such officer or agency. The courts do not have supervisory power over proceedings and actions taken by administrative agencies. For example, the matter of determining whether or not the franchise applicant possesses the qualifications 17

Administrative Law Review 2002 Edition

required by law for the operation of a public carrier is one of the finding of facts and must therefore be respected by the courts. The courts do not have such power to nullify such factual finding made the administrative officer.

Review by Administrative Agencies vs. Review by the Courts In the course of review by the courts of administrative decisions, we have to distinguish: Take note that in a case of the review of the decision by the higher administrative officer of the decision of a lower administrative officer, the superior administrative official is authorized, in the exercise of his discretion, to receive additional evidence. But NOT so when the review is lodged to a judicial body or court. The review of the court is limited to that already submitted by the parties. Q: May the court be compelled to receive additional evidence or to conduct a new hearing in an appealed case brought before it? A: Since the authority of the court is simply to find out whether there is substantial evidence in support of the conclusion reached by the administrative officer, its power of review is limited only to all the evidence already submitted by the parties. It CANNOT be compelled by the parties for them to submit new evidence precisely because its role is not to determine conflicting claims which is a power given to the administrative body. The role of the court is simply to find out whether the evidence supports the decision – whether or not there is substantial evidence to support the finding made by the administrative officer.

General Principles

Q: So in what instances may there be a review by the court of administrative decisions? A: The following are the instances: 1.) in an issue where it involves the constitutionality or legality of law, treaty, ordinance or administrative order; 2.) where the issue involves the jurisdiction of the administrative agency; 3.) where the findings of facts are necessary in order to determine the findings of law; or 4.) where there is an error of law committed by the administrative officer.

Where There is No Substantial Evidence So the rule that factual findings must be given respect does not apply where the evidence is not substantial – where the decision is not supported by substantial evidence. Q: So in what instances may the factual findings of administrative agencies be the subject of judicial review? A: The following are the instances: 1.) where the procedure followed by the administrative agency is irregular or improper. E.g. non-compliance of procedural due process;

But in the review by the superior administrative officer of the decision of a lower administrative officer, it is within the prerogative of the former to order the conduct of a new hearing or trial de novo, in the exercise of his discretion, and even the admission of new evidence. But this is not so in an appeal of an administrative decision before the courts.

2.) where there is capriciousness or arbitrariness committed by the administrative officer in the course of the proceeding; or

Q: When may courts review administrative decisions? A: The general rule is that, factual findings must be accorded respect if not finality. This presupposes that the administrative officer has acted within the powers of his office, without abuse of authority or without capricious exercise or grave abuse of discretion because in the latter cases, the decision may be the subject of judicial review.

4.) where the issue involves pure questions of law. Pure questions of law are subject to judicial review consistent with Article VIII, Section 5 of the Constitution: “All cases in which only an error or question of law is involved.” The administrative officer cannot rule with finality on a legal issue.

3.) where there is a clear lack of authority on the part of the public officer. So there is a need to exhaust administrative remedies.

18

General Principles

Administrative Law Review 2002 Edition

Brandeis Doctrine Of Assimilation Of Facts Mixed questions of facts and law are subject to judicial review under the Brandeis Doctrine of Assimilation of Facts. Under this doctrine, where the factual finding relates to and dependent on a question of law, then the court, in order to resolve the question of law, must therefore look into the factual setting of the case. So there is here a dependence on the issues of law as a means to gather the factual finding; there is an assimilation of the facts under this doctrine and thus, there is authority for a review of both factual and legal issues by the court. The issue of tenancy is not purely a factual issue. It is an issue that involves not simply whether or not there is a tenant on the land, or whether or not tenants have done acts in violation of the agreement. More than this, the legal issue involved is whether or not there is indeed an agreement in the minds of the landholder and the tenant – whether or not there is an agreement – and this can only be proven with finality by the court. So both in this case, there is a need for determination by the court of both factual and legal issues. In the case of MARPEX vs. HO PIA COMPANY FACTS: Marpex already filed and registered the trade name “Salonpas.” Subsequently, Petra Ho Pia filed an application for registration of the trade name “Lionpas.” The latter registration was questioned by Marpex but the Director of Patents denied the motion and allowed the registration of “Lionpas.” The matter was elevated before the court. ISSUE: Whether or not it is still within the power of the court to review the decision made by the Director of Patents. HELD: YES. The decision of the Director of Patents allowed the registration of the trade name “Lionpas” over the objection of the competitor firm which already registered the trade name “Salonpas.” [y klaro!] BEER NA BEER [na!] case: The opposing party here is the San Miguel Corporation. Whatever findings made by the administrative agency or officer is not final because whether or not names are similar to cause confusion in

the minds of the public is an issue belonging to the court and not to the administrative agency. Of course, the law recognizes the competence of administrative agencies, in this case the Bureau of Patents, to allow registration of trade names. BUT where there is a question as to whether or not such a trade name causes confusion, or similar to a prior registered trade name or trademark, such issue is one belonging to the courts. The decisions of immigration authorities excluding an alien on the ground that he is not a Filipino citizen are matters within the competence of the immigration bureau. Whether or not a person is authorized to reside or is an immigrant or an alien is an issue within the primary jurisdiction of the administrative officer. That is why the immigration authorities are very busy screening the refugees from Malaysia because not all these refugees are definitely Filipinos. BUT where there is evidence deemed substantial that the individual possesses Filipino citizenship, or the issue of citizenship is put into issue, then it is within the power of the court to order the administrative agency to defer action on the matter in order for the court to look into the issue of citizenship. Why? The issue of citizenship is one within the exclusive authority of the court and not of the administrative agency. That is the case of Gatchalian vs. Board of Commissioners. Now, PD 1445 provides for the government conduct of audit, examination, and even after such examination the disallowance made by the auditors. In line with the doctrine of exhaustion of administrative remedies, the findings made by the auditor on the matter of claims or settlement of accounts may be the subject of an appeal to the COA within a period of six (6) months from the findings made by the auditor. And from the decision of the COA, the same may be the subject of judicial review within a period of 30 days as mandated by PD 1445.

Criminal and Civil Immunities Administrative bodies are not allowed to grant criminal and civil immunities to persons. But this rule is subject to an exception: where the law itself authorizes the grant of such immunity to the individual. So there must be express conferment by the law just like the power of contempt and the 19

General Principles

Administrative Law Review 2002 Edition

power to issue subpoena. These powers are not inherent in administrative agencies. There must be a law conferring such authority to administrative agencies. In the same manner that the grant of immunities to individuals in criminal and civil cases must be one conferred by law.

were both criminal and administrative cases against the public officer. (Gatchalian vs. Naldoza, 315 SCRA 406) Where there is a finding of guilt in the criminal case, it does not follow that this would also result in a finding of liability in the administrative case.

Now, there are administrative agencies which are empowered to grant criminal and civil immunities to individuals such as the:

Q: Why? A: The evidence required in one is different from the other: In civil case – preponderance of evidence; in criminal cases – proof beyond reasonable doubt; and in administrative case – substantial evidence.

1.) Presidential Commission on Good Government (PCGG) pursuant to E.O. 14 as amended by E.O. 14-A. The PCGG has the power to grant criminal, civil and administrative immunity to persons who testify on the matter of alleged acquisition of illgotten wealth by associates of the Marcoses; and the 2.) Office of the Ombudsman, pursuant to Section 17 of RA 6770, may grant immunity from criminal prosecution to any person whose testimony or possession and production of documents and evidence may be necessary in any proceeding or hearing being conducted by the Office of the Ombudsman. Three-Fold Responsibility Of Public Officers And Employees There is a basic principle that a public officer or employee has “three-fold responsibility” – they have criminal, administrative and civil liabilities. An act or omission may give rise to criminal, civil and administrative liabilities. (Tecson vs. Sandiganbayan, 318 SCRA 80) I (Sir Elman) was informed this morning that one of the questions asked in the bar (September 2002) was on the filing of both criminal and administrative cases against local elective official and the matter of preventive suspension. Another question involves disqualification – where an individual holds dual citizenship which the case of Frivaldo together with the case of Manzano… Manzano, your favorite actor. The question of disqualification under the Local Government Code is found under Section 40. Q: Will the existence of a proceeding in either criminal or administrative case pose a prejudicial question for the holding of an investigation in the other proceeding? A: NO. The principle of prejudicial question does not apply where the actions filed

In other words, even when these cases are filed simultaneously, the finding in one is not conclusive on the other. It is possible for an acquittal in the criminal case but there is a finding of guilt in the administrative case. Or, vice-versa: there is an acquittal in the administrative case but a conviction in the criminal case. This maybe for reasons beyond the control of either proceedings such as when there is a witness in the criminal case but none in the administrative case; or, there is a recantation in the administrative case but in the criminal case a documentary evidence was presented – the crime can be proved through documentary evidence in a criminal proceeding – but in the administrative case, there was desistance. Ordinarily, the rule is, even in administrative law, the execution of an affidavit of desistance will not result in the automatic acquittal of the respondent public officer in the administrative case. But where the conviction of the public officer can only be had through the testimony of the desisting witness, but this witness is no longer available, then the administrative agency will no longer have any option except to dismiss the administrative case. The withdrawal of a complaint does not warrant the dismissal of the complaint. Of course in many decisions decided by the SC, where the case can only be prosecuted with the active participation of a witness and this witness is no longer around, definitely the administrative agency has to dismiss the complaint.

Doctrine Of Forgiveness And Condonation

be

Under this doctrine, public officials cannot subject to disciplinary action for

20

General Principles

Administrative Law Review 2002 Edition

administrative misconduct committed during a prior term. The doctrine is not only founded on the theory that an official’s act re-election expresses the sovereign will of the electorate to forgive, or condone any act or omission constituting a ground for administrative discipline which was committed during his previous term, but also dictated by public policy, otherwise, his second term may just be devoted to defending himself in the said cases to the detriment of public service. This doctrine was applied in the case of

AGUINALDO vs. SANTOS 212 SCRA 768 FACTS: (This was asked in the bar) Here, there was an administrative case filed by then DILG Secretary Santos against Governor Aguinaldo for disloyalty to the Republic. And there was a penalty of dismissal. But pending the administrative case, he ran for the same elective position and got elected as the governor. HELD: Applying the doctrine of forgiveness and condonation, Gov. Aguinaldo could not be held administratively liable for a prior act committed. Why? The previous term is distinct from the succeeding term. So where no sanction was meted for an act during a previous term, definitely no sanction should be allowed for such act committed during a previous term in a subsequent term of office.

But take note that this doctrine cannot be applied to criminal acts which the reelected official may have committed during his previous term (Salima vs. Guingona, 257 SCRA 590). Now, let’s discuss the case of MALINAO vs. REYES because here, the decision rendered by the Sanggunian actually was not the decision of the Sanggunian as required by the law because the matter of the conduct of the administrative investigation against the municipal mayor was delegated to a committee. But before that: Q: Is it possible for the Sanggunian under the Local Government Code (LGC) to delegate the investigation of the administrative case against the elective official? Under the LGC, it is the power of the Sanggunian to hear

the administrative case and impose the proper penalty. Supposing this power to investigate is delegated to a committee such as the blue ribbon committee, is this allowed? Can this power to investigate be delegated to a subordinate officer? A: YES. So long as the Sanggunian does not simply rely on the findings of the subordinate official, body or committee, then the power to investigate may be delegated BUT not the power to decide. The power to decide belongs still to the Sanggunian as required under the LGC.

MALINAO vs. REYES 255 SCRA 616 FACTS: The matter of the conduct of administrative investigation against the municipal mayor here was delegated to a committee by the Sanggunian. The committee report was signed only by the chairman of the committee. The Sanggunian deliberated on the report and made a votation on the matter. By a vote of 5-3, the Sanggunian voted to suspend the municipal mayor. ISSUE: Is the decision of the Sanggunian valid? HELD: NO. There was no decision signed by the members of the Sanggunian. They indeed voted on the matter by a vote of 5-3 and recommended the penalty of suspension but it is not the decision contemplated by the law. Why? Section 6 of the LGC requires that the decision be made in writing, stating clearly and distinctly the factual findings and the reasons for such conclusion reached. So it follows that if there was a deliberation and voting but without the decision signed by the members of the Sanggunian, the members of the Sanggunian can still make a different ruling. So long as there is no affirmation of the decision, they can still change their votes. So that’s the ruling in MALINAO. You know in the second deliberation made by the Sanggunian, it voted 7-2. But this time for the acquittal of the respondent municipal mayor. So the Sanggunian reversed its earlier decision which was not the one contemplated by law in the absence of a decision in writing. There must be a written decision by the Sanggunian.

21

General Principles

Administrative Law Review 2002 Edition

Res Adjudicata in Administrative Cases

Now, the decision and orders of administrative agencies or bodies have, upon their finality, the force and effect of a final judgment within the purview of res judicata principle. So whatever has been threshed out by the administrative officer in the administrative case cannot anymore be the subject of a subsequent action involving the same cause of action, applying the doctrine of res judicata – the decision rendered by the department officer or agency is final and conclusive. Of course, the rule on res judicata does not apply where the exceptions apply such as [1] when there was capriciousness or arbitrariness in the exercise of the discretion. Or, [2] when there was summary dismissal. Summary dismissal has been ruled as unconstitutional where simply on the basis of the pleading submitted, a decision is rendered without anymore proceeding. Thus, the concept of res judicata does not apply because the procedure undertaken is irregular and violative of procedure due process. So there must be the conduct of formal investigation unless there is a waiver of such formal investigation by the parties or when the party fails to present evidence. In this case, the administrative agency can decide in the matter and allow the plaintiff to present evidence ex parte. And thus, the respondent cannot complain a violation of due process because he was already given the opportunity to present his side. Moreover, under the principle of res adjudicata, the decision of the administrative agency is conclusive upon the rights of the parties, as though the decision was rendered by the court. Under this principle, the matter cannot anymore be reopened once determined with finality by the competent administrative body. In other words, this doctrine applies to both judicial and quasi-judicial proceedings. But there is one exception to this rule. In the case of LABO vs. COMELEC, the principle of res judicata does not apply where the issue is citizenship. Why? Because every time that the citizenship of a person is material or indispensable in a case, whether brought before the Bureau of Immigration or before the court, whatever decision made by the officer on such issue is generally not considered as res judicata and there is a need for the same issue to be threshed out as the circumstances may

demand. This involves the personal rights of individuals, thus it has to be threshed out again and again. Where for example, the matter is brought before the administrative agency and the evidence is substantial to support the claim of citizenship, then the administrative agency must defer the case to the authority of the court. In the case of UCHO vs. CARLOS (245 SCRA 489), the principle of conclusiveness of judgment was applied.

UCHO vs. CARLOS 245 SCRA 489 FACTS: Carlos was the landowner of a three-hectare agricultural land. The land was placed under the Comprehensive Agrarian Reform Program (CARP) of the government and subsequently this property was distributed to supposed qualified beneficiaries under the Operation Land Transfer (OLT) of the government. Subsequently, Ucho filed a petition for the recovery of possession and ownership and the nullification of the transfer certificate of titles issued to the beneficiaries. The issue was brought before the provincial adjudicator (PARAD). The PARAD ruled in favor of the landowner by ordering the cancellation of the titles on the ground that the beneficiaries were not really qualified and that some of them had already agricultural land, thus, in violation of the Agrarian Law. When the matter was evaluated by the DARAB by applying the principle of exhaustion of administrative remedies, the DARAB reversed the ruling of the PARAD. And so, the matter was brought before the CA. The CA affirmed the decision of DARAB that the beneficiaries were qualified under the Agrarian Reform Law. But the CA made a finding that Polinar should return the land possessed by and given to him under the OLT, on the ground that he has already an agricultural land. The matter was brought before the SC because it was argued that there was already a prior decision on the matter of possession in another administrative case filed before the DAR legal officer – there was already 22

General Principles

Administrative Law Review 2002 Edition

a ruling that Polinar does not own an agricultural land. ISSUE #1: Is the principle of res adjudicata applicable in the instant case? HELD: YES. The SC ruled that the principle of res adjudicata under Rule 39, Section 47 of the Rules of Court applies not only to court proceedings but even to quasi-judicial proceedings – meaning, the proceeding brought before the DAR legal officer in the case at bar. ISSUE #2: Is it within the power of the courts (CA) to nullify the finding made by the administrative officer (legal officer of the DAR)? Take note that the DAR legal officer ruled that this person (Polinar) does not have any agricultural land. This decision became final because when the motion for reconsideration was denied, no appeal was taken. HELD: Such decision of the administrative officer has become final and thus cannot anymore be the subject of the same litigation before the courts, applying the conclusiveness of judgment. In other words, it does not matter that the issues are different. The issue here (DAR) is one of cancellation of title and recovery of possession and ownership, whereas, the issue in the CA pertains to whether or not this person is the owner of another agricultural land. But nonetheless, since the facts are the same, the issues are related, even if the causes of action are different, the doctrine of res adjudicata still applies.

So if the law does not grant authority to the administrative officer to impose sanctions or penalties for violations of the rules and regulations, in no case shall the administrative officer be authorized to impose such penalty on the private individual. There must be express conferment by virtue of law given to the administrative officer.

=oOo=

ADMINISTRATIVE LAW REVIEW Editors:

Jason John Joyce Nuj Dumbrigue Janis Dumama Sheila Resabal Jade Jamora Cam-cam Basa Tommy Veloso Darry Gallego Vanessa Bello Genie Salvaña Kenneth Lim Mortmort

So there is a need for giving finality not only with respect to the decision of the administrative officer. But such decision must be accorded finality in the absence of capriciousness or grave abuse of discretion. Q: May an administrative officer may be authorized to impose a penalty (e.g. fine) in the administrative case against a private individual? If so, what are the conditions in order to have a valid imposition of a penalty by the administrative officer? A: The rules must have basis on the law. The law itself must confer authority to the administrative agency to impose a penalty for violation not only of the rules and regulations but also of the law. 23

Administrative Agencies

Administrative Law Review 2002 Edition

OFFICE OF THE SOLICITOR GENERAL

T

he Office of the Solicitor General is the counsel of the government, its agency or instrumentality or officials in any litigation, investigation or matter requiring the services of a lawyer. Q: What are the two (2) instances when the Solicitor General is not allowed to represent government officials? A: The following: 1.) where the government official is sued criminally; the reason here is that, the government as the principal, cannot commit a wrong. The illegal acts or omissions committed by the agent cannot be imputed on the principal; 2.) where the public officer is sued civilly for damages arising from a felony; (Urbano vs. Chavez; Go vs. Chavez)

URBANO vs. CHAVEZ FACTS: A criminal case for violation of the Anti-Graft Law was filed against then DILG Secretary Luis Santos before the Office of the Ombudsman. Secretary Santos was represented by the Office of the Solicitor General. The representation made by the Office of the Solicitor General was questioned by Urbano contending that a criminal act allegedly committed by a public office is personal to him. HELD: The SC sustained the argument of Urbano. Secretary Santos cannot be represented by the Solicitor General in the criminal case for violation of the Anti-Graft Law filed against him before the Office of the Ombudsman.

GO vs. CHAVEZ 183 SCRA 347 FACTS: (Solicitor General) Frank Chavez was interviewed by Business World and he uttered defamatory remarks. You know Chavez… masyadong matapang…he just speaks his mind out. So Go filed a civil action for damages arising from these utterances of malicious remarks. Chavez was

represented by the Office of the Solicitor General. HELD: Chavez should not be represented by the Office of the Solicitor General because the case for damages cannot be attributable to the State. If ever there is a judgment for the payment of damages, the government cannot be made answerable therefor. Of course, it does not mean that the Solicitor General should not represent a government official sued in his official capacity where such representation would be adverse to a position taken by another government office. There have been so many instances where the Solicitor General takes a position contrary to that of another government office. Like the case of ORBOS vs. CSC September 12, 1990 FACTS: During the Aquino Administration, then DOTC Secretary Orbos made a reorganization in the DOTC and there was this vacancy in the position of heads of telecommunications engineer. Appointments were made to Ayug and Maglayon. The appointments were questioned by Madarang. He filed a motion for reconsideration before the reorganization bureau and the motion was denied. So he filed an appeal before the CSC. In the exercise of its appellate jurisdiction, the CSC ordered the cancellation of the appointments issued to Ayug and Maglayon. In due deference to the order of the CSC, Sec. Orbos convened the promotion board in order to deliberate who should be appointed to the position. But the CSC disregarded the action taken by Sec. Orbos and ordered the issuance of appointment in favor of Madarang. In our study of the law on Public Officers, the order of the CSC is not valid. The matter of appointment is one solely belonging to the sound discretion of the appointing authority. Of course, Sec. Orbos refused and thus the Solicitor General raised the matter before the court. The DOTC was represented by the Office of the Solicitor General. The representation was questioned by the CSC and Madarang on the ground that the Office of the Solicitor General is the counsel of the government and should not take a position contrary to

24

Administrative Agencies

Administrative Law Review 2002 Edition

that taken by the CSC. Is the contention of the CSC proper? HELD: NO. There have been so many situations where the Commission has taken a position different from that of an agency. Why? It is the duty of the Solicitor General to make known to the Court what position best upholds the position of the government. The Solicitor General should not abdicate this duty. If ever such decision taken by the Solicitor General is different from that of another administrative agency or officer, then the latter may represent itself through an in-house counsel. But of course, there are situations where the other agency has already filed a pleading which is inconsistent with the stand taken by the Solicitor General. In such situation, the Solicitor General may seek permission from the courts not to represent such agency and for that agency to represent itself through its own in-house counsel. Q: What about government owned and controlled corporations (GOCCs)? A: Upon the authority of the President or the head of office, the Solicitor General may also represent GOCCs. Thus, even under the law creating the Office of the Solicitor General, it is empowered to deputize lawyers of other government offices to act as deputized special attorneys of the Office of the Solicitor General. Q: Suppose such authority is given to a lawyer of a GOCC, and there was a copy of an order served on this deputized special attorney acting on behalf of the Office of the Solicitor General, for purposes of determining the period for filing of appeal, is the service of the order to the deputized attorney binding on the Office of the Solicitor General? A: NO. The copy of order served on the deputized special attorney acting on behalf of the Solicitor General is NOT binding on the latter. Meaning, the counting of the period within which to file an appeal starts only from the time the notice (order) is served on the Solicitor General. (NPC vs. NLRC, 272 SCRA 706) Q: What is the effect of the filing of a suit which ought by an agency of government which ought to be represented by the Office of the Solicitor General? A: In the case of

PEOPLE vs. DELGADO September 18, 1990 FACTS: This was an action filed by the Commission on Elections in the name of the People of the Philippines a petition questioning the authority of the RTC to review the actions taken by the COMELEC in the conduct of investigation and prosecution of election offenses brought before the RTC. HELD: The SC ruled that the petition has to be dismissed on the ground that the petition was not filed by the proper counsel for the government which in this case is the Office of the Solicitor General. Only the Office of the Solicitor General can represent the People of the Philippines. In the least, the consent of the Office of the Solicitor General should have been secured by the COMELEC before the filing of the petition.

PHILIPPINE NATIONAL POLICE (PNP)

T

he creation of the PNP is mandated under the Constitution. Article XVI, Section 6 of the Constitution provides that the State shall establish and maintain one police force which shall be national in scope and civilian in character to be administered and controlled by the National Police Commission. Q: What about the authority of local government units? A: The authority of local executives over the elements of the PNP shall be provided by law. Thus, you have RA 6975 as amended by RA 8851. Some of the more important provisions of this RA 6975 are the following: [1] Under Section 8, the question may be asked: Q: May a retired or resigned military officer or police official be appointed by the President as Secretary of the DILG? A: The law provides that no such military officer or police official shall be appointed within one (1) year from the time of his resignation or retirement. In other words, the prohibition is only for a period of 1 year from his separation from the military or police service. Thereafter, the President is

25

Administrative Law Review 2002 Edition

empowered to appoint such retired or resigned military officer or police official. [2] Now under Section 12 of this law, this provision defines the relationship between the DILG and the Department of National Defense. The primary role of the Department of National Defense through the Armed Forces of the Philippines (AFP) is to secure and preserve the external security of the State. In other words, the AFP has the primary, the principal role of preserving external security. Q: What about the DILG through the PNP? Note that under the DILG are several offices, bureaus. Some of them are the PNP, the National Police Commission which exercises administrative control and supervision over the PNP. You have also the Bureau of Jail and Management. What then is the role of the DILG thru the PNP? A: It has the primary role of preserving the internal security of the State. But where there are serious threats, through the national security of the State and in the interest of public order, the President may upon the recommendation of the Peace and Order Council, may call upon the Armed Forces to reassume the primary responsibility of preserving not only the external but also the internal security of the State.

Administrative Agencies

[4] Section 45 provides for citizens’ complaints. This provision authorizes the filing by the private individual of a complaint against a member of the PNP where the offense calls for a penalty punishable by, let us say, a fine the amount, say 15-day salary of suspension, the citizen’s complaint shall be filed before the Chief of Police. Or where the penalty is not more than 30 days suspension, the complaint may be filed before the mayor, Or, where the penalty is more than that period of suspension, let us say, more than a one month of suspension as penalty or even dismissal from the service, a citizen may file such administrative complaint before the People’s Law Enforcement Board (PLEB). There is created a PLEB in every municipality, city or legislative district. The membership in the PLEB is a civic duty. This is one instance where an officer aware of a private individual may be called upon to render public service, to membership in the People’s Law Enforcement Board. [5] Section 45 provides that a disciplinary action imposed by the PNP Regional Director or the PLEB involving demotion or dismissal from the service, may be appealable to the Regional Appellate Board.

So where for example, there are serious threats posed by the Abu Sayyaf or other belligerent forces. In this situation, upon recommendation of the Peace and Order Council, the President may call upon the Armed Forces to reassume its primary responsibility of preserving the internal security of the State.

There is created under this law an administrative disciplinary machinery, known as the Regional Appellate Board (RAB) in cases involving cases taken cognizance of by the Regional Director or the PLEB; and the National Appellate Board (NAB) which involves cases taken cognizance of by the Chief of the PNP.

[3] Section 39 provides for the compulsory retirement of officers and nonofficers upon reaching the age of 56 years – compulsory retirement.

The law provides that the decision of the PNP Regional Director or the PLEB may be appealable within a period of 10 days to the RAB which under the law is given a period of 60 days to decide on such an appeal. If no such decision is made on such appeal by the RAB, then it means that the decision appealed from has become final and executory but subject to the right by the aggrieved individual to appeal to the DILG Secretary. So notwithstanding the lapse of the 60 day period and no action was taken on such appealed case by the RAB, the matter can still be the subject of an appeal to the DILG Secretary.

Q: Is there an instance where the services of such officer be extended? A: The law provides that in case an officer with the rank of Chief Superintendent, Director or the Deputy Director General, the National Police Commission may allow his retention in the service for an unextendible period of one (1) year. So for what positions? Positions of the Director General, the Deputy Director General, the Chief of the PNP, the Director, and down the line is the Chief Superintendent.

It is erroneous to state that the appeal may be taken to the NAPOLCOM. Why? The NAPOLCOM takes cognizance of appealed cases only through its recognized disciplinary 26

Administrative Law Review 2002 Edition

machineries and these are the RAB and the NAB. So the appeal should be taken to these bodies and that is the appeal brought before the NAPOLCOM. In the case of CABADA vs. ALUNAN 260 SCRA 839 FACTS: The aggrieved individual filed the appeal addressed to the DILG Secretary in his capacity as ex-officio Chairman of the NAPOLCOM. HELD: The appeal is defective because the appeal should not be taken before the NAPOLCOM which already exercises appellate authority through the NAB and RAB. the proper body should be the Secretary of the DILG.

[6] Section 46 simply makes it clear that the members of the PNP are no longer subject to the provisions of court martial proceedings nor under the provisions of the CA 408 known as the Articles of War.

Administrative Agencies

Q: What ranks in the PNP service belongs to the jurisdiction of the Sandiganbayan? A: From the rank of Provincial Director up, salary grade 27 and up (high-ranking officer). Below salary grade 27, superintendent is a low ranking officer of the PNP. So courts martial are not courts within the Philippine judicial system. They pertain to the executive department and are simply instrumentalities of the executive branch of the government. [7] Now Section 47, we mention repeatedly the rule that the preventive suspension of a public officer must be for a fixed period – 90 days, 60 days, etc. Of course, one exception to this rule is in the case of a police officer who is charged with a grave offense before the court pursuant to Section 47 of RA 7975. The preventive suspension from office of such PNP officer criminally charged with grave offense shall last until the termination of the case.

You know before the effectivity of the Constitution, there was this Police Constabulary Integrated National Police. There was fusion of these units – the Army, the Philippine Air Force, the Navy and the Philippine Constabulary Integrated National Police as belonging to the AFP. Thus, the offenses committed then by the members of the Integrated National Police were cognizable by the courts martial and not by the regular courts.

The other exception is where there may be indefinite preventive suspension such as under RA 3019 in relation to RA 1379 (Ill-gotten Wealth.) The intention here is to ensure the safety of witnesses because the police officer has the power of the gun (Himagan vs. People, 237 SCRA 538).

But the law now makes it clear in the implementation of the Constitutional provision that the PNP shall be national in scope and civilian in character. Meaning, all members of the PNP are now subject to the authority of civilian courts. So, if cases are to be filed against the members of the PNP, the cases, if evidence warrants, should be filed before the regular courts and not before courts martial pursuant to the provision of PD 1850 and the matters be tried under the civilian laws.

Q: In the matter of the selection of the Chief of Police, what is the extent of authority of the city mayor in appointing the Chief of Police? A: His power to appoint is limited to a selection of any of the 5 eligibles mentioned in the list as submitted to him by the Senior Officers Promotion and Selection Board of the PNP in Camp Crame, Q. C.

There was this case involving the issue of whether or not courts martial are within the ambit of judicial force. It was ruled that courts martial are not judicial bodies but are implementing arms of the executive branch. So it is an administrative body under the executive branch and not a judicial body. But the Sandiganbayan is a regular court where we made a classification whether high ranking or low ranking police officers.

[8] Section 51 defines the powers of local government executives over PNP units.

So the mayor cannot demand the inclusion of the name of another police officer not stated in the list. That power belongs to the Regional Police Director. The Regional Police Director relies on the names as submitted and screened by the Senior Officers Promotion and Selection Board of the PNP in Camp Crame and it is within the power of the PNP Regional Director to submit such list to the (local?) Chief Executive.

27

Administrative Agencies

Administrative Law Review 2002 Edition

So the Chief Executive’s power to appoint is limited to the list submitted to him by the PNP Regional Director. In the provincial level, the Provincial Governor is limited to the list the names of 5 eligible police officers as screened by the Senior Police Officer’s Promotion and Selection Board of the PNP Camp Crame, Quezon City. (Andaya vs. RTC, 319 SCRA 616.) Now what about the relation of the Chief executive to the PNP units or elements? I mentioned already the relationship of the NAPOLCOM to the PNP and that is one of administrative control and supervision. On the other hand, the power of local executives is one of operational supervision and control. Meaning, the Local Chief Executive shall exercise operational supervision and control over PNP units within his territorial jurisdiction. Q: The exception here, in what instance is the local chief executive without authority over such operational control over such PNP units and elements? A: Within a period of 30 days prior immediately preceding a national, local or barangay elections and 30 days thereafter, the local chief executives do not have operational control and supervision. It is the COMELEC which has the operational control over PNP units within 30 days before and 30 days after the elections pursuant to Section 51 of the PNP Law. Q: Now what then is this operational supervision and control exercised by the local chief executive over PNP units? What does it mean? A: This means the power to direct, oversee and even inspect police units, police forces, and the power to employ and deploy PNP units through the Station Commander to ensure public safety and the maintenance of peace and order within the territorial jurisdiction of the local chief executive. So the operational power simply means the power to employ and deploy units and elements of the PNP through the police station commander to ensure the maintenance of peace and order within the territorial jurisdiction. [9] Section 52 is also an important provision. A question may be asked:

Q: May such operational power be withdrawn by the President? Does the President have such power to withdraw this right of the local chief executive to operationally control PNP units? A: Yes. Under Section 52, the President may upon consultation with the Provincial Governor and the Congressman suspend the power of operational supervision and control of any Local Chief Executive over police units on any of the following grounds: a.) abuse of authority by the local chief executive; b.) frequent unauthorized absences; Note that this is also one of the grounds for the institution of disciplinary action against a local executive official under Section 60 of RA 7160; c.) providing material support to criminal elements if the local chief executive is in cahoots, or maintains an army of goons who are members of the PNP; d.) engaging in acts inimical to national security.

Another important case concerning the DILG law is the case of ALUNAN vs. ASUNCION 323 SCRA 623 FACTS: Alunan, then Secretary of the DILG, issued Resolution 93-032 stopping the members of the Criminal Investigation Service (CIS) from exercising certain powers. The CIS is actually a civilian component belonging to the Philippine Constabulary, possessed with police powers – power to arrest, investigate commission of offenses as well as the power to effect seizures. Pursuant to the resolution issued by then Sec. Alunan, the members of the CIS were deprived of their police powers. Moreover, this resolution classifies them as merely civilian components of the PNP. The resolution was questioned as violative of the DILG law (RA 6975). HELD: The SC ruled that on the contrary, the questioned resolution implements RA 6975. The intention of the law is to make the PNP wholly a civilian in character and not a unit of the Armed Forces of the Philippines (AFP). 28

Administrative Law Review 2002 Edition

If follows therefore that members of the PNP must be wholly uniformed officers of the PNP. If no case therefore shall there be authorized non-uniform personnel with police powers. Thus, there was option given to them whenever they join the PNP. The basis of the claim for the CIS members was RA 5750 which provides for the qualification, selection and appointment of the members of the CIS. It also provides police powers to them. But RA 5750 was effectively amended by RA 6975.

OFFICE OF THE OMBUDSMAN et’s now go to the Office of the Ombudsman (RA 6770). Of course, we know the mandate given to the Ombudsman under the Constitution as protector of the people – the Ombudsman shall act promptly on any complaint filed in any manner or form against any public officer or employee.

L

You have the case of DELOSO vs. DOMINGO (191 SCRA 545) which was already asked in the bar at least twice already: DELOSO vs. DOMINGO 191 SCRA 545 FACTS: This Deloso, a very notorious person but he still continue to hold political position. This guy used to be the mayor of Botolan and was elected governor of Zambales. Sometime in the evening of April 22, 1988, Gov. Deloso together with his convoy of security of men composed of civilian and military personnel, attended a basketball victory party. And from there, at about 1:30 A.M. of April 23, they proceeded to a pre-wedding celebration… we do not consider wedding a victory… just joking. And so, while on their way to a place in a barangay in Botolan, they were allegedly ambushed. When the firing started, he jumped out immediately of the car and hid behind the car. And you know what, all the casualties were the ambushers. Not one of the convoy of Gov. Deloso was injured or killed. But in the investigation conducted by the PNP, it is found out that they (Deloso and his men) were actually the ambushers. So

Administrative Agencies

cases were filed against the governor and his escorts before the court martial because at that time there was yet no RA 6975 (DILG Law). But before cases were filed, Deloso claimed in the preliminary investigation by the Ombudsman, that the crime of multiple murder allegedly committed by him was not office-related, and therefore, the Ombudsman has no authority to conduct the preliminary investigation against his person. HELD: The authority of the Ombudsman covers all kinds of offenses, all misfeasances, malfeasances and non-feasances committed by public officers and employees. The mandate given to the Ombudsman under the Constitution is very broad that it covers even offenses not committed in relation to the duties of a public officers. So the SC sustained the power of the Deputy Ombudsman for military to proceed with the investigation and the filing of the cases before the Sandiganbayan. One other claim raised in the case of DELOSO was the power of the Office of the Special Prosecutor (OSP). You know before the creation of the Office of the Ombudsman, what we had was the Tanodbayan. Subsequently, the Tanodbayan remained as the OSP. Under the Constitution, the OSP became a component unit of the Office of the Ombudsman. The OSP can only proceed upon the permission of the Ombudsman in the matter of conducting preliminary investigation and the filing of cases before the Sandiganbayan. In the case of our favorite mayor, ANTONIO SANCHEZ vs. DEMETRIOU… you know Justice Demetriou is now the legal counsel of the daughter of Nida Blanca in the Nida Blanca slay case. [Justice for Nida!] She was then the judge. SANCHEZ vs. DEMETRIOU 227 SCRA 637 FACTS: Rape and homicide cases were filed against Sanchez. But before that, there was an invitation extended to the mayor by police authorities. And while he was already in the police quarter, some witnesses pointed to him as the culprit. So he was arrested. On 29

Administrative Agencies

Administrative Law Review 2002 Edition

the spot, an inquest proceeding was undertaken. Sanchez questioned the authority of the DOJ prosecutors conducting the preliminary investigation on the ground that it is only the Ombudsman which has the power to conduct preliminary investigation against a public officer.

The motion for reconsideration by the Ombudsman was denied and the SC upheld its August 9 ruling on February 22, 2000. But again, the Ombudsman again filed a motion for further clarification. The SC on March 20, 2001 reversed its earlier ruling in the same UY case.

HELD: The authority of the Ombudsman is one of shared and concurrent jurisdiction with other investigating body of the government such as the DOJ. So what then is the effect of the filing of the information before the court by the DOJ without the approval of the Ombudsman? Since the jurisdiction of the Ombudsman is one of shared authority with other similar investigating body of the government, there is no infirmity in the filing of the information before the REGULAR COURTS, in this case the RTC.

HELD: The SC now went back to its earlier ruling in the DELOSO case in the matter of the broad jurisdiction of the Ombudsman to investigate any act or omission of any public officer and employee when such act appears to be illegal, improper, unjust or inefficient. Meaning, the Constitution does not make any distinction that the power of the Ombudsman to investigate covers only cases falling under the Sandiganbayan. The law states that it has primary jurisdiction over such cases cognizable by the Sandiganbayan. But essentially, the power of the Ombudsman covers all kinds of malfeasances, misfeasances and nonfeasances committed by public officers even offenses committed not in relation to their office.

BUT the case would be different where the information is to be filed before the SANDIGANBAYAN. Of course, the law recognizes the primary jurisdiction of the Ombudsman in cases involving public officers cognizable by the Sandiganbayan. Meaning, if the respondent public officer is a High-Ranking Officer (Salary Grade 27 and above) and the case has to be filed before the Sandiganbayan, it must have the approval of the Ombudsman. In fact, the law provides that at any stage of the proceeding, the Ombudsman may take over the investigation of the criminal case from the other investigating body of the government on cases within the primary jurisdiction of the Ombudsman. You have also the case of GEORGE UY vs. SANDIGANBAYAN. You know there are many SC rulings which are inconsistent. UY vs. SANDIGANBAYAN March 20, 2001 FACTS: In August 9, 1999, there was a ruling made by the SC in essence that the power of the Ombudsman to prosecute cases extends only to those cases cognizable by the Sandiganbayan. And thus in effect, the Ombudsman has no power to investigate cases cognizable by the regular courts. That was the first ruling.

In the Davao City case of ORCULLO vs. GERVACIO, JR. 314 SCRA 452 FACTS: There was a request for assistance filed by one Virgilia Yap Morales who was a former government employee and was hired as a coordinator in a study for the codification of the Women Code of Davao. The project was terminated because of lack of funds. She is now claiming that there was non-payment of wages due her in the amount of P70,800.00. The Office of the Ombudsman for Mindanao ordered Councilor Nenita Orcullo to submit her comment. Notwithstanding her comment, the Ombudsman was not satisfied of her explanation on the alleged non-payment of backwages. The investigating officer recommended that anti-graft charges be filed against Orcullo. Such action was questioned by Orcullo. HELD: The Ombudsman has no power to direct the payment of a supposed money claim due an employee. If the money claim is filed 30

Administrative Agencies

Administrative Law Review 2002 Edition

against the City government, such claim should be taken cognizance by the City Council of the LGU. The SC recognizes the power of the Ombudsman to take cognizance of complaints requiring assistance. But the power to order the payment of backwages or other monetary claims belongs to the court of competent jurisdiction depending on the amount of the claim.

lower courts or even order their dismissal. Therefore, it is only the SC that can oversee the judges and court personnel’s compliance with all laws, and take the proper administrative action against them if they commit any violation thereof. No other branch of government may intrude into this power. Thus, where a criminal complaint against a judge or other court employees arises from their administrative duties such as the filling of a certificate of service, the Ombudsman must defer action on said complaint and refer the same to the SC for determination whether said judge or court employee had acted within the scope of their administrative duties.

NATIVIDAD vs. FELIX 229 SCRA 682 FACTS: The provincial prosecutor of Tarlac conducted a preliminary investigation of a murder of an NPA suspect Ceverino Aquino. The crime was allegedly committed by Mayor Natividad of Ramos, Tarlac who claimed that it is only the Ombudsman which has the power to investigate because he is a high-ranking official (mayor). HELD: The authority of the Ombudsman is a shared and concurrent authority with the other investigative bodies of the government. Although it was argued by Mayor Natividad that the murder was committed in relation to his office which is to maintain peace and order in the society since the victim is an NPA, however, nowhere in Section 444 of the LGC is the commission of murder among the duties and responsibilities of a municipal mayor.

MACEDA vs. VASQUEZ 221 SCRA 464 FACTS: A criminal action initiated by the Ombudsman against Judge Maceda for falsification of his certificate of service – that he had completed the number of resolutions within the period mandated. This matter was taken cognizance by the Ombudsman. HELD: The Ombudsman has no jurisdiction. Under Sec. 6, Article XIII of the Constitution, the SC has the administrative supervision over all courts and the personnel thereof. And under Sec. 11, the SC en banc shall have the power to discipline judges of

The same ruling was reiterated in the case of DOLALAS vs. OMBUDSMAN 265 SCRA 819 FACTS: A criminal complaint for violation of the Anti-Graft Law was filed before the Ombudsman against MTC Judge Dolalas of Zamboanga City for unreasonable delay in deciding a case for alarms and scandals filed before her sala. HELD: The Ombudsman has no jurisdiction to initiate an investigation into the alleged undue delay by the judge in the disposition of the criminal case which involves the determination of whether, in resolving the alarms and scandals case, petitioner-judge acted in accordance with the Code of Judicial Conduct. Such is clearly administrative in nature over which the SC has administrative control and supervision.

FUENTES vs. OMBUDSMAN October 23, 2001 FACTS: This case involves the construction of the fly-over in Buhangin, Davao City. There were several private properties which were expropriated. There were also money claims filed because some of the private property owners were still not paid of the amount due them. A motion for execution of the judgment was issued and Judge Fuentes ordered the attachment of several 31

Administrative Agencies

Administrative Law Review 2002 Edition

properties considered as junks found in the compound of DPWH in Panacan. The order of the judge was contested because the attached properties are not junks but still serviceable. The order was questioned before the Ombudsman that there were alleged anomalies in the issuance thereof and in the service of the writ of execution. The fact-finding committee recommended the filing of a criminal case against Judge Fuentes. HELD: The Ombudsman cannot take action on the criminal case against Judge Fuentes for alleged violation of Anti-Graft Act because what is being questioned is the order of the judge. It is only the SC which can look into the issue on whether or not the order issued by the judge is illegal or unjust, or whether or not it is within the scope of the judge’s official duties.

MUST be a final and authoritative judicial declaration that the decision or order of the judge is indeed unjust. In the absence of such declaration, the filing of civil or criminal case against the judge on such matter is premature and cannot prosper. The pronouncement that the judgment is unjust may result either from (1) an action for certiorari or prohibition against such action of the judge, or, (2) pursuant to the filing of an administrative case before the higher court impugning the validity of such judgment or order rendered by the respondent judge.

Preventive Suspension By The Ombudsman On the matter of the power of the Ombudsman to issue preventive suspension order, you have the case of YABUT vs. OMBUDSMAN 233 SCRA 311

DE VERA vs. PELAYO 335 SCRA 281 FACTS: A criminal case was filed by private individual De Vera against RTC Judge Pelayo before the Ombudsman for alleged malicious delay in the administration of justice and knowingly rendering an unjust interlocutory order. Instead of taking an action on the matter by requiring the judge to file an answer, the Ombudsman referred the case to the Supreme Court. It is now contended by De Vera that since his complaint involves a criminal charge, it is within the power of the Ombudsman and not with the SC. Note that the SC has administrative supervision over courts. HELD: No other official of the government has the competence to review a court order or decision whether final or interlocutory. There must be a judicial pronouncement that the order is erroneous as to lay the basis for the institution of a criminal or administrative complaint before the Ombudsman. Thus, the matter has to be referred to the SC. Note that the rule here as held by the SC, before a civil or a criminal case is filed against a judge for violation of Articles 204 and 205 of the Revised Penal Code on rendering an unjust judgment or interlocutory order, there

FACTS: This case arose because of a traffic incident along the intersection of Makati Avenue and Gil Puyat Avenue. Then Vice-Mayor Arturo Yabut was directing traffic. A car driven by an American doctor made a U-turn and shouted at Yabut for the delay. There was exchange of harsh words and resulted to fistfight between them [watch UFC on Solar channel]. Both suffered injuries. A case for simple misconduct and oppression was filed against ViceMayor Yabut. Pending investigation, the Ombudsman issued a preventive suspension order placing him suspended for 90 days which actually he served only for 82 days. Subsequently after trial, the Ombudsman meted the penalty of 90day suspension. It is now contended by Yabut that the period of preventive suspension must be credited to whatever penalty of suspension that may be imposed by the Ombudsman. Thus, the 82 days served by him as preventive suspension should be credited to the 90day suspension penalty imposed. HELD: Vice-Mayor Yabut is wrong. The nature of the preventive suspension is merely a preliminary step in the administrative adjudication precisely to protect and insure the veracity and security of vital records. Therefore, the period of preventive 32

Administrative Law Review 2002 Edition

suspension cannot be credited to whatever penalty that may be meted out.

GARCIA vs. LOGICA FACTS: Criminal and administrative cases were filed against Mayor Garcia of Cebu City in connection with anomalous purchase of asphalt by the City Government with Swelley(?) Corporation. The contract with the corporation was signed four (4) days before the local elections. Mayor Garcia ran and was re-elected. But even before the filing of the answer for the administrative case, the Ombudsman issued preventive suspension order on Garcia for 6 months. Garcia now claims that he could no longer be placed under preventive suspension because of his reelection citing the case of AGUINALDO. ISSUE: Is it still within the power the Ombudsman to issue preventive suspension order despite the fact that the act complained of happened during a previous term? Is the case of AGUINALDO applicable in the instant case? HELD: The Ombudsman can still issue preventive suspension order even if the act in question happened during a previous term. The power of the Ombudsman to issue preventive suspension order is provided for under Section 24 of R.A. 6670. The power to investigate is separate and distinct from the power to impose administrative sanctions. The power to investigate is also separate and distinct from the power to preventively suspend a local elective official. Although in the case at bar, the SC reduced the preventive suspension from 6 months to a period until such time there is an order issued by the SC for the maintenance of the status quo pending investigation into the matter by the SC. What is then the consequence of the re-election of Garcia? Mayor Garcia cannot be sanctioned administratively because the subject of the administrative complaint was committed during a previous term despite the fact that the act complained of happened 4 days before the elections.

Administrative Agencies

What is determinative is the time of commission, i.e., during a previous term. It does not matter that it took place a few days before the elections. There was here a presumed knowledge on the part of the people re-electing him to the same office. Thus, there was condonation as in the AGUINALDO case. BUENASEDA vs. FLAVIER 226 SCRA 646 (Bar) FACTS: This case involves several employees including the Chief (Dr. Buenaseda) of the Hospital of the National Center for Mental Health who were accused of graft practices before the Ombudsman filed by then DOH Secretary Flavier. The Ombudsman directed Dr. Buenaseda et al to file their answers. After filing their answers, the Ombudsman issued preventive suspension order. The respondents contended that there was yet no formal hearing conducted on the matter and so, the issuance of the preventive suspension order violated due process. Moreover, they contended that the Ombudsman has no power to suspend government officials or employees working in offices other than the Office of the Ombudsman. HELD: By nature, a preventive suspension order is not a penalty. Therefore, there was no violation of due process. The issuance of the preventive suspension order is not by reason of disciplinary action taken by the administrative body. And clearly under the law, the power of the Ombudsman covers not only employees within its office but also other offices of the government.

CASTILLO vs. BARBERS 290 SCRA 719 FACTS: Gov. Jose Castillo of Quirino Province was charged with graft practices because of the alleged purchase of a heavy equipment which was not brand-new although the requirement was for a brand-new heavy equipment. What was delivered and accepted by the Provincial Governor was a reconditioned heavy equipment and so, a graft case was filed together with the administrative complaint. 33

Administrative Law Review 2002 Edition

Preventive suspension was decreed on Gov. Castillo. One issue raised was the fact that under the LGC, the maximum preventive suspension is only 60 days and he claimed that what should be followed is the provision of Sec. 63 of LGC providing for the 60-day preventive suspension. HELD: The SC ruled that the provisions under the LGC are different from that under the Ombudsman Act. So administrative proceedings taken by the Ombudsman pursuant to its provisions under the Ombudsman Law ought to be followed. In other words, the Ombudsman can mete out the maximum preventive suspension of six (6) months.

YASAY vs. DESIERTO 300 SCRA 494 HELD: The matter of imposing the period of preventive suspension up to six months lies within the discretion of the Ombudsman. Generally, the SC will not interfere into the exercise of discretion by the Ombudsman. Although in the case of GARCIA vs. LOGICA, the SC ruled that the imposition of six (6) months preventive suspension on Mayor Garcia was unreasonable and so the SC reduced the period. As a general rule however, the matter is within the sound discretion of the Office of the Ombudsman. ALBA vs. NITORREDA 254 SCRA 753 FACTS: This involves a Davao case. There was this complaint filed before the Office of the Ombudsman against the Asst. Regional Director of DECS. There were several graduates of a school in Tagum. The head of the school there refused to look into their complaint. And so there was a request for reconsideration but the Asst. Regional Director did not take cognizance of the complaint. There was an allegation that he was partial to the owner of the school and so there was an administrative complaint. As a result of such proceeding, a penalty of suspension was imposed. There was a complaint that there was a violation of due process because Asst. Regional Director Alba was denied the right to appeal. Note that the right to

Administrative Agencies

appeal is simply granted by law. Thus, it is possible that such right may be withdrawn by the law itself. HELD: Under the Ombudsman Act, where the penalty imposed in the administrative proceeding is suspension not exceeding 30 days or a fine not to exceed one month salary, the decision shall become final and executory. It is only where the decision imposes a suspension of more than one month or a fine of more than a month’s salary that there may be an appeal taken to the higher authorities. So the SC ruled in this case that there is no violation of due process because the law has made such imposition of penalty as final and executory.

In those instances where the penalty imposed by the Ombudsman is more than 30day suspension or up to one year (the period of suspension as a penalty should not exceed one year or dismissal from the service), where should the appeal be taken? What should be the proper remedy? In the usual course of proceedings, the review of the decision of the Ombudsman may be taken to the proper body. Under Section 27 of the Ombudsman Act providing that the decision of the Ombudsman may be appealed to SC by way of petition for review on certiorari, under Rule 45 of the Rules of Court. But this provision has been declared by SC as unconstitutional in FABIAN vs. DESIERTO (295 SCRA 478) because this provision expanded the jurisdiction of SC without its consent and advice.

Q: So what then is the proper remedy? A: The petition for review on certiorari applying Rule 43. That is the usual course is review of the decisions of administrative bodies. It should now be brought before the CA within 10 days. In criminal cases decided by the Ombudsman, the appeal should be taken to SC. The other remedy in administrative proceedings decided by the Ombudsman is under Rule 65 but only as an exception, i.e., where there is grave abuse of discretion, error of law and such other instances. Heire, the remedy is not under Rule 43 but Rule 65. Rule 65 is an independent special civil action precisely to question the decision of the Ombudsman on the ground that the 34

Administrative Agencies

Administrative Law Review 2002 Edition

Ombudsman has abused its power or authority or there is grave capriciousness, or there is error of law committed by the Office of the Ombudsman. What about the approval by the COA of government officials’ disbursements? It may happen that the transaction post audited by COA has been passed in audit and found in order by COA. But nonetheless, despite such findings by the Commission, it is deemed possible for the Ombudsman to inquire into the criminal liability of Public Officers who were responsible for such contract or passage of the documents. So the clearance made by COA on the matter may only relate to the administrative aspect so far as the administrative accountability of the public officer or employee who is subject to the auditorial power of the COA. But it will not prevent the Ombudsman from investigating and finding out whether there is a crime to be prosecuted for violation of penal laws (Rodrigo vs. Sandiganbayan, 303 SCRA 309)

MARQUEZ vs. DESIERTO G.R. 135882, June 23, 2001 FACTS: There was an order by the Ombudsman for the bank manager of Unionbank to produce the bank records or accounts of Lagdameo in connection with the fact-finding investigation conducted by the Ombudsman pertaining to alleged violation of the anti-graft and corrupt practices act. ISSUE: Whether or not the Ombudsman has power to issue subpoena duces tecum for the purpose of inquiring into the records. HELD: SC disregarded its earlier rulings in the case of Purisima and Gancayco vs. PNB because in those two cases, the SC upheld the power of the investigative bodies of the government such as the DOJ and the Tanodbayan to look into bank deposits of public officers accused of violation of the antigraft law and violation of RA 1379 (Illgotten Wealth Law). But in this case of MARQUEZ, SC ruled that the Ombudsman has NO power to look into such bank deposits although this is still subject to a motion for reconsideration from the decision of the Supreme Court.

But let me inject some facts in the case of MARQUEZ. Note that what happened in this case was that the cases brought before the Office of the Ombudsman were only in the fact-finding stage, not in the formal investigation of cases against the public officer. Meaning, in essence, this is still subject to verification of evidence whether there is evidence in support of the complaints. In other words, this fact-finding investigation is some kind of fishing expedition which would violate the secrecy of bank deposits under RA 1405 which prohibits the disclosure and provides for the absolute secrecy of bank deposits and prohibits disclosure of such deposits to any person even including an officer of government unless the exceptions apply. The exceptions are: (1) in the course of an examination by the bank pursuant to an authority given by the Central Bank; (2) an authority given to the auditor for the conduct of an examination of audit; (3) upon written permission of the depositor; (4) in cases of impeachment proceedings; (5) where the money deposited or invested is the subject matter of the controversy; and (6) upon order of competent courts in cases of bribery or dereliction of duty on the part of the public officers. Q: What about a case filed against a public officer for violation of the Anti-Graft Law? Is this still included as an exception? A: Yes because the nature of a charge under the anti-graft law is similar to bribery or with dereliction of duty of public officers.

PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG)

T

he laws creating PCGG are provided under E.O.s 1, 2, 14 and 14-A.

E.O. 1 (February 28, 1986) mandates the PCGG to recover ill-gotten wealth accumulated by the Marcoses, their immediate families, relatives, subordinates, associates and cronies, whether such properties found in the Philippines or abroad. And likewise includes the power to take over or sequester all business enterprises or entities controlled or owned by them.

35

Administrative Law Review 2002 Edition

And under the same law (E.O. 1), PCGG has the power to take over or place under its control any property or office within its authority. Under the same law, there is no civil action shall prosper against the PCGG or any member thereof for the discharge of their functions and duties. E.O. 2 empowers the PCGG to freeze all assets and properties in the Philippines and likewise prohibit any person from transferring or concealing such property alleged to be illgotten. E.O. 14 and E.O. 14-A mandate the PCGG to file and prosecute all cases before the Sandiganbayan which has the exclusive jurisdiction to try and hear cases of the PCGG. And likewise, Section 5 of E.O. 14 as amended, empowers the PCGG to grant immunity from criminal prosecution of any person who testifies. In the case of PCGG vs. PEÑA April 12, 1988 FACTS: There was a freeze order issued by the PCGG over the assets and records of two government firms. This freeze order was contested before the RTC. Based on a complaint, the RTC issued a restraining order. HELD: The RTC has no jurisdiction over PCGG. The SC applied the doctrine of primary jurisdiction and exhaustion of administrative remedies. The PCGG is a co-equal body with the RTC and co-equal bodies have no power to control the other. It is only the Sandiganbayan which has the exclusive jurisdiction over the PCGG.

REPUBLIC vs. SANDIGANBAYAN 173 SCRA 72 FACTS: There was a grant of civil immunity to Jose Campos. Such immunity was extended to his son, Jose Campos, Jr. ISSUE: Whether or not the PCGG is empowered to grant civil immunity. Note that Section 5 of E.O. 14 talks

Administrative Agencies

only of immunity given by PCGG in criminal cases. HELD: Section 5 must be related to Section 3 of E.O. 14 as amended which provides for the procedure and the applicable laws in the prosecution of civil cases, and applying the provision of the New Civil Code, Article 2028 – the mandate is to conciliate civil cases. Therefore the grant of civil immunity in civil case to the son (Jose Campos, Jr.) was within the powers of the PCGG.

CRUZ vs. SANDIGANBAYAN February 26, 1991 FACTS: Roman Cruz was then the President of GSIS. There was a graft complaint against him for is act of entering a contract with a private business allegedly causing injury to the government. The contract was allegedly anomalous. Roman Cruz questioned the authority of the PCGG to investigate him for alleged violation of the AntiGraft Act. HELD: Not all graft cases are within the authority of the PCGG – only those graft cases in relation to the mandate of the PCGG, are within the authority of the commission. In other words, IF there is NO allegation as to the ill-gotten wealth accumulation of the public officer; he is taking advantage of his public office; or his relation to the Marcoses, then the investigation and prosecution of these cases must be undertaken not by the PCGG but by the Office of the Ombudsman.An examination of the pleadings filed against Roman Cruz, does not disclose any relation to the Marcoses. Neither was there any allegation of his alleged accumulation of his ill-gotten wealth by taking advantage of his official position and his relation to the Marcoses. Thus, the PCGG has no power to investigate Roman Cruz. The Ombudsman should be the proper office to investigate the allegation of graft committed by Cruz. Meaning, only those cases for the recovery of the ill-gotten wealth accumulated prior to February 25, 1986 are within the competence of the PCGG. Those ill-gotten wealth cases after

36

Administrative Law Review 2002 Edition

February 25, 1986 are already within the jurisdiction of the Ombudsman. The case of CRUZ is similar to the case of PCGG vs. MIGRINO (August 30, 1990). Here, there was an investigation conducted by the new AFP Anti-Graft Board created by then chairman of the PCGG, on the complaint of the alleged ill-gotten wealth of Col. (Ivan Dkhd) Tecson. But there was no allegation linking Col. Tecson to the Marcoses. Thus, the PCGG is without authority to investigate the graft case against Tecson.

BASECO vs. PCGG 150 SCRA 181 HELD: The PCGG cannot perform acts of ownership or dominion over sequestered properties. The essence of the sequestration order is not an act of ownership. It is simply an act to conserve properties to prevent further dissipation of assets alleged to be ill-gotten. Since the PCGG is not the owner of the sequestered assets, it is not allowed to vote sequestered shares of stocks or even elect members of the board of directors concerned (Cojuangco vs. Azcuna, [April 16, 1991]). The reason here is that, PCGG is a mere conservator and not an owner of the sequestered property. The exception to this rule is in case of a take over of a business belonging to the government or whose capitalization comes from government funds, but now in the hands of the private business. In such situation, the PCGG may vote on the sequestered shares not as an act of ownership but to conserve properties already in the hands of private businesses but which used to be owned by the government, or the capitalization comes from the government.

And under the rules promulgated by the PCGG, there was a question on whether or not the power to issue a writ of sequestration may be delegated to an agent or representative of the PCGG. In the case of

Administrative Agencies

PCGG, Atty. Ramirez. He issued a sequestration order over the assets and properties of Dio Island Resort in Leyte allegedly owned by the Romualdezes. ISSUE #1: Is a sequestration order issued by the head of a task force of the PCGG valid? HELD: The rules implementing the law on PCGG empower the Commission upon authority of at least two (2) Commissioners before a writ of sequestration may be issued by a representative of the PCGG. ISSUE #2: What is then the effect of the ratification made by the Commission on the order earlier issued by a PCGG representative? Does it ratify the act of the representative? HELD: The writ of sequestration is null and void since the issuance made by the representative of the PCGG did not conform to the rules implementing the law. No ratification by the PCGG can cure the defect. Such noncompliance is a fatal defect.

COCOFED vs. PCGG October 2, 1989 (?) HELD: For purposes of this proceeding, all the Court needs to determine is whether or not there is a prima facie justification for the issuance of a sequestration order by the PCGG. In the case of COCOFED, the SC was satisfied that there was a prima facie basis for the issuance of the sequestration order given the public character of the coco levy funds. There are also other circumstances considered by the SC such as the fact that P20 million COCOFED funds were delivered to Imelda Marcos through her scholarship foundation without proper accounting. One other factor was the various cash advancements made by COCOFED officials including Maria Lobregat (tita of Kenneth Lim!!) Moreover, COCOFED purchased an aircraft using levy funds. These circumstances constitute sufficient prima facie basis for the issuance of sequestration order by the PCGG.

REPUBLIC vs. SANDIGANBAYAN July 12, 1996 FACTS: There was a sequestration order issued by a representative of the 37

Administrative Agencies

Administrative Law Review 2002 Edition

CENTRAL BANK

A

s to the authority of the Central Bank to close a bank, a question may arise: whether or not the Central Bank under the Central Bank Act has the power to order the closure of a bank even without prior hearing. Now, the options of the Monetary Board pursuant to the provisions of the Central Bank Act are said to be final and executory. This refers to the proceedings on Insolvency – known as “close now, hear later” policy of the Central Bank. In other words, under this policy, the Central Bank can close down a bank for insolvency without prior notice and hearing. The reason for this policy is to prevent the unwarranted dissipation of the bank’s assets and properties, and likewise to protect the creditors, stockholders and depositors, and the public at large. We go back to the issue: Q: Whether or not the Central Bank can close down a bank for insolvency without prior notice and hearing. A: The answer is in the affirmative. However, there are conditions for such actions of the Central Bank as held in the case of CENTRAL BANK vs. TRIUMPH SAVINGS BANK (220 SCRA 536): 1.) There must be an examination pursuant to the authority of the Central Bank. In other words, the examining department of the Central Bank is given the power by the Central Bank to look into the accounts and records of the bank in question; 2.) On the basis of such examination, a report has to be submitted to the Monetary Board; and 3.) The Monetary Board on the basis of such report finding that further operation would only cause danger to the bank and to the public, then it can order the immediate closure of the bank. Of course under the law, the aggrieved bank is given the opportunity to sue the Central Bank within a period of ten (10) days from the date of closure.

PHILIPPINE AMUSEMENT AND

GAMING CORPORATION (PAGCOR)

T

he PAGCOR was created by virtue of PD 1067 as amended by PD 1869. Basically, the charter of the PAGCOR empowers the corporation to regulate and centralize all games of chance authorized by existing franchises and permitted by law. At the same time, the charter authorizes the PAGCOR to establish, operate and maintain a gambling casinos in any part of the Philippines. In other words, the PAGCOR has two-fold character: (1) governmental and (2) proprietary functions. In its governmental character, the PAGCOR is mandated to regulate and centralize all forms of games of chance in one centralized agency known as the PAGCOR. The basis here is public welfare – the need to regulate gambling and all the consequent evils attendant to operations of gambling joints and casinos. In its exercise of its proprietary function, PAGCOR is therefore authorized to operate as a business. You know, PAGCOR is the third largest revenue earner for the government after the BIR and the Bureau of Customs – about P18 billion income a year. And most of these income goes to the government in the form of social funds under the Office of the President. You have also the President’s share. And all of these are allocated to finance the economic programs of the government. In the case of MAGTAJAS vs. PRYCE PROPERTIES (253 SCRA 255), the issue involves the power of the LGUs to impose a tax on the PAGCOR. Clearly, under the charter of PAGCOR, it is exempt from local taxes. And under the Constitution, the power of the LGUs to tax is subject to such guidelines and limitations that Congress may impose.

Re: Jai-Alai Now there was a case involving the authority of PAGCOR to operate Jai-alai. On June 17, 1999, PAGCOR entered into an agreement with private companies – the Grand Jai-Alai Corporation and the PhilGame. The agreement calls for the Grand Jai-Alai Corporation to make available to PAGCOR the required infrastructure and facilities and to include the quantom(?)… have you seen how 38

Administrative Agencies

Administrative Law Review 2002 Edition

this game is played? This was a very popular game years ago involving some kind of a pelota racket played by ancient Spaniards. And so, under this agreement entered into by PAGCOR, there was no financial cash out on the part of the PAGCOR – what the duty of the PAGCOR is simply to manage and operate – everything was provided by the private corporations. And so there was a petition filed by Congressman Del Mar of Cebu and later joined by other congressmen like Defensor (Lim, Calizo, Mortejo, Peloton, Pito) et al questioning the legality of the agreement on the ground that PAGCOR has no power to give such operation to private business. It is observed that the franchise is essentially a legislative power. HELD: The charter (PD 1869) of PAGCOR does not give it a franchise to operate and manage jai-alai. There are basically three (3) reasons given by the Supreme Court: [1] One is, the nature of a franchise is a special privilege conferred by the State. It can be operated directly by the State, or indirectly through any corporation or any of its public agents, in this case the PAGCOR. So it is only the State through Congress that is truly empowered to legally grant a franchise. It is a privilege of public concern which cannot be exercised at mere pleasure of the PAGCOR. In the case of PAGCOR, clearly there was no such express grant and conditions protective of public interest in its charter – the manner of granting of the franchise to whom it should be granted. All of these issues were not answered in the charter itself of the PAGCOR. In other words, there was no clear authority given to PAGCOR for the operation of jai-alai. [2] The second reason is based on the historical studies made by the organization itself, PAGCOR. Note that PAGCOR was created during the Marcos era in 1977. But even before 1977, there was already a law enacted creating the Philippine Jai-Alai & Amusement Corporation in 1975… and this franchise to operate jai-alai was given to and controlled by the Romualdezes. The Romualdezes were given a 25-year franchise to operate jai-alai in Manila. That was in 1975. The charter of PAGCOR was enacted only in 1977. So clearly, the matter of giving franchise to operate jai-alai was not intended for PAGCOR but to a different corporation pursuant to PD 810 of October 16, 1975. So

the PAGCOR was never given a legislative franchise to operate jai-alai. And subsequently, there were several amendments to the charter of PAGCOR – PD 1067, PD 1399, PD 1632 and PD 1869. And in all of these amendments, there was never a clear indication giving such grant to operate jai-alai to PAGCOR. When the Aquino Administration took over, she issued E.O. 169 on May 8, 1987 repealing PD 810. Thus, E.O 169 revoked the franchise of Philippine Jai-Alai & Amusement Corporation as operated by the Romualdezes. But nevertheless, the State never passed any modification to the charter of PAGCOR. The charter of PAGCOR deals with the details pertaining solely to the operation of gambling casinos. In the mandate given to PAGCOR, it has the duty to centralize all games of chance. It is said that jai-alai is a game of skills, not a game of chance. [3] The third reason cited by the SC is that, PAGCOR is engaged in business affected with public interest. A legislative franchise to operate jai-alai is imbued with public interest and involves the exercise of police power. The statutory construction in the matter of police power should be strictly construed against the grant thereof. Why? Because this is imbued with public interest. The rule here is, laws which grant the right to exercise police power of the State are to be strictly construed and any doubt should be resolved against the grant. So any doubt should be resolved against the grant of such franchise to PAGCOR in the absence of a clear language indicating the intention of the State through Legislature of entrusting this power to operate to PAGCOR.

COMMISSION ON AUDIT (COA)

T

he mandate of the COA is found under Article IX-B, Section 2 – the COA has the power, authority and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities x x x.

39

Administrative Agencies

Administrative Law Review 2002 Edition

Under the same section, the COA has also the power to promulgate rules and regulations in order to prevent or disallow irregular, unnecessary, excessive, extravagant or unconscionable expenditures of government, the uses of government funds and property. In the case of NHA vs. COA 226 SCRA 65 FACTS: There was a loan agreement entered into by the Republic through the NHA with the KFW, a German entity. Under the contract, the German firm would finance the urban housing – the Dagatdagatan project of the government. And there was a need to extend the loan contract and one of the conditions for the renewal of the contract was the extension of the services contract of the German consultant. But the COA disallow such renewal. Thus, the matter was raised before the SC. The NHA argued that the renewal of the loan contract with the German entity is necessary, otherwise, the loaned facilities would have been put in jeopardy. HELD: There is justification for not complying with the Constitutional mandate prohibiting unnecessary expenses of public funds which is beyond compromise. That is the power of the COA to look into any disbursement and to disallow such disbursement if the same is irregular, unnecessary, extravagant, excessive or unconscionable. In the instant case, the renewal of the services agreement in favor of the German consultant was found by the COA as unnecessary expense on the part of the government.

COA and the COA may disallow such grant of informer’s reward. But the matter of disallowing the informer’s reward may still be the subject of review by the courts. The courts may determine whether the disallowance made by the COA of the grant of informer’s reward is proper or not. Thus, it is within the power of the court to rule on the disallowance made by the COA in the grant of informer’s reward.

It is also possible that the COA on its audit report may find the public officer not responsible… or that the COA on its audit report has cleared the public officer of any wrongdoing. In the case of RODRIGO, JR. vs. SANDIGANBAYAN 303 SCRA 309 HELD: The findings of the COA is not binding on the other investigatory office of the government, such as the Office of the Ombudsman, from taking cognizance of a criminal complaint on matters covered by the audit report. As a rule, the audit report is given respect. But nonetheless, if the Ombudsman finds basis to proceed the conduct of the investigation, it is within its power to disregard the finding of non-wrongdoing by the COA and proceed with the investigation against the public officer.

DEPARTMENT OF AGRARIAN REFORM (DAR)

T

In the case of CIR vs. COA 218 SCRA 204 HELD: Under the law, upon the recommendation of the BIR, the Department of Finance which has the supervision and control over the BIR, may grant an informer’s reward pursuant to the provision of the NIRC. This informer’s reward may be the subject of the auditorial scrutiny of the

he law of the DAR is R.A. 6657. It confers to the DAR the original jurisdiction over all cases involving agrarian laws. Basically, you have Section 50 of PD 6657. Under Section 50, the primary jurisdiction is given to the DAR to determine and adjudicate agrarian reform matters and also the exclusive original jurisdiction over all matters pertaining to the implementation of the Comprehensive Agrarian Reform Program (CARP) including the matter of determining the just compensation to be paid to the

40

Administrative Agencies

Administrative Law Review 2002 Edition

landowner whose property is placed under the CARP of the government. As a rule, when we talk of agrarian implementation of agrarian reform laws and other matters, these are within the primary and exclusive jurisdiction of the DAR. Q: In what instances may agrarian-related issues be taken cognizance not by the DAR, but by the COURTS? A: There are two (2) instances: 1.) prosecution of criminal cases under agrarian law; and 2.) petitions for the determination of just compensation to be paid to the landowner under Section 57. Now, the DAR’s exclusive original jurisdiction is exercised through hierarchically-arranged agencies of the DAR, namely: 1.) DARAB (Department of Agrarian Reform Adjudication Board); 2.) RARAD (Regional Agrarian Reform Adjudicator); and 3.) PARAD (Provincial Agrarian Reform Adjudicator) Appellate jurisdiction to the RARAD and to the DARAB. Thus, all cases under the exclusive original jurisdiction of the DAR must commence in the PARAD of the province where the property is situated. The DARAB only has appellate jurisdiction to review the orders and findings of the PARAD. ROXAS & CO. vs. CA 321 SCRA 106 FACTS: This involves the determination made by the DAR that the property in Nasugbu, Batangas should be brought under the coverage of the CARP. This matter was brought before the court because there was already a Presidential Proclamation (1520) declaring the area (Nasugbu, Batangas) as tourist zone. HELD: The Court ruled that the DAR authorities must not simply disregard the Proclamation because it has the effect of a law unless the same is repealed.

The primordial consideration here is the actual use of the property as stated in the proclamation. In the instant case, the actual use as stated in the proclamation is classified as a tourist zone.

Section 50 vs. Section 57 In so far as Sections 50 and 57 of R.A. 6657 are concerned, question may arise: whether or not these provisions contradict each other. Section 50 gives the DAR the power to determine the value of just compensation to be paid to the landowner. In the same manner, Section 57 confers to the RTC the exclusive original jurisdiction to determine just compensation. Q: How then do you reconcile these two provisions? A: Section 50 refers to administrative proceedings which may be the subject of judicial inquiry. Generally, this is more in line with the doctrine of primary jurisdiction and the doctrine of exhaustion of administrative remedies. Section 50 confers to the DAR the primary jurisdiction to determine agrarian reform matters and the exclusive authority over all matters pertaining to the implementation of agrarian reforms which necessarily includes the determination of just compensation to be paid to the landowner. On the other hand, Section 57 confers the exclusive original jurisdiction to the RTC to hear and decide petitions for the determination of just compensation. Section 57 refers to judicial proceedings in determining just compensation. In other words, Section 50 which refers to administrative proceedings is simply the preliminary determination made by the DAR in the matter of the value of the land placed under the CARP and the just compensation.

Q: What are the STAGES required under Section 50 under this agrarian (administrative) proceeding? A: The following: 1.

The Landbank determines a preliminary determination as to the value of land placed under the CARP and the compensation to be paid to the landowner; 41

Administrative Law Review 2002 Edition

2.

3.

4.

5.

6.

7.

The DAR initiates the acquisition of agricultural land by notifying the owner of the property of the desire of the government to place the property under the coverage of the CARP together with the notice and the valuation as initially determined by the DAR; Within 30 days from notice given by the DAR, the landowner must decide whether to accept or reject the offer made by the DAR; If there is rejection by the landowner, there will be a summary administrative proceeding held by the PARAD or RARAD, as the case may be, depending on the value of the land, for purposes of determining just compensation; Parties interested in the transaction are required to submit their respective evidence; The DAR adjudicator must decide the matter within 30 days from submission of the case; If the landowner still finds the price unsatisfactory, the landowner can bring the case immediately and directly to the RTC WITHIN 15 DAYS. There is no need to bring it to the DARAB.

It is wrong to say that since there is already an initial determination of just compensation by the DAR authority, the RTC now exercises appellate jurisdiction on the matter. No! That is wrong. The RTC is exercising still its exclusive original jurisdiction. In fact, under Section 11, Rule 13 of the DARAB Rules, the decision of the adjudicator in the summary administrative proceeding on land-valuation and preliminary determination and payment of just compensation shall not be appealable to the DARAB but shall be filed directly with the RTC which shall be constituted as a Special Agrarian Reform Court. So this still is an exercise of original exclusive jurisdiction of the RTC. Again, this is consistent with the doctrine of primary jurisdiction and the doctrine of exhaustion of administrative remedies. It only means that primary jurisdiction is lodged in the DAR as an administrative agency to determine in a preliminary manner the just compensation.

Administrative Agencies

Whereas, the determination by the RTC is judicial where there is a contest or petition brought by the rejection by the landowner of the offer. In the case of PHIL. VETERANS BANK vs. CA 322 SCRA 140 FACTS: Several properties of PVB were placed under the CARP. The offer tendered by the government through the DAR and Landbank was rejected by the PVB. So the matter of just compensation was put in issue. However, the PVB filed the petition for the determination of just compensation beyond the 15-day period as required under Section 11, Rule 13 of the DARAB Rules. The RTC dismissed the petition. The CA affirmed the trial court. HELD: The SC affirmed the RTC and the CA. The petition must be filed within the 15-day period from the receipt of the notice of the DAR in the summary administrative proceeding conducted. The 15-day period to file the petition for just compensation is mandatory.

LAGUNA ESTATE DEV’T CORP. vs. CA, 335 SCRA 38 FACTS: A total of 234.76 hectares of agricultural land in Casili, Cabuyao, Laguna belonging to the Sta. Rosa Realty Corporation were placed under the CARP and subsequently awarded to qualified beneficiaries. But it so happened that the only passage way to these properties is only through the privately-owned road network of the Laguna Estate Development Corporation and Canluban Sugar Estate. Consequently, an action was filed by the beneficiaries before the DAR for the grant of easement. The DAR, over the objection of Laguna Estate and Canlubang Estate, argued that it has the authority to hear and decide the issue of granting an easement. HELD: DARAB has NO power to grant to the beneficiaries a right of way (easement) over a private property, in this case, the private road network of the petitioners Laguna Estate and Canlubang Estate. These are private 42

Administrative Agencies

Administrative Law Review 2002 Edition

properties intended as for their exclusive use. For the DARAB to have jurisdiction over the case, there must be TENANCY relationship between the parties in the first place. In the instant case, there exist no tenancy relationship between the petitioner estates and the beneficiaries. There are three (3) requirements to consider that there exist a tenancy relationship: 1. the parties are the land-owner and the tenant or agricultural lessee; 2. the subject matter of the relationship is agricultural land. The case at bar involves an easement over private lands intended for private business of the petitioners and has nothing to do with agrarian laws; 3. there must be consent between the parties to the tenancy relationship; 4. the purpose of the relationship is to bring about agricultural production; 5. there is personal cultivation on the part of the tenant; and 6. the harvest is shared between the landowner and the tenant.

What if there is truly possession and cultivation by the tenant? Are these factors sufficient by themselves to conclude that indeed there exist a tenancy relationship? In the case of

BAUTISTA vs. ARANETA 326 SCRA 235 FACTS: There was a decision rendered by the PARAD. On appeal, the DARAB affirmed the PARAD to the effect that petitioner Bautista is a tenant on the landholding occupied by him based on the certification issued by the agrarian reform technician and the MARO (Mun. Agrarian Reform Officer) based on interviews with the persons in occupation of the property. ISSUE: Is possession and cultivation sufficient to make a conclusion that tenancy exists? HELD: NO. There must be a consent by the landowner for the relationship to exist. The certifications

do not show such consent. The certifications show only that Bautista is the possessor and the cultivator of the land. These certifications are not sufficient to show that Bautista is a tenant of Araneta.

LAND TRANSPORATION OFFICE (LTO) and LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD (LTFRB)

T

he LTO and the LTRRB are under the supervision of the Department of Transportation and Communication (DOTC). The DOTC, through the LTO and LTFRB, is mandated to implement laws pertaining to land transportation under RA 4136, otherwise known as the Land Transportation and Traffic Code. The LTO has the duty to register vehicles and licensing of drivers. On the other hand, the LTFRB under E.O. 202, is tasked for the regulation of public utility or “for-hire” vehicles and the grant of franchises or certificates of public convenience. Take note that Section 458 of the Local Government Code confers to the LGUs the regulation of operation of tricycles-for-hire and grant of franchises for the operation thereof, subject to the guidelines issued by the DOTC. The duty of LTO is not affected by Section 458 of the LGC. Still, the LTO is mandated to require the registration of these tricycles-for-hire. R.A. 4136 mandates the registration of all kinds of motor vehicles “used or operated on or upon any public highway” in the Philippines. You have also the case of HODGKINSON(?) CASE

by

FACTS: A bidding was conducted the Subic Bay Metropolitan 43

Administrative Agencies

Administrative Law Review 2002 Edition

Authority (SBMA) for the operation of concession to operate container terminal in Subic Bay. Only 3 bidders were declared as qualified to make the bid after passing the pre-evaluation made by the SBMA technical committee. Among the 2 qualified bidders were the ICTSI and the HPPL. But even before the opening of the sealed bidding, there was already an issue raised by HPPL. It wanted to disqualify the bid submitted by the ICTSI. You know, this ICTSI, up to now, is still the operator of the Manila International Container Port (MICP). And under E.O. 212, there is prohibition as to the operation of the same operator of another similar facility. On this basis, there was a protest on the bid of the ICTSI. The bid acceptable to the SBMA was that of the HPPL because it offered the lowest franchise fee. On this basis, there was a resolution passed by the Board of Directors of the SBMA for the award of the contract to the HPPL. Before that, there was an appeal filed by ICTSI before the SBMA and before the Office of the President because of the rejection of the SBMA of its bid. The appeal was based on violation of E.O. 212. On the basis of this appeal before the Office of the President, then Presidential Adviser Cayetano wrote a memorandum to then Pres. Ramos recommending the re-evaluation of the bid. And there was a re-evaluation made by the SBMA. After re-evaluation, the recommendation was still to the effect that award be given to HPPL. But subsequently, there was another memorandum made by Executive Secretary Ruben Torres recommending for the re-bidding of the project. The HPPL argued that there was already a perfected contract because the SBMA Board of Directors already awarded the contract to HPPL. HELD: Petitioner HPPL has not shown that it has a clear right to be declared as the winning bidder with finality. The award given by the SBMA was not yet final and thus still can be assailed. The basis here is LOI 620 (Oct. 27, 1997) which mandates that the approval of the President of the Philippines is required in all contracts of the national government offices, agencies and instrumentalities including GOCCs

where the contract involves the amount of P2 million and above, awarded either through public bidding or negotiation. Notwithstanding the resolution issued by the SBMA Board of Directors, the award cannot be said to be final and unassailable because SBMA and other instrumentalities of the government is under the control and supervision of the Office of the President. It follows therefore, that it is within the discretion of the President either to overturn or reverse for justifiable reasons any award already made by the SMBA. And in the exercise of this discretion given to the President under LOI 620, the courts will not interfere with the exercise thereof, unless there is injustice, arbitrariness, or unfairness. But none is shown in the case at bar.

Epilogue

So that ends our review on administrative law. So when will be our exams? Two weeks after? One week after? So September 21 (PubOff) and 28 (Admin). What time? Morning? Ok… when your mind is still fresh… yes… it’s good to have your exam in the morning rather in the afternoon… really! So agreeable, morning? Ok. So, 10 to 12 noon? Ok. The same time sched for September 28 exam… Good luck to all of you…. All absent now are considered present…

END

ADMINISTRATIVE LAW REVIEW Editors:

Jason John Joyce Nuj Dumbrigue Janis Dumama Sheila Resabal Jade Jamora Cam-cam Basa Tommy Veloso Darry Gallego Vanessa Bello Genie Salvaña Kenneth Lim Mortmort

44