Reviewer In Administrative Law By Atty.

Edwin Sandoval
Posted on March 22, 2012. Filed under: 2012 Bar Review Materials, Bar Review
Materials, Case Digests, Political & International Law | Tags: Administrative Law, Bar
Examination, Case Digests, Constitutional Law, Law Review, Political Law |

Describe the Administrative Code of 1987.

Held: The Code is a general law and incorporates in a unified document the major
structural, functional and procedural principles of governance (Third Whereas
Clause, Administrative Code of 1987) and embodies changes in administrative
structures and procedures designed to serve the people. (Fourth Whereas Clause,
Administrative Code of 1987) The Code is divided into seven (7) books. These
books contain provisions on the organization, powers and general administration of
departments, bureaus and offices under the executive branch, the organization and
functions of the Constitutional Commissions and other constitutional bodies, the
rules on the national government budget, as well as guidelines for the exercise by
administrative agencies of quasi-legislative and quasi-judicial powers. The Code
covers both the internal administration, i.e., internal organization, personnel and
recruitment, supervision and discipline, and the effects of the functions performed
by administrative officials on private individuals or parties outside government.
(Ople v. Torres, G.R. No. 127685, July 23, 1998 [Puno])

What is Administrative Power?

Held: Administrative power is concerned with the work of applying policies and
enforcing orders as determined by proper governmental organs. It enables the
President to fix a uniform standard of administrative efficiency and check the official
conduct of his agents. To this end, he can issue administrative orders, rules and
regulations. (Ople v. Torres, G.R. No. 127685, July 23, 1998 [Puno])

What is an Administrative Order?

Held: An administrative order is an ordinance issued by the President which relates

to specific aspects in the administrative operation of government. It must be in
harmony with the law and should be for the sole purpose of implementing the law

and carrying out the legislative policy. (Ople v. Torres, G.R. No. 127685, July 23,
1998 [Puno])

What is the Government of the Republic of the Philippines?

Ans.: The Government of the Republic of the Philippines refers to the corporate
governmental entity through which the functions of the government are exercised
throughout the Philippines, including, save as the contrary appears from the
context, the various arms through which political authority is made effective in the
Philippines, whether pertaining to the autonomous regions, the provincial, city,
municipal or barangay subdivisions or other forms of local government. (Sec. 2[1],
Introductory Provisions, Executive Order No. 292)

What is an Agency of the Government?

Ans.: Agency of the Government refers to any of the various units of the
Government, including a department, bureau, office, instrumentality, or
government-owned or controlled corporation, or a local government or a distinct
unit therein. (Sec. 2[4], Introductory Provisions, Executive Order No. 292)

What is a Department?

Ans.: Department refers to an executive department created by law. For purposes

of Book IV, this shall include any instrumentality, as herein defined, having or
assigned the rank of a department, regardless of its name or designation. (Sec.
2[7], Introductory Provisions, Executive Order No. 292)

What is a Bureau?

Ans.: Bureau refers to any principal subdivision or unit of any department. For
purposes of Book IV, this shall include any principal subdivision or unit of any
instrumentality given or assigned the rank of a bureau, regardless of actual name or

designation, as in the case of department-wide regional offices. (Sec. 2[8],

Introductory Provisions, Executive Order No. 292)

What is an Office?

Ans.: Office refers, within the framework of governmental organization, to any

major functional unit of a department or bureau including regional offices. It may
also refer to any position held or occupied by individual persons, whose functions
are defined by law or regulation. (Sec. 2[9], Introductory Provisions, Executive
Order No. 292)

What is a Government Instrumentality? What are included in the term Government

Instrumentality?

Ans.: A government instrumentality refers to any agency of the national

government, not integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, enjoying operational autonomy, usually through a
charter. The term includes regulatory agencies, chartered institutions and
government-owned or controlled corporations. (Sec. 2[10], Introductory Provisions,
Executive Order No. 292)

What is a Regulatory Agency?

Ans.: A regulatory agency refers to any agency expressly vested with jurisdiction to
regulate, administer or adjudicate matters affecting substantial rights and interest
of private persons, the principal powers of which are exercised by a collective body,
such as a commission, board or council. (Sec. 2[11], Introductory Provisions,
Executive Order No. 292)

What is a Chartered Institution?

Ans.: A chartered institution refers to any agency organized or operating under a

special charter, and vested by law with functions relating to specific constitutional
policies or objectives. This term includes state universities and colleges and the
monetary authority of the State. (Section 2[12], Introductory Provisions, Executive
Order No. 292)

What is a Government-Owned or Controlled Corporation?

Ans.: Government-owned or controlled corporation refers to any agency organized

as a stock or non-stock corporation, vested with functions relating to public needs
whether governmental or proprietary in nature, and owned by the Government
directly or through its instrumentalities either wholly, or, where applicable as in the
case of stock corporations, to the extent of at least fifty-one (51) per cent of its
capital stock; x x x (Sec. 2[13], Introductory Provisions, Executive Order No. 292)

When is a Government-Owned or Controlled Corporation deemed to be performing

proprietary function? When is it deemed to be performing governmental function?

Held: Government-owned or controlled corporations may perform governmental or

proprietary functions or both, depending on the purpose for which they have been
created. If the purpose is to obtain special corporate benefits or earn pecuniary
profit, the function is proprietary. If it is in the interest of health, safety and for the
advancement of public good and welfare, affecting the public in general, the
function is governmental. Powers classified as proprietary are those intended for
private advantage and benefit. (Blaquera v. Alcala, 295 SCRA 366, 425, Sept. 11,
1998, En Banc [Purisima])

The Philippine National Red Cross (PNRC) is a government-owned and controlled

corporation with an original charter under R.A. No. 95, as amended. Its charter,
however, was amended to vest in it the authority to secure loans, be exempted
from payment of all duties, taxes, fees and other charges, etc. With the amendnt of
its charter, has it been impliedly converted to a private corporation?

Held: The test to determine whether a corporation is government owned or

controlled, or private in nature is simple. Is it created by its own charter for the
exercise of a public function, or by incorporation under the general corporation law?

Those with special charters are government corporations subject to its provisions,
and its employees are under the jurisdiction of the Civil Service Commission. The
PNRC was not impliedly converted to a private corporation simply because its
charter was amended to vest in it the authority to secure loans, be exempted from
payment of all duties, taxes, fees and other charges, etc. (Camporedondo v. NLRC,
G.R. No. 129049, Aug. 6, 1999, 1st Div. [Pardo])

When may the Government not validly invoke the rule that prescription does not
run against the State? Illustrative Case.

Held: While it is true that prescription does not run against the State, the same
may not be invoked by the government in this case since it is no longer interested
in the subject matter. While Camp Wallace may have belonged to the government
at the time Rafael Galvezs title was ordered cancelled in Land Registration Case No.
N-361, the same no longer holds true today.

Republic Act No. 7227, otherwise known as the Base Conversion and Development
Act of 1992, created the Bases Conversion and Development Authority. X x x

With the transfer of Camp Wallace to the BCDA, the government no longer has a
right or interest to protect. Consequently, the Republic is not a real party in interest
and it may not institute the instant action. Nor may it raise the defense of
imprescriptibility, the same being applicable only in cases where the government is
a party in interest. x x x. Being the owner of the areas covered by Camp Wallace, it
is the Bases Conversion and Development Authority, not the Government, which
stands to be benefited if the land covered by TCT No. T-5710 issued in the name of
petitioner is cancelled.

Nonetheless, it has been posited that the transfer of military reservations and their
extensions to the BCDA is basically for the purpose of accelerating the sound and
balanced conversion of these military reservations into alternative productive uses
and to enhance the benefits to be derived from such property as a measure of
promoting the economic and social development, particularly of Central Luzon and,
in general, the countrys goal for enhancement (Section 2, Republic Act No. 7227).
It is contended that the transfer of these military reservations to the Conversion
Authority does not amount to an abdication on the part of the Republic of its
interests, but simply a recognition of the need to create a body corporate which will

act as its agent for the realization of its program. It is consequently asserted that
the Republic remains to be the real party in interest and the Conversion Authority
merely its agent.

We, however, must not lose sight of the fact that the BCDA is an entity invested
with a personality separate and distinct from the government. X x x

It may not be amiss to state at this point that the functions of government have
been classified into governmental or constituent and proprietary or ministrant.
While public benefit and public welfare, particularly, the promotion of the economic
and social development of Central Luzon, may be attributable to the operation of
the BCDA, yet it is certain that the functions performed by the BCDA are basically
proprietary in nature. The promotion of economic and social development of
Central Luzon, in particular, and the countrys goal for enhancement, in general, do
not make the BCDA equivalent to the Government. Other corporations have been
created by government to act as its agents for the realization of its programs, the
SSS, GSIS, NAWASA and the NIA, to count a few, and yet, the Court has ruled that
these entities, although performing functions aimed at promoting public interest
and public welfare, are not government-function corporations invested with
governmental attributes. It may thus be said that the BCDA is not a mere agency of
the Government but a corporate body performing proprietary functions.

Having the capacity to sue or be sued, it should thus be the BCDA which may file an
action to cancel petitioners title, not the Republic, the former being the real party in
interest. One having no right or interest to protect cannot invoke the jurisdiction of
the court as a party plaintiff in an action. A suit may be dismissed if the plaintiff or
the defendant is not a real party in interest. x x x

However, E.B. Marcha Transport Co., Inc. v. IAC is cited as authority that the
Republic is the proper party to sue for the recovery of possession of property which
at the time of the installation of the suit was no longer held by the national
government body but by the Philippine Ports Authrotiy. In E.B. Marcha, the Court
ruled:

It can be said that in suing for the recovery of the rentals, the Republic of the
Philippines, acted as principal of the Philippine Ports Authority, directly exercising
the commission it had earlier conferred on the latter as its agent. We may presume

that, by doing so, the Republic of the Philippines did not intend to retain the said
rentals for its own use, considering that by its voluntary act it had transferred the
land in question to the Philippine Ports Authority effective July 11, 1974. The
Republic of the Philippines had simply sought to assist, not supplant, the Philippine
Ports Authority, whose title to the disputed property it continues to recognize. We
may expect the that the said rentals, once collected by the Republic of the
Philippines, shall be turned over by it to the Philippine Ports Authority conformably
to the purposes of P.D. No. 857.

E.B. Marcha is, however, not on all fours with the case at bar. In the former, the
Court considered the Republic a proper party to sue since the claims of the Republic
and the Philippine Ports Authority against the petitioner therein were the same. To
dismiss the complaint in E.B. Marcha would have brought needless delay in the
settlement of the matter since the PPA would have to refile the case on the same
claim already litigated upon. Such is not the case here since to allow the
government to sue herein enables it to raise the issue of imprescriptibility, a claim
which is not available to the BCDA. The rule that prescription does not run against
the State does not apply to corporations or artificial bodies created by the State for
special purposes, it being said that when the title of the Republic has been divested,
its grantees, although artificial bodies of its own creation, are in the same category
as ordinary persons. By raising the claim of imprescriptibility, a claim which cannot
be raised by the BCDA, the Government not only assists the BCDA, as it did in E.B.
Marcha, it even supplants the latter, a course of action proscribed by said case.

Moreover, to recognize the Government as a proper party to sue in this case would
set a bad precedent as it would allow the Republic to prosecute, on behalf of
government-owned or controlled corporations, causes of action which have already
prescribed, on the pretext that the Government is the real party in interest against
whom prescription does not run, said corporations having been created merely as
agents for the realization of government programs.

It should also be noted that petitioner is unquestionably a buyer in good faith and
for value, having acquired the property in 1963, or 5 years after the issuance of the
original certificate of title, as a third transferee. If only not to do violence and to
give some measure of respect to the Torrens System, petitioner must be afforded
some measure of protection. (Shipside Incorporated v. Court of Appeals, 352 SCRA
334, Feb. 20, 2001, 3rd Div. [Melo])

Discuss the nature and functions of the National Telecommunications Commission

(NTC), and analyze its powers and authority as well as the laws, rules and
regulations that govern its existence and operations.

Held: The NTC was created pursuant to Executive Order No. 546 x x x. It assumed
the functions formerly assigned to the Board of Communications and the
Communications Control Bureau, which were both abolished under the said
Executive Order. Previously, the NTCs function were merely those of the defunct
Public Service Commission (PSC), created under Commonwealth Act No. 146, as
amended, otherwise known as the Public Service Act, considering that the Board of
Communications was the successor-in-interest of the PSC. Under Executive Order
No. 125-A, issued in April 1987, the NTC became an attached agency of the
Department of Transportation and Communications.

In the regulatory communications industry, the NTC has the sole authority to issue
Certificates of Public Convenience and Necessity (CPCN) for the installation,
operation, and maintenance of communications facilities and services, radio
communications systems, telephone and telegraph systems. Such power includes
the authority to determine the areas of operations of applicants for
telecommunications services. Specifically, Section 16 of the Public Service Act
authorizes the then PSC, upon notice and hearing, to issue Certificates of Public
Convenience for the operation of public services within the Philippines whenever
the Commission finds that the operation of the public service proposed and the
authorization to do business will promote the public interests in a proper and
suitable manner. (Commonwealth Act No. 146, Section 16[a]) The procedure
governing the issuance of such authorizations is set forth in Section 29 of the said
Act x x x. (Republic v. Express Telecommunication Co., Inc., 373 SCRA 316, Jan. 15,
2002, 1st Div. [Ynares-Santiago])

Is the filing of the administrative rules and regulations with the UP Law Center the
operative act that gives the rules force and effect?

Held: In granting Bayantel the provisional authority to operate a CMTS, the NTC
applied Rule 15, Section 3 of its 1978 Rules of Practice and Procedure, which
provides:

Sec. 3. Provisional Relief. Upon the filing of an application, complaint or petition or

at any stage thereafter, the Board may grant on motion of the pleader or on its own
initiative, the relief prayed for, based on the pleading, together with the affidavits
and supporting documents attached thereto, without prejudice to a final decision
after completion of the hearing which shall be called within thirty (30) days from
grant of authority asked for.

Respondent Extelcom, however, contends that the NTC should have applied the
Revised Rules which were filed with the Office of the National Administrative
Register on February 3, 1993. These Revised Rules deleted the phrase on its own
initiative; accordingly, a provisional authority may be issued only upon filing of the
proper motion before the Commission.

In answer to this argument, the NTC, through the Secretary of the Commission,
issued a certification to the effect that inasmuch as the 1993 Revised Rules have
not been published in a newspaper of general circulation, the NTC has been
applying the 1978 Rules.

The absence of publication, coupled with the certification by the Commissioner of

the NTC stating that the NTC was still governed by the 1987 Rules, clearly indicate
that the 1993 Revised Rules have not taken effect at the time of the grant of the
provisional authority to Bayantel. The fact that the 1993 Revised Rules were filed
with the UP Law Center on February 3, 1993 is of no moment. There is nothing in
the Administrative Code of 1987 which implies that the filing of the rules with the
UP Law Center is the operative act that gives the rules force and effect. Book VII,
Chapter 2, Section 3 thereof merely states:

Filing. (1) Every agency shall file with the University of the Philippines Law Center
three (3) certified copies of every rule adopted by it. Rules in force on the date of
effectivity of this Code which are not filed within three (3) months from the date
shall not thereafter be the basis of any sanction against any party or persons.

(2) The records officer of the agency, or his equivalent functionary, shall carry out
the requirements of this section under pain of disciplinary action.

(3) A permanent register of all rules shall be kept by the issuing agency and shall be
open to public inspection.

The National Administrative Register is merely a bulletin of codified rules and it is

furnished only to the Office of the President, Congress, all appellate courts, the
National Library, other public offices or agencies as the Congress may select, and to
other persons at a price sufficient to cover publication and mailing or distribution
costs (Administrative Code of 1987, Book VII, Chapter 2, Section 7). In a similar
case, we held:

This does not imply, however, that the subject Administrative Order is a valid
exercise of such quasi-legislative power. The original Administrative Order issued
on August 30, 1989, under which the respondents filed their applications for
importations, was not published in the Official Gazette or in a newspaper of general
circulation. The questioned Administrative Order, legally, until it is published, is
invalid within the context of Article 2 of Civil Code, which reads:

Article 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette (or in a newspaper of general circulation in the
Philippines), unless it is otherwise provided. X x x

The fact that the amendments to Administrative Order No. SOCPEC 89-08-01 were
filed with, and published by the UP Law Center in the National Administrative
Register, does not cure the defect related to the effectivity of the Administrative
Order.

This Court, in Tanada v. Tuvera stated, thus:

We hold therefore that all statutes, including those of local application and private
laws, shall be published as a condition for their effectivity, which shall begin fifteen
days after publication unless a different effectivity is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by
the President in the exercise of legislative power or, at present, directly conferred by

the Constitution. Administrative Rules and Regulations must also be published if

their purpose is to enforce or implement existing law pursuant also to a valid
delegation.

Interpretative regulations and those merely internal in nature, that is, regulating
only the personnel of the administrative agency and not the public, need not be
published. Neither is publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or guidelines to be followed
by their subordinates in the performance of their duties.

We agree that the publication must be in full or it is no publication at all since its
purpose is to inform the public of the contents of the laws.

The Administrative Order under consideration is one of those issuances which

should be published for its effectivity, since its purpose is to enforce and implement
an existing law pursuant to a valid delegation, i.e., P.D. 1071, in relation to LOI 444
and EO 133.

Thus, publication in the Official Gazette or a newspaper of general circulation is a

condition sine qua non before statutes, rules or regulations can take effect. This is
explicit from Executive Order No. 200, which repealed Article 2 of the Civil Code,
and which states that:

Laws shall take effect after fifteen days following the completion of their publication
either in the Official Gazette or in a newspaper of general circulation in the
Philippines, unless it is otherwise provided (E.O. 200, Section 1).

The Rules of Practice and Procedure of the NTC, which implements Section 29 of the
Public Service Act, fall squarely within the scope of these laws, as explicitly
mentioned in the case of Tanada v. Tuvera.

Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative

rules and regulations must be published if their purpose is to enforce or implement
existing law pursuant to a valid delegation. The only exception are interpretative

regulations, those merely internal in nature, or those so-called letters of instructions

issued by administrative superiors concerning the rules and guidelines to be
followed by their subordinates in the performance of their duties (PHILSA
International Placement & Services Corp. v. Secretary of Labor, G.R. No. 103144,
April 4, 2001, 356 SCRA 174).

Hence, the 1993 Revised Rules should be published in the Official Gazette or in a
newspaper of general circulation before it can take effect. Even the 1993 Revised
Rules itself mandates that said Rules shall take effect only after their publication in
a newspaper of general circulation (Section 20 thereof). In the absence of such
publication, therefore, it is the 1978 Rules that govern. (Republic v. Express
Telecommunication Co., Inc., 373 SCRA 316, Jan. 15, 2002, 1st Div. [YnaresSantiago])

May a person be held liable for violation of an administrative regulation which was
not published?

Held: Petitioner insists, however, that it cannot be held liable for illegal exaction as
POEA Memorandum Circular No. II, Series of 1983, which enumerated the allowable
fees which may be collected from applicants, is void for lack of publication.

There is merit in the argument.

In Tanada v. Tuvera, the Court held, as follows:

We hold therefore that all statutes, including those of local application and private
laws, shall be published as a condition for their effectivity, which shall begin fifteen
days after publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by
the President in the exercise of legislative powers whenever the same are validly
delegated by the legislature or, at present, directly conferred by the Constitution.
Administrative rules and regulations must also be published if their purpose is to
enforce or implement existing law pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating
only the personnel of the administrative agency and the public, need not be
published. Neither is publication required of the so-called letter of instructions
issued by the administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties.

Applying this doctrine, we have previously declared as having no force and effect
the following administrative issuances: a) Rules and Regulations issued by the Joint
Ministry of Health-Ministry of Labor and Employment Accreditation Committee
regarding the accreditation of hospitals, medical clinics and laboratories; b) Letter of
Instruction No. 416 ordering the suspension of payments due and payable by
distressed copper mining companies to the national government; c) Memorandum
Circulars issued by the POEA regulating the recruitment of domestic helpers to Hong
Kong; d) Administrative Order No. SOCPEC 89-08-01 issued by the Philippine
International Trading Corporation regulating applications for importation from the
Peoples Republic of China; and e) Corporate Compensation Circular No. 10 issued
by the Department of Budget and Management discontinuing the payment of other
allowances and fringe benefits to government officials and employees. In all these
cited cases, the administrative issuances questioned therein were uniformly struck
down as they were not published or filed with the National Administrative Register
as required by the Administrative Code of 1987.

POEA Memorandum Circular No. 2, Series of 1983 must likewise be declared

ineffective as the same was never published or filed with the National
Administrative Register.

POEA Memorandum Circular No. 2, Series of 1983 provides for the applicable
schedule of placement and documentation fees for private employment agencies or
authority holders. Under the said Order, the maximum amount which may be
collected from prospective Filipino overseas workers is P2,500.00. The said circular
was apparently issued in compliance with the provisions of Article 32 of the Labor
Code x x x.

It is thus clear that the administrative circular under consideration is one of those
issuances which should be published for its effectivity, since its purpose is to
enforce and implement an existing law pursuant to a valid delegation. Considering
that POEA Administrative Circular No. 2, Series of 1983 has not as yet been

published or filed with the National Administrative Register, the same is ineffective
and may not be enforced. (Philsa International Placement and Services Corporation
v. Secretary of Labor and Employment, 356 SCRA 174, April 4, 2001, 3rd Div.,
[Gonzaga-Reyes])

Does the publication requirement apply as well to administrative regulations

addressed only to a specific group and not to the general public?

Held: The Office of the Solicitor General likewise argues that the questioned
administrative circular is not among those requiring publication contemplated by
Tanada v. Tuvera as it is addressed only to a specific group of persons and not to the
general public.

Again, there is no merit in this argument.

The fact that the said circular is addressed only to a specified group, namely private
employment agencies or authority holders, does not take it away from the ambit of
our ruling in Tanada v. Tuvera. In the case of Phil. Association of Service Exporters v.
Torres, the administrative circulars questioned therein were addressed to an even
smaller group, namely Philippine and Hong Kong agencies engaged in the
recruitment of workers for Hong Kong, and still the Court ruled therein that, for lack
of proper publication, the said circulars may not be enforced or implemented.

Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative

rules and regulations must be published if their purpose is to enforce or implement
existing law pursuant to a valid delegation. The only exceptions are interpretative
regulations, those merely internal in nature, or those so-called letters of instructions
issued by administrative superiors concerning the rules and guidelines to be
followed by their subordinates in the performance of their duties. Administrative
Circular No. 2, Series of 1983 has not been shown to fall under any of these
exceptions.

In this regard, the Solicitor Generals reliance on the case of Yaokasin v.

Commissioner of Customs is misplaced. In the said case, the validity of certain
Customs Memorandum Orders were upheld despite their lack of publication as they
were addressed to a particular class of persons, the customs collectors, who were

also the subordinates of the Commissioner of the Bureau of Customs. As such, the
said Memorandum Orders clearly fall under one of the exceptions to the publication
requirement, namely those dealing with instructions from an administrative superior
to a subordinate regarding the performance of their duties, a circumstance which
does not obtain in the case at bench. X x x

To summarize, petitioner should be absolved from the three (3) counts of exaction
as POEA Administrative Circular No. 2, Series of 1983 could not be the basis of
administrative sanctions against petitioner for lack of publication. (Philsa
International Placement and Services Corporation v. Secretary of Labor and
Employment, 356 SCRA 174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])

May a successful bidder compel a government agency to formalize a contract with it

notwithstanding that its bid exceeds the amount appropriated by Congress for the
project?

Held: Enshrined in the 1987 Philippine Constitution is the mandate that no money
shall be paid out of the Treasury except in pursuance of an appropriation made by
law. (Sec. 29[1], Article VI of the 1987 Constitution) Thus, in the execution of
government contracts, the precise import of this constitutional restriction is to
require the various agencies to limit their expenditures within the appropriations
made by law for each fiscal year.

It is quite evident from the tenor of the language of the law that the existence of
appropriations and the availability of funds are indispensable pre-requisites to or
conditions sine qua non for the execution of government contracts. The obvious
intent is to impose such conditions as a priori requisites to the validity of the
proposed contract. Using this as our premise, we cannot accede to PHOTOKINAs
contention that there is already a perfected contract. While we held in Metropolitan
Manila Development Authority v. Jancom Environmental Corporation that the effect
of an unqualified acceptance of the offer or proposal of the bidder is to perfect a
contract, upon notice of the award to the bidder, however, such statement would
be inconsequential in a government where the acceptance referred to is yet to meet
certain conditions. To hold otherwise is to allow a public officer to execute a binding
contract that would obligate the government in an amount in excess of the
appropriations for the purpose for which the contract was attempted to be made.
This is a dangerous precedent.

In the case at bar, there seems to be an oversight of the legal requirements as early
as the bidding stage. The first step of a Bids and Awards Committee (BAC) is to
determine whether the bids comply with the requirements. The BAC shall rate a bid
passed only if it complies with all the requirements and the submitted price does
not exceed the approved budget for the contract.(Implementing Rules and
Regulations [IRR] for Executive Order No. 262, supra.)

Extant on the record is the fact that the VRIS Project was awarded to
PHOTOKINA on account of its bid in the amount of P6.588 Billion Pesos. However,
under Republic Act No. 8760 (General Appropriations Act, FY 2000, p. 1018,
supra.),the only fund appropriated for the project was P1 Billion Pesos and under the
Certification of Available Funds (CAF) only P1.2 Billion Pesos was available. Clearly,
the amount appropriated is insufficient to cover the cost of the entire VRIS Project.
There is no way that the COMELEC could enter into a contract with PHOTOKINA
whose accepted bid was way beyond the amount appropriated by law for the
project. This being the case, the BAC should have rejected the bid for being
excessive or should have withdrawn the Notice of Award on the ground that in the
eyes of the law, the same is null and void.

Even the draft contract submitted by Commissioner Sadain that provides for a
contract price in the amount of P1.2 Billion Pesos is unacceptable. x x x While the
contract price under the draft contract is only P1.2 Billion and, thus, within the
certified available funds, the same covers only Phase I of the VRIS Project, i.e., the
issuance of identification cards for only 1,000,000 voters in specified areas. In
effect, the implementation of the VRIS Project will be segmented or chopped
into several phases. Not only is such arrangement disallowed by our budgetary
laws and practices, it is also disadvantageous to the COMELEC because of the
uncertainty that will loom over its modernization project for an indefinite period of
time. Should Congress fail to appropriate the amount necessary for the completion
of the entire project, what good will the accomplished Phase I serve? As expected,
the project failed to sell with the Department of Budget and Management. Thus,
Secretary Benjamin Diokno, per his letter of December 1, 2000, declined the
COMELECs request for the issuance of the Notice of Cash Availability (NCA) and a
multi-year obligatory authority to assume payment of the total VRIS Project for lack
of legal basis. Corollarily, under Section 33 of R.A. No. 8760, no agency shall enter
into a multi-year contract without a multi-year obligational authority, thus:

SECTION 33. Contracting Multi-Year Projects. In the implementation of multi-year

projects, no agency shall enter into a multi-year contract without a multi-year
Obligational Authority issued by the Department of Budget and Management for the

purpose. Notwithstanding the issuance of the multi-year Obligational Authority, the

obligation to be incurred in any given calendar year, shall in no case exceed the
amount programmed for implementation during said calendar year.

Petitioners are justified in refusing to formalize the contract with PHOTOKINA.

Prudence dictated them not to enter into a contract not backed up by sufficient
appropriation and available funds. Definitely, to act otherwise would be a futile
exercise for the contract would inevitably suffer the vice of nullity. x x x

Verily, the contract, as expressly declared by law, is inexistent and void ab initio
(Article 1409 of the Civil Code of the Philippines). This is to say that the proposed
contract is without force and effect from the very beginning or from its incipiency,
as if it had never been entered into, and hence, cannot be validated either by lapse
of time or ratification.

In fine, we rule that PHOTOKINA, though the winning bidder, cannot compel the
COMELEC to formalize the contract. Since PHOTOKINAs bid is beyond the amount
appropriated by Congress for the VRIS Project, the proposed contract is not binding
upon the COMELEC and is considered void x x x. (Commission on Elections v. Judge
Ma. Luisa Quijano-Padilla, G.R. No. 151992, Sept. 18, 2002, En Banc [SandovalGutierrez])

What is the remedy available to a party who contracts with the government
contrary to the requirements of the law and, therefore, void ab initio?

Held: Of course, we are not saying that the party who contracts with the
government has no other recourse in law. The law itself affords him the remedy.
Section 48 of E.O. No. 292 explicitly provides that any contract entered into contrary
to the above-mentioned requirements shall be void, and the officers entering into
the contract shall be liable to the Government or other contracting party for any
consequent damage to the same as if the transaction had been wholly between
private parties. So when the contracting officer transcends his lawful and
legitimate powers by acting in excess of or beyond the limits of his contracting
authority, the Government is not bound under the contract. It would be as if the
contract in such case were a private one, whereupon, he binds himself, and thus,
assumes personal liability thereunder. Otherwise stated, the proposed contract is
unenforceable as to the Government.

While this is not the proceeding to determine where the culpability lies, however,
the constitutional mandate cited above constrains us to remind all public officers
that public office is a public trust and all public officers must at all times be
accountable to the people. The authority of public officers to enter into government
contracts is circumscribed with a heavy burden of responsibility. In the exercise of
their contracting prerogative, they should be the first judges of the legality,
propriety and wisdom of the contract they entered into. They must exercise a high
degree of caution so that the Government may not be the victim of ill-advised or
improvident action. (Commission on Elections v. Judge Ma. Luisa Quijano-Padilla,
G.R. No. 151992, Sept. 18, 2002, En Banc [Sandoval-Gutierrez])

Does the Commission on Human Rights have the power to adjudicate?

Held: In its Order x x x denying petitioners motion to dismiss, the CHR theorizes
that the intention of the members of the Constitutional Commission is to make CHR
a quasi-judicial body. This view, however, has not heretofore been shared by this
Court. In Carino v. Commission on Human Rights, the Court x x x has observed that
it is only the first of the enumerated powers and functions that bears any
resemblance to adjudication of adjudgment, but that resemblance can in no way
be synonymous to the adjudicatory power itself. The Court explained:

x x x [T]he Commission on Human Rights x x x was not meant by the fundamental

law to be another court or quasi-judicial agency in this country, or duplicate much
less take over the functions of the latter.

The most that may be conceded to the Commission in the way of adjudicative
power is that it may investigate, i.e., receive evidence and make findings of fact as
regards claimed human rights violations involving civil and political rights. But fact
finding is not adjudication, and cannot be likened to the judicial function of a court
of justice, or even a quasi-judicial agency or official. The function of receiving
evidence and ascertaining therefrom the facts of a controversy is not a judicial
function, properly speaking. To be considered such, the faculty of receiving
evidence and making factual conclusions in a controversy must be accompanied by
the authority of applying the law to those factual conclusions to the end that the
controversy may be decided or determined authoritatively, finally and definitively,
subject to such appeals or modes of review as may be provided by law. This

function, to repeat, the Commission does not have. (Simon, Jr. v. Commission on
Human Rights, 229 SCRA 117, 125, Jan. 5, 1994, En Banc [Vitug, J.])

Does the Commission on Human Rights have jurisdiction to issue TRO or writ of
preliminary injunction?

Held: In Export Processing Zone Authority v. Commission on Human Rights, the

Court x x x explained:

The constitutional provision directing the CHR to provide for preventive measures
and legal aid services to the underprivileged whose human rights have been
violated or need protection may not be construed to confer jurisdiction on the
Commission to issue a restraining order or writ of injunction for, if that were the
intention, the Constitution would have expressly said so. Jurisdiction is conferred
only by the Constitution or by law. It is never derived by implication.

Evidently, the preventive measures and legal aid services mentioned in the
Constitution refer to extrajudicial and judicial remedies (including a writ of
preliminary injunction) which the CHR may seek from the proper courts on behalf of
the victims of human rights violations. Not being a court of justice, the CHR itself
has no jurisdiction to issue the writ, for a writ of preliminary injunction may only be
issued by the judge of any court in which the action is pending [within his district],
or by a Justice of the Court of Appeals, or of the Supreme Court. x x x. A writ of
preliminary injunction is an ancillary remedy. It is available only in a pending
principal action, for the preservation or protection of the rights and interest of a
party thereto, and for no other purpose.

The Commission does have legal standing to indorse, for appropriate action, its
findings and recommendations to any appropriate agency of government. (Simon,
Jr. v. Commission on Human Rights, 229 SCRA 117, 134-135, Jan. 5, 1994, En Banc
[Vitug, J.])

Does the petition for annulment of proclamation of a candidate merely involve the
exercise by the COMELEC of its administrative power to review, revise and reverse
the actions of the board of canvassers and, therefore, justifies non-observance of

procedural due process, or does it involve the exercise of the COMELECs quasijudicial function?

Held: Taking cognizance of private respondents petitions for annulment of

petitioners proclamation, COMELEC was not merely performing an administrative
function. The administrative powers of the COMELEC include the power to
determine the number and location of polling places, appoint election officials and
inspectors, conduct registration of voters, deputize law enforcement agencies and
governmental instrumentalities to ensure free, orderly, honest, peaceful and
credible elections, register political parties, organizations or coalition, accredit
citizens arms of the Commission, prosecute election offenses, and recommend to
the President the removal of or imposition of any other disciplinary action upon any
officer or employee it has deputized for violation or disregard of its directive, order
or decision. In addition, the Commission also has direct control and supervision
over all personnel involved in the conduct of election. However, the resolution of
the adverse claims of private respondent and petitioner as regards the existence of
a manifest error in the questioned certificate of canvass requires the COMELEC to
act as an arbiter. It behooves the Commission to hear both parties to determine the
veracity of their allegations and to decide whether the alleged error is a manifest
error. Hence, the resolution of this issue calls for the exercise by the COMELEC of its
quasi-judicial power. It has been said that where a power rests in judgment or
discretion, so that it is of judicial nature or character, but does not involve the
exercise of functions of a judge, or is conferred upon an officer other than a judicial
officer, it is deemed quasi-judicial. The COMELEC therefore, acting as quasi-judicial
tribunal, cannot ignore the requirements of procedural due process in resolving the
petitions filed by private respondent. (Federico S. Sandoval v. COMELEC, G.R. No.
133842, Jan. 26, 2000 [Puno])

Discuss the contempt power of the Commission on Human Rights (CHR). When may
it be validly exercised.

Held: On its contempt powers, the CHR is constitutionally authorized to adopt its
operational guidelines and rules of procedure, and cite for contempt for violations
thereof in accordance with the Rules of Court. Accordingly, the CHR acted within
its authority in providing in its revised rules, its power to cite or hold any person in
direct or indirect contempt, and to impose the appropriate penalties in accordance
with the procedure and sanctions provided for in the Rules of Court. That power to
cite for contempt, however, should be understood to apply only to violations of its
adopted operational guidelines and rules of procedure essential to carry out its
investigatorial powers. To exemplify, the power to cite for contempt could be

exercised against persons who refuse to cooperate with the said body, or who
unduly withhold relevant information, or who decline to honor summons, and the
like, in pursuing its investigative work. The order to desist (a semantic interplay
for a restraining order) in the instance before us, however, is not investigatorial in
character but prescinds from an adjudicative power that it does not possess. x x x
(Simon, Jr. v. Commission on Human Rights, 229 SCRA 117, 134, Jan. 5, 1994, En
Banc [Vitug, J.])

Discuss the Doctrine of Primary Jurisdiction (or Prior Resort).

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

In recent years, it has been the jurisprudential trend to apply this doctrine to cases
involving matters that demand the special competence of administrative agencies
even if the question involved is also judicial in character. It applies where a claim
is originally cognizable in the courts, and comes into play whenever enforcement of
the claim requires the resolution of issues which, under a regulatory scheme, have
been placed within the special competence of an administrative body; in such case,
the judicial process is suspended pending referral of such issues to the
administrative body for its view.

In cases where the doctrine of primary jurisdiction is clearly applicable, the court
cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction
over which is lodged with an administrative body of special competence. (Villaflor v.
CA, 280 SCRA 297, Oct. 9, 1992, 3rd Div. [Panganiban])

Discuss the Doctrine of Exhaustion of Administrative Remedies. What are the

exceptions thereto?

Held: 1. Before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed of all the means of administrative processes
afforded him. Hence, if a remedy within the administrative machinery can still be

resorted to by giving the administrative officer concerned every opportunity to

decide on a matter that comes within his jurisdiction then such remedy should be
exhausted first before the courts judicial power can be sought. The premature
invocation of courts jurisdiction is fatal to ones cause of action. Accordingly,
absent any finding of waiver or estoppel the case is susceptible of dismissal for lack
of cause of action. This doctrine of exhaustion of administrative remedies was not
without its practical and legal reasons, for one thing, availment of administrative
remedy entails lesser expenses and provides for a speedier disposition of
controversies. It is no less true to state that the courts of justice for reasons of
comity and convenience will shy away from a dispute until the system of
administrative redress has been completed and complied with so as to give the
administrative agency concerned every opportunity to correct its error and to
dispose of the case.

This doctrine is disregarded:

when there is a violation of due process;

when the issue involved is purely a legal question;

when the administrative action is patently illegal amounting to lack or excess of

jurisdiction;

when there is estoppel on the part of the administrative agency concerned;

when there is irreparable injury;

when the respondent is a department secretary whose acts as an alter ego of the
President bears the implied and assumed approval of the latter;

when to require exhaustion of administrative remedies would be unreasonable;

when it would amount to a nullification of a claim;

when the subject matter is a private land in land case proceeding;

when the rule does not provide a plain, speedy and adequate remedy, and

when there are circumstances indicating the urgency of judicial intervention.

(Paat v. CA, 266 SCRA 167 [1997])

2. Non-exhaustion of administrative remedies is not jurisdictional. It only renders

the action premature, i.e., claimed cause of action is not ripe for judicial
determination and for that reason a party has no cause of action to ventilate in
court. (Carale v. Abarintos, 269 SCRA 132, March 3, 1997, 3rd Div. [Davide])