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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY

ADMINISTRATIVE LAW POWER OF CONTROL


DOES E.O. 292 GIVE THE PRESIDENT CONTINUING AUTHORITY TO REORGANIZE AND REDEFINE THE FUNCTIONS OF THE OFFICE OF THE PRESIDENT? BANDA versus- ERMITA G.R. No. 166620 | Apr. 20, 2010 The National Printing Office was formed on July 25, 1987, during the term of former President Corazon C. Aquino (President Aquino), by virtue of Executive Order No. 285[1] which provided, among others, the creation of the NPO from the merger of the Government Printing Office and the relevant printing units of the Philippine Information Agency (PIA). On October 25, 2004, President Arroyo issued the herein assailed Executive Order No. 378, amending Section 6 of Executive Order No. 285 by, inter alia, removing the exclusive jurisdiction of the NPO over the printing services requirements of government agencies and instrumentalities. Pursuant to Executive Order No. 378, government agencies and instrumentalities are allowed to source their printing services from the private sector through competitive bidding, subject to the condition that the services offered by the private supplier be of superior quality and lower in cost compared to what was offered by the NPO. Executive Order No. 378 also limited NPOs appropriation in the General Appropriations Act to its income. RULING It is a well-settled principle in jurisprudence that the President has the power to reorganize the offices and agencies in the executive department in line with the Presidents constitutionally granted power of control over executive offices and by virtue of previous delegation of the legislative power to reorganize executive offices under existing statutes. In Buklod ng Kawaning EIIB v. Zamora,[12] the Court pointed out that Executive Order No. 292 or the Administrative Code of 1987 gives the President continuing authority to reorganize and redefine the functions of the Office of the President. Section 31, Chapter 10, Title III, Book III of the said Code, is explicit on this point. Interpreting the foregoing provision, we held in Buklod ng Kawaning EIIB, thus: But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight of the very source of the power that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is subject to the Presidents continuing authority to reorganize. The issuance of Executive Order No. 378 by President Arroyo is an exercise of a delegated legislative power granted by the aforementioned Section 31, Chapter 10, Title III, Book III of the Administrative Code of 1987, which provides for the continuing authority of the President to reorganize the Office of the President, in order to achieve simplicity, economy and efficiency. This is a matter already well-entrenched in jurisprudence. The reorganization of such an office through executive or administrative order is also recognized in the Administrative Code of 1987.

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY BAR QUESTIONS The President abolished the Office of the Presidential Spokesman in Malacanang Palace and a long-standing Bureau under the Department of Interior and Local Governments. The employees of both offices assailed the action of the President for being an encroachment of legislative powers and thereby void. Was the contention of the employees correct? Explain. (2003 BAR) SUGGESTED ANSWER: The contention of the employees is not correct. As held in Buklod ng Kawaning EHB v. Zamora. 360 SCRA 718 [2001], Section 31, Book III of the Administrative Code of 1987 has delegated to the President continuing authority to reorganize the administrative structure of the Office of the President to achieve simplicity, economy and efficiency. Since this includes the power to abolish offices, the President can abolish the Office of the Presidential Spokesman, provided it is done in good faith. The President can also abolish the Bureau in the Department of Interior and Local Governments, provided it is done in good faith because the President has been granted continuing authority to reorganize the administrative structure of the National Government to effect economy and promote efficiency, and the powers include the abolition of government offices. (Presidential Decree No. 1416, as amended by Presidential Decree No. 1772; Larin v. The Executive Secretary. 280 SCRA 713[1997]). TRUE or FALSE: The President exercises the power of control over all executive departments and agencies, including government-owned or controlled corporations. (2009 BAR) TRUE. In the case of NAMARCO v. Arca (G.R. No. L-25743, September 30, 1969), the Supreme Court ruled that corporations owned or controlled by the government partake of the nature of government bureaus or offices and are covered by the Presidents power of control. Moreover, since government-owned and controlled corporations are part neither of the legislative branch nor of the judicial branch, and since they are neither one of the constitutional bodies nor are they local government units, then they are part of the executive branch and subject to the control of the President.

ADMINISTRATIVE ORGANIZATION
IS RPN 9 A PRIVATE ENTITY, A GOVERNMENT AGENCY OR A GOVERNMENTOWNED OR CONTROLLED CORPORATION? CARANDANG versus- DESIERTO G.R. NO. 148076 | January 12, 2011 Roberto S. Benedicto (Benedicto) was a stockholder of RPN, a private corporation duly registered with the Securities and Exchange Commission (SEC). [6] In March 1986, the Government ordered the sequestration of RPNs properties, assets, and business. The PCGG entered into a compromise agreement with Benedicto, whereby he ceded to the Government all his shares of stock in RPN. Consequently, upon motion of the PCGG, the Sandiganbayan directed RPN to transfer to the PCGG Benedictos shares representing 72.4% of the total issued and outstanding capital stock of RPN. However, Benedicto moved for a reconsideration, contending that his RPN shares ceded to the Government, through the PCGG, represented only 32.4% of RPNs outstanding capital stock, not 72.4%. Benedictos MR has remained unresolved to this date. On July 28, 1998, Carandang assumed office as general manager and chief operating officer of RPN. On April 19, 1999, Carandang and other RPN officials were charged with grave misconduct before the Ombudsman. The charge alleged that Carandang, in his capacity as the general manager of RPN, had entered into a contract with AF Broadcasting Incorporated despite his being an incorporator, director, and stockholder of that corporation; that he had thus held financial and material interest in a contract that had required the approval of his office; and that the transaction was prohibited under Section 7 (a) and Section 9 of Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees), thereby rendering him administratively liable for grave misconduct. Petitioner Antonio M. Carandang (Carandang) challenges the jurisdiction over him of the Ombudsman and of the Sandiganbayan on the ground that he was being held to account for acts committed while he was serving as general manager and chief operating officer of Radio Philippines Network, Inc. (RPN), which was not a government-owned or -controlled corporation; hence, he was not a public official or employee.

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY RULING The law defines what are government-owned or -controlled corporations. Section 2 of Presidential Decree No. 2029 (Defining Government Owned or Controlled Corporations and Identifying Their Role in National Development) states: Section 2. A government-owned or controlled corporation is a stock or a non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by a special law or if organized under the general corporation law is owned or controlled by the government directly, or indirectly through a parent corporation or subsidiary corporation, to the extent of at least a majority of its outstanding capital stock or of its outstanding voting capital stock. Section 2 (13) of Executive Order No. 292 (Administrative Code of 1987)[26] renders a similar definition of government-owned or -controlled corporations. It is clear, therefore, that a corporation is considered a government-owned or -controlled corporation only when the Government directly or indirectly owns or controls at least a majority or 51% share of the capital stock. Consequently, RPN was neither a government-owned nor a controlled corporation because of the Governments total share in RPNs capital stock being only 32.4%. The quantification of Benedictos shareholding cannot be controlling in view of Benedictos timely filing of a motion for reconsideration whereby he clarified and insisted that the shares ceded to the PCGG had accounted for only 32.4%, not 72.4%, of RPNs outstanding capital stock. With the extent of Benedictos holdings in RPN remaining unresolved with finality, concluding that the Government held the majority of RPNs capital stock as to make RPN a government-owned or -controlled corporation would be bereft of any factual and legal basis. Even the PCGG and the Office of the President (OP) have recognized RPNs status as being neither a government-owned nor -controlled corporation. Considering that the construction of a statute given by administrative agencies deserves respect,[35] the uniform administrative constructions of the relevant aforequoted laws defining what are government-owned or -controlled corporations as applied to RPN is highly persuasive. In fine, Carandang was correct in insisting that being a private individual he was not subject to the administrative authority of the Ombudsman and to the criminal jurisdiction of the Sandiganbayan. IS BSP A PRIVATE ENTITY, A GOVERNMENT AGENCY OR A GOVERNMENT-OWNED OR CONTROLLED CORPORATION? BSP VERSUS- COMMISSION ON AUDIT G.R. No. 177131 | June 7, 2011 The Boy Scouts of the Philippines (BSP) is a public corporation and its funds are subject to the COAs audit jurisdiction. The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled An Act to Create a Public Corporation to be Known as the Boy Scouts of the Philippines, and to Define its Powers and Purposes created the BSP as a public corporation to serve the public interest or purpose. There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as presently constituted under Republic Act No. 7278, falls under the second classification. Art. 44. The following are juridical persons: (2) Other corporations, institutions and entities for public interest or purpose created by law; their personality begins as soon as they have been constituted according to law; The BSP, which is a corporation created for a public interest or purpose, is subject to the law creating it under Article 45 of the Civil Code. The purpose of the BSP as stated in its amended charter shows that it was created in order to implement a State policy declared in Article II, Section 13 of the Constitution Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a constitutional mandate, comes within the class of public corporations defined by paragraph 2, Article 44 of the Civil Code and governed by the law which creates it, pursuant to Article 45 of the same Code. The BSPs Classification Under the Administrative Code of 1987 The public, rather than private, character of the BSP is recognized by the fact that, along with the Girl Scouts of the Philippines, it is classified as an attached agency of the DECS under Executive Order No. 292, or the Administrative Code of 1987. As an attached agency, the BSP enjoys operational autonomy, as long as policy and program coordination is achieved by having at least one representative

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY of government in its governing board, which in the case of the BSP is the DECS Secretary. In this sense, the BSP is not under government control or supervision and control. Still this characteristic does not make the attached chartered agency a private corporation covered by the constitutional proscription in question. Art. XII, Sec. 16 of the Constitution refers to private corporations created by government for proprietary or economic/business purposes Article XII, Section 16 bans the creation of private corporations by special law. The said constitutional provision should not be construed so as to prohibit the creation of public corporations or a corporate agency or instrumentality of the government intended to serve a public interest or purpose, which should not be measured on the basis of economic viability, but according to the public interest or purpose it serves as envisioned by paragraph (2), of Article 44 of the Civil Code and the pertinent provisions of the Administrative Code of 1987. The BSP is a public corporation or a government agency or instrumentality with juridical personality, which does not fall within the constitutional prohibition in Article XII, Section 16, notwithstanding the amendments to its charter. Not all corporations, which are not government owned or controlled, are ipso facto to be considered private corporations as there exists another distinct class of corporations or chartered institutions which are otherwise known as public corporations. These corporations are treated by law as agencies or instrumentalities of the government which are not subject to the tests of ownership or control and economic viability but to different criteria relating to their public purposes/interests or constitutional policies and objectives and their administrative relationship to the government or any of its Departments or Offices. BAR QUESTIONS Are government-owned or controlled corporations within the scope and meaning of the Government of the Philippines? (1997 BAR) SUGGESTED ANSWER: Section 2 of the Introductory Provision of the Administrative Code of 1987 defines the government of the Philippines as the corporate governmental entity through which the functions of government are exercised throughout the Philippines, including, same 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. Government owned or controlled corporation are within the scope and meaning of the Government of the Philippines if they are performing governmental or political functions. State with reason(s) which of the following is a government agency or a government instrumentality: (2005 BAR) (a) Department of Public Works and Highway; (b) Bangko Sentral ng Pilipinas; (c) Philippine Ports Authority; (d) Land Transportation Office; (e) Land Bank of the Philippines. SUGGESTED ANSWER: An INSTRUMENTALITY refers to any agency of the national government not integrated within the departmental framework, vested with special functions or jurisdiction by law, with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. (Iron and Steel Authority v. Court of Appeals, G.R. No. 102976, October 25, 1995) AGENCY under the administrative code is any department, bureau, office, commission, authority or officer of the national government, authorized by law or executive order to make rules, issue licenses, grant rights or privileges, and adjudicate cases; research institutions with respect to licensing functions; government corporations with respect to functions regulating private rights, privileges, occupation or business, and officials in the exercise of the disciplinary powers as provided by law. There is NO PRACTICAL DISTINCTION between an instrumentality and agency, for all intents and purposes. A distinction, however, may be made with respect to those entities possessing a separate charter created by statute. DPWH is an agency. It does not possess a separate charter. BSP is an instrumentality because it was incorporated under the new Central Bank Law (R.A. No. 7653) PPA can be defined as both an instrumentality and an agency because it was incorporated by special law and it has its own charter, yet it is integrated with the DOTC. LTO is an agency. It is an office of the DOTC. LBP is an instrumentality

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY having a charter under a special law and is a government financial institution (GFI) independent of any department of government. WHAT IS ADMINISTRATIVE RELATIONSHIP? BSP VERSUS- COMMISSION ON AUDIT G.R. No. 177131 | June 7, 2011 In 1963, congress passed a law creating a government-owned corporation named Manila War Memorial Commission (MWMC), with the primary function of overseeing the construction of a massive memorial in the heart of Manila to commemorate victim of the 1945 Battle of Manila The MWMC charter provided an initial appropriation of P1,000,000, empowered the corporation to raise funds in its own name, and set aside a parcel of land in Malate for the memorial site. The charter set the corporate life of MWMC at 50 years with a proviso that Congress may not abolish MWMC until after the completion of the memorial. Forty-five (45) years later, the memorial was only 1/3 complete and the memorial site itself had long been overrun by squatters. Congress enacted a law abolishing the MWMC and requiring that the funds raised by it be remitted to the National Treasury. The MWMC challenged the validity of the law, arguing that under its charter its mandate is to complete the memorial no matter how long it takes. Decide with reason. (6%) SUGGESTED ANSWER: It is a basic principle in administrative law that the power to create necessarily includes the power to destroy. MWMC was created by a law passed by Congress in 1963. It cannot be disputed therefore that as MWMC was created by law, it can be abolished by the legislature. This is not withstanding the provision in its charter that it shall not be abolished until after the completion of the memorial. The power to abolish is inherent in the power to create. This is especially true when the purpose for which the office was created has not been accomplished despite the lapse of many years. The legislature may exercise its inherent power to destroy an office, which it created in the first place, if only for the greater good of reducing waste in government. The administrative relationship of an attached agency to the department is defined in the Administrative Code. SEC. 38. Definition of Administrative Relationship. Unless otherwise expressly stated in the Code or in other laws defining the special relationships of particular agencies, administrative relationships shall be categorized and defined as follows: (3) Attachment. (a) This refers to the lateral relationship between the department or its equivalent and the attached agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by having the department represented in the governing board of the attached agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency. (Emphasis ours.) As an attached agency, the BSP enjoys operational autonomy, as long as policy and program coordination is achieved by having at least one representative of government in its governing board, which in the case of the BSP is the DECS Secretary. In this sense, the BSP is not under government control or supervision and control. Still this characteristic does not make the attached chartered agency a private corporation covered by the constitutional proscription in question.

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY WHICH QUASI-JUDICIAL AGENCY HAS JURISDICTION OVER ILLEGAL DISMISSAL CASES AGAINST AN ADJUNCT GOVERNMENT AGENCY ENGAGED IN PROPRIETARY FUNCTION? HIDALGO versus- REPUBLIC G.R. No. 179793 | July 5, 2010 AFPCES is a unit/facility of the Armed Forces of the Philippines (AFP) organized pursuant to Letter of Instruction (LOI) No. 31, which was issued on November 20, 1972 by then President Ferdinand Marcos. AFPCES was intended to benefit the veterans, their widows and orphans, and the members of the AFP and their dependents. AFPCES was reorganized as an AFP-Wide Service Support Unit. On February 26, 1987, General Order No. 138 was issued activating the AFPCES as a regular unit under the direct control of the AFP Chief of Staff. Petitioners, numbering 65 in all, were hired as regular employees of AFPCES. Several of them had worked with AFPCES for a number of years, ranging from 4 to 31 years. Since the start of their employment, petitioners were enrolled in the Social Security System (SSS), with respondent AFPCES paying its corresponding employers share in their monthly SSS contribution. Between 1999 and 2001, however, AFPCES advised petitioners to undergo an indefinite leave of absence without pay, allegedly upon a conditional promise that they would be allowed to return to work as soon as AFPCES tax subsidy is released and upon resumption of its store operations. When AFPCES failed to recall petitioners to their work as allegedly promised, petitioners filed a complaint for illegal (constructive) dismissal with damages against AFPCES before the NLRC. RULING Presidential Decree (PD) No. 807 or the Civil Service Decree of the Philippines declares that the Civil Service Commission shall be the central personnel agency to set standards and to enforce the laws governing the discipline of civil servants. PD No. 807 categorically described the scope of the civil service as embracing every branch, agency, subdivision, and instrumentality of the government, including every government-owned or controlled corporations whether performing governmental or proprietary function; and construed an agency to mean any bureau, office, commission, administration, board, committee, institute, corporation, whether performing governmental or proprietary function, or any other unit of the National Government, as well as provincial, city or municipal government, except as otherwise provided.

Subsequently, Executive Order (EO) No. 180 defined government employees as all employees of all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters. It provided that the Civil Service and labor laws shall be followed in the resolution of complaints, grievances and cases involving government employees. In Philippine Refining Company v. Court of Appeals, we declared that AFPCES is a government agency that is not immune from suit since it is engaged in proprietary activities. We find no compelling reason to deviate from such pronouncement. The historical background of its creation and establishment indicates that AFPCES is an agency under the direct control and supervision of the AFP as it was established to take charge of the operations and management of all commissary facilities in military establishments all over the country. By clear implication of law, all AFPCES personnel should therefore be classified as government employees and any appointment, promotion, discipline and termination of its civilian staff should be governed by appropriate civil service laws and procedures. Since it cannot be denied that petitioners are government employees, the proper body that has jurisdiction to hear the case is the CSC. Such fact cannot be negated by the failure of respondents to follow appropriate civil service rules in the hiring, appointment, discipline and dismissal of petitioners. Neither can it be denied by the fact that respondents chose to enroll petitioners in the SSS instead of the GSIS. Such considerations cannot be used against the CSC to deprive it of its jurisdiction. It is not the absence or presence of the required appointment from the CSC, or the membership of an employee in the SSS or in the GSIS that determine the status of the position of an employee. We agree with the opinion of the AFP Judge Advocate General that it is the regulation or the law creating the Service that determines the position of the employee.

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY BAR QUESTIONS The KKK Television Network (KKK-TV) aired the documentary, Case Law: How the Supreme Court Decides, without obtaining the necessary permit required by P.D. 1986. Consequently, the Movie and Television Review and Classification Board (MTRCB) suspended the airing of KKK-TV programs. MTRCB declared that under P.D. 1986, it has the power of prior review over all television programs, except newsreels and programs by the Government, and the subject documentary does not fall under either of these two classes. The suspension order was ostensibly based on Memorandum Circular No. 98-17 which grants MTRCB the authority to issue such an order. KKK-TV filed a certiorari petition in court, raising the issue that: while Memorandum Circular No. 98-17 was issued and published in a newspaper of general circulation, a copy thereof was never filed with the Office of the National Register of the University of the Philippines Law Center. Decide. SUGGESTED ANSWER: The Administrative Code provides: Sec. 3. 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 that date shall not thereafter be the basis of any sanction against any party or persons. Not all rules and regulations adopted by every government agency are to be filed with the UP Law Center. Only those of general or of permanent character are to be filed. According to the UP Law Center's guidelines for receiving and publication of rules and regulations, "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 filed with the UP Law Center. The answer would depend on whether or not the memo-circular issued by the MTRCB is merely interpretative/internal or of general/permanent character. I think it is of the latter because it gives authority to the MTRCB to issue suspension orders.

ADMINISTRATIVE DUE PROCESS


DOES THE RULE THAT ADMINISTRATIVE DUE PROCESS CANNOT BE EQUATED WITH DUE PROCESS IN JUDICIAL SENSE AUTHORIZES AN ADMINISTRATIVE TRIBUNAL TO CONSIDER IN EVIDENCE THAT DID NOT FORM PART OF THE CASE RECORD? GSIS versus- VILAVIZA G.R. No. 180291 | July 5, 2010 Petitioners primarily question the probative value accorded to respondents' letters of explanation in response to the memorandum of the GSIS-IU Manager. The respondents never filed their answers to the formal charges. The petitioners argue that there being no answers, the allegations in the formal charges that they filed should have been deemed admitted pursuant to Section 11, Rule 8 of the Rules of Court The Court does not subscribe to the argument of the petitioners. Petitioners' own rules, Rule XI, Section 4 of the GSIS' Amended Policy and Procedural Guidelines No. 178-04, specifically provides: If the respondent fails to file his Answer within five (5) working days from receipt of the Formal Charge for the supporting evidence, when requested, he shall be considered to have waived his right to file an answer and the PGM or the Board of Trustees, in proper cases, shall render judgment, as may be warranted by the facts and evidence submitted by the prosecution. A perusal of said section readily discloses that the failure of a respondent to file an answer merely translates to a waiver of "his right to file an answer." There is nothing in the rule that says that the charges are deemed admitted. It has not done away with the burden of the complainant to prove the charges with clear and convincing evidence. It is true that Section 4 of the Rules of Court provides that the rules can be applied in a "suppletory character." Suppletory is defined as "supplying deficiencies."10 It means that the provisions in the Rules of Court will be made to apply only where there is an insufficiency in the applicable rule. There is, however, no such deficiency as the rules of the GSIS are explicit in case of failure to file the required

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY answer. What is clearly stated there is that GSIS may "render judgment as may be warranted by the facts and evidence submitted by the prosecution." Note: The assigned issue was raised, but not tackled by the Court in the case. BAR QUESTIONS On July 29, 1991, the Energy Regulatory Board (ERB) in response to public clamor, issued a resolution approving and adopting a schedule for bringing down the prices of petroleum products over a period of one (1) year starting 15 August 1991, over the objection of oil companies which claim that the period covered is too long to prejudge and foresee. Is the resolution valid? (1991 BAR) SUGGESTED ANSWER: No, the resolution is invalid, since the Energy Regulatory Board issued the resolution without a hearing. The resolution here is not a provisional order and therefore it can only be issued after appropriate notice and hearing to affected parties. The ruling in Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218, to the effect that an order provisionally reducing the rates which a public utility could charge, could be issued without previous notice and hearing, cannot apply. executory. Should the motion to dismiss be granted or not? (2004 BAR) Discuss briefly.

SUGGESTED ANSWER: (a) The contention of Director WOW is not meritorious. The suspension meted out to him is preventive and not punitive. Section 24 of Republic Act No. 6770 grants the Ombudsman the power to impose preventive suspension up to six months. Preventive suspension maybe imposed without any notice or hearing. It is merely a preliminary step in an administrative investigation and is not the final determination of the guilt of the officer concerned. (Garcia v. Mojica, 314 SCRA 207 [1999]). (b) The motion to dismiss should be denied. Since the suspension of Director WOW was immediately executory, he would have suffered irreparable injury had he tried to exhaust administrative remedies before filing a petition in court (University of the Philippines Board of Regents v. Rasul, 200 SCRA 685 [19910Besides, the question involved is purely legal. (Azarcon v. Bunagan, 399 SCRA 365 [2003]).

SUBSTANTIAL EVIDENCE RULE

Director WOW failed the lifestyle check conducted by the Ombudsman s Office because WOWs assets were grossly disproportionate to his salary and allowances. Moreover, some assets were not included in his Statement of Assets and Liabilities. He was charged of graft and corrupt practices and pending the completion of investigations, he was suspended from office for six months. (a) Aggrieved, WOW petitioned the Court of Appeals to annul the preventive suspension order on the ground that the Ombudsman could only recommend but not impose the suspension. Moreover, according to WOW, the suspension was imposed without any notice or hearing, in violation of due process. Is petitioners contention meritorious? Discuss briefly. (b) For his part, the Ombudsman moved to dismiss WOWs petition. According to the Ombudsman the evidence of guilt of WOW is strong, and petitioner failed to exhaust administrative remedies. WOW admitted that he filed no motion for reconsideration, but only because the order suspending him was immediately

WHAT IS THE SUBSTANTIAL EVIDENCE RULE? WAS IT SATISFIED IN THIS CASE? TENORIO versus- PERLAS A.M. No. P-10-2817 | January 26, 2011 Sheriff Perlas served upon Tenorio a Notice of Levy on Attachment clearly addressed to spouses Edgardo Pile and Marissa Pile (spouses Pile) of Apalit, Pampanga. Tenorio showed Sheriff Perlas the Certificate of Car Registration of their two (2) units of dump trucks and pleaded to her not to take the trucks away because they were the registered owners of the trucks. However, despite this, Sheriff Perlas forcibly took the two (2) units of trucks without even verifying with the Land Transportation Office (LTO) as to who were the true registered owners of the trucks. Aggrieved, Tenorio filed a Complaint-Affidavit dated January 12, 2009 before the Office of the Court Administrator. Tenorio added in her ComplaintAffidavit that Sheriff Perlas received PhP 50,000 from 747 Lumber & Construction Supply, Inc. as evidenced by the affidavit of Edgardo Pile. [6] In his affidavit, Edgardo

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY Pile stated that he saw the trucks parked in the vicinity of 747 Lumber & Construction Supply; and that despite explaining to the owner of the store who the true owners of the subject vehicles were, he refused to surrender them, saying that he paid Sheriff Perlas money for them. RULING Administrative proceedings are governed by the substantial evidence rule, i.e., such amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion. The standard of substantial evidence is justified when there is reasonable ground to believe that respondent is responsible for the misconduct complained of, even if such evidence is not overwhelming or even preponderant. In the instant case, aside from the affidavit of Edgardo Pile, no other evidence was presented by the complainant to support the allegation that Sheriff Perlas received the money. Such cannot be considered substantial enough to support a finding of a serious charge. RULING The doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In Republic of the Philippines v. Lacap,9 this Court enumerated the numerous exceptions to these rules, namely: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) in quo warranto proceedings. In the present case, conditions (c) and (e) are present. The government project contracted out to respondent was completed almost two decades ago. To delay the proceedings by remanding the case to the relevant government office or agency will definitely prejudice respondent. More importantly, the issues in the present case involve the validity and the enforceability of the "Contract of Agreement" entered into by the parties. These are questions purely of law and clearly beyond the expertise of the Commission on Audit or the DPWH. In Lacap, this Court said: ... It does not involve an examination of the probative value of the evidence presented by the parties. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rests not with them but with the courts of justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative nature is to be or can be done. The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law.

DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES

DID THE RESPONDENT FAIL TO EXHAUST ADMINISTRATIVE REMEDIES? VIGILAR versus- AQUINO G.R. No. 180388 | January 18, 2011 Aquino was awarded by the DPWH, the project for the construction of a dike by bulldozing a part of the Porac River at Barangay Ascomo-Pulungmasle, Guagua, Pampanga. After the project was completed, Aquino claimed that PhP1,262,696.20 was still due him, but petitioners refused to pay the amount. He thus filed a Complaint3 for the collection of sum of money with damages before the Regional Trial Court. Petitioners claim that the Complaint filed by respondent before the Regional Trial Court was done without exhausting administrative remedies. Petitioners aver that respondent should have first filed a claim before the Commission on Audit (COA) before going to the courts.

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY BAR QUESTION The Maritime Industry Authority (MARINA) issued new rules and regulations governing pilotage services and fees, and the conduct of pilots in Philippine ports. This is it did without notice, hearing nor consultation with harbor pilots or their associations whose rights and activities are to be substantially affected. The harbor pilots then filed suit to have the new MARINA rules and regulations declared unconstitutional for having been issued without due process. Decide the case. (2000 BAR) SUGGESTED ANSWER: The issuance of the new rules and regulations violated due process. Under Section 9, Chapter II, Book VII of the Administrative Code of 1987, as far as practicable, before adopting proposed rules, an administrative agency should publish or circulate notices of the proposed rules and afford interested parties the opportunity to submit their views; and in the fixing of rates, no rule shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two weeks before the first hearing on them. In accordance with this provision, in Commissioner of Internal Revenue v CA, 261 SCRA 236 (1996), it was held that when an administrative rule substantially increases the burden of those directly affected, they should be accorded the chance to be heard before its issuance. x x x It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial in character. However, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of fact are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of the court. x x x The issues presented here do not require the expertise, specialized skills and knowledge of respondent for their resolution. On the contrary, the issues here are purely legal questions which are within the competence and jurisdiction of the Court, and not an administrative agency or the Senate to resolve.

ADMINISTRATIVE RES JUDICATA


WHAT IS ADMINISTRATIVE RES JUDICATA? IS IT APPLICABLE IN THIS CASE? SALAZAR versus- DE LEON G.R. No. 127965 | January 20, 2009 Respondent, filed Complaint4 for recovery of possession of real property and damages. The subject property is an unirrigated rice land, capable of only one rice cropping in a calendar year.5 Respondent demanded that he already vacate and surrender possession of the subject property to him because he wanted to personally cultivate the same. Petitioner, however, refused, claiming that he could acquire the subject property from him through the Department of Agrarian Reform (DAR) under the Operation Land Transfer Program of the Government. In the meantime, petitioner initiated before the Department of Agrarian Reform Adjudication Board (DARAB)-Isabela DARAB Case # II-380-ISA94 against respondent. The DAR ruled that petitioner was a bona-fide tenant of respondent who should be maintained in the peaceful possession and cultivation of the subject property. Respondent did not appeal the DARAB Decision.

DOCTRINE OF PRIMARY JURISDICTION


WHAT IS THE DOCTRINE OF PRIMARY JURISDICTION? IS IT APPLICABLE IN THIS CASE? PIMENTELversus- SENATE, G.R. No. 187714 | March 8, 2011 Respondent asserts that the doctrine of primary jurisdiction simply calls for the determination of administrative questions, which are ordinarily questions of fact, by administrative agencies rather than by courts of justice. Citing Pimentel v. HRET, respondent avers that primary recourse of petitioners should have been to the Senate and that this Court must uphold the separation of powers between the legislative and judicial branches of the government. The doctrine of primary jurisdiction does not apply to this case. The Court has ruled:

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ADMINISTRATIVE LAW | EXECUTIVE DEPARTMENT POLITICAL LAW REVIEW COLLEGE OF LAW | SILLIMAN UNIVERSITY RULING Since respondent did not appeal the DARAB Decision, the same has attained finality42and constitutes res judicata43 on the issue of petitioners status as a tenant of respondent. Res judicata is a concept applied in the review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of administrative res judicata: "The rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata." To be sure, early jurisprudence was already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are usually understood as courts without unreasonably circumscribing the scope thereof; and that the more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have been conferred.44 Needless to stress, findings of fact of an administrative agency are binding and conclusive upon this court, for as long as substantial evidence supports said factual findings. In addition, although the Court does not essentially view the Agricultural Leasehold Contract executed between petitioner and respondent during the pendency of the present Petition as a settlement of the controversy between the parties, it actually recognizes the same to be a written confirmation of the tenancy relationship that has existed between the parties from the beginning. In David v. Rivera,46 this Court held that: [I]t is safe to conclude that the existence of prior agricultural tenancy relationship, if true, will divest the MCTC of its jurisdiction the previous juridical tie compels the characterization of the controversy as an "agrarian dispute." x x x. Therefore, the Court could only rule that the dispute herein between respondent as landowner and petitioner as tenant is agrarian in nature falling within the jurisdictional domain of the DARAB. This is in line with the doctrine of primary jurisdiction which precludes the regular courts from resolving a controversy over which jurisdiction has been lodged with an administrative body of special competence.

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