You are on page 1of 28

Administrative law case digest

Ang Tibay vs CIR, 69 Phil 635


Facts: Teodoro Toribio owns and operates
Ang Tibay, a leather company which
supplies the Philippine Army. Due to
alleged shortage of leather, Toribio caused
the layoff of members of National Labor
Union (NLU). NLU averred that Toribios
act is not valid. The CIR, decided the case
and elevated it to the SC, but a motion for
new trial was raised by the NLU. But Ang
Tibay filed a motion for opposing the said
motion.
Issue: What is the function of CIR as a
special court?
Held: To begin with the issue before us is
to realize the functions of the CIR. The
CIR is a special court whose functions are
specifically stated in the law of its creation
which is the Commonwealth Act No. 103).
It is more an administrative board than a
part
of
the
integrated
judicial system of the nation. It is not
intended to be a mere receptive organ of
the government. Unlike a court of justice
which is essentially passive, acting only
when its jurisdiction is invoked and
deciding only cases that are presented to
it by the parties litigant, the function of
the CIR, as will appear from perusal of its
organic law is more active, affirmative and
dynamic. It not only exercises judicial or
quasi-judicial
functions
in
the
determination
of
disputes
between
employers and employees but its functions
are
far
more
comprehensive
and
extensive. It has jurisdiction over the
entire Philippines, to consider, investigate,
decide, and settle any question, matter
controversy or disputes arising between,
and/
or
affecting
employers
and
employees or laborers, and landlords and
tenants or farm-laborers, and regulates
the relations between them, subject to,
and in accordance with, the provisions of
CA 103.
The CIR is free from rigidity of certain
procedural requirements, but this not
mean that it can in justiciable cases
coming before it, entirely ignore or

disregard the fundamental and essential


requirements of due process in trials and
investigations
of
an
administrative
character.
There are
cardinal primary
rights which must be respected even
in proceedings of this character:
(1) the right to a hearing, which includes
the right to present ones cause and
submit evidence in support thereof;
(2) The tribunal must consider the
evidence presented;
(3) The decision must have something to
support itself;
(4) The evidence must be substantial;
(5) The decision must be based on the
evidence presented at the hearing; or at
least contained in the record and disclosed
to
the
parties
affected;
(6) The tribunal or body or any of its
judges must act on its own independent
consideration of the law and facts of the
controversy, and not simply accept the
views of a subordinate;
(7) The Board or body should, in all
controversial questions, render its decision
in such manner that the parties to the
proceeding can know the various Issue
involved, and the reason for the decision
rendered.
The failure to grasp the fundamental issue
involved is not entirely attributable to the
parties adversely affected by the result.
Accordingly, the motion for a new trial
should be, and the same is hereby
granted, and the entire record of this case
shall be remanded to the CIR, with
instruction that it reopen the case receive
all such evidence as may be relevant, and
otherwise proceed in accordance with the
requirements set forth.
Cojuangcovs PCGG, 190 SCRA 226
Facts: President Corazon C. Aquino
directed the Solicitor General to prosecute
all persons involved in the misuse of
coconut levy funds. Pursuant to the above
directive the Solicitor General created a
task force to conduct a thorough study of
the possible involvement of all persons in
the anomalous use of coconut levy funds.

Administrative law case digest


Upon the creation of the PCGG under EO.
1 issued by President Aquino, the PCGG
was charged with the task of assisting the
President not only in the recovery of
illgotten wealth or unexplained wealth
accumulated by the former President, his
immediate family, relatives, subordinates
and close associates but also in the
investigation of such cases of graft and
corruption as the President may assign to
the Commission from time to time and to
prevent a repetition of the same in the
future.
Petitioner alleges that the PCGG may not
conduct a preliminary investigation of the
complaints filed by the Solicitor General
without violating petitioner's rights to due
process and equal protection of the law,
and that the PCGG has no right to conduct
such preliminary investigation.
Issue: WON the Presidential Commission
on Good Government (PCGG) has the
power
to
conduct
a
preliminary
investigation
of
the
anti-graft
and
corruption cases filed by the Solicitor
General against Eduardo Cojuangco, Jr.
and other respondents for the alleged
misuse of coconut levy funds.
Held: the court ruled in the negative.
Considering that the PCGG, like the
courts, is vested with the authority to
grant
provisional
remedies
of
(1)
sequestration, (2) freezing assets, and (3)
provisional takeover, it is indispensable
that, as in the case of attachment and
receivership, there exists a prima facie
factual foundation, at least, for the
sequestration order, freeze order or
takeover order, an adequate and fair
opportunity to contest it and endeavor to
cause its negation or nullification. Both are
assured under the foregoing executive
orders and the rules and regulations
promulgated by the PCGG.
The general power of investigation vested
in the PCGG may be divided into two
stages. The first stage of investigation
which is called the criminal investigation
stage is the fact finding inquiring which is

usually conducted by the law enforcement


agents whereby they gather evidence and
interview witnesses after which they
assess the evidence and if they find
sufficient basis, file the complaint for the
purpose of preliminary investigation. The
second
stage
is
the
preliminary
investigation stage of the said complaint.
It is at this stage, as above discussed,
where it is ascertained if there is sufficient
evidence to bring a person to trial.
It is in such instances that we say one
cannot be "a prosecutor and judge at the
same time." Having gathered the evidence
and filed the complaint as a law enforcer,
he cannot be expected to handle with
impartiality the preliminary investigation
of his own complaint, this time as a public
prosecutor.
The Court holds that a just and fair
administration of justice can be promoted
if the PCGG would be prohibited from
conducting the preliminary investigation of
the complaints subject of this petition and
the petition for intervention and that the
records of the same should be forwarded
to
the
Ombudsman,
who
as
an
independent constitutional officer has
primary jurisdiction over cases of this
nature, to conduct such preliminary
investigation and take appropriate action.
GSIS vs. CSC, 202 SCRA 799
FACTS: Respondent Belo held the position
of Vice-Governor of Capiz continuously
between January 5, 1972 up to February
1, 1988. From January 25, 1972 up to
December 31, 1979, she held office by
virtue of an election and was paid a fixed
salary. From December 31, 1979 up to
February 1, 1988, she held the
position of Vice Governor of Capiz in a
holdover capacity, broken down into
two periods:
1. A period in which she was paid on a per
diem basis from December 31, 1976 to
December 31, 1979; and

Administrative law case digest


2. A period in which she was paid a fixed
salary from January 1, 1980 to
February 1,1988.
In its June 7, 1989 Resolution 3 on the
matter, CSC held that the services
rendered for the first holdover period
between January 31, 1976 to January
1, 1979 was creditable for purposes
of retirement. CSC noted that during the
entire holdover period, respondent Belo
actually served on a full time basis as Vice
Governor and was on call 24 hours a day.
Disagreeing with the CSC's insistence that
the period in which respondent Belo was
paid on a per diem basis should be
credited in computing the number of years
of creditable service to the government,
GSIS subsequently filed a petition for
certiorari before this court, questioning
the orders of the CSC. Agreeing that per
diems were not compensation within the
meaning of Section 1(c) of R.A. 1573
which amended Section 1(c) of C.A. No.
186 (Government Service Insurance Act),
we granted the petitions in G.R. Nos.
98395 and 102449, 4 and reversed the
CSC Orders and Resolutions in question.
ISSUE: Whether or not regular service in
government on a per diem basis, without
any other form of compensation or
emolument, is compensation within the
contemplation of the term "service with
compensation" under the Government
Service Insurance Act of 1987.
RULING: Section 1(c) of R.A. No 1573
provides:
(c) Salary, pay or compensation shall be
construed as to exclude all bonuses, per
diems, allowances and overtime pay, or
salary, pay or compensation given to the
base pay of the position or rank as fixed
by law or regulations.
Since it is generally held that an
allowance for expenses incident to
the discharge of an office is not a
salary of office, it follows that if the
remuneration received by a public
official in the performance of his
duties does not constitute a mere

"allowance for expenses" but appears


to be his actual base pay, then no amount
of categorizing the salary as base pay, a
"per diem" would take the allowances
received by petitioner from the term
service with compensation for the purpose
of computing the number of years of
service in government. Furthermore, it
would grossly violate the law's intent to
reward the public servant's years of
dedicated service to government for us to
gloss over the circumstances surrounding
the payment of the said remunerations to
the petitioner in taking a purely
mechanical approach to the problem by
accepting an attached label at face value.
In the sense in which the phrase "per
diem" is used under the Government
Service Insurance Law, a per diem is a
daily allowance given for each day an
officer or employee of government is
away from his home base. This is its
traditional meaning: its usual signification
is as a reimbursement for extra expenses
incurred by the public official in the
performance of his duties. Under this
definition the per diem intended to cover
the cost of lodging and subsistence of
officers and employees when the latter are
on duty outside of their permanent
station.
Retirement
benefits
given
to
government
employees
in effect
reward them for giving the best years
of their lives to the service of their
country. This is especially true with those
in government service occupying positions
of leadership or positions requiring
management skills because the years they
devote to government service could be
spent
more
profitably
in
lucrative
appointments in the private sector. In
exchange for their selfless dedication
to government service, they enjoy
security of tenure and are ensured of
a reasonable amount of support after
they leave the government. The basis
for the provision of retirement benefits is,
therefore, service to government. While a
government insurance system rationalizes
the management of funds necessary to

Administrative law case digest


keep this system of retirement support
afloat and is partly dependent on
contributions made by the thousands of
members of the system, the fact that
these contributions are minimal when
compared to the amount of retirement
benefits actually received shows that such
contributions, while necessary, are not
absolutely determinative in drawing up
criteria for those who would qualify as
recipients of the retirement benefit
system.
It cannot be convincingly asserted that
petitioners could not avail themselves of
the benefits of the policy because no
deductions were made from their salaries
during the disputed periods when they
were paid on a per diem basis. In
respondent Belo's case, before and after
that short interregnum, she was paid a
fixed salary. She was not duly informed
that short period was not to be credited in
computing the length of her service for
retirement purposes. She assumed in all
good faith that she continued to be
covered by the GSIS insurance benefits
considering that in fact and in practice the
deductions are virtually mandatorily made
from all government employees on an
essentially involuntary basis. Similarly,
had
respondent
Baradero
been
informed of the need to pay the
required deductions for the purpose
of qualifying for retirement benefits,
he would have willingly paid the
required sums. In a sense, the
contract made between the GSIS and
the government employee is done on
a take-it-or-leave-it basis, that is, it is
a virtual contract of adhesion which
gives the employee no choice but to
involuntarily accede to the deductions
made from their oftentimes meager
salaries. If the GSIS did not deduct, it
was by its own choice: contributions were
exacted from petitioner before and after
the disputed period. To assert that
petitioners would have been entitled to
benefits had they opted for optional
deductions at that point misses the
principal fact in issue here, which is the
question as to whether or not the disputed

periods should be credited as service with


compensation
for
the
purposes
of
retirement.
ESTATE OF GREGORIA FRANCISCO v.
COURT OF APPEALS
G.R. No. 95279, 25 July 1991, 199 SCRA
595
FACTS: Basilan Municipal Mayor Benjamin
Valencia summarily ordered the demolition
of an antiquated and dilapidated quonset
warehouse situated in Port Area, Strong
Boulevard, Isabela, Basilan, outside the
zone for warehouses. The legal possessor
of the quonset sought the prohibition of
the Order but was denied by the RTC. The
CA originally overturned the RTC but
subsequently reversed itself. In question
in this case is the validity of such order by
the Municipal Mayor, which was in effect
an abatement of nuisance, without prior
judicial authority.
ISSUE: Whether or not Respondent Mayor
could summarily and extra-judicially order
the demolition of petitioner's quonset
building.
HELD:NO
Ordinance No. 147 relied upon by
Respondents should not be interpreted as
authorizing the summary removal of a
non-conforming building by the municipal
government. For if it does, it must be
struck down for being in contravention
of the requirements of due process, as
originally held by the Court of Appeals.
Moreover,
the
enforcement
and
administration of the provisions of the
Ordinance resides with the Zoning
Administrator. It is said official who may
call upon the City Fiscal to institute the
necessary legal proceedings to enforce the
provisions of the Ordinance. And any
person aggrieved by the decision of the
Zoning
Administrator
regarding
the
enforcement of the Ordinance may appeal
to the Board of Zoning Appeals.

Administrative law case digest


Violation of a municipal ordinance neither
empowers the Municipal Mayor to avail of
extra-judicial remedies. On the contrary,
the Local Government Code imposes upon
him the duty "to cause to be instituted
judicial proceedings in connection with the
violation
of
ordinances"
(Local
Government Code, Sec. 141 [2] [t]).
Respondents cannot seek cover under
the
general
welfare
clause
authorizing
the
abatement
of
nuisances
without
judicial
proceedings, which applies only to a
nuisance per se or one which affects the
immediate safety of persons and property
and may be summarily abated under the
undefined law of necessity (Monteverde v.
Generoso, 52 Phil. 123 [1982]). The
storage of copra in the quonset building is
a legitimate business. By its nature, it
cannot be said to be injurious to rights of
property, of health or of comfort of the
community. If it be a nuisance per
accidens it may be so proven in a hearing
conducted for that purpose. It is not per
se a nuisance warranting its summary
abatement without judicial intervention.
The provincial governor, district engineer
or district health officer is not authorized
to destroy private property consisting of
dams and fishponds summarily and
without any judicial proceedings whatever
under the pretense that such private
property constitutes a nuisance. A dam or
a fishery constructed in navigable rivers is
not a nuisance per se. A dam or fishpond
may be a nuisance per accidens where it
endangers or impairs the health or
depreciates property by causing water to
become
stagnant.
(Monteverde
v.
Generoso, supra).
While the Sangguniang Bayan may
provide for the abatement of a nuisance
(Local Government Code, Sec. 149 [ee]),
it can not declare a particular thing as a
nuisance
per
se
and
order
its
condemnation. The nuisance can only be
so adjudged by judicial determination.

[Municipal councils] do not have the


power to find as a fact that a particular
thing is a nuisance when such thing is not
a nuisance per se nor can they authorize
the extra judicial condemnation and
destruction of that as a nuisance which, in
its nature, situation or use is not such.
These things must be determined in the
ordinary courts of law. In the present
case, . . . the ice factory of the plaintiff is
not a nuisance per se. It is a legitimate
industry . . . . If it be in fact a nuisance
due to the manner of its operation, that
question cannot be determined by a mere
resolution of the board. The petitioner is
entitled to a fair and impartial heating
before a judicial tribunal. (Iloilo Cold
Storage v. Municipal Council, 24 Phil. 47
[1913]).
Petitioner was in lawful possession of the
lot and quonset building by virtue of a
permit from the Philippine Ports Authority
(Port of Zamboanga) when demolition was
effected. It was not squatting on public
land. Its property was not of trifling value.
It was entitled to an impartial hearing
before a tribunal authorized to decide
whether
the
quonset
building
did
constitute a nuisance in law. There was no
compelling necessity for precipitate action.
It follows then that respondent public
officials of the Municipality of Isabela,
Basilan, transcended their authority in
abating summarily petitioner's quonset
building. They had deprived petitioner of
its property without due process of law.
The fact that petitioner filed a suit for
prohibition and was subsequently heard
thereon will not cure the defect, as opined
by the Court of Appeals, the demolition
having been a fait accompli prior to
hearing and the authority to demolish
without a judicial order being a prejudicial
issue.
Angara vs Electoral Commission 63
Phil 139
Facts: This is an original action instituted
in this court by the petitioner, Jose A.
Angara, for the issuance of a writ of
prohibition to restrain and prohibit the

Administrative law case digest


Electoral
Commission,
one
of
the
respondents,
from
taking
further
cognizance of the protest filed by Pedro
Ynsua, another respondent, against the
election of said petitioner as member of
the National Assembly for the first
assembly district of the Province of
Tayabas.
Petitioner
challenges
the
jurisdiction of the Electoral Commission.
Issue: WON Electoral Commission acted
without or in excess of its jurisdiction in
assuming to take cognizance of the
protest filed against the election of the
herein
petitioner notwithstanding the
previous confirmation of such election by
resolution of the National Assembly?
Ratio: The creation of the Electoral
Commission
carried
with
it
ex
necesitaterei the power regulative in
character to limit the time within which
protests intrusted to its cognizance should
be filed. It is a settled rule of construction
that where a general power is conferred or
duty enjoined, every particular power
necessary for the exercise of the one or
the performance of the other is also
conferred
(Cooley,
Constitutional
Limitations, eighth ed., vol. I, pp. 138,
139). In the absence of any further
constitutional provision relating to the
procedure to be followed in filing protests
before
the
Electoral
Commission,
therefore,
the
incidental
power
to
promulgate such rules necessary for the
proper exercise of its exclusive powers to
judge all contests relating to the election,
returns and qualifications of members of
the National Assembly, must be deemed
by necessary implication to have been
lodged also in the Electoral Commission.
Presidential Anti-Dollar Salting Task
Force vs CA 171 SCRA 348
Facts: The petitioner, the Presidential AntiDollar Salting Task Force, the President's
arm assigned to investigate and prosecute
so-called "dollar salting" activities in the
country. PADS issued search warrants
against certain companies.

Issue: WON the PADS is a quasi-judicial


body issue search warrants under the
1973 Constitution?
Held: the court ruled that PADS was not
granted by law to issue a warrant of
arrest. A quasi-judicial body has been
defined as "an organ of government other
than a court and other than a legislature,
which affects the rights of private parties
through either adjudication or rule making
It is the basic function of these bodies to
adjudicate claims and/or to determine
rights, and unless its decision are
seasonably appealed to the proper
reviewing authorities, the same attain
finality and become executory. A perusal
of the Presidential Anti-Dollar Salting Task
Force's organic act, Presidential Decree
No. 1936, as amended by Presidential
Decree No. 2002, convinces the Court that
the Task Force was not meant to exercise
quasi-judicial functions, that is, to try and
decide claims and execute its judgments.
As the President's arm called upon to
combat the vice of "dollar salting" or the
blackmarketing and salting of foreign
exchange, it is tasked alone by the Decree
to handle the prosecution of such
activities, but nothing more.
Carinovs CHR 204 SCRA 483
Facts: Some 800 public school teachers,
among them members of the Manila Public
School Teachers Association (MPSTA) and
Alliance of Concerned Teachers (ACT)
undertook what they described as amass
concerted actions" to "dramatize and
highlight' their plight resulting from the
alleged failure of the public authorities to
act upon grievances that had time and
again been brought to the latter's
attention. According to them they had
decided
to
undertake
said
"mass
concerted actions" after the protest rally
staged at the DECS premises on
September 14, 1990 without disrupting
classes as a last call for the government
to negotiate the granting of demands had
elicited no response from the Secretary of
Education. Through their representatives,
the teachers participating in the mass

Administrative law case digest

actions were served with an order of the


Secretary of Education to return to work
in 24 hours or face dismissal, and a
memorandum directing the DECS officials
concerned
to
initiate
dismissal
proceedings against those who did not
comply and to hire their replacements.
"For failure to heed the return-to-work
order, the CHR complainants (private
respondents)
were
administratively
charged on the basis of the principal's
report and given five (5) days to answer
the charges. They were also preventively
suspended for ninety (90) days 'pursuant
to Section 41 of P.D. 807' and temporarily
replaced. An investigation committee was
consequently formed to hear the charges
in accordance with P.D. 807."

But it cannot try and decide cases (or hear


and determine causes) as courts of
justice, or even quasi-judicial bodies do.
"x x 'It may be said generally that the
exercise of judicial functions is to
determine what the law is, and what the
legal rights of parties are, with respect to
a matter in controversy; and whenever an
officer is clothed with that authority, and
undertakes to determine those questions,
he acts judicially.'x x."

Issue: WON the Commission on Human


Rights
has
jurisdiction,
adjudicatory
powers over, or the power to try and
decide, or hear and determine, certain
specific type of cases, like alleged human
rights violation involving civil or political
rights.

GSIS vs CSC 202 SCRA 799

Held: The Court declares the Commission


on Human Rights to have no such power.
The Constitution clearly and categorically
grants to the Commission the power to
investigate all forms of human rights
violations involving civil and political
rights. It can exercise that power on its
own initiative or on complaint of any
person. It may exercise that power
pursuant to such rules of procedure as it
may adopt and, in cases of violations of
said rules, cite for contempt in accordance
with the Rules of Court. In the course of
any investigation conducted by it or under
its authority, it may grant immunity from
prosecution
to
any
person
whose
testimony or
whose
possession
of
documents or other evidence is necessary
or convenient to determine the truth. It
may also request the assistance of any
department, bureau, office, or agency in
the performance of its functions, in the
conduct of its investigation or in extending
such remedy as may be required by its
findings.

Hence it is that the Commission on Human


Rights, having merely the power "to
investigate," cannot and should not "try
and resolve on the merits" (adjudicate)
the matters involved in Striking Teachers
HRC.

Facts: The Government Service Insurance


System
(GSIS)
dismissed
six
(6)
employees
as
being
"notoriously
undesirable," they having allegedly been
found to be connected with irregularities
in the canvass of supplies and materials.
Five of these six dismissed employees
appealed to the Merit Systems Board. The
Board found the dismissals to be illegal
because affected without formal charges
having been filed or an opportunity given
to the employees to answer, and ordered
the remand of the cases to the GSIS for
appropriate disciplinary proceedings. The
GSIS appealed to the Civil Service
Commission.
By
Resolution,
the
Commission ruled that the dismissal of all
five was indeed illegal. GSIS appealed to
the SC and affirmed the decision of the
CSC with a modification that it eliminated
the payment of back salaries until the
outcome
of
the
investigation
and
reinstatement of only 3 employees since
the other two had died. The heirs of the
deceased sought execution of the order
from the CSC which was granted. GSIS
opposed and came to the SC on certiorari
contending that the CSC does not have
any power to execute its resolution or
judgment.

Administrative law case digest


Issue: WON the CSC had powers to
execute its resolution or judgment.
Ratio: The Civil Service Commission, like
the Commission on Elections and the
Commission on Audit, is a constitutional
commission invested by the Constitution
and relevant laws not only with authority
to administer the civil service, but also
with quasi-judicial powers. It has the
authority
to
hear
and
decide
administrative disciplinary cases instituted
directly with it or brought to it on appeal.
The Civil Service Commission promulgated
Resolution
No.
89-779
adopting,
approving
and
putting
into
effect
simplified
rules
of
procedure
on
administrative disciplinary and protest
cases, pursuant to the authority granted
by the constitutional and statutory
provisions. The provisions are analogous
and entirely consistent with the duty or
responsibility reposed in the Chairman by
PD 807, subject to policies and resolutions
adopted by the Commission. In light of all
the foregoing constitutional and statutory
provisions, it would appear absurd to deny
to the Civil Service Commission the power
or authority to enforce or order execution
of its decisions, resolutions or orders
which, it should be stressed, it has been
exercising through the years. It would
seem quite obvious that the authority to
decide cases is inutile unless accompanied
by the authority to see that what has been
decided is carried out. Hence, the grant
to
a
tribunal
or
agency
of
adjudicatory power, or the authority
to hear and adjudge cases, should
normally and logically be deemed to
include the grant of authority to
enforce or execute the judgments it
thus
renders,
unless
the
law
otherwise provides.
Death, however, has already sealed that
outcome, foreclosing the initiation of
disciplinary administrative proceedings, or
the continuation of any then pending,
against
the
deceased
employees.
Whatever may be said of the binding force
of the Resolution of July 4, 1988 so far as,

to all intents and purposes, it makes


exoneration
in
the
administrative
proceedings a condition precedent to
payment of back salaries, it cannot exact
an impossible performance or decree a
useless exercise.
Smart Communications vs NTC G.R.
No. 151908 12 August 2003
Facts: Petitioners Isla Communications
Co.,
Inc.
and
Pilipino
Telephone
Corporation filed against the National
Telecommunications
Commission,
an
action for declaration of nullity of NTC
Memorandum Circular No. 13-6-2000 (the
Billing Circular). Petitioners allege that the
NTC has no jurisdiction to regulate the
sale of consumer goods such as the
prepaid call cards since such jurisdiction
belongs to the Department of Trade and
Industry under the Consumer Act of the
Philippines; that the Billing Circular is
oppressive, confiscatory and violative of
the constitutional prohibition against
deprivation of property without due
process of law; that the Circular will result
in the impairment of the viability of the
prepaid
cellular
service
by
unduly
prolonging the validity and expiration of
the prepaid SIM and call cards; and that
the requirements of identification of
prepaid card buyers and call balance
announcement are unreasonable. Hence,
they prayed that the Billing Circular be
declared null and void ab initio.
Issue:WON the RTC has jurisdiction over
the case
Held: Petitions are granted. The issuance
by the NTC of Memorandum Circular No.
13-6-2000 and its Memorandum dated
October 6, 2000 was pursuant to its
quasi-legislative or rule-making power. As
such, petitioners were justified in invoking
the judicial power of the Regional Trial
Court to assail the constitutionality and
validity of the said issuances. What is
assailed
is
the
validity
or
constitutionality
of
a
rule
or
regulation
issued
by
the
administrative
agency
in
the

Administrative law case digest


performance of its quasi-legislative
function, the regular courts have
jurisdiction
to
pass
upon
the
same.The determination of whether a
specific rule or set of rules issued by
an administrative agency contravenes
the law or the constitution is within
the jurisdiction of the regular courts.
Indeed, the Constitution vests the power
of judicial review or the power to declare a
law, treaty, international or executive
agreement, presidential decree, order,
instruction, ordinance, or regulation in the
courts, including the regional trial courts.25
This is within the scope of judicial power,
which includes the authority of the courts
to determine in an appropriate action the
validity of the acts of the political
departments.26Judicialx power includes the
duty of the courts of justice to settle
actual controversies involving rights which
are legally demandable and enforceable,
and to determine whether or not there has
been a grave abuse of discretion
amounting to lack or excess of jurisdiction
on
the
part
of
any
branch
or
instrumentality of the Government.
Not to be confused with the quasilegislative or rule-making power of an
administrative agency is its quasi-judicial
or administrative adjudicatory power. This
is the power to hear and determine
questions of fact to which the legislative
policy is to apply and to decide in
accordance with the standards laid down
by the law itself in enforcing and
administering
the
same
law.
The
administrative body exercises its
quasi-judicial power when it performs
in a judicial manner an act which is
essentially
of
an
executive
or
administrative nature, where the
power to act in such manner is
incidental to or reasonably necessary
for the performance of the executive
or administrative duty entrusted to it.
In carrying out their quasi-judicial
functions, the administrative officers
or bodies are required to investigate
facts or ascertain the existence of
facts, hold hearings, weigh evidence,
and draw conclusions from them as
basis for their official action and

exercise of discretion in a judicial


nature.
Commissioner of Internal Revenue vs.
Philippine American Life Insurance
Co.
(GR 105208, 29 May1995)
Facts: On 30 May 1983, the Philippine
American Life Insurance Co. (Philamlife)
paid to the Bureau of Internal Revenue
(BIR) its first quarterly corporate income
tax for Calendar Year (CY) 1983
amounting to P3,246,141.00. On 29
August 1983, it paid P396,874.00 for the
Second Quarter of 1983. For the Third
Quarter of 1983, it declared a net taxable
income of P2,515,671.00 and a tax due of
P708,464.00. After
crediting the amount of P3,899,525.00 it
declared
a
refundable
amount
of
P3,158,061.00. For its Fourth and Final
quarter ending 31 December, Philamlife
suffered a loss and thereby had no income
tax liability. In return for that Quarter, it
declared a refund of P3,991,841.00 as
withholding taxes on rental income for
1983 and P133,084.00 representing 1982
income tax refund applied as 1983 tax
credit. In 1984, Philamlife again suffered a
loss and declared no income tax liability.
However, it applied as tax credit for 1984,
the amount of P3,991,841.00 representing
its 1982 and 1983 overpaid income taxes
and the amount of P250,867.00 as
withholding tax on rental income for 1984.
On 26 September 1984, Philamlife filed a
claim for its 1982 income tax refund of
P133,084.00. On 22 November 1984, it
filed a petition for review with the Court of
Tax Appeals (CTA Case 3868) with respect
to its 1982 claim for refund of
P133,084.00. On 16 December 1985, it
filed another claim for refund with the
Commissioners appellate division in the
aggregate amount of P4,109,624.00 for
the period of 1982 to 1984 less the
amount claimed in CTA Case 3868. On 2
January 1986 Philamlife filed a petition for
review with the CTA (CTA Case 4018
regarding its 1983 and 1984 claims for
refund) Later, it amended its petition by
limiting its claim for refund to only

Administrative law case digest 10


P3,858,757.00. On 16 September 1991,
the CTA rendered a decision, granting
Philamlifes
claim
for
refund
for
P3,246,141.00
and
P396,874.00
representing excess corporated income
tax payments for the first and second
quarters of 1983, respectively, or a total
of P3,643,015.00. The Commissioner
appealed. The Court of Appeals affirmed
the decision of the Court of Tax Appeals
on 26 March 1992 (CA-GR 26598).

Section 230 of the National Internal


Revenue Code (formerly Section 292)
further provides that . A refund check
or warrant issued in accordance with the
pertinent provisions of this Code which
shall remain unclaimed or uncashed within
five (5) years from the date said warrant
or check was mailed or delivered shall be
forfeited in favor of the government and
the amount thereof shall revert to the
General Fund.

The Commissioner filed a petition for


review on certiorari.

3. Pacific Procon Ltd. vs. Court of Tax


Appeals overturned by CIR vs. TMX Sales

The Supreme Court dismissed the petition


and affirmed the decision of the Court of
Appeals in toto; without costs.

Although it is true that in the Pacific


Procon case, the Court held that the right
to bring and action forrefund had
prescribed, the tax having been found to
have paid at the end of the first quarter
when thewithholding tax corresponding
thereto was remitted to the Bureau of
Internal Revenue, not at the time of filing
of the Final Adjustment return in April of
the following year; said case was
overturned by the Court in Commissioner
of Internal Revenue v. TMX Sales
Incorporated and the Court of Tax
Appeals, where the Court held that it is
necessary to consider not only Section
292 (now Section 230) of the National
Internal Revenue Code but also the other
provisions of the Tax Code, particularly
Sections 84, 85 (now both incorporated as
Section 68), Section 86 (now Section 70)
and Section 87 (now Section 69) on
Quarterly Corporate Income Tax Payment
and Section 321 (now Section 232) on
keeping of books of accounts; and that all
these provisions of the Tax Code should be
harmonized with each other.

1. Section 230 NIRC; Recovery of tax


erroneously or illegally collected
Section 230 of the National Internal
Revenue Code (formerly Section 292)
provides that No suit or proceeding shall
be maintained in any court for the
recovery of any national internal revenue
tax hereafter alleged to have been
erroneously or illegally assessed or
collected, or of any penalty claimed to
have been collected without authority, or
of any sum alleged to have been excessive
or in any manner wrongfully collected,
until a claim for refund or credit has been
duly filed with the Commissioner; but such
suit or proceeding may be maintained,
whether or not such tax, penalty, or sum
has been paid under protest or duress.In
any case, no such suit or proceeding shall
be begun after the expiration of two years
from the date of payment of the tax or
penalty regardless of any supervening
cause that may arise after payment:
Provided, however, That the Commissioner
may, even without a written claim
therefor, refund or credit any tax, where
on the face of the return upon which
payment was made, such payment
appears clearly to have been erroneously
paid.
2. Section 230 NIRC; Forfeiture of refund

4. Section 292 (now Section 230) NIRC


qualified by Sections 68 and 69 of present
Tax Code
Section 292 (now Section 230) stipulates
that the two-year prescriptive period to
claim refunds should be counted from
date of payment of the tax sought to be
refunded. When applied to tax payers
filing income tax returns on a quarterly
basis, the date of payment mentioned in

Administrative law case digest 11


Section 292 (now Section 230) must be
deemed to be qualified by Sections 68 and
69 of the present Tax Code.
5. Section 68 NIRC;
Quarterly Income Tax

Declaration

of

Section 68 of the Tax Code provides that


Every corporation shall file in duplicate a
quarterly summary declaration of its gross
income and deductions on a cumulative
basis for the preceding quarter or quarters
upon which the income tax, as provided in
Title II of this Code shall be levied,
collected and paid.
The Tax so computed shall be decreased
by the amount of tax previously paid or
assessed during the preceding quarters
and shall be paid not later than sixty (60)
days from the close of each of the first
three (3) quarters of the taxable year.
6. Section 69 NIRC; Final Adjustment
Return
Section 69 of the Tax Code provides that
Every corporation liable to tax under
Section 24 shall file a final adjustment
return covering the total net income for
the preceding calendar or fiscal year. If
the sum of the quarterly tax payments
made during the said taxable year is not
equal to the total tax due on the entire
taxable net income of that year the
corporation shall either: (a) Pay the
excess still due; or (b) Be refunded the
excess amount paid, as the case may be.
In case the corporation is entitled to a
refund of the excess estimated quarterly
income taxes paid, the refundable amount
shown on its final adjustment return may
be
credited
against
the
estimated
quarterly income tax liabilities for the
taxable quarters of the succeeding taxable
year.
7. Refund due is amount shown in final
adjustment return and not on its quarterly
returns
The last paragraph of Section 69 of the
Tax Code provides that the refundable

amount, in case a refund is due a


corporation, is that amount which is
shown on its final adjustment return and
not on its quarterly returns. This is in light
of the fact that although quarterly taxes
due on are required to be paid within sixty
days from the close of each quarter, the
fact that the amount shall be deducted
from the tax due for the succeeding
quarter shows that until a final adjustment
return shall have been filed, the taxes
paid in the preceding quarters are merely
partial taxes due from a corporation.
Neither amount can serve as the final
figure to quantify what is due the
government nor what should be refunded
to the corporation.
8. Reckoning date determined after a final
adjustment return is accomplished
The prescriptive period of two years
should commence to run only from the
time that the refund is ascertained, which
can only be determined after a final
adjustment return is accomplished. In the
present case, this date is 16 April 1984,
and two years from this date would be 16
April 1986. The record shows that the
claim for refund was filed on 10 December
1985 and the petition for review as
brought before the CTA on 2 January
1986. Both dates are within the two-year
reglementary period. Philamlife being a
corporation,Section 292 (now Section
230) cannot serve as the sole basis for
determining the two-year prescriptive
periodfor refunds. As earlier said in the
TMX Sales case, Sections 68, 69, and 70
on Quarterly Corporate Income Tax
Payment and Section 321 should be
considered in conjunction with it.
9. Two-year period not jurisdictional
Even if the two-year period had already
lapsed, the same is not jurisdictional and
may be suspended for reasons of equity
and other special circumstances.
David vs. Arroyo
G.R. No. 171396 May 3, 2006

Administrative law case digest 12


Facts of the case:
During the celebration of People Power I,
President
Arroyo
issued
Presidential
Proclamation 1017 (PP 1017 for brevity)
declaring a state of national emergency.
The President also issued General Order
(G.O.) No. 5 implementing PP 1017.
The President stated that over the past
months, elements in political opposition
have
conspired
with
extreme
left
represented by NDF- CCP- NPA and
military adventurists, which caused her to
declare
such
order. The
President
considered aims to oust the President and
take- over reigns of government as clear
and present danger.
On March 3, President Arroyo lifted PP
1017.
Solicitor General argued that the basis of
declaring PP 1017 was that the intent of
the
Constitution
is
to
give
full
discretionary powers to the President in
determining the necessity of calling out
the AFP.
However despite the contentions of the
Solicitor General, the Magdalo group
indicted the Oakwood mutiny and called to
wear red bands on their left arms to show
disgust.
At the same time Oplan Hackle I was
discovered, which constitutes plans of
bombings and attacks on PMA Alumni
Homecoming in Baguio, the same event
where the President was invited. The next
morning after the alumni homecoming
celebration, a bomb was found inside the
campus.
PNP Chief Arturo Lomibao also intercepted
information that PNP- SAF members are
planning
to
defect
from
the
administration, while on the same view
Congressman Peping Cojuanco plotted
moves to bring down the Arroyo
Administration.

Huge number of soldiers joined the rallies


to provide critical mass and armed
component to Anti- Arroyo protests.
Bombings of telephone communication
towers and cell sites in Bulacaan and
Bataan was also considered as an
additional factual basis after the issuance
of PP 1017 and GO 5.
Because of these incidental series of
events which clearly presents a critical
situation, President Arroyo cancelled all
activities related to EDSA People Power I.
Mike Arroyo, then Executive Secretary,
announced that warrantless arrest and
takeover of facilities can be implemented.
Succeeding this announcement was the
arrest of Randy David, a Filipino journalist
and UP professor due to a mistake of fact
that he was actually involved in the street
rallies. Seizure of Daily Tribune, Malaya
and Abante-- all local news publication,
took place which, according to the PNP,
was meant to show a strong presence to
tell the media outlets not to connive or do
anything that would help rebels in
bringing down the government. Police
also
arrested
Congressman
Crispin
Beltran, who then represented the
Anakpawis Party.
Issue:
Whether
or
not
the
issuance
of
Presidential Proclamation PP 1017 is
unconstitutional? Whether or not the
arrest of Randy David and the seizure of
Daily Tribune et. al., is unconstitutional?
Ruling of the court:
Respondents claim that such petition is
moot and academic based on the issuance
of PP 1017, but the Court rejects such
contention. A moot and academic case is
one that ceases to present a justiciable
controversy. In this case, the Court is
convinced that the President was justified
in issuing PP 1017 which calls for military
aid.

Administrative law case digest 13


Most people then equate it to martial law,
but such case is different wherein the
basis then was the 1973 Constitution.
Under the present 1987 Constitution, the
President may summon armed forces to
aid him in supporting lawless violence.
The President's declaration of state
rebellion was merely an act declaring a
status or conduction of a public moment
of interest. State of national emergency,
however, is the prerogative of the
President. Her exercise of emergency
powers such as the taking over of
privately owned utility requires delegation
from the Congress, which is entirely
different from the martial law.
As to the seizure of the Daily Tribune and
the arrest of Randy David, the Court
considers those actions unlawful based on
the fact that it violates the constitutional
mandate of freedom of expression.
Louis Barok C. Biraogo v. The
Philippine Truth Commission of 2010
(G.R. No. 192935, December 7, 2010)
FACTS:
At the dawn of his administration,
President Noynoy Aquino signed Executive
Order No. 1 establishing the Philippine
Truth Commission of 2010. The Philippine
Truth Commission (PTC) is created to
investigate reports of graft and corruption
committed by third-level public officers
and
employees,
their
co-principals,
accomplices and accessories during the
administration of Gloria Macapagal Arroyo
ONLY, and thereafter to submit its finding
and recommendations to the President,
Congress and the Ombudsman. The
commission is expected to finish their
investigation on or before December 31,
2012. There are 5 commissioners,
including the chairman. The Philippine
Truth Commission of 2010 is spearheaded
by former Chief Justice HilarioDavide, Jr.,
while the members are former Supreme
Court Justices Romeo Callejo Jr., Ruth
Romero, and Ateneo Law Professors
MenardoGuevarra and Carlos Medina Jr.

Barely a month after the issuance of EO


No. 1, two cases were filed before the SC
assailing the validity and constitutionality
of the said EO.
The first case is a special civil action for
prohibition instituted by petitioner Louis
Biraogo in his capacity as a citizen and
taxpayer. Biraogo assails Executive Order
No. 1 for being violative of the legislative
power of Congress under Section 1, Article
VI of the Constitution as it usurps the
constitutional authority of the legislature
to create a public office and to appropriate
funds therefor. Biraogo argues that EO No.
1 is unconstitutional because there is no
provision in the Constitution or any
specific law that authorizes the President
to create a truth commission.
The second case is a special civil action for
certiorari
and
prohibition
filed
by
petitioners Edcel C. Lagman, Rodolfo B.
Albano Jr., Simeon A. Datumanong, and
Orlando
B.
Fua,
Sr.
(petitionerslegislators) as incumbent members of the
House of Representatives. PetitionersLegislators argue that the said Order is
unconstitutional because the creation of a
public office lies within the province of
Congress and not with the executive
branch of government.
The OSG counters that there is nothing
exclusively legislative about the creation
by the President of a fact-finding body
such as a truth commission. Pointing to
numerous
offices
created
by
past
presidents, it argues that the authority of
the President to create public offices
within the Office of the President Proper
has long been recognized. According to
the OSG, the Executive, just like the other
two branches of government, possesses
the inherent authority to create factfinding committees to assist it in the
performance
of
its
constitutionally
mandated functions and in the exercise of
its administrative functions.
The OSG also cites the recent case of
Banda v. Ermita, where it was held that
the President has the power to reorganize

Administrative law case digest 14


the offices and agencies in the executive
department in line with his constitutionally
granted power of control and by virtue of
a valid delegation of the legislative power
to reorganize executive offices under
existing statutes. The OSG concludes that
the power of control necessarily includes
the
power
to
create
offices.
1. Does the creation of the PTC
fall within the ambit of the
power
to
reorganize
as
expressed in Section 31 of the
Revised Administrative Code?
No. The power to reorganize as expressed
in
Section
31
of
the
Revised
Administrative
Code
contemplates
reorganization
as
limited
by
the
following functional and structural lines:
(1) restructuring the internal organization
of the Office of the President Proper by
abolishing, consolidating or merging units
thereof or transferring functions from one
unit to another; (2) transferring any
function under the Office of the President
to any other Department/Agency or vice
versa; or (3) transferring any agency
under the Office of the President to any
other Department/Agency or vice versa.
Clearly, the provision refers to reduction of
personnel, consolidation of offices, or
abolition thereof by reason of economy or
redundancy of functions. These point to
situations where a body or an office is
already existent but a modification or
alteration thereof has to be effected. The
creation
of
an
office
is
nowhere
mentioned, much less envisioned in said
provision. Accordingly, the answer to the
question is in the negative.
2. May the President legally create
the Philippine Truth Commission
(PTC)? Is there a valid delegation of
power from Congress empowering the
President to create a public office?
Yes. The creation of the PTC finds
justification under Section 17, Article VII
of the Constitution, imposing upon the
President the duty to ensure that the laws
are faithfully executed. Section 17 reads:

Section 17. The President shall have


control of all the executive departments,
bureaus, and offices. He shall ensure that
the laws be faithfully executed.
Indeed, the Executive is given
much leeway in ensuring that our laws are
faithfully executed. As stated above, the
powers of the President are not limited to
those
specific
powers
under
the
Constitution. One of the recognized
powers of the President granted pursuant
to this constitutionally-mandated duty is
the power to create ad hoc committees.
This flows from the obvious need to
ascertain facts and determine if laws have
been faithfully executed.
On the charge that Executive Order
No. 1 transgresses the power of Congress
to appropriate funds for the operation of a
public office, suffice it to say that there
will be no appropriation but only an
allotment or allocations of existing funds
already appropriated. Accordingly, there is
no usurpation on the part of the Executive
of the power of Congress to appropriate
funds. Further, there is no need to specify
the amount to be earmarked for the
operation of the commission because, in
the words of the Solicitor General,
whatever funds the Congress has
provided for the Office of the President will
be the very source of the funds for the
commission. Moreover, since the amount
that would be allocated to the PTC shall be
subject to existing auditing rules and
regulations, there is no impropriety in the
funding.
3. According to petitioners, E.O. No. 1
illegally amended the Constitution
and pertinent statutes when it vested
the Truth Commission with quasijudicial powers duplicating, if not
superseding, those of the Office of the
Ombudsman created under the 1987
Constitution and the Department of
Justice
created
under
the
Administrative Code of 1987. Is this
correct?

Administrative law case digest 15


No. Fact-finding is not adjudication and it
cannot be likened to the judicial function
of a court of justice, or even a quasijudicial agency or office. Contrary to
petitioners apprehension, the PTC will not
supplant the Ombudsman or the DOJ or
erode their respective powers. If at all,
the
investigative
function
of
the
commission will complement those of the
two offices. As pointed out by the Solicitor
General,
the
recommendation
to
prosecute is but a consequence of the
overall task of the commission to conduct
a fact-finding investigation.
The
actual
prosecution
of
suspected
offenders,
much
less
adjudication on the merits of the charges
against them, is certainly not a function
given to the commission. Furthermore,
the function of determining probable
cause for the filing of the appropriate
complaints before the courts remains to
be with the DOJ and the Ombudsman.
4. Petitioners argue that E.O. No. 1
violates the equal protection clause
as
it
selectively
targets
for
investigation and prosecution officials
and
personnel
of
the
previous
administration ONLY as it excludes
those of the other administrations,
past and present, who may be
indictable.
Are
the
petitioners
correct?
Yes! Although the purpose of the Truth
Commission falls within the investigative
power of the President, the Court finds
difficulty in upholding the constitutionality
of Executive Order No. 1 in view of its
apparent transgression of the equal
protection clause enshrined in Section 1,
Article III (Bill of Rights) of the 1987
Constitution, which reads:
Section 1. No person shall be deprived of
life, liberty or property without due
process of law, nor shall anyone be denied
the equal protection of the laws.

Such classification, however, to be valid


must pass the test of reasonableness. The
test has four requisites: (1) The
classification
rests
on
substantial
distinctions; (2) It is germane to the
purpose of the law; (3) It is not limited to
existing conditions only; and (4) It applies
equally to all members of the same class.
Applying these precepts to this case,
Executive Order No. 1 should be struck
down as violative of the equal protection
clause. The clear mandate of the
envisioned
truth
commission
is
to
investigate and find out the truth
concerning the reported cases of graft
and corruption during the previous
administration only. The intent to single
out the previous administration is a plain
and patent manifestation that the equal
protection clause is indeed violated.
In this regard, it must be borne in mind
that the Arroyo administration is but just a
member of a class, that is, a class of past
administrations. It is not a class of its
own. Not to include past administrations
similarly situated constitutes arbitrariness
which the equal protection clause cannot
sanction.
Such
discriminating
differentiation clearly reverberates to label
the
commission
as a vehicle
for
vindictiveness and selective retribution.
Though the OSG enumerates several
differences
between
the
Arroyo
administration
and
other
past
administrations, these distinctions are not
substantial enough to merit the restriction
of the investigation to the previous
administration only.
Tatad vs Secretary of DOE
FACTS:
The
petitions
challenge
the
constitutionality of RA No. 8180 entitled
An Act Deregulating the Downstream Oil
Industry and For Other Purposes. The
deregulation process has two phases: (a)
the transition phase (Aug. 12, 1996) and

Administrative law case digest 16


the (b) full deregulation phase (Feb. 8,
1997 through EO No. 372).

and
stable
established.

Sec. 15 of RA No. 8180 constitutes an


undue delegation of legislative power to
the President and the Sec. of Energy
because it does not provide a determinate
or determinable standard to guide the
Executive Branch in determining when to
implement the full deregulation of the
downstream oil industry, and the law does
not provide any specific standard to
determine when the prices of crude oil in
the world market are considered to be
declining nor when the exchange rate of
the peso to the US dollar is considered
stable.

(b) YES. Sec. 15 did not mention the


depletion of the OPSF fund as a factor to
be given weight by the Executive before
ordering full deregulation. The Executive
department failed to follow faithfully the
standards set by RA No. 8180 when it
co0nsidered the extraneous factor of
depletion of the OPSF fund. The Executive
is bereft of any right to alter either by
subtraction or addition the standards set
in RA No. 8180 for it has no powers to
make laws.

Issue:
w/n the provisions of RA No. 8180 and EO
No.
372
is
unconstitutional.
sub-issue:
(a) w/n sec. 15 violates the constitutional
prohibition on undue delegation of power,
and
(b) w/n the Executive misapplied RA No.
8180 when it considered the depletion of
the OPSF fund as factor in fully
deregulating the downstream oil industry
in Feb. 1997.

Facts: On May 24, 2005, the President


signed into law Republic Act 9337 or the
VAT Reform Act. Before the law took effect
on July 1, 2005, the Court issued a TRO
enjoining government from implementing
the law in response to a slew of petitions
for certiorari and prohibition questioning
the constitutionality of the new law.

HELD/RULING:
(a) NO. Sec. 15 can hurdle both the
completeness test and the sufficient
standard test. RA No. 8180 provided that
the full deregulation will start at the end
of March 1997 regardless of the
occurrence of any event. Thus, the law is
complete on the question of the final date
of full deregulation.
Sec. 15 lays down the standard to guide
the judgment of the Presidenthe is to
time it as far as practicable when the
prices of crude oil and petroleum in the
world market are declining and when the
exchange rate of the peso to the US dollar
is considered stable.
Webster defines practicable as meaning
possible to practice or perform, decline
as meaning to take a downward direction,

as

meaning

firmly

ABAKADA vs Ermita

The challenged section of R.A. No. 9337 is


the common proviso in Sections 4, 5 and
6: That the President, upon the
recommendation of the Secretary of
Finance, shall, effective January 1, 2006,
raise the rate of value-added tax to 12%,
after any of the following conditions has
been satisfied:
(i) Value-added tax collection as a
percentage of Gross Domestic Product
(GDP) of the previous year exceeds two
and four-fifth percent (2 4/5%);
or (ii) National government deficit as a
percentage of GDP of the previous year
exceeds one and one-half percent (1
%)
Petitioners allege that the grant of standby authority to the President to increase
the VAT rate is an abdication by Congress
of its exclusive power to tax because such
delegation is not covered by Section 28
(2), Article VI Consti. They argue that VAT
is a tax levied on the sale or exchange of

Administrative law case digest 17


goods and services which cant be
included within the purview of tariffs
under the exemption delegation since this
refers to customs duties, tolls or tribute
payable
upon
merchandise
to
the
government and usually imposed on
imported/exported goods. They also said
that the President has powers to cause,
influence or create the conditions provided
by law to bring about the conditions
precedent. Moreover, they allege that no
guiding standards are made by law as to
how the Secretary of Finance will make
the recommendation.
Issue: Whether or not the RA 9337's
stand-by authority to the Executive to
increase the VAT rate, especially on
account of the recommendatory power
granted to the Secretary of Finance,
constitutes undue delegation of legislative
power? NO
Held: The powers which Congress is
prohibited from delegating are those
which are strictly, or inherently and
exclusively, legislative. Purely legislative
power which can never be delegated is the
authority to make a complete lawcomplete as to the time when it shall take
effect and as to whom it shall be
applicable,
and
to
determine
the
expediency of its enactment. It is the
nature of the power and not the liability of
its use or the manner of its exercise which
determines the validity of its delegation.
The exceptions are:
(a) delegation of tariff powers to President
under Constitution
(b) delegation of emergency powers to
President under Constitution
(c) delegation to the people at large
(d) delegation to local governments
(e) delegation to administrative bodies
For the delegation to be valid, it must be
complete and it must fix a standard. A

sufficient standard is one which defines


legislative policy, marks its limits, maps
out its boundaries and specifies the public
agency to apply it.
In this case, it is not a delegation of
legislative power BUT a delegation of
ascertainment of facts upon which
enforcement and administration of the
increased rate under the law is contingent.
The legislature has made the operation of
the 12% rate effective January 1, 2006,
contingent upon a specified fact or
condition. It leaves the entire operation or
non-operation of the 12% rate upon
factual matters outside of the control of
the executive. No discretion would be
exercised by the President. Highlighting
the absence of discretion is the fact that
the word SHALL is used in the common
proviso. The use of the word SHALL
connotes a mandatory order. Its use in a
statute denotes an imperative obligation
and is inconsistent with the idea of
discretion.
Thus, it is the ministerial duty of the
President to immediately impose the 12%
rate upon the existence of any of the
conditions specified by Congress. This is a
duty, which cannot be evaded by the
President. It is a clear directive to impose
the 12% VAT rate when the specified
conditions are present.
Congress just granted the Secretary of
Finance the authority to ascertain the
existence of a fact--- whether by
December 31, 2005, the VAT collection as
a percentage of GDP of the previous year
exceeds 2 4/5 % or the national
government deficit as a percentage of
GDP of the previous year exceeds one and
1%. If either of these two instances has
occurred, the Secretary of Finance, by
legislative mandate, must submit such
information to the President.
In making his recommendation to the
President on the existence of either of the
two conditions, the Secretary of Finance is
not acting as the alter ego of the President
or even her subordinate. He is acting as

Administrative law case digest 18


the agent of the legislative department, to
determine and declare the event upon
which its expressed will is to take effect.
The Secretary of Finance becomes the
means or tool by which legislative policy is
determined and implemented, considering
that he possesses all the facilities to
gather data and information and has a
much broader perspective to properly
evaluate them. His function is to gather
and collate statistical data and other
pertinent information and verify if any of
the two conditions laid out by Congress is
present.
Congress does not abdicate its functions
or unduly delegate power when it
describes what job must be done, who
must do it, and what is the scope of his
authority; in our complex economy that is
frequently the only way in which the
legislative process can go forward.
There is no undue delegation of legislative
power but only of the discretion as to the
execution of a law. This is constitutionally
permissible. Congress did not delegate the
power to tax but the mere implementation
of the law.
Larin vs. Executive Secretary
280 SCRA 713; GR. No. L- 112745;
October 16, 1997
FACTS:
The President issued E.O. No. 132
which mandates for the streamlining of
the Bureau of Internal Revenue. Under
said order, some positions and functions
are
either
abolished,
renamed,
decentralized or transferred to other
offices, while other offices are also
created. The Excise Tax Service, of which
the
petitioner
was
the
Assistant
Commissioner, was one of those offices
that was abolished. Petitioner assailed the
legality of EO No. 132 claiming that he
was removed as a result of the
reorganization made in the BIR pursuant
to E.O. No. 132. He claimed that there is
yet no law enacted by Congress which
authorizes the reorganization by the

Executive
Department
of
agencies, particularly the BIR.

executive

ISSUE: Whether or not the President has


the power to reorganize the BIR or to
issue the questioned EO No. 132.
HELD: YES. Section 48 of R.A. 7645
clearly mentions the acts of "scaling down,
phasing out and abolition" of offices only
and does not cover the creation of offices
or transfer of functions. Nevertheless, the
act of creating and decentralizing is
included in the subsequent provision of
Section 62 which shows that the President
is authorized to effect organizational
charges including the creation of offices in
the department or agency concerned.
Presidential
Decree
No.
1772 which
amended Presidential Decree No. 1416
expressly grants the President of the
Philippines the continuing authority to
reorganize the national government,
which includes the power to group,
consolidate bureaus and agencies, to
abolish offices, to transfer functions, to
create and classify functions, services and
activities and to standardize salaries and
materials.
Dario vs Mison
August 8, 1989
FACTS:
In
1986,
Cory
Aquino
promulgated
Proclamation
No.
3,
"DECLARING A NATIONAL POLICY TO
IMPLEMENT THE REFORMS MANDATED BY
THE PEOPLE..., the mandate of the people
to Completely reorganize the government.
In January 1987, she promulgated EO
127, "REORGANIZING THE MINISTRY OF
FINANCE".
Among
other
offices,
Executive Order No. 127 provided for the
reorganization of the Bureau of Customs
and prescribed a new staffing pattern
therefor.
In
February
1987,
a
brand
new
constitution was adopted. On January
1988,
incumbent
Commissioner
of
Customs
Salvador
Mison
issued
a

Administrative law case digest 19


Memorandum, in the nature of "Guidelines
on the Implementation of Reorganization
Executive
Orders,"
prescribing
the
procedure in personnel placement. It also
provided that by February 1988, all
employees covered by EO 127 and the
grace period extended to the Bureau of
Customs
by
the
President
on
reorganization shall be: a) informed of
their re-appointment, or b) offered
another position in the same department
or agency, or c) informed of their
termination.
Mison addressed several notices to various
Customs officials stating that they shall
continue to perform their respective duties
and
responsibilities
in
a
hold-over
capacity, and that those incumbents
whose positions are not carried in the new
reorganization pattern, or who are not reappointed, shall be deemed separated
from the service. A total of 394 officials
and employees of the Bureau of Customs
were
given
individual
notices
of
separation. They filed appeals with the
CSC.
On June 1988, the CSC promulgated its
ruling ordering the reinstatement of the
279
employees,
the
279
private
respondents
in
G.R.
No.
85310.
Commissioner Mison, represented by the
Solicitor General, filed a motion for
reconsideration,
which
was
denied.
Commissioner Mison instituted certiorari
proceedings.
On June 10, 1988, Republic Act No. 6656,
"AN ACT TO PROTECT THE SECURITY OF
TENURE OF CIVIL SERVICE OFFICERS
AND
EMPLOYEES
IN
THE
IMPLEMENTATION
OF
GOVERNMENT
REORGANIZATION," was signed into law
containing the provision:
Sec. 9. All officers and employees who
are found by the Civil Service Commission
to have been separated in violation of the
provisions of this Act, shall be ordered
reinstated or reappointed as the case may
be without loss of seniority and shall be
entitled to full pay for the period of

separation. Unless also separated for


cause, all
officers and employees,
including
casuals
and
temporary
employees, who have been separated
pursuant to reorganization shall, if entitled
thereto,
be
paid
the
appropriate
separation pay and retirement and other
benefitsxxx
On June 23, 1988, BenedictoAmasa and
William Dionisio, customs examiners
appointed
by
Commissioner
Mison
pursuant to the ostensible reorganization
subject of this controversy, petitioned the
Court to contest the validity of the statute.
On October 21, 1988, thirty-five more
Customs officials whom the Civil Service
Commission had ordered reinstated by its
June 30, 1988 Resolution filed their own
petition to compel the Commissioner of
Customs to comply with the said
Resolution.
Cesar Dario was one of the Deputy
Commissioners of the Bureau of Customs
until his relief on orders of Commissioner
Mison on January 26, 1988. In essence,
he questions the legality of his dismissal,
which he alleges was upon the authority of
Section 59 of Executive Order No. 127
(SEC. 59. New Structure and Pattern.
Upon approval of this Executive Order, the
officers and employees of the Ministry
shall, in a holdover capacity, continue to
perform their respective duties and
responsibilities
and
receive
the
corresponding salaries and benefits unless
in the meantime they are separated from
government service pursuant to Executive
Order No. 17 (1986) or Article III of the
Freedom Constitution. Incumbents whose
positions are not included therein or who
are not reappointed shall be deemed
separated from the service. Those
separated from the service shall receive
the retirement benefits to which they may
be entitled.
A provision he claims the Commissioner
could not have legally invoked. He avers
that he could not have been legally
deemed to be an "incumbent whose
position is not included therein or who is

Administrative law case digest 20


not reappointed to justify his separation
from the service. He contends that neither
the Executive Order (under the second
paragraph of the section) nor the staffing
pattern proposed by the Secretary of
Finance abolished the office of Deputy
Commissioner of Customs, but, rather,
increased it to three. Nor can it be said,
so he further maintains, that he had not
been "reappointed"
(under the second
paragraph of the section) because
"reappointment therein presupposes that
the position to which it refers is a new one
in lieu of that which has been abolished or
although an existing one, has absorbed
that which has been abolished."
He
claims, finally, that under the Provisional
Constitution, the power to dismiss public
officials without cause ended on February
25, 1987, and that thereafter, public
officials enjoyed security of tenure under
the provisions of the 1987 Constitution.
Vicente Feria asserts his security of tenure
and that he cannot be said to be covered
by Section 59 of Executive Order No. 127,
having been appointed on April 22, 1986 during the effectivity of the Provisional
Constitution.
He
adds
that
under
Executive Order No. 39, "ENLARGING THE
POWERS AND FUNCTIONS OF THE
COMMISSIONER OF CUSTOMS,"
the
Commissioner of Customs has the power
"to appoint all Bureau personnel, except
those appointed by the President,"
and
that his position, which is that of a
Presidential appointee, is beyond the
control of Commissioner Mison for
purposes of reorganization.
Provisions of Section 16, Article XVIII
(Transitory Provisions) explicitly authorize
the removal of career civil service
employees "not for cause but as a result
of
the
reorganization
pursuant
to
Proclamation No. 3 dated March 25, 1986
and the reorganization following the
ratification of this Constitution. For this
reason, Mison posits, claims of violation of
security of tenure are allegedly no
defense. That contrary to the employees'
argument, Section 59 of Executive Order
No. 127 is applicable (in particular, to

Dario and Feria), in the sense that


retention in the Bureau, under the
Executive Order, depends on either
retention of the position in the new
staffing pattern or reappointment of the
incumbent, and since the dismissed
employees had not been reappointed,
they
had
been
considered
legally
separated. Moreover, Mison proffers that
under
Section
59
incumbents
are
considered on holdover status, "which
means that all those positions were
considered vacant."
The Commissioner's two petitions are
direct challenges to three rulings of the
Civil
Service
Commission:
(1)
the
Resolution,
dated
June
30,
1988,
reinstating the 265 customs employees
above-stated; (2) the Resolution, dated
September
20,
1988,
denying
reconsideration; and (3) the Resolution,
dated November 16, 1988, reinstating five
employees.
ISSUE: WON Section 16 of Article XVIII of
the 1987 Constitution is a grant of a
license upon the Government to remove
career public officials it could have validly
done under an "automatic"-vacancyauthority and to remove them without
rhyme or reason. (NO)
RATIO: The State can still carry out
reorganizations provided that it is done in
good faith. Removal of career officials
without cause cannot be done after the
passing of the 1987 Constitution.
Section 16 Article XVIII, of the 1987
Constitution:
Sec. 16. Career civil service employees
separated from the service not for cause
but as a result of the reorganization
pursuant to Proclamation No. 3 dated
March 25, 1986 and the reorganization
following
the
ratification
of
this
Constitution
shall
be
entitled
to
appropriate separation pay and to
retirement and other benefits accruing to
them under the laws of general application
in force at the time of their separation. In
lieu thereof, at the option of the

Administrative law case digest 21


employees, they may be considered for
employment in the Government or in any
of its subdivisions, instrumentalities, or
agencies, including government-owned or
controlled
corporations
and
their
subsidiaries. This provision also applies to
career
officers
whose
resignation,
tendered in line with the existing policy.
The above is a mere recognition of the
right of the Government to reorganize its
offices, bureaus, and instrumentalities.
Under Section 4, Article XVI, of the 1935
Constitution.
Transition
periods
are
characterized
by
provisions
for
"automatic" vacancies. They are dictated
by the need to hasten the passage from
the old to the new Constitution free from
the "fetters" of due process and security
of tenure.
Since 1935, transition periods have been
characterized
by
provisions
for
"automatic" vacancies. We take the
silence of the 1987 Constitution on this
matter
as
a
restraint
upon
the
Government to dismiss public servants at
a moment's notice. If the present Charter
envisioned an "automatic" vacancy, it
should have said so in clearer terms.
Plainly the concern of Section 16 is to
ensure compensation for "victims" of
constitutional revamps - whether under
the Freedom or existing Constitution - and
only secondarily and impliedly, to allow
reorganization.
In order to be entitled to the benefits
granted under Section 16 of Article XVIII
of the Constitution of 1987, two
requisites, one negative and the other
positive, must concur, to wit: 1. The
separation must not be for cause, and 2.
The separation must be due to any of the
three situations mentioned.
By its terms, the authority to remove
public officials under the Provisional
Constitution ended on February 25, 1987,
advanced by jurisprudence to February 2,
1987. It can only mean, then, that
whatever reorganization is taking place is
upon the authority of the present Charter,

and necessarily, upon the mantle of its


provisions and safeguards. Hence, it
cannot be legitimately stated that we are
merely continuing what the revolutionary
Constitution
of
the
Revolutionary
Government had started. We are through
with reorganization under the Freedom
Constitution - the first stage. We are on
the second stage - that inferred from the
provisions of Section 16 of Article XVIII of
the permanent basic document.
After February 2, 1987, incumbent
officials and employees have acquired
security of tenure.
The present organic act requires that
removals "not for cause" must be as a
result of reorganization. As we observed,
the Constitution does not provide for
"automatic" vacancies. It must also pass
the test of good faith. As a general rule, a
reorganization is carried out in "good
faith" if it is for the purpose of economy or
to make bureaucracy more efficient. In
that event, no dismissal (in case of a
dismissal) or separation actually occurs
because the position itself ceases to exist.
And in that case, security of tenure would
not be a Chinese wall. Be that as it may, if
the "abolition," which is nothing else but a
separation or removal, is done for political
reasons or purposely to defeat security of
tenure, or otherwise not in good faith, no
valid "abolition" takes place and whatever
"abolition" is done, is void ab initio. There
is an invalid "abolition" as where there is
merely a change of nomenclature of
positions, or where claims of economy are
belied by the existence of ample funds.
The Court finds that Commissioner Mison
did not act in good faith since after
February
2,
1987
no
perceptible
restructuring of the Customs hierarchy except for the change of personnel - has
occurred, which would have justified (all
things
being
equal)
the
contested
dismissals. There is also no showing that
legitimate structural changes have been
made - or a reorganization actually
undertaken, for that matter - at the
Bureau
since
Commissioner
Mison

Administrative law case digest 22


assumed office, which would have validly
prompted him to hire and fire employees.
With respect to Executive Order No. 127,
Commissioner Mison submits that under
Section 59 thereof, "Those incumbents
whose positions are not included therein
or who are not reappointed shall be
deemed separated from the service." He
submits that because the 394 removed
personnel have not been "reappointed,"
they are considered terminated. To begin
with, the Commissioner's appointing
power is subject to the provisions of
Executive Order No. 39. Under Executive
Order No. 39, the Commissioner of
Customs
may
"appoint
all
Bureau
personnels except those appointed by the
President." Thus, with respect to Deputy
Commissioners Cesar Dario and Vicente
Feria, Jr., Commissioner Mison could not
have validly terminated them, they being
Presidential appointees.
That Customs employees, under Section
59 of Executive Order No. 127 had been
on a mere holdover status cannot mean
that the positions held by them had
become vacant. The occupancy of a
position in a holdover capacity was
conceived to facilitate reorganization and
would have lapsed on 25 February 1987
(under the Provisional Constitution), but
advanced to February 2, 1987 when the
1987 Constitution became effective. After
the said date the provisions of the latter
on security of tenure govern.
DISPOSITIVE: Resolutions of the CSC
are affirmed. Petitions of employees are
GRANTED.
Petitions
of
Mison
are
DISMISSED. Commissioner of Customs is
ordered to REINSTATE employees he
removed and those he appointed as
replacements are ordered to VACATE their
posts subject to payment of lawful
benefits.

Buklod ng Kawaning EIIB vs Zamora


2001

FACTS:
Economic Intelligence and Investigation
Bureau (EIIB)- by virtue of Cory Aquinos
EO 127, it was designated to perform
functions primarily to gather information
and pieces of evidence on illegal activities,
such as, but not limited to the ff:
a. Economic sabotage
b. Smuggling
c. Tax evasion
d. Dollar salting
By virtue of Memorandum Order 225,
EIIB was assigned as the agency of
primary
responsibility
for
ANTISMUGGLING OPERATIONS
11 years after, Erap issued EO 191
Deactivation of the EIIB because of the
ff:
a. The designated functions of EIIB are
also performed by other agencies
b. There is a need to monitor the
overlapping functions
Erap issued EO 196 creating the
Presidential Anti-Smuggling Task Force
Aduana
Erap also issued EO 223, EIIB
employees were separated from service
pursuant to the reorganization hence, the
case.
ISSUES:
(1) WON EO Nos. 191 and 223 are
unconstitutional (Sec. 2(3) Art. IX-B) and
do these amount to grave abuse of
discretion
Sec. 2 (3) Art. IX- B. No officer or
employee of the civil service shall be
removed or suspended except for cause
provided by law.
(2) WON EO Nos. 191 and 223 are
considered reorganization of the EIIB and
if these were done in good faith
(3) WON the President has the authority
to abolish EIIB
HELD/ RATIO:

Administrative law case digest 23


(1) The petitioners right to security of
tenure is not violated.
Reorganizations in this jurisdiction have
been regarded as valid provided they are
pursued in good faith. As a general rule, a
reorganization is carried out in good
faith if it is for the purpose of economy or
to make bureaucracy more efficient. In
that event, no dismissal (in case of
dismissal) or separation actually occurs
because the position itself ceases to exist.
And in that case, security of tenure would
not be a Chinese wall.
There is no such thing as an absolute
right to hold office. Except constitutional
offices which provide for special immunity
as regards salary and tenure, no one can
be said to have any vested right in an
office or its salary.
(2) Yes, it is considered as reorganization.
It is valid so long as it is done in GOOD
FAITH. It is done in good faith if it is for
the purpose of economy or to make
bureaucracy more efficient. RA 6656
provides for 5 circumstances of BAD
FAITH:
1. where there is a significant increase in
the number of positions in the new
staffing pattern of the department or
agency concerned;
2. where an office is abolished and
another performing substantially the same
functions is created;
3. where incumbents are replaced by
those less qualified in terms of status of
appointment, performance and merit;
4. where there is a classification of offices
in the department or agency concerned
and the reclassified offices perform
substantially the same functions as the
original offices, and
5. where the removal violates the order of
separation
Even though Aduana was established
after the deactivation of EIIB, it was done
for economy.
3 Justifications:

1. No employment was made for the task


force, they are employees of other
existing agencies.
2. The idea is to encourage and utilize
personnel, facilities and resources instead
of maintaining an independent office,
which is burdensome for the government
3. Based on the budget appropriation, it
was evident that the intent was to lessen
the expenses of EIIB
Task Force Aduana have additional
powers that EIIB previously do not
possess, i.e. power to effect searches,
seizures and arrests. Furthermore, it has
the
authority
to
investigate
cases
involving ill-gotten wealth.
(3) Yes, the President has the authority to
do so. Sec. 48 of RA 7645 provides:
Scaling Down and Phase Out of Activities
of Agencies Within the Executive Branch.
The heads of departments, bureaus and
offices and agencies are hereby directed
to identify their respective activities which
are no longer essential in the delivery of
public services and which may be scaled
down, phased out or abolished, subject to
civil service rules and regulations. X X X.
Actual scaling down, phasing out or
abolition of the activities shall be effected
pursuant to Circulars or Orders issued for
the purpose by the Office of the President.
SOLID HOMES, INC., petitioner, vs.
TERESITA PAYAWAL and COURT OF
APPEALS, respondents.
G.R. No. 84811 August 29, 1989
FACTS:
A complaint was filed by TeresitaPayawal
against Solid Homes, Inc. before the
Regional Trial Court alleging that the
defendant contracted to sell to her a
subdivision lot in Marikina for the agreed
price of P 28,080.00, and that, she had
already paid the defendant the total
amount of P 38,949.87 in monthly
installments and interests. Solid Homes
subsequently executed a deed of sale over
the land but failed to deliver the
corresponding certificate of title despite

Administrative law case digest 24


her repeated demands because, as it
appeared later, the defendant had
mortgaged the property in bad faith to a
financing company. The plaintiff asked for
delivery of the title to the lot or,
alternatively, the return of all the amounts
paid by her plus interest. She also claimed
moral and exemplary damages, attorney's
fees and the costs of the suit.
Solid Homes moved to dismiss the
complaint on the ground that the court
had no jurisdiction, this being vested in
the National Housing Authority under PD
No. 957. The motion was denied. The
defendant repleaded the objection in its
answer, but the judgment was rendered in
favor of the plaintiff and the defendant
was ordered to deliver to her the title to
the land or, failing this, to refund to her
the sum of money plus interest with moral
and exemplary damages, attorneys fees
and the cost of the suit.
Solid Homes appealed but the decision
was affirmed by the respondent court.
ISSUE:
Whether or not the respondent court has
jurisdiction over the case.
HELD:
NO. The applicable law in the case at bar
is Presidential Decree (P.D.) No. 957, as
amended by P.D. No. 1344. Pursuant to
this law, it is the National Housing
Authority who have exclusive jurisdiction
to hear and decide cases of the following
nature: A. Unsound real estate business
practices; B. Claims involving refund and
any other claims filed by subdivision lot or
condominium unit buyer against the
project owner, developer, dealer, broker or
salesman; and C. Cases involving specific
performance of contractual and statutory
obligations filed by buyers of subdivision
lot or condominium unit against the
owner, developer, dealer, broker or
salesman.
Clearly, it is the National Housing
Authority and not the Regional Trial Court
who has jurisdiction over the case. It is

settled that any decision rendered without


jurisdiction is a total nullity and may be
struck down at any time. The only
exception is where the party raising the
issue is barred by estoppel, which does
not appear in the present case.
Whereby, the Court rendered its decision
reversing and setting aside the previous
decision of the trial court without
prejudice to the filing of the appropriate
complaint before the Housing and Land
Use Regulatory Board.
CHRISTIAN GENERAL ASSEMBLY, INC.
v. IGNACIO
G.R. No. 164789 | August 27, 2009
FACTS
CGA entered into a Contract to Sell a
subdivision lot4 (subject property) with
the respondents the registered owners
and developers of a housing subdivision
known as Villa Priscilla Subdivision located
in Bulacan. Under the Contract to Sell,
CGA would pay P2,373,000.00 for the
subject property on installment basis;
they were to pay a down payment of
P1,186,500, with the balance payable
within three years. Subsequently, the
parties mutually agreed to amend the
Contract to Sell to extend the payment
period from three to five years.
According to CGA, it religiously paid the
monthly
installments
until
its
administrative pastor discovered that the
title covering the subject property was
actually part of two consolidated lots (Lots
2-F and 2-G Bsd-04-000829 [OLT]) that
the respondents had acquired from
Nicanor
Adriano
(Adriano)
and
CeferinoSison
(Sison),
respectively.
Adriano and Sison were former tenantbeneficiaries of Purificacion S. Imperial
(Imperial) whose subject property had
been placed under Presidential Decree
(PD) No. 27s Operation Land Transfer.
According to CGA, Imperial applied for the
retention of five hectares of her land
under Republic Act No. 6657, which the
Department of Agrarian Reform (DAR)
granted. The DAR Order authorized

Administrative law case digest 25


Imperial to retain the farm lots previously
awarded to the tenant-beneficiaries,
including Lot 2-F previously awarded to
Adriano, and Lot 2-G Bsd-04-000829
awarded to Sison.
Understandably
aggrieved
after
discovering these circumstances, CGA filed
a complaint against the respondents
before the RTC. CGA claimed that the
respondents fraudulently concealed the
fact that the subject property was part of
a property under litigation; thus, the
Contract to Sell was a rescissible contract
under Article 1381 of the Civil Code. CGA
asked the trial court to rescind the
contract; order the respondents to return
the amounts already paid; and award
actual, moral and exemplary damages,
attorneys fees and litigation expenses.
Instead
of
filing
an
answer, the
respondents filed a motion to dismiss
asserting that the RTC had no jurisdiction
over the case. The respondents claimed
that the case falls within the exclusive
jurisdiction of the HLURB since it involved
the sale of a subdivision lot. CGA opposed
the motion to dismiss, claiming that the
action is for rescission of contract, not
specific performance, and is not among
the
actions
within
the
exclusive
jurisdiction of the HLURB.
ISSUE
Which of the two the regular court or
the HLURB has exclusive jurisdiction
over CGAs action for rescission and
damages.
HELD
HLURB has exclusive jurisdiction over
CGAs action for rescission and damages.
Rationale
for
HLURBs
quasi-judicial powers

extensive

The surge in the real estate business in


the country brought with it an increasing
number of cases between subdivision
owners/developers and lot buyers on the
issue of the extent of the HLURBs
exclusive jurisdiction. The courts have

consistently ruled that the HLURB has


exclusive jurisdiction over complaints
arising from contracts between the
subdivision developer and the lot buyer or
those aimed at compelling the subdivision
developer to comply with its contractual
and statutory obligations to make the
subdivision a better place to live in.
Generally, the extent to which an
administrative agency may exercise its
powers depends largely, if not wholly, on
the provisions of the statute creating or
empowering such agency. Presidential
Decree (P.D.) No. 1344, "Empowering The
National Housing Authority To Issue Writ
Of Execution In The Enforcement Of Its
Decision Under Presidential Decree No.
957," clarifies and spells out the quasijudicial dimensions of the grant of
jurisdiction to the HLURB.
The provisions of PD 957 were intended to
encompass
all
questions
regarding
subdivisions and condominiums. The
intention was aimed at providing for an
appropriate government agency, the
HLURB, to which all parties aggrieved in
the implementation of provisions and the
enforcement of contractual rights with
respect to said category of real estate
may take recourse. The business of
developing subdivisions and corporations
being imbued with public interest and
welfare, any question arising from the
exercise of that prerogative should be
brought to the HLURB which has the
technical know-how on the matter. In the
exercise of its powers, the HLURB must
commonly interpret and apply contracts
and determine the rights of private parties
under such contracts. This ancillary power
is no longer a uniquely judicial function,
exercisable only by the regular courts.
The argument that only courts of justice
can adjudicate claims resoluble under the
provisions of the Civil Code is out of step
with the fast-changing times. There are
hundreds of administrative bodies now
performing this function by virtue of a
valid authorization from the legislature.
This quasi-judicial function, as it is called,

Administrative law case digest 26


is exercised by them as an incident of the
principal power entrusted to them of
regulating certain activities falling under
their particular expertise. In this era of
clogged court dockets, the need for
specialized
administrative
boards
or
commissions with the special knowledge,
experience and capability to hear and
determine promptly disputes on technical
matters or essentially factual matters,
subject to judicial review in case of grave
abuse of discretion, has become well nigh
indispensable.
In general, the quantum of judicial or
quasi-judicial
powers
which
an
administrative agency may exercise is
defined in the enabling act of such agency.
In other words, the extent to which an
administrative entity may exercise such
powers depends largely, if not wholly on
the provisions of the statute creating or
empowering such agency. In the exercise
of such powers, the agency concerned
must commonly interpret and apply
contracts and determine the rights of
private parties under such contracts. One
thrust
of
the
multiplication
of
administrative agencies is that the
interpretation of contracts and the
determination of private rights thereunder
is no longer a uniquely judicial function,
exercisable only by our regular courts.
Subdivision cases under the RTCs
jurisdiction
The expansive grant of jurisdiction to the
HLURB does not mean, however, that all
cases
involving
subdivision
lots
automatically fall under its jurisdiction.
The mere relationship between the
parties, i.e., that of being subdivision
owner/developer and subdivision lot
buyer, does not automatically vest
jurisdiction in the HLURB. For an action to
fall within the exclusive jurisdiction of the
HLURB, the decisive element is the nature
of the action as enumerated in Section 1
of P.D. 1344. On this matter, the courts
have consistently held that the concerned
administrative
agency,
the
National
Housing Authority (NHA) before and now

the
HLURB,
has
jurisdiction
over
complaints aimed at compelling the
subdivision developer to comply with its
contractual and statutory obligations.
The HLURB has no jurisdiction over cases
filed by subdivision or condominium
owners or developers against subdivision
lot or condominium unit buyers or owners.
The rationale behind this can be found in
the wordings of Sec. 1, PD No. 1344,
which expressly qualifies that the cases
cognizable by the HLURB are those
instituted by subdivision or condomium
buyers or owners against the project
developer or owner. This is also in keeping
with the policy of the law, which is to curb
unscrupulous practices in the real estate
trade and business.
The only instance that HLURB may take
cognizance of a case filed by the
developer is when said case is instituted
as a compulsory counterclaim to a
pending case filed against it by the buyer
or owner of a subdivision lot or
condominium unit.
The Present Case
In
the
present
case,
CGA
is
unquestionably the buyer of a subdivision
lot from the respondents, who sold the
property in their capacities as owner and
developer. The main thrust of the CGA
complaint is clear to compel the
respondents to refund the payments
already made for the subject property
because the respondents were selling a
property that they apparently did not own.
In other words, CGA claims that since the
respondents cannot comply with their
obligations under the contract, i.e., to
deliver the property free from all liens and
encumbrances, CGA is entitled to rescind
the contract and get a refund of the
payments already made. This cause of
action clearly falls under the actions
contemplated PD No. 1344.
The CA erred in applying Article 1191 of
the Civil Code as basis for the contracts
rescission to be a negligible point.

Administrative law case digest 27


Regardless of whether the rescission of
contract is based on Article 1191 or 1381
of the Civil Code, the fact remains that
what CGA principally wants is a refund of
all payments it already made to the
respondents.
This
intent,
amply
articulated in its complaint, places its
action within the ambit of the HLURBs
exclusive jurisdiction and outside the
reach of the regular courts. Accordingly,
CGA has to file its complaint before the
HLURB, the body with the proper
jurisdiction.
FABELLA V. CA
FACTS:
On September 17, 1990, DECS Secretary
Carino issued a return-to-work order to all
public
school
teachers
who
had
participated in walk-outs and strikes on
various dates during the period of
September to October 1990. The mass
action had been staged to demand
payment of 13th month pay, allowances
and passage of debt cap bill in
Congress. On October 1990, Secretary
Carino filed administrative cases against
respondents,
who
are
teachers
of
Mandaluyong High School. The charge
sheets required respondents to explain in
writing why they should not be punished
for having taken part in the mass action in
violation of civil service laws.
Administrative
hearings
started
on
December 1990. Respondents, through
counsel assailed the legality of the
proceedings on the following due process
grounds: first, they were not given copies
of the guidelines adopted by the
committee for the investigation and
denied access to evidence; second, the
investigation placed the burden of proof
on respondents to prove their innocence;
third, that the investigating body was
illegally constituted, their composition and
appointment violated Sec.9 of the Magna
Carta for Public School Teachers. Pending
the action assailing the validity of the
administrative
proceedings,
the
investigating
committee
rendered
a

decision finding the respondents guilty


and ordered their immediate dismissal.
ISSUE:
Whether or not private respondents were
denied due process?
HELD:
YES. In administrative proceedings, due
process has been recognized to include
the following: (1) the right to actual or
constructive notice of the institution of
proceedings
which
may
affect
a
respondents legal rights; (2) a real
opportunity to be heard personally or with
the assistance of counsel, to present
witnesses and evidence in ones favor, and
to defend ones rights; (3) a tribunal
vested with competent jurisdiction and so
constituted as to afford a person charged
administratively a reasonable guarantee of
honesty as well as impartiality; and (4) a
finding by said tribunal which is supported
by substantial evidence submitted for
consideration during the hearing or
contained in the records or made known
to the parties affected.
The legislature enacted a special law, RA
4670 known as the Magna Carta for Public
School Teachers, which specifically covers
administrative
proceedings
involving
public schoolteachers. Section 9 of said
law expressly provides that the committee
to
hear
public
schoolteachers
administrative cases should be composed
of the school superintendent of the
division as chairman, a representative of
the local or any existing provincial or
national teachers organization and a
supervisor of the division.
In the present case, the various
committees formed by DECS to hear the
administrative charges against private
respondents
did
not
include
a
representative of the local or, in its
absence, any existing provincial or
national
teachers
organization
as
required by Section 9 of RA 4670.
Accordingly, these
committees
were
deemed
to
have
no
competent
jurisdiction.
Thus,
all
proceedings

Administrative law case digest 28


undertaken by them were necessarily
void. They could not provide any basis for
the suspension or dismissal of private
respondents.
The
inclusion
of
a
representative of a teachers organization
in these committees was indispensable to
ensure an impartial tribunal. It was this
requirement that would have given
substance and meaning to the right to be
heard. Indeed, in any proceeding, the
essence of procedural due process is
embodied in the basic requirement of
notice and a real opportunity to be
heard. Other minor issues: Petitioners
allege that Sec 9 of RA 4670 was complied
with because the
respondents are
members of Quezon City Teachers
Federation.
We
disagree.
Mere
membership of said teachers in their
respective teachers organizations does
not ipso facto make them authorized
representatives of such organizations as
contemplated by Section 9 of RA 4670.
Under
this
organization

section,
possesses

the
the

teachers
right to

indicate its choice of representative to be


included by the DECS in the investigating
committee. Such right to designate cannot
be usurped by the secretary of education
or the director of public schools or their
underlings. In the instant case, there is no
dispute that none of the teachers
appointed by the DECS as members of its
investigating
committee
was
ever
designated or authorized by a teachers
organization as its representative in said
committee. Sec 9 of RA 4670 was
repealed by PD 807. Statcon principle, a
subsequent general law cannot repeal a
previous specific law, unless there is an
express stipulation. Always interpret laws
so as to harmonize them.