Describe the Administrative Code of 1987.

Held: The Code is a general law and incorporates in a unified

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

What is Administrative Power?

Held: Administrative power is concerned with the work of applying

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

What is an Administrative Order?

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

which relates to specific aspects in the administrative operation of
government. It must be in harmony with the law and should be for the
sole purpose of implementing the law and carrying out the legislative
policy. (Ople v. Torres, G.R. No. 127685, July 23, 1998 [Puno])

What is the Government of the Republic of the Philippines?

Ans.: The Government of the Republic of the Philippines refers to the

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

What is an Agency of the Government?

Ans.: Agency of the Government refers to any of the various units of

the Government, including a department, bureau, office,
instrumentality, or government-owned or controlled corporation, or a
local government or a distinct unit therein. (Sec. 2[4], Introductory
Provisions, Executive Order No. 292)

What is a Department?

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

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

What is a Bureau?

Ans.: Bureau refers to any principal subdivision or unit of any

department. For purposes of Book IV, this shall include any principal
subdivision or unit of any instrumentality given or assigned the rank of
a bureau, regardless of actual name or designation, as in the case of
department-wide regional offices. (Sec. 2[8], Introductory Provisions,
Executive Order No. 292)

What is an Office?

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

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

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

Government Instrumentality?

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

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

What is a Regulatory Agency?

Ans.: A regulatory agency refers to any agency expressly vested with

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

What is a Chartered Institution?

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

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

What is a Government-Owned or Controlled Corporation?

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

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

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

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

Held: Government-owned or controlled corporations may perform

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

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

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

Held: The test to determine whether a corporation is government

owned or controlled, or private in nature is simple. Is it created by its
own charter for the exercise of a public function, or by incorporation
under the general corporation law? Those with special charters are
government corporations subject to its provisions, and its employees
are under the jurisdiction of the Civil Service Commission. The PNRC
was not impliedly converted to a private corporation simply because
its charter was amended to vest in it the authority to secure loans, be
exempted from payment of all duties, taxes, fees and other charges,
etc. (Camporedondo v. NLRC, G.R. No. 129049, Aug. 6, 1999, 1st Div.
[Pardo])

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

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

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

With the transfer of Camp Wallace to the BCDA, the government no

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

Nonetheless, it has been posited that the transfer of military

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

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

It may not be amiss to state at this point that the functions of

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

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

Having the capacity to sue or be sued, it should thus be the BCDA

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

Moreover, to recognize the Government as a proper party to sue in this

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

However, E.B. Marcha Transport Co., Inc. v. IAC is cited as authority

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

It can be said that in suing for the recovery of the rentals, the Republic
of the Philippines, acted as principal of the Philippine Ports Authority,
directly exercising the commission it had earlier conferred on the latter
as its agent. We may presume that, by doing so, the Republic of the
Philippines did not intend to retain the said rentals for its own use,
considering that by its voluntary act it had transferred the land in
question to the Philippine Ports Authority effective July 11, 1974. The
Republic of the Philippines had simply sought to assist, not supplant,
the Philippine Ports Authority, whose title to the disputed property it
continues to recognize. We may expect the that the said rentals, once
collected by the Republic of the Philippines, shall be turned over by it
to the Philippine Ports Authority conformably to the purposes of P.D.
No. 857.

It should also be noted that petitioner is unquestionably a buyer in

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

Discuss the nature and functions of the National Telecommunications

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

Held: The NTC was created pursuant to Executive Order No.

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

In the regulatory communications industry, the NTC has the

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

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

Held: In granting Bayantel the provisional authority to

operate a CMTS, the NTC applied Rule 15, Section 3 of its 1978 Rules of
Practice and Procedure, which provides:

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

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

Respondent Extelcom, however, contends that the NTC

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

In answer to this argument, the NTC, through the Secretary of

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

The absence of publication, coupled with the certification by

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

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

(2) The records officer of the agency, or his equivalent functionary,

shall carry out the requirements of this section under pain of
disciplinary action.

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

The National Administrative Register is merely a bulletin of

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

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

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

The fact that the amendments to Administrative Order No. SOCPEC 8908-01 were filed with, and published by the UP Law Center in the
National Administrative Register, does not cure the defect related to the
effectivity of the Administrative Order.

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

We hold therefore that all statutes, including those of local application

and private laws, shall be published as a condition for their effectivity,
which shall begin fifteen days after publication unless a different
effectivity is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders

promulgated by the President in the exercise of legislative power or, at
present, directly conferred by the Constitution. Administrative Rules
and Regulations must also be published if their purpose is to enforce
or implement existing law pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is,

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

Held: Petitioner insists, however, that it cannot be held liable

for illegal exaction as POEA Memorandum Circular No. II, Series of
1983, which enumerated the allowable fees which may be collected
from applicants, is void for lack of publication.

There is merit in the argument.

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

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

The Administrative Order under consideration is one of those

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

We hold therefore that all statutes, including those of local application

and private laws, shall be published as a condition for their effectivity,
which shall begin fifteen days after publication unless a different
effectivity date is fixed by the legislature.

Thus, publication in the Official Gazette or a newspaper of

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

Covered by this rule are presidential decrees and executive orders

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

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

The Rules of Practice and Procedure of the NTC, which

implements Section 29 of the Public Service Act, fall squarely within
the scope of these laws, as explicitly mentioned in the case of Tanada
v. Tuvera.

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

Administrative rules and regulations must be published if their purpose
is to enforce or implement existing law pursuant to a valid delegation.
The only exception are interpretative regulations, those merely internal
in nature, or those so-called letters of instructions issued by
administrative superiors concerning the rules and guidelines to be
followed by their subordinates in the performance of their
duties (PHILSA International Placement & Services Corp. v. Secretary
of Labor, G.R. No. 103144, April 4, 2001, 356 SCRA 174).

Hence, the 1993 Revised Rules should be published in the

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

May a person be held liable for violation of an administrative

regulation which was not published?

Interpretative regulations and those merely internal in nature, that is,

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

Applying this doctrine, we have previously declared as having

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

POEA Memorandum Circular No. 2, Series of 1983 must

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

POEA Memorandum Circular No. 2, Series of 1983 provides

for the applicable schedule of placement and documentation fees for
private employment agencies or authority holders. Under the said
Order, the maximum amount which may be collected from prospective
Filipino overseas workers is P2,500.00. The said circular was
apparently issued in compliance with the provisions of Article 32 of the
Labor Code x x x.

It is thus clear that the administrative circular under

consideration is one of those issuances which should be published for
its effectivity, since its purpose is to enforce and implement an existing
law pursuant to a valid delegation. Considering that POEA
Administrative Circular No. 2, Series of 1983 has not as yet been
published or filed with the National Administrative Register, the same is
ineffective and may not be enforced. (Philsa International Placement
and Services Corporation v. Secretary of Labor and Employment, 356
SCRA 174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])

Does the publication requirement apply as well to administrative

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

Held: The Office of the Solicitor General likewise argues that

the questioned administrative circular is not among those requiring
publication contemplated by Tanada v. Tuvera as it is addressed only to
a specific group of persons and not to the general public.

Again, there is no merit in this argument.

The fact that the said circular is addressed only to a specified

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

Our pronouncement in Tanada v. Tuvera is clear and

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

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

v. Commissioner of Customs is misplaced. In the said case, the validity
of certain Customs Memorandum Orders were upheld despite their lack
of publication as they were addressed to a particular class of persons,
the customs collectors, who were also the subordinates of the
Commissioner of the Bureau of Customs. As such, the said
Memorandum Orders clearly fall under one of the exceptions to the
publication requirement, namely those dealing with instructions from
an administrative superior to a subordinate regarding the performance
of their duties, a circumstance which does not obtain in the case at
bench. X x x

To summarize, petitioner should be absolved from the three (3) counts

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

May a successful bidder compel a government agency to formalize a

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

Held: Enshrined in the 1987 Philippine Constitution is the mandate that

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

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

In the case at bar, there seems to be an oversight of the legal

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

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

Even the draft contract submitted by Commissioner Sadain

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

SECTION 33. Contracting Multi-Year Projects. - In the implementation

of multi-year projects, no agency shall enter into a multi-year contract
without a multi-year Obligational Authority issued by the Department of
Budget and Management for the purpose. Notwithstanding the
issuance of the multi-year Obligational Authority, the obligation to be
incurred in any given calendar year, shall in no case exceed the amount
programmed for implementation during said calendar year.

Petitioners are justified in refusing to formalize the contract with

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

Verily, the contract, as expressly declared by law, is inexistent

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

In fine, we rule that PHOTOKINA, though the winning bidder, cannot

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

What is the remedy available to a party who contracts with the

government contrary to the requirements of the law and, therefore,
void ab initio?

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

While this is not the proceeding to determine where the

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

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

Held: In its Order x x x denying petitioners motion to

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

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

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

The most that may be conceded to the Commission in the way of

adjudicative power is that it may investigate, i.e., receive evidence and
make findings of fact as regards claimed human rights violations
involving civil and political rights. But fact finding is not adjudication,
and cannot be likened to the judicial function of a court of justice, or
even a quasi-judicial agency or official. The function of receiving
evidence and ascertaining therefrom the facts of a controversy is not a
judicial function, properly speaking. To be considered such, the faculty
of receiving evidence and making factual conclusions in a controversy
must be accompanied by the authority of applying the law to those
factual conclusions to the end that the controversy may be decided or
determined authoritatively, finally and definitively, subject to such
appeals or modes of review as may be provided by law. This function,
to repeat, the Commission does not have. (Simon, Jr. v. Commission on
Human Rights, 229 SCRA 117, 125, Jan. 5, 1994, En Banc [Vitug, J.])

Does the Commission on Human Rights have jurisdiction to issue TRO

or writ of preliminary injunction?

Held: In Export Processing Zone Authority v. Commission on

Human Rights, the Court x x x explained:

The constitutional provision directing the CHR to provide for

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

Evidently, the preventive measures and legal aid services mentioned

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

The Commission does have legal standing to indorse, for appropriate

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

Does the petition for annulment of proclamation of a candidate merely

involve the exercise by the COMELEC of its administrative power to
review, revise and reverse the actions of the board of canvassers and,
therefore, justifies non-observance of procedural due process, or does
it involve the exercise of the COMELECs quasi-judicial function?

Held: Taking cognizance of private respondents petitions for

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

Discuss the contempt power of the Commission on Human Rights

(CHR). When may it be validly exercised.

Held: On its contempt powers, the CHR is constitutionally

authorized to adopt its operational guidelines and rules of procedure,
and cite for contempt for violations thereof in accordance with the
Rules of Court. Accordingly, the CHR acted within its authority in
providing in its revised rules, its power to cite or hold any person in
direct or indirect contempt, and to impose the appropriate penalties in
accordance with the procedure and sanctions provided for in the Rules
of Court. That power to cite for contempt, however, should be
understood to apply only to violations of its adopted operational
guidelines and rules of procedure essential to carry out its
investigatorial powers. To exemplify, the power to cite for contempt
could be exercised against persons who refuse to cooperate with the
said body, or who unduly withhold relevant information, or who decline
to honor summons, and the like, in pursuing its investigative work. The
order to desist (a semantic interplay for a restraining order) in the
instance before us, however, is not investigatorial in character but
prescinds from an adjudicative power that it does not possess. x x
x (Simon, Jr. v. Commission on Human Rights, 229 SCRA 117, 134, Jan.
5, 1994, En Banc [Vitug, J.])

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

Held: Courts cannot and will not resolve a controversy involving a

question which is within the jurisdiction of an administrative tribunal,
especially where the question demands the exercise of sound
administrative discretion requiring the special knowledge, experience
and services of the administrative tribunal to determine technical and
intricate matters of fact.

In recent years, it has been the jurisprudential trend to apply this

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

In cases where the doctrine of primary jurisdiction is clearly applicable,

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

Discuss the Doctrine of Exhaustion of Administrative Remedies. What

are the exceptions thereto?

Held: 1. Before a party is allowed to seek the intervention of the court,

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

This doctrine is disregarded:

when there is a violation of due process;

when the issue involved is purely a legal question;

when the administrative action is patently illegal amounting to lack or

excess of jurisdiction;

when there is estoppel on the part of the administrative agency

concerned;

when there is irreparable injury;

when the respondent is a department secretary whose acts as an alter

ego of the President bears the implied and assumed approval of the
latter;

when to require exhaustion of administrative remedies would be

unreasonable;

when it would amount to a nullification of a claim;

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

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

when there are circumstances indicating the urgency of judicial

intervention.

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

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

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