Reviewer in Administrative Law by Atty.

Edwin Sandoval
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, 1 st 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 Galvez’s 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 country’s goal for enhancement (Section 2, Republic Act
No. 7227). It is contended that the transfer of these military reservations to the Conversion Authority does not amount to
an abdication on the part of the Republic of its interests, but simply a recognition of the need to create a body corporate
which will act as its agent for the realization of its program. It is consequently asserted that the Republic remains to be
the real party in interest and the Conversion Authority merely its agent.

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

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

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

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

It can be said that in suing for the recovery of the rentals, the Republic of the Philippines, acted as principal of the
Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as its agent. We may
presume that, by doing so, the Republic of the Philippines did not intend to retain the said rentals for its own use,
considering that by its voluntary act it had transferred the land in question to the Philippine Ports Authority effective July
11, 1974. The Republic of the Philippines had simply sought to assist, not supplant, the Philippine Ports Authority, whose
title to the disputed property it continues to recognize. We may expect the that the said rentals, once collected by the
Republic of the Philippines, shall be turned over by it to the Philippine Ports Authority conformably to the purposes of P.D.
No. 857.
E.B. Marcha is, however, not on all fours with the case at bar. In the former, the Court considered the Republic a proper
party to sue since the claims of the Republic and the Philippine Ports Authority against the petitioner therein were the
same. To dismiss the complaint in E.B. Marcha would have brought needless delay in the settlement of the matter since
the PPA would have to refile the case on the same claim already litigated upon. Such is not the case here since to allow
the government to sue herein enables it to raise the issue of imprescriptibility, a claim which is not available to the BCDA.
The rule that prescription does not run against the State does not apply to corporations or artificial bodies created by the
State for special purposes, it being said that when the title of the Republic has been divested, its grantees, although
artificial bodies of its own creation, are in the same category as ordinary persons . By raising the claim of
imprescriptibility, a claim which cannot be raised by the BCDA, the Government not only assists the BCDA, as it did in
E.B. Marcha, it even supplants the latter, a course of action proscribed by said case.

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

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

Discuss the nature and functions of the National Telecommunications Commission (NTC), and analyze its
powers and authority as well as the laws, rules and regulations that govern its existence and operations.

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

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

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

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

Sec. 3. Provisional Relief. – Upon the filing of an application, complaint or petition or at any stage thereafter, the Board
may grant on motion of the pleader or on its own initiative, the relief prayed for, based on the pleading, together with the
affidavits and supporting documents attached thereto, without prejudice to a final decision after completion of the
hearing which shall be called within thirty (30) days from grant of authority asked for.

Respondent Extelcom, however, contends that the NTC should have applied the Revised Rules which were
filed with the Office of the National Administrative Register on February 3, 1993. These Revised Rules deleted the phrase
“on its own initiative”; accordingly, a provisional authority may be issued only upon filing of the proper motion before the
Commission.
 In answer to this argument, the NTC, through the Secretary of the Commission, issued a certification to the
effect that inasmuch as the 1993 Revised Rules have not been published in a newspaper of general circulation, the NTC
has been applying the 1978 Rules.

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

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

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

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

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

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

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

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

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

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

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

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

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

The Administrative Order under consideration is one of those issuances which should be published for its effectivity, since
its purpose is to enforce and implement an existing law pursuant to a valid delegation, i.e., P.D. 1071, in relation to LOI
444 and EO 133.
 Thus, publication in the Official Gazette or a newspaper of general circulation is a condition sine qua non
before statutes, rules or regulations can take effect. This is explicit from Executive Order No. 200, which repealed Article
2 of the Civil Code, and which states that:

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

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

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

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

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

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

There is merit in the argument.

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

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

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

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

Applying this doctrine, we have previously declared as having no force and effect the following administrative
issuances: a) Rules and Regulations issued by the Joint Ministry of Health-Ministry of Labor and Employment Accreditation
Committee regarding the accreditation of hospitals, medical clinics and laboratories; b) Letter of Instruction No. 416
ordering the suspension of payments due and payable by distressed copper mining companies to the national
government; c) Memorandum Circulars issued by the POEA regulating the recruitment of domestic helpers to Hong Kong;
d) Administrative Order No. SOCPEC 89-08-01 issued by the Philippine International Trading Corporation regulating
applications for importation from the People’s 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, 3 rd 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 General’s 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 PHOTOKINA’s 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 COMELEC’s
request for the issuance of the Notice of Cash Availability (NCA) and a multi-year obligatory authority to assume payment
of the total VRIS Project for lack of legal basis. Corollarily, under Section 33 of R.A. No. 8760, no agency shall enter into
a multi-year contract without a multi-year obligational authority, thus:

“SECTION 33. Contracting Multi-Year Projects. - In the implementation of multi-year projects, no agency shall enter into
a multi-year contract without a multi-year Obligational Authority issued by the Department of Budget and Management
for the purpose. Notwithstanding the issuance of the multi-year Obligational Authority, the obligation to be incurred in
any given calendar year, shall in no case exceed the amount programmed for implementation during said calendar year.”

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

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

In fine, we rule that PHOTOKINA, though the winning bidder, cannot compel the COMELEC to formalize the contract.
Since PHOTOKINA’s 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 [Sandoval-Gutierrez])
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
COMELEC’s quasi-judicial function?

Held: Taking cognizance of private respondent’s petitions for annulment of petitioner’s 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 citizen’s 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 court’s judicial power can be sought. The
premature invocation of court’s jurisdiction is fatal to one’s 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])