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
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, 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 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])
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