Case Digests

Reviewer in Administrative Law by Atty. Edwin Sandoval

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Describe the Administrative Code of 1987.

Held: The Code is a general law and incorporates in a unified document the major
structural, functional and procedural principles of governance (Third Whereas Clause,
Administrative Code of 1987) and embodies changes in administrative structures and
procedures designed to serve the people. (Fourth Whereas Clause, Administrative Code of
1987) The Code is divided into seven (7) books. These books contain provisions on the
organization, powers and general administration of departments, bureaus and offices under
the executive branch, the organization and functions of the Constitutional Commissions and
other constitutional bodies, the rules on the national government budget, as well as
guidelines for the exercise by administrative agencies of quasi-legislative and quasi-judicial
powers. The Code covers both the internal administration, i.e., internal organization,
personnel and recruitment, supervision and discipline, and the effects of the functions
performed by administrative officials on private individuals or parties outside
government. (Ople v. Torres, G.R. No. 127685, July 23, 1998 [Puno])
What is Administrative Power?
Held: Administrative power is concerned with the work of applying policies and enforcing
orders as determined by proper governmental organs. It enables the President to fix a
uniform standard of administrative efficiency and check the official conduct of his agents. To
this end, he can issue administrative orders, rules and regulations. (Ople v. Torres, G.R.
No. 127685, July 23, 1998 [Puno])
What is an Administrative Order?
Held: An administrative order is an ordinance issued by the President which relates to
specific aspects in the administrative operation of government. It must be in harmony with
the law and should be for the sole purpose of implementing the law and carrying out the
legislative policy. (Ople v. Torres, G.R. No. 127685, July 23, 1998 [Puno])
What is the Government of the Republic of the Philippines?
Ans.: The Government of the Republic of the Philippines refers to the corporate
governmental entity through which the functions of the government are exercised
throughout the Philippines, including, save as the contrary appears from the context, the
various arms through which political authority is made effective in the Philippines, whether
pertaining to the autonomous regions, the provincial, city, municipal or barangay
subdivisions or other forms of local government. (Sec. 2[1], Introductory Provisions,
Executive Order No. 292)
What is an Agency of the Government?
Ans.: Agency of the Government refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or controlled

corporation, or a local government or a distinct unit therein. (Sec. 2[4], Introductory

Provisions, Executive Order No. 292)
What is a Department?
Ans.: Department refers to an executive department created by law. For purposes of Book
IV, this shall include any instrumentality, as herein defined, having or assigned the rank of a
department, regardless of its name or designation. (Sec. 2[7], Introductory Provisions,
Executive Order No. 292)
What is a Bureau?
Ans.: Bureau refers to any principal subdivision or unit of any department. For purposes of
Book IV, this shall include any principal subdivision or unit of any instrumentality given or
assigned the rank of a bureau, regardless of actual name or designation, as in the case of
department-wide regional offices. (Sec. 2[8], Introductory Provisions, Executive
Order No. 292)
What is an Office?
Ans.: Office refers, within the framework of governmental organization, to any major
functional unit of a department or bureau including regional offices. It may also refer to any
position held or occupied by individual persons, whose functions are defined by law or
regulation. (Sec. 2[9], Introductory Provisions, Executive Order No. 292)
What is a Government Instrumentality? What are included in the term
Government Instrumentality?
Ans.: A government instrumentality refers to any agency of the national government, not
integrated within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, enjoying
operational autonomy, usually through a charter. The term includes regulatory agencies,
chartered institutions and government-owned or controlled corporations. (Sec. 2[10],
Introductory Provisions, Executive Order No. 292)
What is a Regulatory Agency?
Ans.: A regulatory agency refers to any agency expressly vested with jurisdiction to
regulate, administer or adjudicate matters affecting substantial rights and interest of private
persons, the principal powers of which are exercised by a collective body, such as a
commission, board or council. (Sec. 2[11], Introductory Provisions, Executive Order
No. 292)
What is a Chartered Institution?
Ans.: A chartered institution refers to any agency organized or operating under a special
charter, and vested by law with functions relating to specific constitutional policies or
objectives. This term includes state universities and colleges and the monetary authority of
the State. (Section 2[12], Introductory Provisions, Executive Order No. 292)
What is a Government-Owned or Controlled Corporation?
Ans.: Government-owned or controlled corporation refers to any agency organized as a
stock or non-stock corporation, vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the Government directly or through its
instrumentalities either wholly, or, where applicable as in the case of stock corporations, to

the extent of at least fifty-one (51) per cent of its capital stock; x x x (Sec. 2[13],
Introductory Provisions, Executive Order No. 292)
When is a Government-Owned or Controlled Corporation deemed to be performing
proprietary function? When is it deemed to be performing governmental function?
Held: Government-owned or controlled corporations may perform governmental or
proprietary functions or both, depending on the purpose for which they have been created.
If the purpose is to obtain special corporate benefits or earn pecuniary profit, the function is
proprietary. If it is in the interest of health, safety and for the advancement of public good
and welfare, affecting the public in general, the function is governmental. Powers classified
as proprietary are those intended for private advantage and benefit. (Blaquera v.
Alcala, 295 SCRA 366, 425, Sept. 11, 1998, En Banc [Purisima])
The Philippine National Red Cross (PNRC) is a government-owned and controlled
corporation with an original charter under R.A. No. 95, as amended. Its charter,
however, was amended to vest in it the authority to secure loans, be exempted
from payment of all duties, taxes, fees and other charges, etc. With the amendnt
of its charter, has it been impliedly converted to a private corporation?
Held: The test to determine whether a corporation is government owned or controlled, or
private in nature is simple. Is it created by its own charter for the exercise of a public
function, or by incorporation under the general corporation law? Those with special charters
are government corporations subject to its provisions, and its employees are under the
jurisdiction of the Civil Service Commission. The PNRC was not impliedly converted to a
private corporation simply because its charter was amended to vest in it the authority to
secure loans, be exempted from payment of all duties, taxes, fees and other charges,
etc. (Camporedondo v. NLRC, G.R. No. 129049, Aug. 6, 1999, 1st Div. [Pardo])
When may the Government not validly invoke the rule that prescription does not
run against the State? Illustrative Case.
Held: While it is true that prescription does not run against the State, the same may not be
invoked by the government in this case since it is no longer interested in the subject
matter. While Camp Wallace may have belonged to the government at the time Rafael
Galvezs title was ordered cancelled in Land Registration Case No. N-361, the same no
longer holds true today.
Republic Act No. 7227, otherwise known as the Base Conversion and Development Act of
1992, created the Bases Conversion and Development Authority. X x x
With the transfer of Camp Wallace to the BCDA, the government no longer has a right or
interest to protect. Consequently, the Republic is not a real party in interest and it may not
institute the instant action. Nor may it raise the defense of imprescriptibility, the same
being applicable only in cases where the government is a party in interest. x x x. Being the
owner of the areas covered by Camp Wallace, it is the Bases Conversion and Development
Authority, not the Government, which stands to be benefited if the land covered by TCT No.
T-5710 issued in the name of petitioner is cancelled.

Nonetheless, it has been posited that the transfer of military reservations and their
extensions to the BCDA is basically for the purpose of accelerating the sound and balanced
conversion of these military reservations into alternative productive uses and to enhance the
benefits to be derived from such property as a measure of promoting the economic and
social development, particularly of Central Luzon and, in general, the countrys goal for
enhancement (Section 2, Republic Act No. 7227). It is contended that the transfer of these
military reservations to the Conversion Authority does not amount to an abdication on the
part of the Republic of its interests, but simply a recognition of the need to create a body
corporate which will act as its agent for the realization of its program. It is consequently
asserted that the Republic remains to be the real party in interest and the Conversion
Authority merely its agent.
We, however, must not lose sight of the fact that the BCDA is an entity invested with a
personality separate and distinct from the government. 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
countrys goal for enhancement, in general, do not make the BCDA equivalent to the
Government. Other corporations have been created by government to act as its agents for
the realization of its programs, the SSS, GSIS, NAWASA and the NIA, to count a few, and
yet, the Court has ruled that these entities, although performing functions aimed at
promoting public interest and public welfare, are not government-function corporations
invested with governmental attributes. It may thus be said that the BCDA is not a mere
agency of the Government but a corporate body performing proprietary functions.
Having the capacity to sue or be sued, it should thus be the BCDA which may file an action
to cancel petitioners title, not the Republic, the former being the real party in interest. One
having no right or interest to protect cannot invoke the jurisdiction of the court as a party
plaintiff in an action. A suit may be dismissed if the plaintiff or the defendant is not a real
party in interest. x x x
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
NTCs function were merely those of the defunct Public Service Commission (PSC), created
under Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act,
considering that the Board of Communications was the successor-in-interest of the PSC.

Under Executive Order No. 125-A, issued in April 1987, the NTC became an attached agency
of the Department of Transportation and Communications.
In the regulatory communications industry, the NTC has the sole authority to issue
Certificates of Public Convenience and Necessity (CPCN) for the installation, operation, and
maintenance of communications facilities and services, radio communications systems,
telephone and telegraph systems. Such power includes the authority to determine the
areas of operations of applicants for telecommunications services. Specifically, Section 16 of
the Public Service Act authorizes the then PSC, upon notice and hearing, to issue
Certificates of Public Convenience for the operation of public services within the Philippines
whenever the Commission finds that the operation of the public service proposed and the
authorization to do business will promote the public interests in a proper and suitable
manner. (Commonwealth Act No. 146, Section 16[a]) The procedure governing the
issuance of such authorizations is set forth in Section 29 of the said Act x x x. (Republic v.
Express Telecommunication Co., Inc., 373 SCRA 316, Jan. 15, 2002, 1st Div.
[Ynares-Santiago])
Is the filing of the administrative rules and regulations with the UP Law Center
the operative act that gives the rules force and effect?
Held: In granting Bayantel the provisional authority to operate a CMTS, the NTC applied
Rule 15, Section 3 of its 1978 Rules of Practice and Procedure, which provides:
Sec. 3. Provisional Relief. Upon the filing of an application, complaint or petition or at any
stage thereafter, the Board may grant on motion of the pleader or on its own initiative, the
relief prayed for, based on the pleading, together with the affidavits and supporting
documents attached thereto, without prejudice to a final decision after completion of the
hearing which shall be called within thirty (30) days from grant of authority asked for.
Respondent Extelcom, however, contends that the NTC should have applied the Revised
Rules which were filed with the Office of the National Administrative Register on February 3,
1993. These Revised Rules deleted the phrase on its own initiative; accordingly, a
provisional authority may be issued only upon filing of the proper motion before the
Commission.
In answer to this argument, the NTC, through the Secretary of the Commission, issued a
certification to the effect that inasmuch as the 1993 Revised Rules have not been published
in a newspaper of general circulation, the NTC has been applying the 1978 Rules.
The absence of publication, coupled with the certification by the Commissioner of the NTC
stating that the NTC was still governed by the 1987 Rules, clearly indicate that the 1993
Revised Rules have not taken effect at the time of the grant of the provisional authority to
Bayantel. The fact that the 1993 Revised Rules were filed with the UP Law Center on
February 3, 1993 is of no moment. There is nothing in the Administrative Code of 1987
which implies that the filing of the rules with the UP Law Center is the operative act that
gives the rules force and effect. Book VII, Chapter 2, Section 3 thereof merely states:

Filing. (1) Every agency shall file with the University of the Philippines Law Center three
(3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of
this Code which are not filed within three (3) months from the date shall not thereafter be
the basis of any sanction against any party or persons.
(2) The records officer of the agency, or his equivalent functionary, shall carry out the
requirements of this section under pain of disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing agency and shall be open
to public inspection.
The National Administrative Register is merely a bulletin of codified rules and it is furnished
only to the Office of the President, Congress, all appellate courts, the National Library, other
public offices or agencies as the Congress may select, and to other persons at a price
sufficient to cover publication and mailing or distribution costs (Administrative Code of
1987, Book VII, Chapter 2, Section 7). In a similar case, we held:
This does not imply, however, that the subject Administrative Order is a valid exercise of
such quasi-legislative power. The original Administrative Order issued on August 30, 1989,
under which the respondents filed their applications for importations, was not published in
the Official Gazette or in a newspaper of general circulation. The questioned Administrative
Order, legally, until it is published, is invalid within the context of Article 2 of Civil Code,
which reads:
Article 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette (or in a newspaper of general circulation in the
Philippines), unless it is otherwise provided. X x x
The fact that the amendments to Administrative Order No. SOCPEC 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 Peoples Republic of China; and e) Corporate
Compensation Circular No. 10 issued by the Department of Budget and Management
discontinuing the payment of other allowances and fringe benefits to government officials
and employees. In all these cited cases, the administrative issuances questioned therein
were uniformly struck down as they were not published or filed with the National
Administrative Register as required by the Administrative Code of 1987.
POEA Memorandum Circular No. 2, Series of 1983 must likewise be declared ineffective as
the same was never published or filed with the National Administrative Register.
POEA Memorandum Circular No. 2, Series of 1983 provides for the applicable schedule of
placement and documentation fees for private employment agencies or authority holders.
Under the said Order, the maximum amount which may be collected from prospective
Filipino overseas workers is P2,500.00. The said circular was apparently issued in
compliance with the provisions of Article 32 of the Labor Code x x x.
It is thus clear that the administrative circular under consideration is one of those issuances
which should be published for its effectivity, since its purpose is to enforce and implement
an existing law pursuant to a valid delegation. Considering that POEA Administrative
Circular No. 2, Series of 1983 has not as yet been published or filed with the National
Administrative Register, the same is ineffective and may not be enforced. (Philsa
International Placement and Services Corporation v. Secretary of Labor and
Employment, 356 SCRA 174, April 4, 2001, 3rd Div., [Gonzaga-Reyes])

Does the publication requirement apply as well to administrative regulations

addressed only to a specific group and not to the general public?
Held: The Office of the Solicitor General likewise argues that the questioned administrative
circular is not among those requiring publication contemplated by Tanada v. Tuvera as it is
addressed only to a specific group of persons and not to the general public.
Again, there is no merit in this argument.
The fact that the said circular is addressed only to a specified group, namely private
employment agencies or authority holders, does not take it away from the ambit of our
ruling in Tanada v. Tuvera. In the case of Phil. Association of Service Exporters v. Torres,
the administrative circulars questioned therein were addressed to an even smaller group,
namely Philippine and Hong Kong agencies engaged in the recruitment of workers for Hong
Kong, and still the Court ruled therein that, for lack of proper publication, the said circulars
may not be enforced or implemented.
Our pronouncement in Tanada v. Tuvera is clear and categorical. Administrative rules and
regulations must be published if their purpose is to enforce or implement existing law
pursuant to a valid delegation. The only exceptions are interpretative regulations, those
merely internal in nature, or those so-called letters of instructions issued by administrative
superiors concerning the rules and guidelines to be followed by their subordinates in the
performance of their duties. Administrative Circular No. 2, Series of 1983 has not been
shown to fall under any of these exceptions.
In this regard, the Solicitor Generals reliance on the case of Yaokasin v. Commissioner of
Customs is misplaced. In the said case, the validity of certain Customs Memorandum
Orders were upheld despite their lack of publication as they were addressed to a particular
class of persons, the customs collectors, who were also the subordinates of the
Commissioner of the Bureau of Customs. As such, the said Memorandum Orders clearly fall
under one of the exceptions to the publication requirement, namely those dealing with
instructions from an administrative superior to a subordinate regarding the performance of
their duties, a circumstance which does not obtain in the case at bench. X x x
To summarize, petitioner should be absolved from the three (3) counts of exaction as POEA
Administrative Circular No. 2, Series of 1983 could not be the basis of administrative
sanctions against petitioner for lack of publication. (Philsa International Placement and
Services Corporation v. Secretary of Labor and Employment, 356 SCRA 174, April
4, 2001, 3rd Div., [Gonzaga-Reyes])
May a successful bidder compel a government agency to formalize a contract with
it notwithstanding that its bid exceeds the amount appropriated by Congress for
the project?
Held: Enshrined in the 1987 Philippine Constitution is the mandate that no money shall be
paid out of the Treasury except in pursuance of an appropriation made by law. (Sec. 29[1],
Article VI of the 1987 Constitution) Thus, in the execution of government contracts, the
precise import of this constitutional restriction is to require the various agencies to limit
their expenditures within the appropriations made by law for each fiscal year.

It is quite evident from the tenor of the language of the law that the existence of
appropriations and the availability of funds are indispensable pre-requisites to or
conditions sine qua non for the execution of government contracts. The obvious intent is to
impose such conditions as a priori requisites to the validity of the proposed contract. Using
this as our premise, we cannot accede to PHOTOKINAs contention that there is already a
perfected contract. While we held in Metropolitan Manila Development Authority v. Jancom
Environmental Corporation that the effect of an unqualified acceptance of the offer or
proposal of the bidder is to perfect a contract, upon notice of the award to the bidder,
however, such statement would be inconsequential in a government where the acceptance
referred to is yet to meet certain conditions. To hold otherwise is to allow a public officer to
execute a binding contract that would obligate the government in an amount in excess of
the appropriations for the purpose for which the contract was attempted to be made. This
is a dangerous precedent.
In the case at bar, there seems to be an oversight of the legal requirements as early as the
bidding stage. The first step of a Bids and Awards Committee (BAC) is to determine
whether the bids comply with the requirements. The BAC shall rate a bid passed only if it
complies with all the requirements and the submitted price does not exceed the approved
budget for the contract.(Implementing Rules and Regulations [IRR] for Executive Order No.
262, supra.)
Extant on the record is the fact that the VRIS Project was awarded to
PHOTOKINA on account of its bid in the amount of P6.588 Billion Pesos. However, under
Republic Act No. 8760 (General Appropriations Act, FY 2000, p. 1018, supra.),the only fund
appropriated for the project was P1 Billion Pesos and under the Certification of Available
Funds (CAF) only P1.2 Billion Pesos was available. Clearly, the amount appropriated is
insufficient to cover the cost of the entire VRIS Project. There is no way that the COMELEC
could enter into a contract with PHOTOKINA whose accepted bid was way beyond the
amount appropriated by law for the project. This being the case, the BAC should have
rejected the bid for being excessive or should have withdrawn the Notice of Award on the
ground that in the eyes of the law, the same is null and void.
Even the draft contract submitted by Commissioner Sadain that provides for a contract price
in the amount of P1.2 Billion Pesos is unacceptable. x x x While the contract price under the
draft contract is only P1.2 Billion and, thus, within the certified available funds, the same
covers only Phase I of the VRIS Project, i.e., the issuance of identification cards for only
1,000,000 voters in specified areas. In effect, the implementation of the VRIS Project will
be segmented or chopped into several phases. Not only is such arrangement disallowed
by our budgetary laws and practices, it is also disadvantageous to the COMELEC because of
the uncertainty that will loom over its modernization project for an indefinite period of time.
Should Congress fail to appropriate the amount necessary for the completion of the entire
project, what good will the accomplished Phase I serve? As expected, the project failed to
sell with the Department of Budget and Management. Thus, Secretary Benjamin Diokno,
per his letter of December 1, 2000, declined the COMELECs request for the issuance of the
Notice of Cash Availability (NCA) and a multi-year obligatory authority to assume payment
of the total VRIS Project for lack of legal basis. Corollarily, under Section 33 of R.A. No.

8760, no agency shall enter into a multi-year contract without a 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 PHOTOKINAs bid is beyond the amount appropriated by
Congress for the VRIS Project, the proposed contract is not binding upon the COMELEC and
is considered void x x x. (Commission on Elections v. Judge Ma. Luisa QuijanoPadilla, 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 COMELECs quasijudicial function?
Held: Taking cognizance of private respondents petitions for annulment of petitioners
proclamation, COMELEC was not merely performing an administrative function. The
administrative powers of the COMELEC include the power to determine the number and
location of polling places, appoint election officials and inspectors, conduct registration of
voters, deputize law enforcement agencies and governmental instrumentalities to ensure
free, orderly, honest, peaceful and credible elections, register political parties, organizations
or coalition, accredit citizens arms of the Commission, prosecute election offenses, and
recommend to the President the removal of or imposition of any other disciplinary action
upon any officer or employee it has deputized for violation or disregard of its directive, order
or decision. In addition, the Commission also has direct control and supervision over all
personnel involved in the conduct of election. However, the resolution of the adverse claims
of private respondent and petitioner as regards the existence of a manifest error in the
questioned certificate of canvass requires the COMELEC to act as an arbiter. It behooves
the Commission to hear both parties to determine the veracity of their allegations and to
decide whether the alleged error is a manifest error. Hence, the resolution of this issue calls
for the exercise by the COMELEC of its quasi-judicial power. It has been said that where a
power rests in judgment or discretion, so that it is of judicial nature or character, but does
not involve the exercise of functions of a judge, or is conferred upon an officer other than a
judicial officer, it is deemed quasi-judicial. The COMELEC therefore, acting as quasi-judicial
tribunal, cannot ignore the requirements of procedural due process in resolving the petitions
filed by private respondent. (Federico S. Sandoval v. COMELEC, G.R. No. 133842, Jan.
26, 2000 [Puno])
Discuss the contempt power of the Commission on Human Rights (CHR). When
may it be validly exercised.
Held: On its contempt powers, the CHR is constitutionally authorized to adopt its
operational guidelines and rules of procedure, and cite for contempt for violations thereof in
accordance with the Rules of Court. Accordingly, the CHR acted within its authority in
providing in its revised rules, its power to cite or hold any person in direct or indirect
contempt, and to impose the appropriate penalties in accordance with the procedure and
sanctions provided for in the Rules of Court. That power to cite for contempt, however,

should be understood to apply only to violations of its adopted operational guidelines and
rules of procedure essential to carry out its investigatorial powers. To exemplify, the power
to cite for contempt could be exercised against persons who refuse to cooperate with the
said body, or who unduly withhold relevant information, or who decline to honor summons,
and the like, in pursuing its investigative work. The order to desist (a semantic interplay
for a restraining order) in the instance before us, however, is not investigatorial in character
but prescinds from an adjudicative power that it does not possess. x x x (Simon, Jr. v.
Commission on Human Rights, 229 SCRA 117, 134, Jan. 5, 1994, En Banc [Vitug,
J.])
Discuss the Doctrine of Primary Jurisdiction (or Prior Resort).
Held: Courts cannot and will not resolve a controversy involving a question which is within
the jurisdiction of an administrative tribunal, especially where the question demands the
exercise of sound administrative discretion requiring the special knowledge, experience and
services of the administrative tribunal to determine technical and intricate matters of fact.
In recent years, it has been the jurisprudential trend to apply this doctrine to cases
involving matters that demand the special competence of administrative agencies even if
the question involved is also judicial in character. It applies where a claim is originally
cognizable in the courts, and comes into play whenever enforcement of the claim requires
the resolution of issues which, under a regulatory scheme, have been placed within the
special competence of an administrative body; in such case, the judicial process is
suspended pending referral of such issues to the administrative body for its view.
In cases where the doctrine of primary jurisdiction is clearly applicable, the court cannot
arrogate unto itself the authority to resolve a controversy, the jurisdiction over which is
lodged with an administrative body of special competence. (Villaflor v. CA, 280 SCRA
297, Oct. 9, 1992, 3rd Div. [Panganiban])
Discuss the Doctrine of Exhaustion of Administrative Remedies. What are the
exceptions thereto?
Held: 1. Before a party is allowed to seek the intervention of the court, it is a pre-condition
that he should have availed of all the means of administrative processes afforded him.
Hence, if a remedy within the administrative machinery can still be resorted to by giving the
administrative officer concerned every opportunity to decide on a matter that comes within
his jurisdiction then such remedy should be exhausted first before the courts judicial power
can be sought. The premature invocation of courts jurisdiction is fatal to ones cause of
action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of
dismissal for lack of cause of action. This doctrine of exhaustion of administrative remedies
was not without its practical and legal reasons, for one thing, availment of administrative
remedy entails lesser expenses and provides for a speedier disposition of controversies. It
is no less true to state that the courts of justice for reasons of comity and convenience will
shy away from a dispute until the system of administrative redress has been completed and
complied with so as to give the administrative agency concerned every opportunity to
correct its error and to dispose of the case.

This doctrine is disregarded:

when there is a violation of due process;
when the issue involved is purely a legal question;
when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
when there is estoppel on the part of the administrative agency concerned;
when there is irreparable injury;
when the respondent is a department secretary whose acts as an alter ego of the President
bears the implied and assumed approval of the latter;
when to require exhaustion of administrative remedies would be unreasonable;
when it would amount to a nullification of a claim;
when the subject matter is a private land in land case proceeding;
when the rule does not provide a plain, speedy and adequate remedy, and
when there are circumstances indicating the urgency of judicial intervention.
(Paat v. CA, 266 SCRA 167 [1997])
2. Non-exhaustion of administrative remedies is not jurisdictional. It only renders the
action premature, i.e., claimed cause of action is not ripe for judicial determination and for
that reason a party has no cause of action to ventilate in court. (Carale v. Abarintos, 269
SCRA 132, March 3, 1997, 3rd Div. [Davide])