ADMINISTRATIVE LAW

Dean Hilario Justino F. Morales

ADMINISTRATIVE BODIES OR AGENCIES

An administrative agency is a body, other than the courts and the legislature, endowed with quasi-legislative and quasi-judicial
powers for the purpose of enabling it to carry out laws entrusted to it for enforcement or execution. In Metro Construction Inc., vs.
Chathau Properties Inc., 365 SCRA 697, the Supreme Court defined a quasi-judicial agency or body as an organ of government other
than a court and other than a legislature, which affects the rights of private parties through either adjudication or rule-making.

Manner of Creation
1. by constitutional provisions (Office of the President, COMELEC, COA, CSC);
2. by legislative enactment (NLRC, SEC, NAPOLCOM); and
3. by authority of law (EIIB, TFA).

The President can validly reorganize his office even without congressional authority because the Administrative Code of 1987
(EO 292) has empowered the President continuing authority to reorganize his office in order to achieve economy and efficiency. Thus,
the EIIB is subject to the President’s continuing authority to reorganize. As far as bureaus, agencies or offices in the executive
department is concerned, the President’s power of control may justify him to inactivate the function of a particular office, or certain
law may grant him the broad authority to carry out reorganization measure.(Buklod ng Kawaning EIIB vs. Zamora, 360 SCRA 718)

The equal protection clause was violated when the Philippine Truth Commission singled out only the officials and employees of
the Arroyo Administration but not the other officials of previous administrations who are similarly situated. (Biraogo v. Philippine Truth
Commission of 2010, GR No. 192935, December 10, 2010)

A. QUASI-LEGISLATIVE OR RULE-MAKING POWER

Nature and scope of the power

The legislative power has been described generally as the power to make , alter and repeal laws. The details and manner of
carrying out the law are left to the administrative agency charged with its implementation – in this sense, the rules and regulations
promulgated by an administrative agency are the product of delegated power to create new or additional legal provisions that will have
the effect of law. Quasi-legislative power is exercised by administrative agencies through the promulgation of rules and regulations within
the confines of the granting statute and the doctrine of non-delegation of certain powers flowing from the separation of the great
branches of the government. (Abellar vs. CSC, 442 SCRA 507) The grant of express power to formulate implementing rules and
regulations must necessarily include the power to amend, revise, alter or repeal the same. (Yazaki vs. Torres Manufacturing, Inc. vs. 493
SCRA 86) It is a standard provision in administrative rules that prior issuances of administrative agencies that are inconsistent therewith
are declared repealed or modified. (Pharmaceutical and Health Care Association of the Philippines vs. Duque III,535 SCRA 265)

Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules or regulations. Delegated
rule-making power has become a practical necessity in modern governance due to increasing complexity and variety of public functions.
In the exercise of delegated legislative power, administrative bodies have no discretion to determine what the law shall be. They have
merely the authority to fix details in execution or enforcement of a policy set out in the law itself. Thus, the Supreme Court declared
unconstitutional Administrative Order No.308 as it did not merely implement the Administrative Code. It established a national
computerized identification reference system which requires a delicate adjustment of various contending state policies, the
primacy of national security, the extent of privacy against dossier-gathering by the government, and choices of policies. It deals with a
subject that should be covered by law. (Ople vs. Torres, 293 SCRA 141)

Kinds of administrative rules and regulations

1. Legislative regulation
a. Supplementary or detailed legislation, e.g., Rules and Regulations Implementing the Labor Code. LEGISLATIVE
REGULATION affects the substantial rights of the general public and has the force and effect of a law.
b. Contingent regulation
2. Interpretative legislation or internal rules, e.g., BIR Circulars
INTERPRETATIVE RULE merely clarifies the meaning of a pre-existing law by inferring its implication. the court may
review the correctness of the interpretation of the law given by the administrative body, and substitute its own view of what is
correct to that of the administrative body. It does not have to be published because it is not a law itself.
INTERNAL RULE is only an instruction from a higher officer to a lower officer within the same office concerning the
rules and guidelines to be followed by subordinates in the performance of their duties. It has no effect of law because no clear
legal right which can be invoked by a third person emanates from it. It does not have to be published to be effective.

Subordinate Legislation
This is the power of administrative agency to promulgate rules and regulations with force and effect of a law on matters of their
own specialization. Administrative authorities are vested with the power to make rules and regulations because it is impracticable for
lawmakers to provide general regulations for various varying details of management. (PNOC vs. CA, 457 SCRA 32) As subordinate
legislation, the power to make rules and regulations so passed by administrative agencies are only of the nature of implementing rules
and regulations, which are tested by their conformity to the standards set by, and their ability to carry out the legislative intent contained
in the primary law.
In Commission on Internal Revenue vs. Bicolandia Drug Corp., 496 SCRA 176, it was held that Revenue Regulations No 2-94
is still subordinate to RA7432 and in cases of conflict, the implementing rule will not prevail over the law it seeks to implement. Thus, the
said regulation is null and void for failing to conform to the law it sought to implement. Administrative rules, regulations and orders have
the efficacy and force of law so long as they do not contravene any statute or the Constitution.

Requisites for valid exercise of rule-making power

1. the rule must be issued under the authority of law or its promulgation must be authorized by the legislature;
2. the administrative issuance must be within the scope and purview of the law; or authority given by the legislature
Section 5(a) of the Revised Guidelines on the Implementation of the 13th month Pay Law is void, because it unduly
expanded the concept of basic salary as defined in PD 851. Basic salary is the rate of pay for a standard work period exclusive
of additional payment as bonuses and overtime. The DOLE order included the commission paid its sales representatives in the
computation of the 13th pay due them. (Boie-Takeda Chemicals, Inc. vs. De la Serna, 228 SCRA 329)
It is well settled that rules and regulations which are the product of a delegated power to create new and additional
legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to
the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and that it be
not in contradiction to, but in conformity, with the standards prescribed by law. (Commissioner of Customs v. Hypermix Feeds
Corporation, GR No. 179579, February 1, 2012)
3. the rule must be promulgated in accordance with the prescribed procedure, including public participation, filing and publication;
Interpretative rules and those merely internal in nature are not required to be published and filed with the UP Law Center.
(ASTEC v. ERC, GR No. 192117, September 18, 2012) As a general rule, prior notice and hearing are not essential to the
validity of rules and regulations promulgated to govern future conduct. (Abella vs. CSC, 442 SCRA 507); and
4. the rules must be reasonable (KMU vs. Director-General, NEDA, GR No.167798, April 19, 2006) .

Additional requisites if rules contain penal sanctions

1. Law itself must declare as punishable the violation of administrative rule or regulation (People vs. Maceren, 79, SCRA 450);
and
2. Law should define or fix penalty therefor.

In Perez vs. LPG Refillers Association of the Philippines, 492 SCRA 638, the Supreme Court cited two requisites for an
administrative regulations to have force and effect of penal law, to wit:
1. the violation of the administrative regulation must be made a crime by the delegating statute itself,
2. the penalty for such violation must be provided by the statute itself.
Publication, filing and effectivity
a. Publication is essential to the effectivity of any law or regulation as a requirement of due process. Publication is required as a
condition precedent to the effectivity of a law to inform the public of the contents of the law or rules and regulations before their
rights and interests are affected by the same. (Philippine International Trading Corp. vs. COA, 309 SCRA 177)
b. What must be published: rules and regulation of administrative agencies which have the force and effect of law. All legislative
rules and regulations, not only those of penal character, must be published. (Tanada vs. Tuvera, 146 SCRA 446)
c. Where published: Either in the Official Gazette or newspaper of general circulation. (EO 200, amending Art. 2 of the Civil
Code) Hence, DBM-CCC No. 10 which was issued by the DBM pursuant to Sec. 23 of RA 6758 is of no force and effect due to
the absence of publication in the Official Gazette or in a newspaper of general circulation. (PITC vs. COA, supra)
d. How published: In full, not just the title but the entire rule, if it is to serve the purpose of due process.
e. Filing: administrative rules and regulations must be filed with the National Administrative Register (UP Law Center) as required
by Sections 3(1) and 4, Chapter 2, Book VII, EO 292.
f. Effectivity: If a rule or regulation does not provide for a date of effectivity, it shall become effective 15 days after publication. If it
provides otherwise, then the period provided applies, but in no case before publication.
Exception: in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a
statement accompanying the rule.

Necessity of Publication. Considering that POEA Administrative Circular No. 2 Series of 1983, which enumerated the
allowable fees which may be collected from applicants, has not yet been published or filed with the National Administrative Register, the
same is ineffective and may not be enforced. An Administrative Circular that was never filed with the NAR cannot be used as basis for
the imposition of administrative sanctions. The fact that POEA Administrative Circular No. 2 is addressed only to specified group-namely
private employment agencies or authority holders, does not take it away from the ambit of the ruling in Tanada vs. Tuvera, 136 SCRA
27, which 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. (Philsa International Placement and Service Corporation vs. Secretary of DOLE, 356 SCRA
174) Also, since the Electric Cooperative Election Code applies to all electric cooperatives in the country, and it is not a mere internal
memorandum, interpretative regulation, or instruction to subordinate, then it should comply with the requirements of the Civil Code and
Administrative Code of 1987 relative to the publication requirement. (Nea vs. Gonzaga, 539 SCRA 388)
Publication Not Necessary. Where petitioners challenged the validity of Revenue Memorandum Circular No. 30-67, which
interpreted the Tobacco Inspection Law, on the ground that it was not published in the Official Gazette, the Supreme Court ruled the
same is for the internal administration of the Bureau of Internal Revenue. It also interpreted the law. No publication is necessary
for its validity. (La Suerte Cigar and Cigarette Factory vs. CA, 134 SCRA 29)
Notice and Hearing Not Necessary. As a general rule, prior notice and hearing are not essential to the validity of rules and
regulations promulgated to govern future conduct. (Equi-Asia Placement, Inc. vs. DFA, 502 SCRA 295)

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B. QUASI-JUDICIAL POWER
Quasi-judicial power is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies
required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their
official action, and to exercise discretion of a judicial nature. 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 or adjudicatory. (Patalinghug vs. COMELEC, 543 SCRA 175)

Award of damages
Powers of administrative agencies are limited and usually administrative in nature. In case of injury or inconvenience suffered
by a person because of breach of contractual obligation arising from negligence, the proper forum for him to ventilate their grievances for
possible recovery of damages should be in the courts and not in administrative agencies. Being a creature of the legislature,
administrative agencies can exercise only such jurisdiction and power as are expressly or by necessary implication conferred upon it
by statute. (RCPI vs. Board of Communications, L-43653, L-45378, November 29, 1977)
Exceptions. However, the NHA (now the Housing and Land Use Regulatory Board) has been conferred by PD 1344, the
competence to award damages including attorney’s fees which are recoverable either by agreement of the parties or under Article 2208
of the Civil Code. (Solid Homes vs. Payawal, 177 SCRA 72) And so with the National Labor Relations Commission in labor cases, by
virtue of the provisions of the Labor Code.

Imposition of fines and penalties

Rules penalizing certain acts are valid only if the primary law pursuant to which the rule was issued also provides that the act
be penalized. But if the primary law does not make the act criminal, then the rule which makes it criminal is void. (People vs. Maceren,
79, SCRA 450) The penalty for such violation must also be provided by the statute itself. (Perez vs. Refillers Association of the
Philippines, 492 SCRA 638)

Power to grant immunities from criminal and civil prosecutions

The rule is that administrative bodies in the performance of their quasi- judicial functions cannot grant criminal and civil
immunities to persons unless the law explicitly and specifically confers such prerogative or power. However, insofar as the Presidential
Commission on Good Government is concerned, it is conferred such power under Sec. 5 of EO No. 14. (Republic vs. Sandiganbayan,
173 SCRA 72)
Likewise, the Commission on Human Rights, in the course of its investigation, may grant immunity from prosecution to any
person whose testimony or whose possession of documents or other evidence is necessary or convenient to determine the truth. (Carino
vs. CHR, 204 SCRA 483)

PROCEEDINGS BEFORE ADMINISTRATIVE BODIES

A. PROMULGATION OF RULES AND REGULATIONS
Filing. Every agency shall file with the University of the Philippines Law Center three certified copies of every rule adopted by
it. Rules in force not filed within three months from the date of effectivity of this Code shall not be the basis of any sanction. (Book VII,
Sec. 3) (See also Philsa International Placement and Service Corporation vs. Secretary of DOLE, 356 SCRA 174)
Publication. The University of the Philippines Law Center shall publish a quarterly bulletin setting forth the text of rule
filed with it. (Book VII, Sec. 5) Every rule establishing an offense or defining an act subject to a penalty shall be published in full. [Book
VII, Sec. 6 (2)]
Public Participation. If not otherwise required by law, an agency shall, as far as practicable, published notice of proposed rules
and afford interested parties the opportunity to submit their view, [Book VII, Sec. 9 (1)]

B. ADJUDICATION
Two necessary conditions
1) Jurisdiction and
2) Due Process

Jurisdiction
Jurisdiction is essential to give validity to the determinations of quasi-judicial bodies (administrative authorities.) Without
jurisdiction, their acts are void and open to collateral attack. Any decision rendered without justification is a total nullity and may be struck
down at any time even on appeal. The only exception is where the party raising the issue is barred by estoppel. (Solid Homes vs.
Payawal, supra)

Rules of procedure; rationale; how interpreted

The quasi-judicial body may promulgate its own rules of procedure as they may see them fit and proper to govern their
proceedings, provided they do not increase, diminish or modify substantive rights, and subject to disapproval by the Supreme Court.
Hence rules of procedure must be faithfully followed except only for persuasive reasons, they may be relaxed to relieve a litigant of an
injustice not commensurate with his failure to comply with the prescribed procedure. (PNOC-EDC vs. Veneracion, 509 SCRA 93)
Rules of procedure should be construed liberally in order to promote their objective and to assist in obtaining just, speedy and
inexpensive determinations of the respective claims and defenses.

Concept of due process

The essence of due process is simply to be heard, or as applied in administrative proceedings, an opportunity to explain one’s
side or an opportunity to seek reconsideration of the action or ruling complained of. (Arboleda vs. NLRC, 303 SCRA 38 and Adiong
vs. CA, 371 SCRA 373)

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 Where the party has the opportunity to appeal, or seek reconsideration of the action or ruling complained of, defects in
procedural dues process may be cured. (Autencio vs. Manara, 449 SCRA 46)
Such process requires notice and an opportunity to be heard before judgment is rendered. One may be heard, not solely by
verbal presentation in an oral argument, but also and perhaps even many times more creditably and practically through pleadings. So
long as the parties are given the opportunity to explain their side, the requirements of due process are satisfactorily complied with.
(Garcia vs. Pajaro, GR No. 141149, July 5, 2002)
Administrative due process is recognized to include the right to:
A. Procedural Due Process
1. Notice, be it actual or constructive, of the institution of the proceedings that may affect a person’s legal right;
2. Reasonable opportunity to appear and defend his rights, and to introduce witnesses and relevant evidence in his favor;
B. Substantive Due Process
3. A tribunal so constituted as to give him reasonable assurance of honesty and impartiality, and one of competent jurisdiction;
4. And a finding or decision by that tribunal supported by substantial evidence presented at the hearing, or at least ascertained in
the records or disclosed to the parties. (Air Manila, Inc. vs. Balatbat, 38 SCRA 489; Fabella vs. CA, 282 SCRA 256; Domingo
vs. Ryala, 545 SCRA 90 )

Notice and hearing, as the fundamental requirements of due process, are essential only when an administrative body
exercises its quasi-judicial function, but in the performance of its executive or legislative functions, such as issuing rules and regulations,
an administrative body need not comply with the requirements of notice and hearing, except when it involves revocation of a license.
(Corona vs. United Harbor Pilots Association of the Philippines, 283 SCRA 31)
General Rule. Due process in administrative context does not require trial type-proceedings similar to those in the courts of
justice. (UP Board of Regents, vs. CA, 313 SCRA 404) Administrative due process cannot be fully equated to due process in its strict
judicial sense since it is enough that the party is given the chance to be heard before the case against him is decided. (Ocampo vs.Office
of the Ombudsman, 322 SCRA 17; Ledesma vs. CA, 541 SCRA 444) A formal trial-type hearing is not at all times and in all
instances essential to due process – it is enough that the parties are given a fair and reasonable opportunity to explain their respective
sides of the controversy and to present evidence on which a fair decision can be based. (Melendres vs. COMELEC, 319 SCRA 262)
Due process does not necessarily mean or require a hearing, but simply an opportunity or right to be heard. One may be
heard, not solely by verbal presentation but also perhaps many times more creditably and predictable than oral argument, through
pleadings xxx. A formal type hearing is not at all times and in all instances essential. The requirement are satisfied when the parties are
afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of
notice and hearing. (Barot vs. COMELEC, 404 SCRA 352) It is not legally objectionable for being violative of due process for an agency
to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the parties affidavits of witnesses
may take the place of their direct testimony. (Lastimoso vs. Asayo, 539 SCRA 381)

Exceptions. In administrative cases, the requirement of notice and hearing does not connote full adversarial proceedings, as
actual adversarial proceedings become necessary only for clarification or when there is a need to profound searching questions to
witnesses who give vague testimonies. (Artezuela vs. Maderazo, 381 SCRA 49)

Evidence in quasi-judicial proceedings

As a matter of general rule, quasi-judicial bodies are not bound by the strict or technical rules of evidence governing court
proceedings. They are given macro leeway in hearing and considering a variety of material evidence and the receipt and consideration
of incompetent evidence do not constitute a denial of due process. However, the exemption from strict rules of evidence does not
empower a quasi-judicial body to act arbitrarily.
In administrative proceedings, the quantum of proof required to establish the administrative liability of a respondent is
substantial evidence, not proof beyond reasonable doubt. Substantial evidence means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion. (Mariano vs. Roxas, 385 SCRA 500) Relevant evidence means evidence having
any tendency in reason to prove any material matter. Material matter means a matter the existence or non-existence of which is
provable in action according to substantive law and the pleadings. Evidence may be said to be relevant when it relates directly to
a fact from which, by the process of logic, an inference may be made as to the existence of the fact in issue. The fact that administrative
bodies are not bound by technical rules of procedure in adjudicating cases does not mean that basic rules of proving allegation should
be entirely dispensed with – any decision based on unsubstantiated allegation cannot stand as it will offend due process. (Aya-ay Sr. vs.
Arpaphil Shipping Corporation, 481 SCRA 282)

Power to issue subpoena and cite for contempt

Subpoena. As a general rule, the power to issue subpoena and cite a person in contempt is not inherent to an administrative
agency and thus depends on a statutory grant. To allow administrative bodies to issue subpoenas without express legislative authority
violates the doctrine of separation of powers. The usual procedure is for these administrative bodies to apply to a court for an order
enforcing an administrative order or subpoena. EO 292 grants administrative agencies in general the power to issue subpoenas by
requiring the attendance of witnesses or the production of documents. (Book VII, Sec. 13), but only as an incident of their power to
investigate.
The power of an agency to issue a subpoena is not confined solely to quasi-judicial functions as this will nullify the
investigatory function of the agency. An administrative subpoena differs from a judicial subpoena. Its purpose is not to prove a pending
charge but to discover evidence on the basis of which a charge may be filed if the evidence discovered so justifies. A subpoena may be
enforced if the inquiry is within the authority of the agency, the demand is not too definite, and the information is reasonably relevant.
(Evangelista vs. Jarencio, 68 SCRA 99)
Contempt. The power to punish persons for contempt is essentially a judicial power. The power to punish contempt must be
expressly granted to the administrative body; and when so granted may be exercised only when the administrative body is actually
performing quasi-judicial functions. The COMELEC, SEC and the Insurance Commissioner are granted these powers by special
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statutory grant. The COMELEC has the power to cite for contempt, but this power may be exercised only while the COMELEC is
engaged in the performance of quasi - judicial functions. (Guevara vs. COMELEC, 104 Phil. 269)
However, the Commission on Human Rights, an agency without quasi-judicial power, in cases of violation of its rules of
procedure may cite a person for contempt in accordance with the Rules of Court. (Carino vs. CHR, 204 SCRA 483) Likewise, the
authority to conduct hearings or inquiries and the power to hold any person in contempt may be exercised by another agency not
conferred with quasi-judicial power, the Cooperative Development Authority but limited only in the performance of its administrative
functions. (CDA vs. Dolefil Agrarian Reform Beneficiaries Cooperative Inc, 382 SCRA 552)

Form and promulgation of quasi-judicial determination

Form and Content. Every decision of an agency shall be in writing and shall state the facts and the law on which it is based.
(Book VII, Section 14) The mandate of Section 14, Article VIII of the Constitution requiring courts to state clearly and distinctly the facts
and the legal basis of their decisions is equally applicable to administrative bodies. (Naguiat vs. NLRC, 269 SCRA 564 and Pilipinas Kao
Inc. vs. CA, 372 SCRA 548))
In order to effectively buttress the judgment arrived at, it is imperative that a decision should not be simply limited to the
dispositive portion but must state the nature of the case, summarize the facts with references to the record, and contain a statement of
the applicable laws and jurisprudence and the tribunal assessments and conclusion on the case. (People vs. Baring, GR No. 137933,
January 28 2002)
Rationale. This vital requirement is similarly required to give basis for all their decisions, rulings or judgments pursuant to the
Administrative Code whose roots may also be traced to the constitutional mandate. This practice would better enable the courts to
make an appropriate consideration of whether the dispositive portion of the judgment sought to be enforced is consistent with the
findings of facts and conclusions of law by the tribunal that rendered the decision. (Id.)
Likewise, the requirement is demanded by the due process clause of the Constitution, and of fair play. It is also designed to
enable an appellant to pinpoint the possible errors of the tribunal for review by a higher tribunal. It also gives assurance to the parties
that in reaching judgment, the tribunal did so through the processes of legal reasoning. The decision shall become final 15 days after
receipt of the party unless an administrative appeal or judicial review is perfected. One motion for reconsideration, which shall suspend
the said period, may be filed. (Book VII, Section 15, EO 292)
Administrative determinations where notice and hearing are NOT necessary for due process
1. Grant of provisional authority for increased rates (only pursuant to quasi-legislative power), or to engage in a particular line of
business;
2. Summary proceedings of distraint and levy upon the property of a delinquent taxpayer;
3. Cancellation of a passport where no abuse of discretion is committed by the Foreign Secretary;
4. Summary abatement of nuisance per se which affects the immediate safety of persons or property.
5. Summary sequestration of ill-gotten wealth by the PCGG.
6. Preventive suspension of a public officer pending investigation.

Administrative appeal and review

Pursuant to the doctrine of exhaustion of administrative remedies, before a party litigant can seek judicial intervention, he must
exhaust all means of administrative redress available under the law, subject to the exceptions provided for by law or jurisprudence.
Nature of the Right to Appeal. Right to appeal is not a constitutional, natural or inherent right- it is a statutory privilege and of
statutory origin and, therefore, available only if granted or provided by statute. (Dela Cruz vs. Ramiscal, 450 SCRA 449). Where
provided by law, appeal from an administrative determination may be made to a higher or superior administrative officer or body.
By virtue of the power of control of the President over all executive department, the President, by himself or through the
Department Secretaries (pursuant to the “alter ego doctrine”), may affirm, modify, alter, or reverse the administrative decision of
subordinate officials and employees. Unless otherwise provided by law, an appeal from a decision of an agency may be taken to the
Department Head (Book VII, Sec. 20, EO 292) The President has the power to review decisions of department heads pursuant to the
President’s power of control over all executive departments, bureaus and offices. (Land Car, Inc. vs. Bachelor Express, 417 SCRA 307)
Reglementary Period and General Administrative Appeal Procedure. shall be perfected within fifteen days after receipt of the
copy of the decision by filing with the agency a notice of appeal, serving copies of it upon the prevailing party and the appellate agency,
and paying the required fees. If motion for reconsideration is denied, the movant shall perfect his appeal within the remainder of the
period for appeal. If the decision is reconsidered, the aggrieved party shall have fifteen days from receipt of the reversal within which to
appeal. [Book VII, Sec. 20 (2), EO 292] The appellate agency shall review the records and may on its own initiative receive additional
evidence (Book VII, Sec. 22, EO 292). The appellate administrative agency may conduct additional hearings in the appealed case, if
deemed necessary. But just like in the appellate courts, appellate administrative bodies may only pass upon errors assigned. (Diamonon
vs. DOLE, GR No. 108951, March 7, 2000)
Effect of Pendency of Appeal; Finality of Decision. Appeal shall stay the decision appealed from unless the law otherwise
provides or the appellate agency directs execution pending appeal. (Book VII, Sec. 21, EO 292) The decision of an administrative
agency shall become final fifteen days after receipt of a copy of the parties. (Book VII, Sec. 23, EO 292)
Denial of Substantive Due Process. But a cabinet secretary acted with grave abuse of discretion in reviewing his decisions as
Director of the Bureau of Mines. In order that the review of the decision of a subordinate officer may not be a farce, the reviewing officer
must be other than the one whose decision is under review. Being human, he would not admit he was mistaken in his first view of the
case. Petitioners were deprived of due process when the Secretary reviewed his own decision. (Zambales Chromite Mining Co. vs. Court
of Appeals, 94 SCRA 261)
Appeals from the decisions of the NAPOLCOM should be lodged first with the DILG and then with the CSC. An appeal is not a
natural but a statutory right, and one who seeks to avail oneself of it must comply with the statute or the rule in effect when the right
arose. (Miralles vs. Go, 349 SCRA 596) Failing to do so, the right to appeal is lost.

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Licensing procedure under EO 292
Except in cases of willful violation of laws, rules and regulations or when public security, health or safety require otherwise, no
license may be suspended or revoked without notice and hearing. [Book VII, Section 17(2)] (Underscoring supplied))
Thus, the administrative order of the Philippine Ports Authority which provided that all licenses of harbor pilots shall be for a
term of one year only subject to yearly renewal after an evaluation of performance will unduly restrict the harbor pilots to practice
their profession before their compulsory retirement. Under the order, their appointment ipso facto expire at every year. Renewal is
dependent on evaluation of performance after the license have been cancelled. Pilotage as a profession is a property right.
Before harbor pilots can earn a license to practice their profession, they have to pass five examinations, each followed by
training and practice. Their appointment allows them to engage in pilotage until they retire at the age of seventy. This is a vested
right. The pre-evaluation cancellation makes the order unreasonable. It is a deprivation of property without due process. (Corona vs.
UHPAP, 283 SCRA 31)

Where the license made a timely and sufficient application for renewal, the existing license shall not expire until the application
has been finally determined by the agency. (Book VII, Section 18, EO 292)

Fixing rates, wages, prices; double nature of rate-fixing

The grant of the power to fix rates, wages and prices is allowed because this function usually requires technical knowledge
which the legislature does not have. But the administrative agency cannot further delegate this to another entity. (Kilusang Mayo Uno
Labor Center vs. Garcia, 239 SCRA 386) Rate fixing calls for the technical
examination and specialized review of specific details which the court are ill-equipped to enter – such matters are primarily entrusted to
the administrative or regulating authority. (MERALCO vs. Lualhati, 510 SCRA 455)

Generally, the power to fix rate is a quasi-legislative function and, as such, the grant of prior notice and hearing to the affected
parties is not a requirement of due process.. But if the rate is applicable only to an individual, then the function becomes quasi-judicial.
When an administrative body performs rate-fixing in a quasi judicial capacity, the valid exercise of this power demands previous notice
and hearing. The rate fixing order, even if temporary, is not exempt from the requirements of notice and hearing (PHILCOMSAT vs.
Alcuaz, 180 SCRA 218)
Where the rules and the rates are meant to apply to all enterprises of a given kind throughout the country, they may partake of
a legislative character. But if they apply exclusively to a particular party, based upon finding of fact, then its function is quasi-judicial in
character. Hence, the necessity of prior notice and hearing. (The Philippine Consumers Foundation vs. Secretary, DECS, 153 SCRA
622)

Res Judicata
Res Judicata literally means “a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment,” and lays the rule that an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of
competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions
or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit. (Khemani vs.
Heirs of Anastacio Trinidad, 540 SCRA 83) Thus, the rule of res judicata forbids the reopening of a matter once determined by
competent authority acting within their exclusive jurisdiction. The principle of res judicata is also available in administrative proceedings,
the laudable purpose of which is to put final rest a decision which has become final and executory. (Nasipit Lumber vs. NLRC, 177
SCRA 93) These decisions and orders are as conclusive upon the rights of the affected parties as though the same had been rendered
by a court of general jurisdiction. (Ysmael vs. Deputy Executive Secretary, 190 SCRA 673)
Applicability: The Doctrine of Res Judicata applies only to judicial or quasi-judicial proceedings not to the exercise of
administrative powers. (Montemayor vs. Bundalian, 405 SCRA 264 and Hilado vs. Reyes, 496 SCRA 282) Exception: However, the
doctrine does not ordinarily apply in administrative adjudication relative to questions of citizenship except when: (a) a person’s
citizenship is resolved by a court or administrative body as a material issue in the controversy, after a full-blown hearing; (b) with
the active participation of the Solicitor General or his representative; and (c) the finding of his citizenship is affirmed by the Supreme
Court. (Board of Commissioners, CID vs. dela Rosa, 197 SCRA 853)

JUDICIAL REVIEW OF ADMINISTRATIVE DECISIONS

Decisions of administrative or quasi-administrative agencies which are declared by law final and unappealable are subject to
judicial review if they fail the test of arbitrariness, or upon proof of grave abuse of discretion, fraud or error of law. When such
administrative or quasi-judicial bodies grossly misappreciate evidence of such nature as to compel a contrary conclusion, the Court will
not hesitate to reverse the factual findings. Thus the
decision of the Ombudsman may be reviewed, modified or reversed via petition for certiorari under Rule 65 of the Rules of Court, or
grave abuse of discretion amounting to excess or lack of jurisdiction. (Dagan v. Office of the ombudsman, GR No. 184083, November
19, 2013)

Requisites of judicial review of administrative action

1. Administrative remedies must have been exhausted or the principle of exhaustion of administrative remedies.
2. Administrative action must have been completed or the principle of finality of administrative action.

EXHAUSTION OF ADMINISTRATIVE REMEDIES

General Rule: Before a party can invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of
administrative redress afforded to him by law. The rule on exhaustion of administrative remedies applies only where there is an express
legal provision requiring such administrative step as a condition precedent to taking action in court. (CSC vs. DBM, 464 SCRA 115)
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Thus, a detainer suit is premature if it fails to exhaust all administrative remedies, such as compliance with Section 412 of the Local
Government Code on the need for prior barangay conciliation proceedings. (Villadar vs. Zabala, 545 SCRA325) Also, in Catipon Jr.
v.Japson, GR No. 191787, June 22, 2015, it was ruled that where petitioner’s recourse lies in an appeal to the (CSC) Commission
Proper in accordance with the procedure prescribed in MC 19, the Court of Appeals may not be faulted for refusing to acknowledge
petitioner before it.
Applicability. Exhaustion of administrative remedies is applicable when there is competence on the part of the administrative
body to act upon the matter complained of. Administrative agencies are not courts; they are neither part of the judicial system, nor are
they deemed judicial tribunals. In Regino vs. Pangasinan Colleges of Science and Technology, GR No. 156109, November 18, 2004, the
Supreme Court ruled that the petitioners action for damages inevitably calls for the application and the interpretation of the Civil Code, a
function that falls within the jurisdiction of the courts and not the CHED. Hence, petitioner could not have commenced her case before
the Commission.
The principle of exhaustion of administrative remedies applies only where the act of the administrative agency concerned was
performed pursuant to its quasi-judicial function and not when the assailed act pertained to its rule-making or quasi-legislative power.
Where the act assailed is the validity or constitutionality of a rule or regulation is issued by the administrative agency in the performance
of its quasi-legislative functions, the regular courts have jurisdiction to pass upon the same. (Holy Spirit Homeowners Association, Inc.
vs. Defensor, 497 SCRA 581)
Rationale. One of the reasons for the doctrine of exhaustion of administrative remedies is the separation of powers which
enjoins upon the judiciary a becoming policy of non-interference with matters coming primarily within the competence of other
department. The legal reason is that the courts should not act and correct its mistakes or errors and amend its decision on a given matter
and decide it properly. (Lopez vs. City of Manila, 303 SCRA 448) 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 dispose of the case., Indeed, the administrative agency – in this case the
Commission Proper – is in the best position to correct any previous error committed in its forum. (Catipon Jr. v.Japson,supra) And the
practical reason is that the administrative process is intended to provide less expensive and more speedy solution to disputes.
(Association of Philippine Coconut Desiccators vs. PCA, GR No. 110526, February 10, 1998)

Effect of failure to exhaust administrative remedies

Failure to exhaust administrative remedies will not affect the jurisdiction of the courts. Non-compliance with the doctrine will
deprive the complainant of a cause of action which is a ground for a motion to dismiss the case. However, if no motion to dismiss is filed
on this ground, there is deemed to be a waiver. (Rosario vs. CA, 211 SCRA 384 and Baguioro vs. Basa, 214 SCRA 437)

Exceptions to the Doctrine

1. doctrine of qualified political agency, 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.

No appeal need be taken to the Office of the President from the decision of a department head because the latter is
in theory the alter ego of the former. There is greater reason for not requiring prior resort to the Office of the President in this
case since the administrative decision sought to be reviewed is that of the President himself. (Secretary of Justice vs. Bacal,
GR No. 139382, December 6, 2000)

Exception to the exception: where the law expressly provides for exhaustion. Hence, the failure of the petitioner to
appeal the order to the Secretary of Natural Resources to the President was deemed fatal to the petition. The Supreme Court
ruled that even if the respondent was a Department Secretary, an appeal to the President was proper where the law (Executive
Proclamation No. 238) expressly provided for exhaustion. (Tan vs. Director of Forestry, 125 SCRA 302)
2. issue involved is purely legal and well within the jurisdiction of the trial court (Regino vs. Pangasinan Colleges of Science and
Technology, GR No. 156109, November 18, 2004)
3. administrative remedy is fruitless;
4. where there is estoppel on the part of the administrative agency;
5. administrative action is patently illegal, amounting to lack or excess of jurisdiction;
6. where there is unreasonable delay or official inaction;
7. where there is irreparable injury, or threat thereof, unless judicial recourse is immediately made
8. in land cases, where the subject matter is a private land, including those acquired by purchase or resale to individuals;
9. where law does not make exhaustion a condition precedent to judicial recourse;
10. where observance of the doctrine will result in nullification of claim;
11. where there are special reasons or circumstances demanding immediate court action;
12. when due process of law is clearly violated;
13. When, in extreme cases, there is no plain, adequate and speedy remedy available except to seek judicial protection;
14. when the issue is rendered moot and academic (Land Bank of the Philippines vs. Court of Appeals, 318 SCRA 144)
15. when public interest is involved. (Indiana Aeronautics University vs. CHED, 356 SCRA 367)

Primary Jurisdiction or Preliminary Resort

The Doctrine of Primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized training
and knowledge of the proper administrative bodies, relief must first be obtained in an administrative proceeding before a remedy is
supplied by the courts even if the matter may well be within their proper jurisdiction. In such a case, the court in which the claim is
sought to be enforced may suspend judicial process pending referral of such issues to the administrative body for its view or, if the
parties would not be unfairly disadvantaged, dismiss the case without prejudice. (The Province of Aklan v. Jody King Construction and
Development Corp. GR Nos. 197592 & 202623 November 27, 2013)
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 The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising
its jurisdiction until after than administrative agency has determined some question or some aspect of some question arising in the
proceeding before the court. The doctrine does not warrant a court to arrogate unto itself authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative body of special competence. All the proceedings of the court in violation of
the doctrine and all orders and decisions rendered thereby are null and void. (The Province of Aklan v. Jody King Construction and
Development Corp. GR Nos. 197592 & 202623 November 27, 2013; Roxas & Co. Inc. vs. Court of Appeals, 321 SCRA 106 and
Province of Zamboanga del Norte vs. Court of Appeals, 342 SCRA)
Effect of Failure to Avail of the Doctrine. The application of the doctrine of primary jurisdiction does not call for the immediate
dismissal of the case pending before the court. The case is merely suspended until the issues resolvable by the administrative body are
threshed out and fully determined. (Industrial Enterprises, Inc. vs. CA, 184 SCRA 426) Under the doctrine of primary jurisdiction
administrative remedies are neither alternative nor cumulative to judicial review where such review is available to the aggrieved parties
and the same has not been resolved with finality. Thus, complaints for breach of contract or specific performance with damages filed by
a subdivision lot or condominium unit buyer against the owner or developer fall under the quasi-judicial power of the Housing Land Use
Regulatory Board. (Larucom vs. Jacoba, 484 SCRA 206)

The DOCTRINE OF FINALITY OF ADMINISTRATIVE ACTION postulates that no resort to courts will be allowed unless
administrative action has been completed and there is nothing left to be done in administrative structure. (Sta. Rosa Mining vs. Leido,
156 SCRA 1) An administrative decision must first be appealed to administrative superiors up to the highest level before it may be
elevated to a court of justice for review. The power of judicial review may therefore be exercised only if an appeal is first made by the
highest administrative body in the hierarchy of the executive branch of the government. Hence, an appeal to the Office of the President
from the decision of the Department Secretary in an administrative case is the last step that an aggrieved party should take in the
administrative hierarchy, as it is a plain, speedy and adequate remedy available to the petitioner. (Valencia vs. CA, 401 SCRA 666)

A party seeking an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief, but
also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to
decide the matter itself correctly and prevent unnecessary and premature resort to court action. (CIR vs. Acosta, 529 SCRA 177)

Jurisdiction
General Rule: It is the Court of Appeals that is conferred with the power of judicial review over the decisions of administrative
agencies. except COMELEC, COA, Ombudsman in criminal cases in which case the Supreme Court exercises jurisdiction. BP 129
provides that the Court of Appeals shall exercise “xxx exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction
of the Supreme Court in accordance with the Constitution.”
Likewise, Rule 43 of the 1997 Rules of Civil Procedure provides that the Court of Appeals shall have appellate jurisdiction over
awards, judgments, final orders or resolutions of any quasi-judicial agency in the exercise of its quasi- judicial function. Thus, if a party
disagrees with the decision of the Office of the President, he should elevate the matter by petition for review before the Court of Appeals
for the latter’s exercise of judicial review, pursuant to Sec. 9(3) of BP 129. (Sanado vs. CA, 356 SCRA 546 and Serondo vs. CA, 375
SCRA 167)
As with other administrative agencies discharging quasi-judicial functions, recourse must first be had through the Court of
Appeals under Rule 43 of the 1997 Rules of Civil Procedure on the orders, resolutions or decisions of the following: (1) the Commission
on the Settlement of Land Problems (COSLAP) (Republic vs. Damayan ng Purok 14, INC., GR No. 143135, April 4, 2003), (2) the
Board of Commissioners of the Bureau of Immigration (Agus Dwikarma vs. Domingo, GR No. 153454, July 7, 2004), (3) voluntary
arbitrators (Silver Trading Co. vs. Semana, GR No. 152456, April 28, 2004), (4) National Labor Relations Commission (St. Martin
Funeral Homes vs. NLRC, 295 SCRA 494), (5) Secretary of Labor (National Federation of Labor vs. Laguesma, 304 SCRA 407), (6)
Director of Bureau of Labor Relations (Abbot Laboratories Phil. Vs. Abbot Laboratories Employees Union) and (7) DOJ Secretary in
petitions for review (Public Utilities Department, Olongapo City vs.Guingona, 365 SCRA 467) and (8) Ombudsman in administrative
cases. Hence, as a co-equal body, the RTC has no jurisdiction to interfere with or to restrain the execution of the Ombudsman’s
decisions in disciplinary cases. (DILG v. Gatuz, GR No. 191176, October 14, 2015)
Exceptions: The Supreme Court, however, exercises appellate jurisdiction over all final judgments, decisions, resolutions or
orders of the COMELEC, Commission on Audit and Ombudsman in criminal cases in accordance with the Constitution. (Garcia-Rueda
vs. Pascasio, 278 SCRA 769)
However, under EO 226, the Omnibus Investment Code of 1987 , and under RA 6770, the Ombudsman Act of 1989 both of
which granted the right to appeal to the Supreme Court from the decisions and final orders of the Board of Investment and the
Ombudsman in administrative cases, respectively, were declared unconstitutional by the Supreme Court as it expanded the Supreme
Court’s jurisdiction without its advice and concurrence. (Fabian vs. Desierto, GR No. 129742, September 16, 1998.)

Rationale. The provision of Sec. 30, Art. VI of the Constitution is intended to give the Supreme Court a measure of control over
cases placed under its appellate jurisdiction. For the indiscriminate enactment of legislation enlarging its appellate jurisdiction can
unnecessarily burden the Court and thereby undermine its essential function of expounding the law in its most profound national aspects.
Under RA 9282, the Court of Tax Appeals exercises appellate jurisdiction over the decisions or ruling of the Central Board of
Assessment Appeals, Customs Commissioner, BIR, and the Secretaries of the DOF, DA and DTI.

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