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C. Powers of administrative agencies

1. POWERS

Administrative agencies possess two kinds of powers:

1) The quasi-legislative or rule-making power; and,

2) The quasi-judicial or administrative adjudicatory power. (The Palawan Council for Sustainable Development v. Lim, G.R. No. 183173, 24 August 2016)

1. Rule-making power

The quasi-legislative or rule-making power is the power to make rules and regulations that results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers. (Ibid.)

a. DELEGATED POWER

Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law. (Grego v. COMELEC, En Banc, G.R. No. 125955, 19 June 1997

Congress may validly delegate to administrative agencies the authority to promulgate rules and regulations to implement a given legislation and effectuate its policies. (Sibayan v. Peña, G.R. No. L-57665, 02 July 1990)

1) Purpose

Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law. (Grego v. COMELEC, En Banc, G.R. No. 125955, 19 June 1997

2) Limited to implementing the law

The power of administrative officials to promulgate rules and regulations in the implementation of a statute is necessarily limited only to carrying into effect what is provided in the legislative enactment. (Miners Association of the Philippines, Inc. v. Factoran, Jr., En Banc, G.R. No. 98332, 16 January 1995)

The regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself can not be extended. So long, however, as the regulations relate solely to carrying into effect its general provisions of the law, they are valid. (United States v. Tupasi Molina, En Banc, G.R. No. L-9878, 24 December 1914)

The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (People v. Maceren, G.R. No. L-32166, 18 October 1977)

3) Force and effect of law

Quasi-legislative or rule-making power is the power of an administrative agency to make rules and regulations that have the force and effect of law so long as they are issued “within the confines of the granting statute.” (PBOAP v. DOLE, En Banc, G.R. No. 202275, 17 July 2018)

4) Principle of legislative approval by re-enactment

The principle of legislative approval by re-enactment may briefly be stated thus: Where a statute is susceptible of the meaning placed upon it by a ruling of the government agency charged with its enforcement and the Legislature thereafter re-enacts the provisions without substantial change, such action is to some extent confirmatory that the ruling carries out the legislative purpose. (Alexander Howden & Co., Ltd. v. CIR, En Banc, G.R. No. L-19392, 14 April 1965)

5) Doctrine of judicial respect for administrative construction

Considering that the statutory provisions in question have not been the subject of previous judicial interpretation, then the application of the doctrine of “judicial respect for administrative construction,” would be in order… Only where the court of last resort has not previously interpreted the statute is the rule applicable that courts will give consideration to construction by administrative or executive departments of the state. (Asturias Sugar Central, Inc. v. Commissioner of Customs, En Banc, G.R. No. L-19337, 30 September 1969)

The formal or informal interpretation or practical construction of an ambiguous or uncertain statute or law by the executive department or other agency charged with its administration or enforcement is entitled to consideration and the highest respect from the courts, and must be accorded appropriate weight in determining the meaning of the law, especially when the construction or interpretation is long continued and uniform or is contemporaneous with the first workings of the statute, or when the enactment of the statute was suggested by such agency. (2 Am. Jur. 2d 66-67 cited in Asturias Sugar Central, Inc. v. Commissioner of Customs, supra.)

b. PROSPECTIVE APPLICATION

Statutes, including administrative rules and regulations, operate prospectively only, unless the legislative intent to the contrary is manifest by express terms or by necessary implication. (BPI Leasing Corporation v. CA, G.R. No. 127624, 18 November 2003)

c. WHEN ASSAILED

1) Presumption of constitutionality and validity

Administrative issuances have the force and effect of law. They benefit from the same presumption of validity and constitutionality enjoyed by statutes. These two precepts place a heavy burden upon any party assailing governmental regulations. The burden of proving unconstitutionality rests on such party. The burden becomes heavier when the police power is at issue. (Mirasol v. DPWH, En Banc, G.R. No. 158793, 08 June 2006)

1) Certiorari as remedy

Regardless of the act of the administrative agency concerned, i.e., whether the act being assailed concerns a quasi-judicial, or quasi-legislative function, or is purely regulatory, the remedy is a petition for certiorari – which requires the application of the doctrine of exhaustion of administrative remedies. (Association of Medical Clinics for Overseas Workers, Inc. v. GCC Approved Medical Centers Association, Inc., G.R. Nos. 207132 & 207205, 06 December 2016)

a) Prohibition, incorrect remedy

A petition for prohibition is not the proper remedy to assail an administrative order issued in the exercise of a quasilegislative function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity or person to desist from further proceedings when said proceedings are without or in excess of said entity’s or person’s jurisdiction, or are accompanied with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law. It lies against the exercise of judicial or ministerial functions, not against the exercise of legislative or quasi-legislative functions. Generally, the purpose of the writ of prohibition is to keep a lower court within the limits of its jurisdiction in order to maintain the administration of justice in orderly channels. In other words, prohibition is the proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling matters clearly within its cognizance the inferior court transgresses the bounds prescribed to it by the law, or where there is no adequate remedy available in the ordinary course of law by which such relief can be obtained. (Ibid.)

2) RTC Jurisdiction

If what is being assailed is the validity or constitutionality of a rule or regulation issued by an administrative agency in the performance of its quasi-legislative functions, then the Regional Trial Court has jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the Constitution is within the jurisdiction of the Regional Trial Court. (Ibid.)

a. Kinds of administrative rules and regulations

Administrative issuances may be distinguished according to their nature and substance:

1) Legislative rule; and,

2) Interpretative rule. (BPI Leasing Corporation v. CA, supra.)

1) Legislative Rule

A legislative rule is in the matter of subordinate legislation, designed to implement a primary legislation by providing the details thereof. (Ibid.)

a) Hearing / Public Consultation

In the same way that laws must have the benefit of public hearing, it is generally required that before a legislative rule is adopted there must be hearing. (CIR v. Michel J. Lhuillier Pawnshop, Inc., G.R. No. 150947, 15 July 2003)

Public Participation – If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.

(1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two weeks before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed. (Section 9, Chapter 2, Book VII, E.O. 292, The Administrative Code of 1987)

2) Interpretative Rule

An interpretative rule, on the other hand, is designed to provide guidelines to the law which the administrative agency is in charge of enforcing. (BPI Leasing Corporation v. CA, supra.)

When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law. (CIR v. Michel J. Lhuillier Pawnshop, Inc., supra.)

b. Requisites for validity

1) Requisites

In order to be valid, the administrative regulation must:

1) Be germane to the objects and purposes of the law;

2) Conform to the standards that the law prescribes;, and,

3) Must relate solely to carrying into effect the general provisions of the law. (Sibayan v. Peña, supra.)

2) Publication

GENERAL RULE: Administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. (Tañada v. Tuvera, G.R. No. L-63915, 29 December 1986)

EXCEPTIONS:

1) Interpretative regulations;

2) Internal rules (i.e. regulating only the personnel of the administrative agency and not the public);

3) Letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. (Ibid.)

Publication is the operative act for administrative rules to be given full force and effect. 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. (Republic v. Express Telecommunication Co., Inc., G.R. No. 147096, 15 January 2002)

3) Filing

Every agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it. (Section 3, Chapter 2, Book VII, E.O. 292, The Administrative Code of 1987)

In addition to other rule-making requirements provided by law, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them. (Ibid.)

4) Notice and hearing

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. (Corona v. United Harbor Pilots Association of the Philippines, En Banc, G.R. No. 111953, 12 December 1997)

2. Adjudicatory power

The quasi-judicial or administrative adjudicatory power is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. (The Palawan Council for Sustainable Development v. Lim, supra.)

The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act that is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. (Ibid.)

a. Administrative due process

Due process, as a constitutional precept, does not always and in all situations require a trial-type proceeding. Due process is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. (Ledesma v. CA, G.R. No. 166780, 27 December 2007)

The essence of due process is to be heard, and, as applied to administrative proceedings, this means a fair and reasonable opportunity to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of. (Vivo v. PAGCOR, En Banc, G.R. No. 187854, 12 November 2013)

In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of. (Ledesma v. CA, supra.)

1) Cardinal primary rights for due process in administrative proceedings

Ang Tibay v. The Court of Industrial Relations (1940)

(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof…

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented…

(3) While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached…

(4) Not only must there be some evidence to support a finding or conclusion… but the evidence must be “substantial.”… “Substantial evidence is more than a mere scintilla It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected…

(6) [The agency/tribunal] must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision…

(7) [The agency/tribunal] should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered… (Ang Tibay v. The Court of Industrial Relations, En Banc, G.R. No. L-46496, 27 February 1940)

2) Procedural Due Process

The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. In administrative proceedings, procedural due process simply means the opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complained of. “To be heard” does not mean only verbal arguments in court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process. (Vivo v. PAGCOR, supra.)

a) Elements of procedural due process

In administrative proceedings, procedural due process has been recognized to include the following:

1) The right to actual or constructive notice of the institution of proceedings which may affect a respondent’s legal rights;

2) A real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in one’s favor, and to defend one’s rights;

3) A tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality; and,

4) A finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected. (Ibid.)

3) Notice and hearing

a) Formal or trial-type hearing, not required

GENERAL RULE: Administrative due process cannot be fully equated with due process in its strict judicial sense, for in the former a formal or trial-type hearing is not always necessary, and technical rules of procedure are not strictly applied. (Vivo v. PAGCOR, supra.)

EXCEPTION: While the Court recognized that the lack of a formal hearing does not necessarily transgress the due process guarantee, it did not however regard the formal hearing as a mere superfluity. It is a procedural right that may be invoked by the party. (Saunar v. Ermita, G.R. No. 186502, 13 December 2017)

A closer perusal of past jurisprudence shows that the Court did not intend to trivialize the conduct of a formal hearing but merely afforded latitude to administrative bodies especially in cases where a party fails to invoke the right to hearing or is given the opportunity but opts not to avail of it. In the landmark case of Ang Tibay, the Court explained that administrative bodies are free from a strict application of technical rules of procedure and are given sufficient leeway. In the said case, however, nothing was said that the freedom included the setting aside of a hearing but merely to allow matters which would ordinarily be incompetent or inadmissible in the usual judicial proceedings. (Ibid.)

b) Submitting pleadings comply with due process

In other words, it is not legally objectionable for being violative of due process for an administrative agency to resolve a case based solely on position papers, afidavits or documentary evidence submitted by the parties as affidavits of witnesses may take the place of their direct testimony. (Samalio v. CA, En Banc, G.R. No. 140079, 31 March 2005)

c) Filing motion for reconsideration complies with due process

The essence of due process is simply the opportunity to be heard or, as applied to administrative proceedings, the opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complained of. And any seeming defect in its observance is cured by the filing of a motion for reconsideration. Denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard on his motion for reconsideration. (Ibid.)

d) Opportunity to be heard before any definitive action

As long as the parties are given the opportunity to be heard before any definitive action is taken, the demands of due process are sufficiently met. (Quisumbing v. Rosales, G.R. No. 209283, 11 March 2015)

4) Substantial evidence as quantum of proof

It is fundamental that the quantum of proof in administrative cases is substantial evidence. (Gubaton v. Amador, A.C. No. 8962, 09 July 2018)

Substantial evidence – is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. (Ibid.)

5) Right to Counsel

a) Not imperative but optional

The right to counsel is not indispensable to due process unless required by the Constitution or the law. (Lumiqued v. Exevea, En Banc, G.R. No. 117565, 18 November 1997)

While investigations conducted by an administrative body may at times be akin to a criminal proceeding, the fact remains that under existing laws, a party in an administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and of the respondent’s capacity to represent himself, and no duty rests on such a body to furnish the person being investigated with counsel. (Ibid.)

In an administrative proceeding, a respondent has the option of engaging the services of counsel. As such, the right to counsel is not imperative because administrative investigations are themselves inquiries conducted only to determine whether there are facts that merit disciplinary measures against erring public officers and employees, with the purpose of maintaining the dignity of government service. (Gubaton v. Amador, supra.)

6) Right to cross-examine witnesses

There is no denial of due process when a party is afforded the right to cross-examine the witnesses but fails to exercise the same. (Saunar v. Ermita, G.R. No. 186502, 13 December 2017 citing Gas Corporation of the Phils. v. Inciong, G.R. No. L-49481, 23 October 1979)

7) Right against self-incrimination

The right against self-incrimination is accorded to every person who gives evidence, whether voluntary or under compulsion of subpoena, in any civil, criminal or administrative proceeding. (Rosete v. Lim, G.R. No. 136051, 08 June 2006)

The right is not to be compelled to be a witness against himself. It secures to a witness, whether he be a party or not, the right to refuse to answer any particular incriminatory question, i.e., one the answer to which has a tendency to incriminate him for some crime. However, the right can be claimed only when the specific question, incriminatory in character, is actually put to the witness. It cannot be claimed at any other time. It does not give a witness the right to disregard a subpoena, decline to appear before the court at the time appointed, or to refuse to testify altogether. The witness receiving a subpoena must obey it, appear as required, take the stand, be sworn and answer questions. It is only when a particular question is addressed to which may incriminate himself for some offense that he may refuse to answer on the strength of the constitutional guaranty. (Ibid.

In an administrative hearing against a medical practitioner for alleged malpractice, respondent Board of Medical Examiners cannot, consistently with the self-incrimination clause, compel the person proceeded against to take the witness stand without his consent. (Pascual v. Board of Medical Examiners, En Banc, G.R. No. L-25018, 26 May 1969)

7) Adversarial proceeding

GENERAL RULE: Administrative due process does not necessarily connote full adversarial proceedings. (Saunar v. Ermita, G.R. No. 186502, 13 December 2017 citing Arboleda v. NLRC, G.R. No. 119509, 11 February 1999; Arboleda v. NLRC, supra.)

EXCEPTION: Actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies. (Arboleda v. NLRC, supra.)

This is a procedural right which the respondent must ask for since it is not an inherent right, and summary proceedings may be conducted thereon. (Ibid.)

a) Motu proprio

The Board of Nursing is not precluded from filing an administrative case motu proprio and initiate an administrative investigation on its own. Having determined the existence of a prima facie case against Cordero, there is no more need to wait for a complainant, or a formal complaint, much more file the same at the offices mentioned in the PRC Rules. (Cordero v. Board of Nursing, G.R. No. 188646, 21 September 2016)

8) Technical rules of procedure

Administrative bodies are not bound by the technical niceties of law and procedure and the rules obtaining in courts of law. Administrative tribunals exercising quasi-judicial powers are unfettered by the rigidity of certain procedural requirements, subject to the observance of fundamental and essential requirements of due process in justiciable cases presented before them. In administrative proceedings, technical rules of procedure and evidence are not strictly applied and administrative due process cannot be fully equated with due process in its strict judicial sense. (Samalio v. CA, En Banc, G.R. No. 140079, 31 March 2005)

9) Requirements for a valid decision

No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based. (Section 14, Article VIII, 1987 Constitution)

Faithful compliance by the courts and quasi-judicial bodies with Art. VIII, Sec. 14 of the 1987 Constitution, is a vital element of due process as it enables the parties to know how decisions are arrived at as well as the legal reasoning behind them. (South Cotabato Communications Corporation v. Sto. Tomas, G.R. No. 217575, 15 June 2016)

10) Appellate courts

In our legal system, the opportunity for a hearing after the administrative level may not arise as the reception of evidence or the conduct of hearings are discretionary on the part of the appellate courts. (Saunar v. Ermita, G.R. No. 186502, 13 December 2017)

11) Separate and distinct from civil/criminal/other cases

A criminal action is separate and distinct from the administrative case. And, if only for that reason, so is administrative liability separate and distinct from penal liability. (Samalio v. CA, En Banc, G.R. No. 140079, 31 March 2005)

Even if dismissal had been one of the accessory penalties of the principal penalty imposed upon petitioner in the criminal case, and even if the administrative case had been decided earlier than the criminal case, still the imposition of the penalty of dismissal could not have been suspended by the grant of probation. Probation affects only the criminal aspect of the case, not its administrative dimension. (Ibid.)

b. Administrative appeal and review

1) Appeal to Department Head under the Administrative Code

Unless otherwise provided by law or executive order, an appeal from a final decision of the agency may be taken to the Department head. (Section 19, Chapter 4, Book VII, E.O. 292, Administrative Code of 1987)

2) Rule 43 of the Rules of Court

a) Appeals From the Court of Tax Appeals and Quasi-Judicial Agencies to the CA

Rule 43 shall apply to appeals from:

1) Judgments or final orders of the Court of Tax Appeals; and,

2) Awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. (Section 1, Rule 43, Rules of Court)

Among these agencies are the:

1) Civil Service Commission;

2) Central Board of Assessment Appeals;

3) Securities and Exchange Commission;

4) Office of the President;

5) Land Registration Authority;

6) Social Security Commission;

7) Civil Aeronautics Board;

8) Bureau of Patents, Trademarks and Technology Transfer;

9) National Electrification Administration;

10) Energy Regulatory Board;

11) National Telecommunications Commission;

12) Department of Agrarian Reform under Republic Act No. 6657;

13) Government Service Insurance System;

14) Employees Compensation Commission;

15) Agricultural Invention Board;

16) Insurance Commission;

17) Philippine Atomic Energy Commission;

18) Board of Investments;

19) Construction Industry Arbitration Commission; and,

20) Voluntary arbitrators authorized by law. (Ibid.)

Appeals from judgments and final orders of quasi-judicial agencies are now required to be brought to the Court of Appeals on a verified petition for review, under the requirements and conditions in Rule 43 which was precisely formulated and adopted to provide for a uniform rule of appellate procedure for quasi-judicial agencies. (Fabian v. Desierto, En Banc, G.R. No. 129742, 16 September 1998)

(1) Administrative Cases before the Office of the Ombudsman

All appeals from decisions of the Ombudsman in administrative disciplinary cases may be taken to the Court of Appeals under Rule 43 of the 1997 Rules of Civil Procedure. (Tirol v. Del Rosario, G.R. No. 135913, 04 November 1999)

b) Cases not covered

1) Labor Cases – Rule 43 shall not apply to judgments or final orders issued under the Labor Code of the Philippines. (Section 1, Rule 43, Rules of Court)

2) Non-administrative cases before the Omnbudsman – In non-administrative cases in which the Ombudsman had acted with grave abuse of discretion amounting to lack or excess of jurisdiction, a petition for certiorari under Rule 65 may be filed directly with the Court. (Villanueva v. Ople, G.R. No. 165125, 18 November 2005)

c) Where to appeal

An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law. (Section 3, Rule 43, Ibid.)

d) Period of appeal

The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of the denial of petitioner’s motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion and the payment of the full amount of the docket fee before the expiration of the reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review. No further extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days. (Section 4, Rule 43, Ibid.)

3) Rule 65 of the Rules of Court

a) Petition for certiorari

When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. (Section 1, Rule 65, Rules of Court)

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (Paragraph 2, Section 1, Rule 65, Ibid.)

b) Petition for prohibition

When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. (Section 2, Rule 65, Ibid.)

The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (Paragraph 2, Section 2, Rule 65, Ibid.)

c) Petition for mandamus

When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. (Section 3, Rule 65, Ibid.)

The petition shall also contain a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (Paragraph 2, Section 3, Rule 65, Ibid.)

d) When and where petition filed

The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion. (Section 4, Rule 65, Ibid.)

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals. (Paragraph 2, Section 4, Rule 65, Ibid.)

No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding fifteen (15) days. (Paragraph 3, Section 4, Rule 65, Ibid.)

c. Administrative res judicata

1) Concept

Jurisprudence has recognized the rule of administrative res judicata: “The rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers… It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata.” (Salazar v. De Leon, G.R. No. 127965, 20 January 2009)

GENERAL RULE: Res judicata applies in administrative cases. (Ibid.)

EXCEPTIONS:

1) Labor relations proceedings; and

2) Judgment based on a void contract.

a) Labor relations proceedings

The principle of res judicata may not be invoked in labor relations proceedings considering that Section 5, Rule XIII, Book V of the Rules and Regulations Implementing the Labor Code provides that such proceedings are “non-litigious and summary in nature without regard to legal technicalities obtaining in courts of law.” Said pronouncement is in consonance with the jurisprudential dictum that the doctrine of res judicata applies only to judicial or quasi-judicial proceedings and not to the exercise of administrative powers. (Nasipit Lumber Company, Inc. v. NLRC, G.R. No. 54424, 31 August 1989)

b) Judgment based on a void contract

Where the former judgment is based on a prohibited or null and void contract, there is no valid judgment which can be predicated on res judicata. (B.F. Goodrich Philippines, Inc. v. Workmens Compensation Commission, G.R. No. L-38569, 28 March 1988)

2) Requisites

The essential requisites for the existence of res judicata are:

1) The former judgment must be final;

2) It must have been rendered by a court having jurisdiction of the subject matter and the parties;

3) It must be a judgment on the merits; and,

4) There must be, between the first and second actions (a) identity of parties (b) identity of subject matter and (e) identity of cause of action. (Ipekdjian Merchandising Co., Inc. v. CTA, En Banc, G.R. No. L-15430, 30 September 1963)

d. Related adjudicatory powers Added

1) Power to issue internal rules of procedure

Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court. (Section 5[5], Article VIII, 1987 Constitution)

2) Power to issue subpoena

In any contested case, the agency shall have the power to require the attendance of witnesses or the production of books, papers, documents and other pertinent data, upon request of any party before or during the hearing upon showing of general relevance. Unless otherwise provided by law, the agency may, in case of disobedience, invoke the aid of the Regional Trial Court within whose jurisdiction the contested case being heard falls. The Court may punish contumacy or refusal as contempt. (Section 13, Chapter 3, Book VII, E.O. 292, Administrative Code of 1987)

Administrative agencies may enforce subpoenas issued in the course of investigations, whether or not adjudication is involved, and whether or not probable cause is shown and even before the issuance of a complaint. It is not necessary, as in the case of a warrant, that a specific charge or complaint of violation of law be pending or that the order be made pursuant to one. It is enough that the investigation be for a lawfully authorized purpose. (Evangelista v. Jarencio, En Banc, G.R. No. L-29274, 27 November 1975)

a) When criminal case is already filed, only court may issue subpoena

A subpoena meets the requirements for enforcement if the inquiry is:

1) Within the authority of the agency;

2) The demand is not too indefinite; and,

3) The information is reasonably relevant. (Ibid.)

b) Purpose

The purpose of the subpoena is to discover evidence, not to prove a pending charge, but upon which to make one if the discovered evidence so justifies.  Its obligation cannot rest on a trial of the value of testimony sought; it is enough that the proposed investigation be for a lawfully authorized purpose, and that the proposed witness be claimed to have information that might shed some helpful light. (Ibid.)

Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues on litigations it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. The administrative agency has the power of inquisition which is not dependent upon a case or controversy in order to get evidence, but can investigate merely on suspicion that the law is being violated or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too may take steps to inform itself as to whether there is probable violation of the law. (Ibid.)

c) When criminal case is already filed, only court may issue subpoena

Athough the City Fiscal and his assistants have the power to issue subpoenas and summon witnesses to testify, the attendance or evidence of an absent or refractory witness can be enforced only by application to the proper Municipal Court or Court of First Instance. This is obviously intended to give the person subpoenaed a chance to question the validity, propriety and reasonableness of the subpoena. (In Re Petition for Contempt against Mrs. Sison v. Sison, En Banc, G.R. No. L-15902, 23 December 1964)

3) Power to punish contempt

Contempt power has to be expressly given by law.

Where the law desires and intend to punish any violation of or disobedience to any process or order issued by any administrative official or body, it clearly defines and terms such violation as contempt of court, or it authorizes said official or body to summarily punish for contempt, providing at the same time the corresponding penalty; and where the aid of the courts is necessary, the corresponding penalty upon conviction is also prescribed. (People v. Mendoza, En Banc, G.R. Nos. L-5059-60, 30 January 1953)

a) Suppletory application of Rules of court

Unless otherwise provided by law, this Rule shall apply to contempt committed against persons, entities, bodies or agencies exercising quasi-judicial functions, or shall have suppletory effect to such rules as they may have adopted pursuant to authority granted to them by law to punish for contempt. The Regional Trial Court of the place wherein the contempt has been committed shall have jurisdiction over such charges as may be filed therefor. (Section 12, Rule 71, Rules of Court)

The Rules of Court must defer to the CSC’s power to promulgate and apply its own rules in penalizing contempt committed against it. The existence of the CSC’s Revised Rules on Contempt, therefore, calls for the application of its own procedure and penalties, thus, precluding Section 7, Rule 7 of the Rules of Court from coming into play at first instance. This is not an expansion of the CSC’s authority to punish for contempt under EO 292 but the Court’s deference to the CSC to wield such power.  (Eusebio v. CSC, G.R. No. 223623, 29 January 2020)

3. Fact-finding, investigative, licensing, and rate-fixing powers

a. FACT-FINDING AND INVESTIGATION

The life blood of the administrative process is the flow of fact, the gathering, the organization and the analysis of evidence. Investigations are useful for all administrative functions, not only for rule making, adjudication, and licensing, but also for prosecuting, for supervising and directing, for determining general policy, for recommending, legislation, and for purposes no more specific than illuminating obscure areas to find out what if anything should be done. (Evangelista v. Jarencio, En Banc, G.R. No. L-29274, 27 November 1975)

An administrative agency may be authorized to make investigations, not only in proceedings of a legislative or judicial nature, but also in proceedings whose sole purpose is to obtain information upon which future action of a legislative or judicial nature may be taken and may require the attendance of witnesses in proceedings of a purely investigatory nature. It may conduct general inquiries into evils calling for correction, and to report findings to appropriate bodies and make recommendations for actions. (Ibid.)

1) Purpose

There is no law or rule which imposes a legal duty on petitioner to furnish respondent with a copy of the investigation report. On the contrary, a respondent in an administrative case is not entitled to be informed of the findings and recommendations of any investigating committee created to inquire into charges filed against him. He is entitled only to the administrative decision based on substantial evidence made of record, and a reasonable opportunity to meet the charges and the evidence presented against her during the hearings of the investigation committee. Respondent no doubt had been accorded these rights. (Pefianco v. Moral, G.R. No. 132248, 19 January 2000)

b. LICENSING

Congress has granted certain administrative agencies the power to grant licenses for, or to authorize the operation of certain public utilities. (Philippine Airlines, Inc. v. Civil Aeronautics Board, G.R. No. 119528, 26 March 1997)

With the growing complexity of modern life, the multiplication of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a constantly growing tendency towards the delegation of greater powers by the legislature, and towards the approval of the practice by the courts. (Ibid.)

It is generally recognized that a franchise may be derived indirectly from the state through a duly designated agency, and to this extent, the power to grant franchises has frequently been delegated, even to agencies other than those of a legislative nature. In pursuance of this, it has been held that privileges conferred by grant by local authorities as agents for the state constitute as much a legislative franchise as though the grant had been made by an act of the Legislature. (Ibid.)

c. RATE-FIXING POWERS

The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation. (Republic v. MERALCO, G.R. Nos. 141314 and 141369, 15 November 2002)

While the power to fix rates is a legislative function, whether exercised by the legislature itself or delegated through an administrative agency, a determination of whether the rates so fixed are reasonable and just is a purely judicial question and is subject to the review of the courts. (Ibid.)

1) Functions

The function of prescribing rates by an administrative agency may be either:

1) A legislative function; or

2) An adjudicative function.  (Philippine Consumers Foundation, Inc. v. DECS Secretary, En Banc, G.R. No. 78385, 31 August 1987)

a) Legislative function

If it were a legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process. (Ibid.)

When the rules and/or rates laid down by an administrative agency are meant to apply to all enterprises of a given kind throughout the country, they may partake of a legislative character. (Ibid.)

b) Adjudicative function

As regards rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity of such rates. (Ibid.)

Where the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function is quasi-judicial in character. (Ibid.)

The action of an administrative agency in granting or denying, or in suspending or revoking, a license, permit, franchise, or certificate of public convenience and necessity is administrative or quasi-judicial. The act is not purely administrative but quasi-judicial or adjudicatory since it is dependent upon the ascertainment of facts by the administrative agency, upon which a decision is to be made and rights and liabilities determined. (Sañado v. CA, G.R. No. 108338, 17 April 2001 citing De Leon, Administrative Law: Text and Cases, 1993 ed., pp. 143-144)

2) The three (3) major factors

In determining the just and reasonable rates to be charged by a public utility, three major factors are considered by the regulating agency:

1) Rate of return;

2) Rate base; and,

3) The return itself or the computed revenue to be earned by the public utility based on the rate of return and rate base. (Republic v. MERALCO, supra.)

a) Rate of return

The rate of return is a judgment percentage which, if multiplied with the rate base, provides a fair return on the public utility for the use of its property for service to the public. The rate of return of a public utility is not prescribed by statute but by administrative and judicial pronouncements. This Court has consistently adopted a 12% rate of return for public utilities. The rate base, on the other hand, is an evaluation of the property devoted by the utility to the public service or the value of invested capital or property which the utility is entitled to a return. (Ibid.)

3) Limitations on fixing rates

a) Rate must yield a fair return on investment

In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests. (Ibid.)

b) Rate must be reasonable and just

In the fixing of rates, the only standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just. It has been held that even in the absence of an express requirement as to reasonableness, this standard may be implied. What is a just and reasonable rate is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened and independent judgment. The requirement of reasonableness comprehends such rates which must not be so low as to be confiscatory, or too high as to be oppressive. In determining whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the utility. (Ibid.)

What is a just and reasonable rate is not a question of formula but of sound business judgment based upon the evidence it is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened and independent judgment. In determining whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the utility. A method often employed in determining reasonableness is the fair return upon the value of the property to the public utility. Competition is also a very important factor in determining the reasonableness of rates since a carrier is allowed to make such rates as are necessary to meet competition. (PHILCOMSAT v. Alcuaz, En Banc, G.R. No. 84818, 18 December 1989)

4) Provisional authority

In a number of cases that an administrative agency may be empowered to approve provisionally, when demanded by urgent public need, rates of public utilities without a hearing. The reason is easily discerned from the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved after final hearing. (Padua v. Ranada, G.R. Nos. 141949 and 151108, 14 October 2002)

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