11.

Examples of rule-making in various agencies

Sand v. Abad Santos Educational Institution, 58 SCRA 33

American Tobacco Co. v. Director of Patents, 67 SCRA 287
HELD: No. The Supreme Court ruled that the power to decide resides solely in the
administrative agency vested by law, this does not preclude a delegation of the power to hold
a hearing on the basis of which the decision of the administrative agency will be made. The
rule that requires an administrative officer to exercise his own judgment and discretion does
not preclude him from utilizing, as a matter of practical administrative procedure, the aid of
subordinates to investigate and report to him the facts, on the basis of which the officer
makes his decisions. It is sufficient that the judgment and discretion finally exercised are
those of the officer authorized by law. Neither does due process of law nor the requirements
of fair hearing require that the actual taking of testimony be before the same officer who will
make the decision in the case. As long as a party is not deprived of his right to present his
own case and submit evidence in support thereof, and the decision is supported by the
evidence in the record, there is no question that the requirements of due process and fair trial
are fully met. In short, there is no abnegation of responsibility on the part of the officer
concerned as the actual decision remains with and is made by said officer. It is, however,
required that to “give the substance of a hearing, which is for the purpose of making
determinations upon evidence the officer who makes the determinations must consider and
appraise the evidence which justifies them.”
The Conference of Maritime Manning Agencies, Inc. v. POEA,
243 SCRA 666

12. Fixing of Rates, Wages, Prices

Administrative Code of 1987 Sec. 9, Book VII

Vigan Electric Light Co. Inc. v. PSC, 10 SCRA 46

In support to its special defense, respondent PSC maintains that rate-fixing is a legislative
function; that legislative or rule-making powers may constitutionally be exercised
without previous notice or hearing. Although the rule-making power and even the power
to fix rates – when such are meant to apply to all enterprises of a given kind throughout
the Philippines – may partake of legislative character, such is not the nature of the order
complained of. Here, the order exclusively applies to petitioner. What is more, it is
predicated upon the finding of fact, whether the petitioner is making a profit more than
12% of its invested capital which is denied by the petitioner. Obviously, the latter is
entitled to cross-examine the maker of the said report, and to introduce evidence to
disprove the contents thereof and/or explain or complement the same, as well as to refute
the conclusions drawn therefrom by the respondent. In other words, in making said
finding of fact, respondent performed a function partaking of a quasi-judicial character,
the valid exercise of which demands previous notice and hearing.

Indeed, Sections 16(c) and 20 (a) of CA No. 146, explicitly require notice and hearing.
Wherefore, we hold that the determination of the issue involved in the order complained
of partakes the nature of quasi-judicial function and that, having been issued without
 previous notice and hearing, said order is clearly violative of the due process clause, and
hence, null and void.

Phil. Communications Satellite Corp. v. Alcuaz, 180 SCRA 218

In Vigan Electric Light Co., Inc. vs. Public Service Commission the Supreme Court said that
although the rule-making power and even the power to fix rates- when such rules and/or rates
are meant to apply to all enterprises of a given kind throughout the Philippines-may partake
of a legislative character. Respondent Alcuaz no doubt contains all the attributes of a quasi-
judicial adjudication. Foremost is the fact that said order pertains exclusively to petitioner
and to no other

The respondent admits that the questioned order was issued pursuant to its quasi-judicial
functions. It, however, insists that notice and hearing are not necessary since the assailed
order is merely incidental to the entire proceedings and, therefore, temporary in nature but
the supreme court said that While respondents may fix a temporary rate pending final
determination of the application of petitioner, such rate-fixing order, temporary though it
may be, is not exempt from the statutory procedural requirements of notice and hearing

The Supreme Court Said that it is clear that with regard to rate-fixing, respondent has no
authority to make such order without first giving petitioner a hearing, whether the order be
temporary or permanent. In the Case at bar the NTC didn’t scheduled hearing nor it did give
any notice to the petitioner

Intia, Jr. vs. Commission on Audit, 306 SCRA 593

Freedom from Debt Coalition v. ERC, 432 SCRA 157

13. Licensing Function

Secs 17-18, Book VII, Administrative Code of 1987

Gonzalo Sy Trading v. Central Bank of the Phil., 70 SCRA 570
RULING: YES, PETITION DENIED. Their permit was only for a limited period 
Christmas Season of 1968 and it does not extend up to 1969 and 1970.

 A license or a permit is not a contract between the sovereignty and the licensee, and it is not
property in any constitutional sense, hence the non-impairment of contracts doctrine cannot
apply.

 A license is in the nature of a special privilege, of a permission or authority to do what is

within its terms. It is not absolute, and a license granted by the State is always revocable. The
absence of an expiry date does not make the license perpetual.

 The Special Import Permit covers only the Christmas Season of 1968. In the application of
GST, it made manifest that the reason for its application was so that it could cope with the
demands of its buyers during the Christmas Season of 1968. In effect, it was GST itself
which furnished the period for the permit, and should only subsist within such period. The
omission of an expiry date in the Special Import Permit affords no legal basis for GST to
 conclude that the said permit is impressed with continuous validity, i.e., not merely limited to
the Christmas season of 1968.

 GST mistakenly asserts that the continuous validity of its Special Import Permit has
already been passed upon by this Court in Commissioner of Customs v. Alikpala. What was
raised in that case is the question of whether the Collector of Customs for the Port of Manila
has observed the rediments of administrative due process in ordering the seizure and sale at
public auction of GST's imported goods in particular that arrived in June, 1970, as well as the
question of the legality of the Collector's order requiring only cash bond, surety bond not
accepted, for the release of the goods. The Court made no ruling on the continuity of GST's
Special Import Permit after the Christmas season of 1968.

 The equitable principle of estoppel forbids GST from taking an inconsistent position now
and claim that the permit extends beyond the period it itself asked for. Where conduct or
representation has induced another to change its position in good faith or the same is such
that reasonable man would rely thereon, the consequences of such conduct or representation
cannot later on be disowned.

 The doctrine of promissory estoppel was here invoked by GST pointing to the letter issued
by the Director of Foreign Exchange.* (see Facts) On the contrary, while the letter advised
the agent bank that it may continue issuing release certificates to cover petitioner-appellant's
"no-dollar" importations of fresh fruits, it at the same time subjects the issuance of release
certificates "to the same terms and conditions imposed by the Monetary board" on the
Special Import Permit, one of which is the resolutory term of 1968.

 The SC, held, however, that a promise cannot, by itself, be the basis of estoppel without
any justifiable reliance or irreparable detriment to the promisee. The latter element is lacking
in this case. The letter referred to specifically mentioned that it was subject to the existing
terms imposed by the Monetary Board. Moreover, the Director could not have modified the
Special Permit since it was not given the authority to do so, as in fact it was the Monetary
Board who issued it and only the latter has the power to modify it.

 Even assuming arguendo, however, that the aforementioned letter really tended to impress
that further importations could be made, still the doctrine of estoppel cannot apply, as it does
not operate against the Government. The Government is never estopped by the errors of its
agents (in this case, the Monetary Board).

 The authority of the CB to regulate "no-dollar" imports, owing to the influence and effect
that the same may exert upon the stability of our peso and its international value, emanates
from its broad powers to maintain our monetary stability and to preserve the international
value of our currency as well as its corollary power to issue such rules and regulations for the
effective discharge of its responsibilities and exercise of powers

A. Judicial Function

1. What is an Administrative Offense

 Salalima v. Guingona, 257 SCRA 55
HELD:

YES, guilty. But Salalima & Co. cannot be subject to disciplinary action for
administrative misconduct committed during a prior term.

RATIONALE:

Sec. 481 of the Local Government Code (R.A. No. 7160) requires the appointment of a
legal officer for the province whose function is to represent the local government unit in all
civil actions and special proceedings wherein the local government unit or any official
thereof, in his official capacity, is a party. Exception to this rule is when a component city or
municipality is a party adverse to the provincial government or to another component city or
municipality. Since the case does not fall under the exception, the retainer contract is
contrary to law. The respondents also violated Circular 86-25 which requires a prior written
approval of the Solicitor General and written concurrence of the COA before disbursements
can be made to lawyers. However, in this case, the written approval of the SolGen was
secured only after the disbursement was made. Another irregularity was the fact that it was
only Atty. Cornego who appeared as the corroborating counsel of the Province of Albay in
the Supreme Court case. The law firm never made its appearance although it was paid P3.6
Million. The attorney’s fee was also unconscionable. The only tasks the lawyers performed
were to appear in court and submit a memorandum, which are not commensurate to the fee
of P38.5 Million. The professional character and social standing of Atty. Cornago are not
such as would merit a P38.5 million fee for the legal services rendered. It was admitted
later that the governor hired Atty. Cornago because they were schoolmates at San Beda
College. By considering the labor and time involved, the skill and experience called for in
the
performance of the services and the professional character and social standing of the
lawyers, the attorney’s fee of P38.5 million is unconscionable. Allowing such attorney’s
fees, which is patently disadvantageous to the state, respondents are guilty of grave abuse of
authority

2. Investigation and Adjudication

Sections 10 -15, Book VII, Administrative Code of 1987

See Revised Rules on Administrative Cases in the Civil Service (BRACCS)

a. Power to issue subpoena, declare contempt

1. General statutory provision.

Sec. 13, Book VII, Administrative Code of 1987

2. Special Statutory Grant

 Evangelista v. Jarencio, 68 SCRA 99
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.
The petitioner draws its subpoena power in EO No. 4 and the enabling law fixes no
distinction when and in what function the subpoena power should be exercised. The Court
finds no reason to depart from the established rule, ubi lex non distinguit nec nos distinguere
debemos.
Nor could the court find merit in the argument that the subpoena power granted by Section
580 of the Revised Administrative Code is restricted under the Rules of Court to abridge its
application. The Rules of Court require that the subpoena may be issued only when a specific
case is pending before a court for hearing or trial and that the hearing or trial must be in
connection with the exercise of the court’s judicial or adjudicatory functions before a non-
judicial subpoena can be issued. However, a distinction must be made that an administrative
subpoena differs in essence from a judicial subpoena. To an extent, the restrictions and
qualifications referred to in Section 580 of the RAC could mean that the restraints against
infringement of constitutional rights or when the subpoena is unreasonable or oppressive and
when the relevancy of the books, documents or things does not appear.
Administrative 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. 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. 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.

The 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.

For the case at bar, the anomalous transaction in question fall within the authority of the
Agency, and that the information sought to be elicited from Manalastas is reasonably relevant
to the investigations.

The court is not unmindful that the privilege against self-incrimination extends in
administrative investigations. However, the court finds that in the present case, Manalastas is
not facing any administrative charge. He is merely cited as a witness in connection with the
fact-finding investigation of anomalies and irregularities in the City Government of Manila
with the object of submitting the assembled facts to the President or to file the corresponding
charges. Since, the only purpose of the investigation is to discover facts, any unnecessary
extension of the privilege would thus be unwise.
 The respondents would also challenge the constitutionality of EO No. 4 collaterally.
However, the constitutionality of executive orders cannot be collaterally impeached. Much
more when the issue was not duly pleaded in the court below as to be acceptable for
adjudication now.
WHEREFORE, Order of respondent Judge is SET ASIDE.
Fernando, J., Concurring:
United States c. Morton Salt Co., penned by Justice Jackson, “It is sufficient if the inquiry is
within the authority of the agency, the demand is not too indefinite and the information
sought is reasonably relevant.”

Tolentino v. Inciong, 91 SCRA 563

WoN Inciong had the authority to cite Tolentino and Judge delos Angeles in contempt.
NO.

 The contempt proceedings should already have been rendered moot and academic had
Inciong formally quashed the contempt citation. Instead, he only stated in the letter that
he would not enforce the contempt citation.
 Citing Villegas v Subido, the Court emphasized that there should be no presumption on
the part of public officers that they are empowered to act in a certain way. There should
be a delegation of authority, either express or implied.
 PD No. 21 does not contain any provision empowering Inciong to hold any person in
contempt, much less over a judge of a court of first instance.
 When Judge delos Angeles reserved judgment, the proper step for Inciong should have
been to seek the dismissal of the petition before the CFI. Instead, he cited the judge in
contempt.
 Neither did Tolentino commit any act that warranted a contempt citation.

DISPOSITION: Orders citing petitioner and Judge delos Angeles in contempt declared
void for having no force or effect. TRO declared permanent

Guevarra v. COMELEC, 104 Phil. 268

Although the negotiation conducted by the Commission has resulted in controversy
between several dealers, that however merely refers to a ministerial duty which the
Commission has performed in its administrative capacity. It only discharged a ministerial
duty; it did not exercise any judicial function. Such being the case, it could not exercise
the power to punish for contempt as postulated in the law, for such power is inherently
judicial in nature. As this Court has aptly said: "The power to punish for contempt is
inherent in all courts; its existence is essential to the preservation of order in judicial
proceedings, and to the enforcement of judgments, orders and mandates of courts, and,
consequently, in the administration of justice". We are therefore persuaded to conclude
that the Commission on Elections has no power nor authority to submit petitioner to
contempt proceedings if its purpose is to discipline him because of the publication of the
article mentioned in the charge under consideration.