DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDY Ramil F.

De Jesus

Introduction When the aggrieved party to a dispute in an administrative agency goes directly to the Court for judicially review without utilizing the remedies available within the agency or from the higher authority of the department, the case will be dismissed by the court for lack of jurisdiction for failure to exhaust administrative remedies. A party must first seek the review of the decision within the agency or within the department, this is called the doctrine of exhaustion of administrative remedies. When a procedure or remedy is provided within the administrative for redress of an aggrieved party, the latter should first exhaust such procedure up to the conclusion of the case before seeking judicial review. The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence.1 The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.2 Courts, for reasons of law, comity and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum.3

1 2

Caballes v. Perez-Sison, G.R. No. 131759 Estrada v. Court of Appeals, G.R. No. 137862 3 Carale vs. Abarintos, 269 SCRA 132, 141

Within the administrative forum the law may provide for review of decisions by higher authorities. Before a party can be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of administrative redress afforded him. There are both legal and practical reasons for this. The administrative process is intended to provide less expensive and more speedy solutions to disputes. Where the enabling statute indicates a procedure for administrative review, and provides a system of administrative appeal, or reconsideration, the courts for reasons of law, comity and convenience, will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given oppurturity to act and correct the errors committed in the administrative forum.4 It is thus clear that any aggrieved party must see to it that he has exhausted all available remedy prescribed in the procedure before he may elevating the matter in court. Failing on this, the case will be dismissed for being premature and for failing to exhaust administrative remedies. This term paper is aimed to provide an overview of the doctrine of exhaustion of administrative remedy and its recognized exceptions. Objectives 1. To cite the reason for the doctrine and the effect of failure to exhaust administrative remedies. 2. To enumerate the recognized exceptions and to cite decided cases. Discussion The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective

Teotico v. Agda, G.R.87437(1991), quoting CORTES, Irene, R., Philippine Administrative Law, Cases and Materials, Revised Second Ed., 1984, p. 394.

competence. Reasons of law, comity and convenience prevent the courts from entertaining cases proper for determination by administrative agencies.5 The purpose behind the policy of requiring a party to first exhaust all administrative remedies before resorting to the court is to provide an orderly procedure which favors a preliminary administrative sifting process, particularly with respect to matters peculiarly within the competence of the administrative authority (42 Am. Jur. 581 cited in Santiago vs. Cruz, 98 Phil. 168, 173). Observance of the mandate regarding exhaustion of administrative remedies is a sound practice and policy. It ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters peculiarly within the competence of the administrative agency, avoidance of interference with functions of the administrative agency by withholding judicial action until the administrative process had run its course, and prevention of attempts to swamp the courts by a resort to them in the first instance. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same correctly. There are both legal and practical reasons for this principle. The administrative process is intended to provide less expensive and more speedy solutions to disputes. Where the enabling statute indicates a procedure for administrative review, and provides a system of administrative appeal, or reconsideration, the courts, for reasons of law, comity and convenience, will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum.6

5 6

Gonzales v. Court of Appeals, G.R. No. 106028 Carale v. Abarientos G.R. No. 120704. March 3, 1997, citing Antonio v. Tanco, 65 SCRA 448, 454 [1975], De los Santos v. Limbaga, 4 SCRA 224, 226 and IRENE R. CORTES, Philippine Administrative Law, Cases and Materials [Rev. 2nd Ed., 1984] 394

The failure to observe the doctrine of exhaustion administrative remedies does not affect the jurisdiction of the court. The only effect of non-compliance with the rules is that it will deprive the complainant a cause of action, which is a ground for a motion to dismiss. If not invoked at the proper time, this ground is deemed waived and the court can take cognizance of the case and try it. If the motion to dismiss on such ground is filed at the last stage of the proceedings where the remaining task left for the party who invoked it was to file a written offer of evidence, it came too late and the same is deemed waived. 7 Failure of the a party to avail and exhaust the administrative remedy is a fatal defect that would mean dismissal of the case and failure on the part of the other party to raise an objection at the proper time will bar the party from the raising the issue of exhaustion of administrative remedies. The party will be considered to have waived his right to raise the doctrine as a defense. The doctrine however is not absolute and does admit exceptions. In Laguna Cable Network v. Maraan, et. al.8 where an employer seek the intervention of the Court of Appeals without exhausting available remedies with the Secretary of Labor, the Supreme restated the rule and its exceptions, it provides:
This Court, in a long line of cases, has consistently held that if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted first before the courts judicial power can be sought. The party with 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
7

Agpalo, Ruben E.Administrative Law, Law on Public Officers and Election Law.(2005), citing Republic v. Sandiganbayan, 255 SCRA438(1996); Rosario v. CA 211 SCRA 384 (1992); Sunville Timber Products, Inc. v. Abad, 206 SCRA 482 (1002) 8 LAGUNA CATV NETWORK, INC.,v. Maraan, et. al. G.R. No. 139492 November 19, 2002, citing Province of Zamboanga del Norte vs. Court of Appeals, (2000); Zabat vs. Court of Appeals, (2000); Diamonon vs. Department of Labor and Employment, (2000); Social Security System Employees Association vs. BathanVelasco, (1999); Paat vs. Court of Appeals, (1997). [19] Carale vs. Abarintos

matter itself correctly and prevent unnecessary and premature resort to the court. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter will decide the same correctly. Therefore, petitioner should have completed the administrative process by appealing the questioned Orders to the Secretary of Labor. Although this Court has allowed certain exceptions to the doctrine of exhaustion of administrative remedies, such as: 1) when there is a violation of due process; 2) when the issue involved is a purely legal question; 3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction; 4) when there is estoppel on the part of the administrative agency concerned; 5) when there is irreparable injury; 6) 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; 7) when to require exhaustion of administrative remedies would be unreasonable; 8) when it would amount to a nullification of a claim; 9) when the subject matter is a private land in land case proceedings; 10) when the rule does not provide a plain, speedy, adequate remedy; 11) when there are circumstances indicating the urgency of judicial intervention; 12) when no administrative review is provided by law; 13) where the rule of qualified political agency applies; and 14) when the issue of non-exhaustion of administrative remedies has been rendered moot.

In Quisumbing v. Gumba9 where a Deped district supervisor seek the judicial intervention of the court without exhausting administrative, the Supreme Court had occasion to rule that:
Finally, the lower court did not err in taking cognizance of the case. The doctrine of exhaustion of administrative remedies is not a hard and fact rule. It has been
9

Quisumbing v. GUmba, G.R. No. 85156, February 5, 1991, citing Laganapan v. Asedillo, 154 SCRA 377 [1987]

repeatedly held that the requiring previous exhaustion of administrative remedies is not applicable where the question in dispute is purely a legal one: where the controverted act is patently illegal or was performed without jurisdiction or in excess of jurisdiction; where the respondent is a department secretary, whose acts as an alter ego of the President, bear the implied or assumed approval of the latter; where there are circumstances indicating the urgency of judicial intervention; or where the respondent has acted in utter disregard of due process. The rule does not apply where insistence on its observance would result in nullification of the claim being asserted; and when the rule does not provide a plain, speedy and adequate remedy.

The Supreme Court in decision in Sarmiento v. Morato where the petitioner seeks the nullification of certain Resolution of the MTRCB directly to the Supreme Court, respondent argued that the petitioner failed to exhaust administrative remedy and the petition should be dismissed, the Court declared:
We disagree. The doctrine of exhaustion of administrate remedies simply provides that before a party litigant is allowed resort to the courts, he is required to comply with all administrative remedies available under the law (Rosales v. Court of Appeals, 165 SCRA 344 [1988]). The rationale behind this salutory principle is that for reasons of practical considerations, comity and convenience, the courts of law will not entertain a case until all the available administrative remedies provided by law have been resorted to and the appropriate authorities have been given ample opportunity to act and to correct the errors committed in the administrative level. If the error is rectified, judicial intervention would then be unnecessary. Nonetheless, the doctrine of exhaustion of administrative remedies is not absolute. The applicability of the principle admits of certain exceptions, such as: 1) when no administrative review is provided by law; 2) when the only question involved is one of law (Valmonte v. Valmonte, 170 SCRA 256 [1989], citing Aguilar v. Valencia, 40 SCRA 210 [1971]; Malabanan v. Ramento, 129 SCRA 359 [1984]; Bagatsing v. Ramirez, 74 SCRA 306; Del Mar v. Philippine Veterans Administration, 51 SCRA 340 [1973]; Pascual v. Provincial Board, 106 Phil. 466 [1959]; 3) where the party invoking the doctrine is guilty of estoppel (Vda. de Tan v. Veterans' Backpay Commission [1969]; 4) where the challenged administrative action is patently illegal, arbitrary and oppressive (Azur v. Provincial Board, 27 SCRA 50 [1969]; National Development Co. v. Collector of Customs of Manila, 9 SCRA 429 [1963]; 5) where there is unreasonable delay or official inaction that would greatly prejudice the complainant (Gravador v. Mamigo, 20 SCRA 742 [1967]; Azuelo v. Arnaldo, 108 Phil. 293 [1960]; 6) where to exhaust administrative review is 6

impractical and unreasonable (Cipriano v. Marcelino, 43 SCRA 291); and 7) where the rule of qualified political agency applies (Demaisip v. Court of Appeals, 106 Phil. 237 [1906]).

The issue raised in the instant petition is one of law, hence the doctrine of non-exhaustion of administrative remedy relied upon by respondents is inapplicable and cannot be given any effect. At any rate, records are replete with events pointing to the fact that petitioner adhered to the administrative processes in the disposition of the assailed resolutions of public respondents prior to filing the instant petition by, among others, writing the Executive Secretary and bringing the matter to the attention of the Office of the President (Rollo, pp. 145-147). Respondents' claim that petitioner failed to exhaust administrative remedies must therefore fail.

However in Merida Water District v. Bacarro10, where consumers of a water utility invoke the exception to the exhaustion of administrative because of denial of due process, the Supreme Court ruled that:
Jurisprudence affirming the failure to observe the doctrine of exhaustion due to a denial of due process involves instances when the party seeking outright judicial intervention was denied the opportunity to be heard.37 Here, respondents admit that Merida Water District conducted a public hearing on October 10, 2001 regarding the increase of water rates. The existence of a hearing for this purpose renders the allegation of a denial of due process without merit. The failure of the respondents to show that the instant case falls within the exceptions to the doctrine of exhaustion necessitates in the due observance of exhausting the proper administrative remedies before seeking judicial intervention.

The decision of the Supreme Court in UP v. Rasul11 restated the exception when irreparable injury will result when administrative remedy will be observed. It involves the reorganization of UP PGH where the incumbent director of the Philippine General Hospital (PGH) invoked security of tenure notwithstanding the abolition of the said position by the University of the Philippines Board of Regents, the Court ruled:
Anent the issue regarding respondent Estrella's failure to exhaust all administrative remedies, We hold that this
10

Merida Water District v. Bacarro, G.R. No. 16599, September 30, 2008 citing Pagara v. Court of Appeals, 325 Phil. 66 (1996); Samahang Magbubukid ng Kapdula, Inc. v. Court of Appeals, G.R. No. 103953, March 25, 1999, 305 SCRA 147 11 UP v. Rasul, G.R. No. 91551 August 16, 1991

case has special circumstances that made it fall under the jurisprudentially accepted exceptions to the rule. As the facts show, respondent Dr. Estrella was about to be replaced by the Nomination Committee. He must have believed that airing his protest with the Board of Regents would only be fruitless and that unless he goes to the courts, irreparable damage or injury on his part will be caused by the implementation of the proposed reorganization.

While the part must pursue the case and exhaust administrative remedies up to the conclusion, however in Palma-Fernandez v. Dela Paz where the complaint of the petitioner remained unacted the Court ruled that it is covered by the recognized exception it ruled:
There was substantial compliance by petitioner with the requirement of exhaustion of administrative remedies since she had filed a letter-protest With the respondent Secretary of Health, with copies furnished the Commissioner of Civil Service, and the Chairman of the Government Reorganization Commission, but the same remained unacted upon and proved an inadequate remedy. Besides, an action for quo warranto must be filed within one year after the cause of action accrues (Sec. 16, Rule 66, Rules of Court), and the pendency of administrative remedies does not operate to suspend the running of the one-year period (Cornejo vs. Secretary of Justice L-32818, June 24, 1974, 57 SCRA 663). In Rocamora v. RTC12, where owners of lands seek judicial intervention when their properties were taken by the government without just compensation, the petitioners invoked failure on the part of the respondent to exhaust administrative remedies, the Court ruled that: we affirm the salutary rule that decisions of administrative authorities must first be appealed to their superiors in the executive department before resort to judicial review may be permitted; otherwise, the case may be dismissed for lack of a cause of action. 15 This is based on sound public policy and practical grounds. One reason is that the administrative superiors, if given a chance, can and will correct the mistakes of their subordinates, thus rendering judicial intervention unnecessary. Another is that administrative authorities are presumed to be experts in their respective fields of specialization and their decisions should as a rule not be disturbed by the courts of justice, which cannot claim similar knowledgeability. A third justification is that these decisions are usually reviewable only in the special civil actions of certiorari, prohibition and mandamus, which are not accepted except only where there is no plain, speedy and adequate remedy available to the petitioner. No less important is the consideration that by withholding action until the administrative remedies have been exhausted, the judiciary will be observing the
12

Rocamora v. RTC, G.R. No. L-65037, November 23, 1988 citing

doctrine of separation of powers and according deference to the acts of a coordinate department of the government. But the doctrine of exhaustion of administrative remedies is not an inflexible rule. In fact, it yields to many accepted exceptions. As we have noted in a number of cases, exhaustion is not necessary where inter alia there is estoppel on the part of the party invoking the doctrine; 16 where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; 17 where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; 18 where the amount involved is relatively small so as to make the rule impractical and oppressive; 19 and where the question involved is purely legal and will ultimately have to be decided anyway by the courts of justice. 20 At least two of these exceptions are applicable to the case at bar. In the first place, it appears that the administrative officers have sat on this case for as long as nine months, during which as many as eight endorsements were made from office to office in an apparently endless discussion and denial of the complainants' claims for compensation. 21 Even the supposed adjustment of the appraisals to be made by the Ministry of Public Highways was still pending after the complaint was filed and when the defendants submitted their answer. 22 The matter was apparently hibernating in the doldrums of bureaucratic indecision and inaction. In the meantime, the complainants remained unpaid despite their repeated demands. In the second place, the other issue raised was a question of law, to wit, the applicable criterion in the determination of the compensation to be paid the plaintiffs for the loss they had sustained. More specifically, the legal question presented was whether or not P.D. 76 should dictate the amount of the compensation to be paid the owners as against the price they negotiated with the Ministry of Public Highways. It is not disputed that P.D. 1445, otherwise known as the Government Auditing Code of the Philippines, provides: Sec. 48. Appeal from decision of Auditors.Any person aggrieved by the decision of an auditor of any government agency in the settlement of an account or claim may within six months from receipt of a copy of the decision appeal in writing to the Commission. However, in view of the exceptions above noted, we hold that the complaint was not prematurely filed and could be validly admitted by the trial court despite the failure to exhaust administrative remedies.

The plaintiffs were not supposed to hold their breath and wait until the Commission on Audit and the Ministry of Public Highways had acted on the claims for compensation for the lands appropriated by the government. The road had been completed; the Pope had come and gone; but the plaintiffs had yet to be paid for the properties taken from them. Given this official indifference, which apparently would continue indefinitely, the private respondents had to act to assert and protect their interests. As for the defendants' contention that the applicable law in the ascertainment of the said compensation was P.D. 76, this was a question that at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rested not with them but with the courts of justice. The Court recalls the case of Amigable v. Cuenca 23 which, although not exactly analogous, also involved a deviation from the doctrine of exhaustion of administrative remedies. In that case, the plaintiff was allowed to sue directly for the value of the land taken from her by the government instead of being required to first file her claim with the General Auditing Office in accordance with the usual procedure. The doctrine was waived because it was the government itself that had initially violated the procedural requirements. It had simply taken the plaintiffs property without filing the appropriate expropriation proceedings and paying her just compensation.

Conclusion The doctrine of exhaustion of administrative remedy is conceived to enable the litigants to seek redress immediately within the administrative machinery. It is a process whereby complaints may be acted upon speediously and to prevent cases which may be decided within the administrative process from reaching the court thereby preventing long litigations. The exception on the other hand are guard against violation of due process and justice and equity. It is a protection for both all parties. But the observance of the doctrine will violate the recognized exceptions it will defeat its own purpose and shall be dispensed with .

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