ADMINISTRATIVE LAW

I- DEFINITION, SCOPE & PURPOSE

Definition(s)

• Branch of public law w/c fixes the organization of government, determines the competence of
administrative authorities who execute the law & indicates to individual the remedies for violation
of his rights.

• System of legal principles w/c settles the conflicting claims of the executive & administrative
authorities on one hand and of the individual or private right on the other.

• Deals w/ powers & procedures of administrative agencies, including judicial review.

Scope of administrative law:

All portions of public law concerning executive and administrative officials.

Purpose of administrative law:

The protection of private rights. Its subject matter is the nature & mode of exercise of
administrative power and the system of relief vs. administrative action.

Function of administrative law:

To make the government machinery work well & in an orderly manner.

Distinguish administrative body from court.

Test to determine whether a body is administrative or judicial:

ADMINISTRATIVE where its functions are regulatory even if it hears &

determines a controversy xxx; JUDICIAL if its primary duty is to decide legal rights xxx.

Types of administrative bodies: (BQ)

 those offering some gratuity or privilege
 those seeking to carry on certain business of government
 those seeking to regulate business xxx
 to adjust individual controversies xxx

Republic of the Philippines (or GRP) refers to the corporate governmental entity thru w/c the
functions of government are exercised throughout the PH, including the various arms while National
Government refers to the entire machinery of the central government, composed of the executive,
legislative & judicial departments as distinguished from the different forms of local governments.

(Admin. Code of 1987, Sec. 2)

Sec. 2. General Terms Defined. - Unless the specific words of the text, or the context as a whole,
or a particular statute, shall require a different meaning:

i. Government of the Republic of the Philippines

(1) "Government of the Republic of the Philippines" refers to the corporate governmental entity
through which the functions of government are exercised throughout the Philippines, including, save
as the contrary appears from the context, the various arms through which political authority is made
effective in the Philippines, whether pertaining to the autonomous regions, the provincial, city,
municipal or barangay subdivisions or other forms of local government.

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ii. National Government (same provision)

(2) "National Government" refers to the entire machinery of the central government, as distinguished
from the different forms of local governments.

iii. Local Government (same)

(3) "Local Government" refers to the political subdivisions established by or in accordance with the
Constitution.

iv. Agency of the Gov’t (same)

(4) "Agency of the Government" refers to any of the various units of the Government, including a
department, bureau, office, instrumentality, or government-owned or controlled corporations, or a local
government or a distinct unit therein.

(5) "National agency" refers to a unit of the National Government.

(6) "Local agency" refers to a local government or a distinct unit therein.

v. Departments (same)

(7) "Department" refers to an executive department created by law. For purposes of Book IV, this shall
include any instrumentality, as herein defined, having or assigned the rank of a department, regardless
of its name or designation.

vi. Bureau (same)

(8) "Bureau" refers to any principal subdivision or unit of any department. For purposes of Book IV,
this shall include any principal subdivision or unit of any instrumentality given or assigned the rank of
a bureau, regardless of actual name or designation, as in the case of department-wide regional offices.

vii. Office (same)

(9) "Office" refers, within the framework of governmental organization, to any major functional unit of
a department or bureau including regional offices. It may also refer to any position held or occupied
by individual persons, whose functions are defined by law or regulation.

viii. Instrumentality (same)

(10) "Instrumentality" refers to any agency of the National Government, not integrated within the
department framework vested within special functions or jurisdiction by law, endowed with some if not
all corporate powers, administering special funds, and enjoying operational autonomy, usually through
a charter. This term includes regulatory agencies, chartered institutions and government-owned or
controlled corporations.

ix. Regulatory agency (same)

(11) "Regulatory agency" refers to any agency expressly vested with jurisdiction to regulate, administer
or adjudicate matters affecting substantial rights and interests of private persons, the principal powers
of which are exercised by a collective body, such as a commission, board or council.
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x. Chartered institution (same)

(12) "Chartered institution" refers to any agency organized or operating under a special charter, and
vested by law with functions relating to specific constitutional policies or objectives. This term includes
the state universities and colleges and the monetary authority of the State.

xi. Gov’t-owned or controlled corporation (same)

(13) "Government-owned or controlled corporation" refers to any agency organized as a stock or non-
stock corporation, vested with functions relating to public needs whether governmental or proprietary
in nature, and owned by the Government directly or through its instrumentalities either wholly, or,
where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per cent
of its capital stock: Provided, That government-owned or controlled corporations may be further
categorized by the Department of the Budget, the Civil Service Commission, and the Commission on
Audit for purposes of the exercise and discharge of their respective powers, functions and
responsibilities with respect to such corporations.

C A S E S

Is Central Bank part of National Government?

(CB vs. Ablaza, 63 SCRA 431). Central Bank is a government instrumentality created as an
autonomous body under R.A. 265 to administer the monetary and banking system.

CENTRAL BANK V. ABLAZA

63 SCRA 431, April 22, 1975

FACTS:
Defendant Central Bank of the Philippines awarded to private respondent Ablaza Construction
the contract for the general construction of its various proposed regional offices, including the Central
Bank regional office building in San Fernando, La Union.

CB allowed the Ablaza to commence the construction work without any formal, written contract.

CB then failed and refused to continue with the project unless the plans were modified and the
agreed construct price was lowered, contending that its action was in compliance with the policy of
fiscal restraint declared by then new president of the Philippines and with latter’s memorandum circular
no. 1.

Ablaza sued for damages arising from breach of contract before the CFI of Rizal, which ordered
the CB to pay damages. It was also affirmed by the CA.

CB claimed that there was no perfected contract in this case because there was no showing of
compliance with a specific requirement that there must be a certification of availability of funds by the
Auditor General. Section 607 of the Revised Administrative Code provides that “Certificate showing
appropriation to meet contract. — Exception the case of a contract for personal service or for supplies
to be carried in stock, no contract involving an expenditure by the National Government of three
thousand pesos or more shall been entered into or authorized until the Auditor General shall have
certified to the officer entering into such obligation that funds have been duly appropriated for such
purpose and that the amount necessary to cover the proposed contract is available for expenditure on
account thereof. When application is made to the Auditor General for the certificate herein required, a
copy of the proposed contract or agreement shall be submitted to him accompanied by a statement in
writing from the officer making the application showing all obligations not yet presented for audit which
have been incurred against the appropriation to which the contraction question would be chargeable;
and such certificate, when signed by the Auditor, shall be attached to and become a part of the

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proposed contract, and the sum so certified shall not thereafter be available for expenditure for any
other purposes until the Government is discharged from the contract in question.”

ISSUE: Whether or not the CB is considered part of the National Government.

HELD:
NO. Section 607 specifically refers to "expenditure(s) of the National Government" and that the
term "National Government" may not be deemed to include the Central Bank. Under the Administrative
Code itself, the term "National Government" refers only to the central government, consisting of the
legislative, executive and judicial departments of the government, as distinguished from local
governments and other governmental entities and is not synonymous, therefore, with the terms "The
Government of the Republic of the Philippines" or "Philippine Government", which are the expressions
broad enough to include not only the central government but also the provincial and municipal
governments, chartered cities and other government-controlled corporations or agencies, like the
Central Bank.

Central Bank is a government instrumentality. But it was created as an autonomous body

corporate to be governed by the provisions of its charter, Republic Act 265, "to administer the monetary
and banking system of the Republic."(Sec. 1) As such, it is authorized "to adopt, alter and use a
corporate seal which shall be judicially noticed; to make contracts; to lease or own real and personal
property, and to sell or otherwise dispose of the same; to sue and be sued; and otherwise to do and
perform any and all things that may be necessary or proper to carry out the purposes of this Act.

The Central Bank may acquire and hold such assets and incur such liabilities as result directly
from operations authorized by the provisions of this Act, or as are essential to the proper conduct of
such operations."(Sec. 4) It has capital of its own and operates under a budget prepared by its own
Monetary Board and otherwise appropriates money for its operations and other expenditures
independently of the national budget. It does not depend on the National Government for the financing
of its operations; it is the National Government that occasionally resorts to it for needed budgetary
accommodations. Under Section 14 of the Bank's charter, the Monetary Board may authorize such
expenditures by the Central Bank as are in the interest of the effective administration and operation of
the Bank." Its prerogative to incur such liabilities and expenditures is not subject to any prerequisite
found in any statute or regulation not expressly applicable to it.

Relevantly to the issues in this case, it is not subject, like the Social Security Commission, to
Section 1901 and related provisions of the Revised Administrative Code which require national
government constructions to be done by or under the supervision of the Bureau of Public Works. (Op.
of the Sec. of Justice No. 92, Series of 1960) For these reasons, the provisions of the Revised
Administrative Code invoked by the Bank do not apply to it. The contract entered into by the bank in
this case, is not within the contemplation of Sec 607 of the RAC, which clearly refers to an expenditure
by the national government.

Is the National Coconut Co. within the term GRP?

BACANI V. NACOCO
100 PHIL 468, November 29, 1956

FACTS:
Plaintiffs are court stenographers of the CFI of Manila. During the pendency of a civil case of
said court, entitled Francisco Sycip vs. NACOCO, Assistant Corporate Counsel Federico Alikpala, counsel
for NACOCO, requested said stenographers for copies of the transcript of the stenographic notes taken
by them during the hearing. Plaintiffs complied with the request by delivering to Counsel Alikpala the
needed transcript containing 714 pages and thereafter submitted to him their bills for the payment of

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their fees. The National Coconut Corporation paid the amount of P564 to Bacani and P150 to Matoto
for said transcript at the rate of P1 per page.

Upon inspecting the books of this corporation, the Auditor General disallowed the payment of
these fees and sought the recovery of the amounts paid. The Auditor General required the Plaintiffs to
reimburse said amounts on the strength of a circular of the Department of Justice wherein the opinion
was expressed that NACOCO, being a government entity, was exempt from the payment of the fees in
question. The Auditor General issued an order directing the Cashier of the DOJ to deduct from the
salary of Bacani the amount of P25every payday and from the salary of Matoto the amount of P10every
payday beginning March 30, 1954. To prevent deduction of these fees from their salaries and secure a
judicial ruling that the NACOCO is not a government entity within the purview of section16, Rule 130
of the Rules of Court, this action was instituted in the CFI of Manila.

ISSUE: Whether or not NACOCO is a government entity within the purview of section 2 of the Revised
Administrative Code of 1917 and, hence, is exempted from paying the stenographers’ fees under Rule
130 of the Rules of Court.

HELD:
No. It is not exempted from paying the stenographers’ fees under Rule 130 of the Rules of
Court. Sec. 2 of the Revised Administrative Code defines the scope of the term “Government of the
Republic of the Philippines”. To begin with, we state that the term “Government” may be defined as
“that institution or aggregate of institutions by which an independent society makes and carries out
those rules of action which are necessary to enable men to live in a social state, or which are imposed
upon the people forming that society by those who possess the power or authority of prescribing them”
(U.S. vs. Dorr, 2 Phil., 332). This institution, when referring to the national government, has reference
to what our Constitution has established composed of three great departments, the legislative,
executive, and the judicial, through which the powers and functions of government are exercised.

These functions are twofold: constitute and ministrant. The former are those which constitute
the very bonds of society and are compulsory in nature; the latter are those that are undertaken only
by way of advancing the general interests of society, and are merely optional. The most important of
the ministrant functions are: public works, public education, public charity, health and safety
regulations, and regulations of trade and industry. The principles determining whether or not a
government shall exercise certain of these optional functions are:

(1) that a government should do for the public welfare those things which private capital would not
naturally undertake; and

(2) that a government should do these things which by its very nature it is better equipped to administer
for the public welfare than is any private individual or group of individuals. (Malcolm, The Government
of the Philippine Islands, pp.19-20.)

From the above we may infer that, strictly speaking, there are functions which our government
is required to exercise to promote its objectives as expressed in our Constitution and which are
exercised by it as an attribute of sovereignty, and those which it may exercise to promote merely the
welfare, progress and prosperity of the people. To this latter class belongs the organization of those
corporations owned or controlled by the government to promote certain aspects of the economic life
of our people such as the National Coconut Corporation. These are what we call government-owned or
controlled corporations which may take on the form of a private enterprise or one organized with
powers and formal characteristics of a private corporation under the Corporation Law.

The question that now arises is: Does the fact that these corporations perform certain
functions of government make them a part of the Government of the Philippines?

The answer is simple: they do not acquire that status for the simple reason that they do not come
under the classification of municipal or public corporation. Take for instance the National Coconut

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Corporation. While it was organized with the purpose of “adjusting the coconut industry to a position
independent of trade preference s in the United States” and of providing “Facilities for the better curing
of copra products and the proper utilization of coconut by- products”, a function which our government
has chosen to exercise to promote the coconut industry, however, it was given a corporate power
separate and distinct from our government, for it was made subject to the provisions of our Corporation
Law in so far as its corporate existence and the powers that it may exercise are concerned (sections 2
and 4, Commonwealth Act No. 518). It may sue and be sued in the same manner as any other private
corporations, and in this sense it is an entity different from our government. To recapitulate, we may
mention that the term “Government of the Republic of the Philippines” used in section 2 of the Revised
Administrative Code refers only to that government entity through which the functions of the
government are exercised as an attribute of sovereignty, and in this are included those arms through
which political authority is made effective whether they be provincial, municipal or other form of local
government. These are what we call municipal corporations. They do not include government entities
which are given a corporate personality separate and distinct from the government and which are
governed by the Corporation Law. Their powers, duties and liabilities have to be determined in the light
of that law and of their corporate charters. They do not therefore come within the exemption clause
prescribed in section 16, Rule 130 of our Rules of Court.

ANTONIO MECANO V. COMMISSION ON AUDIT

216 SCRA 500, DEC. 11, 1992

FACTS:
Petitioner Antonio Mecano, a Director II of the National Bureau of Investigation, filed a petition
for certoriari to nullify the decision of Commission of Audit (COA) in the 7 th Indorsement denying him
of reimbursement anchored on the provisions of Section 699 of the Revised Administrative Code (RAC)
in the amount of Php 40,831.00. Earlier, the petitioner was hospitalized because of cholecystitis and
incurred the abovementioned amount. Under Sec. 699 of RAC, he is entitled to allowances in case of
injury, sickness, death incurred in the performance of duty. Hence, the petitioner requested
reimbursement for his expenses to NBI Director Alfredo Lim forwarding the request to the Secretary of
Justice.

The request was returned due to the comments of the COA Chairman stating that the RAC being
relied upon was already repealed by the Administrative Code of 1987. The petitioner resubmitted the
request asserting that the Administrative Code did not operate to repeal or abrogate in its entirety the
RAC, including Section 699. Director Lim transmitted the request to the Justice Secretary who
recommended the payment to the COA Chairman. The COA Chairman again denied the request
asserting the same reason and furthered that Section 699 was not restated nor re-enacted in the
Administrative Code of 1987.

According to the COA Chairman, the claim may be filed with the Employees' Compensation
Commission, considering that the illness of Director Mecano occurred after the effectivity of
the Administrative Code of 1987. Eventually, the request was again returned to Director Lim with an
advice of elevating the matter in the Supreme Court if he so desires.

ISSUE: Whether or not the Administrative Code of 1987 repealed or abrogated the
Revised Administrative Code including Section 699

HELD:
In determining whether a particular law has been repealed or not by a subsequent law is a
matter of legislative intent which is manifested in the incorporation of a repealing provision which
expressly and specifically cites the particular law or laws, and portions that are intended to be repealed.
Scrutinizing the repealing clause will determine if the new law really supplants the old law. The
repealing clause of the Administrative Code of 1987 states:

Sec. 27. Repealing Clause. All laws, decrees, orders, rules and regulations, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.

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The repealing clause of the Administrative Code of 1987 is repeal by implication because it failed
to identify which specific laws shall be repealed. The failure to indicate specific laws reveal that the
intent was not to repeal any existing law, unless an irreconcilable inconsistency and repugnancy exist
in the terms of the new and old laws. The two categories of repeal by implication are as follows:

a) where provisions in the two acts on the same subject matter are in an irreconcilable conflict,
the later act to the extent of the conflict constitutes an implied repeal of the earlier one; and

b) if the later act covers the whole subject of the earlier one and is clearly intended as a
substitute, it will operate to repeal the earlier law.

In this case, the new Code (Administrative Code of 1987) does not cover nor attempt to
cover the entirety of the old code’s (Sec 699, RAC) subject matter. There are matters included in the
old Code which are not found in the new one, like the provisions on notaries public, the leave law, the
public bonding law, military reservations, claims for sickness benefits under Section699, and others.
Apparently, COA failed to prove that RAC has conflicting provisions with the Administrative Code of
1987 that may warrant the former’s repeal.

The rules of statutory construction state that repeal of statutes by implication are not favored.
The presumption is against inconsistency and repugnancy for the legislature is presumed to know the
existing laws on the subject and not to have enacted inconsistent or conflicting statutes. The Court
explained that it is presumed that laws are passed with full knowledge of existing laws related to the
matter.

In passing a statute, it is reasonable to presume that it does not intend to interfere with or
abrogate with previously passed laws, unless there are irreconcilable and conflicting provisions between
them. Hence, every effort must be exhausted to make all acts stand and if possible, reconciled; the
later act will not operate as a repeal of the earlier. Wherefore, the Court granted the petition and
ordered the respondent to reimburse the petitioner’s claim for benefits.

LUZON DEV’T BANK V. ASSOCIATION OF

LUZON DEV’T BANK EMPLOYESS, 249 SCRA 162
PRECLARO V. SANDIGANBAYAN, 247 SCRA 454
MANILA INTERNATIONAL AIRPORT AUTHORITY V. COURT OF APPEALS 495 SCRA 592
REPUBLIC V. RAMBUYONG, 632 SCRA 66
MACEDA V. MACARAIG, 197 SCRA 771
IRON AND STEEL AUTHORITY V. COURT OF APPEALS 249 SCRA 538

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LAGUNA LAKE DEVELOPMENT AUTHORITY V. COURT OF APPEALS

231 SCRA 292 (1994)

FACTS:
The residents of Tala Estate, Barangay Camarin, Caloocan City raised a complaint with
the Laguna Lake Development Authority (LLDA), seeking to stop the operation of the City Government
of Caloocan of an 8.6 hectare open garbage dumpsite in Tala Estate, due to its harmful effects on the
health of the residents and the pollution of the surrounding water. LLDA discovered that the City
Government of Caloocan has been maintaining the open dumpsite at the Camarin Area without a
requisite Environmental Compliance Certificate from the Environmental Management Bureau of the
DENR. They also found the water to have been directly contaminated by the operation of the dumpsite.

LLDA issued a Cease and Desist Order against the City Government and other entities to
completely halt, stop and desist from dumping any form or kind of garbage and other waste matter on
the Camarin dumpsite. The City Government went to the Regional Trial Court of Caloocan City to file
an action for the declaration of nullity of the cease and desist order and sought to be declared as the
sole authority empowered to promote the health and safety and enhance the right of the people in
Caloocan City to a balanced ecology within its territorial jurisdiction.

LLDA sought to dismiss the complaint, invoking the Pollution Control Law that the review of
cease and desist orders of that nature falls under the Court of Appeals and not the RTC.

RTC RULING:
RTC denied LLDA’s motion to dismiss, and issued a writ of preliminary injunction enjoining LLDA
from enforcing the cease and desist order during the pendency of the case.

CA RULING:
The Court of Appeals promulgated a decision that ruled that the LLDA has no power and
authority to issue a cease and desist order enjoining the dumping of garbage.

The residents seek a review of the decision.

ISSUE: WON the LLDA has authority and power to issue an order which, in its nature and effect was
injunctive.

THEORY OF THE PARTIES

City Government of Caloocan: As a local government unit, pursuant to the general welfare provision of
the Local Government Code, they have the mandate to operate a dumpsite and determine the effects
to the ecological balance over its territorial jurisdiction.
LLDA: As an administrative agency which was granted regulatory and adjudicatory powers and
functions by RA No. 4850, it is invested with the power and authority to issue a cease and desist order
pursuant to various provisions in EO No. 927.

HELD:
YES.

1. LLDA is mandated by law to manage the environment, preserve the quality of human life and
ecological systems and prevent undue ecological disturbances, deterioration and pollution in
the Laguna Lake area and surrounding provinces and cities, including Caloocan.

While pollution cases are generally under the Pollution Adjudication Board under the Department
of Environment and Natural Resources, it does not preclude mandate from special laws that provide

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another forum. In this case, RA No. 4850 provides that mandate to the LLDA. It is mandated to pass
upon or approve or disapprove plans and programs of local government offices and agencies within
the region and their underlying environmental/ecological repercussions. The DENR even recognized
the primary jurisdiction of the LLDA over the case when the DENR acted as intermediary at a meeting
among the representatives of the city government, LLDA and the residents.

2. LLDA has the authority to issue the cease and desist order.

a. Explicit in the law.

· Section 4, par. (3) explicitly authorizes the LLDA to make whatever order may be necessary in
the exercise of its jurisdiction.

While LLDA was not expressly conferred the power “to issue an ex-parte cease and desist order”
in that language, the provision granting authority to “make (…) orders requiring the discontinuance of
pollution”, has the same effect.

b. Necessarily implied powers.

Assuming arguendo that the cease and desist order” was not expressly conferred by law, there
is jurisprudence enough to the effect. While it is a fundamental rule that an administrative agency has
only such power as expressly granted to it by law, it is likewise a settled rule that an administrative
agency has also such powers as are necessarily implied in the exercise of its express powers. Otherwise,
it will be reduced to a “toothless” paper agency.

In Pollution Adjudication Board vs Court of Appeals, the Court ruled that the PAB has the power
to issue an ex-parte cease and desist order on prima facie evidence of an establishment exceeding the
allowable standards set by the anti-pollution laws of the country. LLDA has been vested with sufficiently
broad powers in the regulation of the projects within the Laguna Lake region, and this includes the
implementation of relevant anti-pollution laws in the area.

MAKATI STOCK EXCHANGE, INC. V. SECURITIES AND EXCHANGE COMMISSION

16 SCRA 623 (1965)

RADIO COMMUNICATIONS OF THE PHIL., INC. V. BOARD OF COMMUNICATIONS

80 SCRA 471 (1977)

CELIA S. VDA. DE HERRERA VS. EMELITA BERNARDO, EVELYN BERNARDO

G.R. NO. 170251

COMMISSIONER OF CUSTOMS V. PHILIPPINE ACETYLENE CO.

39 SCRA 70 (1970)

VICTORIAS MILLING CO. V. SOCIAL SECURITY COMMISSION

4 SCRA 627 (1962)

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