Admin+Law+Part+III

8/10/2019 Admin+Law+Part+III

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Part III | Admin Law Cases | Dean Roy 2D 2012

ANTONIO | CABRAL | CRUZ | HIPOLITO | MENDOZA J | MENDOZA R | SIRON | SOLLER 1

III. POWERS AND FUNCTIONS OF ADMINISTRATIVE AGENCIES

A. SOURCES AND SCOPE

1. GUERZON V CA

FACTSPetitioner executed with Basic Landoil Energy Corp (later acquired by Shell) a Service Station Lease and Dealers SalesContract. Respondent Bureau of Energy Utilization (BEU) approved the latter contract and issued a Certificate of Authorityin Petitioners favor. After the contract, respondent Shell wrote Guerzon informing him that they are not renewing thecontract. A copy of said letter was furnished to BEU. Thereafter, BEU issued an order directing petitioner to vacate thepremises and to show cause in writing why no administrative order and/or criminal proceedings shall be instituted for his

violations.

Shell was able to secure the possession of the gas station. Guerzon then filed with the RTC a complaint but such wasdismissed for lack of jurisdiction to annuk the order of a quasi-judicial body of equivalent category as the RTC.

ISSUESW/N the BEU has the authority to order petitioner to vacate the premises.

RULINGNO. The power of an administrative agency has only such powers as are expressly granted (here PD 1206) to it by law and

those that are necessarily implied in the exercise thereof. Said PD states that after notice and hearing, it can impose andcollect a fine and failure to pay the fine or to cease and discontinue the violation of the law (i.e. illegal trading in petroleumproducts) shall be sufficient reason for suspension, closure or stoppage of operations.

Nowhere in the order is it stated that petitioner engaged inillegal trading or any other violation of BP 33. It merely made avague reference to violation of BEU laws, rules and regulation. The BEU (like its predecessor, the Oil IndustryCommission) has no power to decide contractual disputes between gasonline dealers and oil companies. It cannot order

petitioner to vacate the premises as this is an appropriate case in the vicil courts for unlawful detainer. Assuming arguendothat it did had the authority, it still failed to comply with the requirement of notice and hearing.

NOTE: Nevertheless,petitioner could not require that possession be given to him as the contract was not renewed.

2. LASTIMOSA V VASQUEZ

FACTS

Petitioner is First Asst. Provincial Prosecutor or Cebu. She and the Provincial Prosecutor refused or failed to file a criminalcharge of attempted rape against Municipal Mayor Rogelio Ilustrisimo. Petitioner was filed with an administrative complaintfor grave misconduct, insubordination, gross neglect of duty and maliciously refraining from prosecuting crime and a chargefor indirect contempt. They were also placed under 6 mos preventive suspension.

Prior to this, a complaint was assigned to a graft investigation officer who found noprima facieevidence and recommendeddismissal. However, the Ombudsman Vasquex disapproved the recommendation and directed that the Mayor be charged inthe RTC. The Deputy Ombudsman for Visayas then referred the matter to the Provincial Prosecutor and later to petitioner.

Petitioner found that only acts of lasciviousness have been committed and filed a case under such.

ISSUESW/N the Ombudsman has authority to file an administrative case against the petitioners and preventively suspend them.

RULINGYES.The Ombudsmans power to investigate and prosecute include the investigation and prosecution of any crime

committed by a public official regardless if such were related to, or connected with, or arise from, the performance of hisofficial duty. The Ombudsman is authorized to call on prosecutors for assistance under S31 fo RA 6770

1. When a

prosecutor is deputized, he is subject to supervision and control of the Ombudsman. Such supervision and control wouldmean that they can alter, repeal or modify findings of their subordinates. The office also has the power to punish forcontempt under Rule 71, S3 of the Rules of Court

2.

1Ombudsman Act of 19892The case does not resolve the issue of w/n petitioners refusal amounted to defiance of orders. Only the power to cite for contempt was established.


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3. MATIENZO V ABELLERA

FACTSPetitioners and private respondents are taxicab operators in Metro Manila. The respondents, however, admit to operate

colorum or kabit taxis, thus, they applied for legalization of their unauthorized excess tacis citing PD 101. Respondent Boardset such applications for hearing and granted provisional authority to operate. Petitioners argue that the Board cannot dothis as the six month period in the Transitory Provision has lapsed and has become functus officio.

ISSUESW/N the board can grant such permits.

RULING

YES. The power vested by PD 101 to BOT was to grant special permits of limited term for the operation of public utilitymotor vehicles as may, in the judgment of the Board, be necessary to replace or convert clandestine operators intolegitimate and responsible operators. Such power remains even after the six months prescribed in the law as such periodmerely provides for the withdrawal of the States waiver of its right to punish said colorum operators. Notice and hearing arenot required for the grant of such temporary authority because of its provisional nature and that the primary application shallbe given a full hearing.

To determine whether a Board or Commission has power, it should be (1) liberally construed in light of its purpose for which

is was created and (2) that incidentally necessary to a full implementation of legislative intent as being germane to the law.Thus, the BOR shall, from time to tim,e, re-study the public need for publit utilities in any area int he Phils for the purpose of

re-evaluating the policies.

4. PASEI V TORRES

FACTSPhil. Asso. Of Service Exporters Inc is the largest national org of private employment and recruitment agencies duly licensedand authorized by the POEA for landbased workers, including domestic helpers. Due to the abuses suffered by DHs, DOLE

Sec. Torres issues Dept. Order 16, temporarily suspending the reecruitment of DH in HK. Pursuant to such, POEA issuedMemo Circ. 30 providing guidelines on the Govt processing and deployment of DH to HK and accreditation of HKrecruitment agencies.

ISSUESW/N the DOLE and POEA acted in grave abuse of discretion in creating such order and circulars.

RULING

The vesture of quasi-legislative and quasi-judicial powers are not unconstitutional, unreasonable and oppressive as it isnecessitated by the growing complezity of the modern society. The power to restrict and regulate under Art 36 of the LaborCode

3involves a grant of police power. The circulars do NOT prohibit petitioner from recruiting and deployment of OFWs.

Nevertheless, it cannot be implemented because of lack of publication.

5. REALTY EXCHANGE VENTURE CORP. V SENDINO

FACTSRespondent Sendino entered into a reservation agreement with petitioner Realty Exchange Venture, Inc. (REVI) for a lotlocated in Raymondville Subdivision in Sucat for P307,800. Sendino paid a total of P5000 as reservation fee.

Six months thereafter Sendino paid 16K as downpayment. She was however advised by REVI to change her co-maker.Sendino agreed, to which she asked for an extension of one month or so. For alleged non-compliance with the appropriatedocumentary requirements, REVI unilaterally rescinded the contract.

Sendino sued for Specific Performance against REVI with the Office of Appeals, Adjudication and Legal Affairs (OAALA) ofthe HLURB.

REVI argued that OAALA-HLURB has no jurisdiction to hear and decide the case because EO 90 which created the HLURBdid not grant such powers to it. Although such quasi-judicial function was exercised by the Human Settlements RegulatoryCommission (HSRC), HLURBs predecessor.

3Art. 36Regulatory Power the Sec. Of labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of thistitle (Regulation of Recruitment and Placement activities) and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and

implement the provisions of this title.


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2. EVANGELISTA V JARENCIO

FACTSThe President created the Presidential Agency on Reforms and Government Operations (PARGO). Its main function being to

investigate all cases of graft, and to submit the proper recommendation to the President. For a realistic performance of thesefunctions, the President vested this agency all investigating powers including the power to summon witnesses by subpoenaad testificandum or duces tecum, administer oaths, take testimony or evidence relevant to the investigation.

Usec Evangelista issued a subpoena ad testificandum to Manalastas, commanding him to be a witness for the PARGO, andtestify in a certain investigation being conducted by the Agency.

Manalastas petitioned the CFI of Manila to issue a TRO against PARGO. He was also assailing the legality of the subpoena.

ISSUEW/N the PARGO, an executive office, enjoys the authority to issue subpoenas in its conduct of fact finding investigation.

RULINGYES. An administrative agency may be authorized to make investigations in proceedings for the sole purpose of obtaininginformation on which future action of a legislative or judicial nature may be taken. The subpoena power of PARGO is notconfined to mere quasi-judicial functions but may also be used to meet the very purpose of its creation, to forestall and erode

nefarious activities and anomalies in the civil service.

Administrative agencies may issue administrative subpoenas in the course of investigations whether or notadjudication is involved and whether or not probable cause is shown.

C. ADMINISTRATIVE CONSTRUCTION AND INTERPRETATION

1. ESPANOL v CHAIRMAN and MEMBERS OF THE BOARD OF ADMINISTRATORS, PHIL. VETERANSADMINISTRATION

FACTSEspanol was a widow of a deceased veteran, who died in the service during WWII. She applied for a monthly pension underRA 65 with the PVA. It was approved and she received her monthly pension and her minor children their monthlydependent's pension.

However, the PVA cancelled her monthly pension as well as the minor children's, in accordance with an administrative policystating that beneficiaries of veterans receiving pension from the US Veterans Administration are no longer entitled to receive

pension from PVA.

After more than 22 years, Espanol filed a petition against PVA for the restoration and continued payment of her monthlypension, including that of her minor children. CFI of Manila ruled in favor of Espanol.

ISSUES1. W/N the action to restore her monthly pension and that of her children has already prescribed2. W/N there was a need for prior exhaustion of administrative remedies

3. W/N a corresponding appropriation is necessary before PVA can disburse public funds to restore her pension

HELD1. NO. Art. 1144 of the NCC provides for a 10-year prescription for actions based on an obligation created by law. Espanolcannot be said to have a cause of action, in compelling PVA to continue paying her monthly pension because PVA's act ofcancellation, being pursuant to an administrative policy, cannot be considered a violation of her right to receive her monthlypension.

It is a rule in admin law that admin regulations and policies enacted by admin bodies to interpret the law which they areentrusted to enforce, have the force of law, are entitled to great respect and have in their favor a presumption of legality.Thus, the cancellation of Espanol's monthly pension, being presumed valid, cannot be considered as a violation of Espanol'sright to receive monthly pension under RA 65. It is only when the Court declares such policy invalid will the prescriptionperiod begin to run.

2. NO. It is a rule that when a case involves solely legal questions, as in this case, the litigant (Espanol) need not exhaust alladministrative remedies before judicial relief is sought.

3. NO. Espanol does not seek to recover increased benefits under RA 5753 (which increased the pension of totally disabledveterans of WWII and their living dependents--needs prior appropriation), but for the restoration of her monthly pension and


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her children's monthly dependent's pension under RA 65, the coverage of which Congress had already appropriated.

2. VICTORIAS MILLING COMPANY v SOCIAL SECURITY COMMISSION

FACTSIn 1958, the SSC issued a circular (no. 22) providing that bonuses and overtime pay shall be included in the computation ofthe employers' and employees' respective monthly premium contributions.

However, Victorias Milling protested such circular and contended that it was contradictory to a previous circular (no. 7),which expressly excluded bonuses and overtime from the computation. Moreover, it challenged the validity of the circular forlack of authority on the part of SSC to promulgate it without the approval of the President and for lack of publication in theOG.

The SSC ruled that the circular is not a rule or regulation that needed the approval of the President and publication to beeffective, but an administrative interpretation of the statute, a mere statement of general policy or opinion as to how the lawshould be construed.

ISSUEW/N Circular No. 22 is a rule or regulation that requires presidential approval and publication in the OG for its effectivity

HELDNO. There is a distinction between an admin rule or regulation and an admin interpretation of a law whose enforcement is

entrusted to an admin body. When an administrative agency promulgates rules and regulations, it "makes" a new law withthe force and effect of a valid law, while when it renders an opinion or gives a statement of policy, it merely interprets a pre-existing law. Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon theadministrative agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penalsanction provided in the law. This is so because statutes are usually couched in general terms, after expressing the policy,purposes, objectives, remedies and sanctions intended by the legislature. The details and the manner of carrying out the laware often times left to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and

regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law.

The SSC issued Circular No. 22 to apprise those concerned of the interpretation and understanding of the Commission ofthe law, as amended, which it was its duty to enforce. It did not add any duty or detail that was not already in the law asamended. It merely stated and circularized the opinion of the Commission as to how the law should be construed--that theexemption of bonuses, allowances and overtime pay was deleted by the amendatory law.

Circular No. 22 merely advised employers-members of the system of what they should include in the determination of the

monthly compensation of their employees upon which the contributions are based.

3. HILADO v CIR and CTA

FACTSEmilio Hilado filed his income tax return for 1951 with the treasurer of Bacolod City, claiming a deductible item of P12,837.65from his gross income pursuant to General Circular V-123 issued by the Collector of Internal Revenue, pursuant to rules laiddown by the Secretary of Finance. The Secretary of Finance, through the Collector, issued General Circular V-139 which

revoked and declared void Circular V-123; and laid down the rule[s] that losses of property which occurred in World War IIfrom fires, storms, shipwreck or other casualty, or from robbery, theft, or embezzlement are deductible in the year of actualloss or destruction of said property. As a consequence, the deductions were disallowed.

ISSUEW/N the Secretary of Finance acted without valid authority in revoking V-123 and approving V-139 in lieu thereof

HELDNO. The Secretary of Finance is vested with authority to revoke, repeal or abrogate the acts or previous rulings of hispredecessor in office because the construction of a statute by those administering it is not binding on their successors ifthereafter the latter becomes satisfied that a different construction should be given.

Moreover, since V-123, having been issued on a wrong construction of the law, it cannot give rise to a vested right that canbe invoked by a taxpayer. A vested right cannot spring from a wrong interpretation


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Petitioners invoke due process for publication of certain laws to comply with the requirement of publication pursuant to article2 of the NCC. The public respondents on the other hand assert that publication is not required as indicated in the clauseunless it is otherwise provided

ISSUEWhether publication is required in all laws.

HELDYES. The clause unless it is otherwise provided refers to the date of effectivity and not to the requirement of publicationitself, which cannot in any way be omitted. The clause does not mean that the legislature may make the law effectiveimmediately upon approval, or on any other date, without its previous publication.

Publication is indispensible in every case, but the legislature may in its discretion provide that the usual fifteen day periodshall be shortened or extended. Thus, all statutes, including those of local application and private laws, shall be published asa condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is fixed by thelegislature.

3. PHIL. CONSUMERS FOUNDATION INC V SECRETARY OF EDUCATION

FACTS

In 1987, the Task Force on Private Higher Education submitted a report, which favorably recommended to the DECScourses of action with respect to the Government's policy on increases in school fees for SY 1987-1988.

On this basis, the Secretary of DECS issued an order authorizing a 15-20% increase in school fees as recommended by theTask Force. Philippine Consumers Foundation Inc (PCFI) opposed the order on the ground that the increases were too high.

DECS issued Dept Order No. 37 reducing the increases to a lower ceiling of 10-15%. Again, PCFI opposed.

ISSUE

W/N DECS has the power to prescribe school fees

HELDYES. In the absence of a statute stating otherwise, this power includes the power to prescribe school fees. No othergovernment agency has been vested with the authority to fix school fees and as such, the power should be consideredlodged with the DECS if it is to properly and effectively discharge its functions and duties under the law.

The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative 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. Asregards rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearingare essential to the validity of such rates. When the rules and/or rates laid down by an administrative agency are meant toapply to all enterprises of a given kind throughout the country, they may partake of a legislative character. Where the rulesand the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function is quasi-judicial incharacter.

Is Department Order No. 37 issued by the DECS in the exercise of its legislative function? YES. The assailed Department

Order prescribes the maximum school fees that may be charged by all private schools in the countryfor SY 1987 to 1988.This being so, prior notice and hearing are not essential to the validity of its issuance.

4. PHILCOMSAT V ALCUAZ

FACTSBy virtue of Republic Act 5514, the Philippine Communications Satellite Corporation (PHILCOMSAT) was granted a

franchise to establish, construct, maintain and operate in the Philippines, at such places as the grantee may select, station orstations and associated equipment and facilities for international satellite communications, the authority to construct andoperate such ground facilities as needed to deliver telecommunications services from the communications satellite systemand ground terminal or terminals. By designation of the Republic of the Philippines, it is also the sole signatory for thePhilippines in the Agreement and the Operating Agreement relating to the International Telecommunications SatelliteOrganization (INTELSAT), as well as in the Convention and the Operating Agreement of the International Maritime SatelliteOrganization (INMARSAT), which two global commercial telecommunications satellite corporations were collectivelyestablished by various states in line with the principles set forth in Resolution 1721 (XVI) of the United Nationss GeneralAssembly. Since 1968, It has been leasing its satellite circuits to PLDT, Philippine Global Communications, EasternTelecom, Globe Mackay Cable and Radio Corp. ITT, and Capitol Wireless or their predecessors-in-interest. The satellite

services thus provided by PHILCOMSAT enable said international carriers to serve the public with indispensablecommunication services, such as overseas telephone, telex, facsimile, telegrams, high speed data, live television in full


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color, and television standard conversion from European to American or vice versa. It was exempt from the jurisdiction of thethen Public Service Commission, now National Telecommunications Commission (NTC). However, pursuant to ExecutiveOrder (EO) 196 issued on 17 June 1987, it was placed under the jurisdiction, control and regulation of NTC, including all itsfacilities and services and the fixing of rates. Implementing said executive order, NTC required PHILCOMSAT to apply for

the requisite certificate of public convenience and necessity covering its facilities and the services it renders, as well as thecorresponding authority to charge rates therefor. On 9 September 1987, PHILCOMSAT filed with NTC an application forauthority to continue operating and maintaining the same facilities it has been continuously operating and maintaining since1967, to continue providing the international satellite communications services it has likewise been providing since 1967, andto charge the current rates applied for in rendering such services. Pending hearing, it also applied for a provisional authorityso that it can continue to operate and maintain the facilities, provide the services and charge therefor the aforesaid ratestherein applied for. On 16 September 1987, PHILCOMSAT was granted a provisional authority to continue operating itsexisting facilities, to render the services it was then offering, and to charge the rates it was then charging. This authority was

valid for 6 months from the date of said order. When said provisional authority expired on 17 March 1988, it was extended foranother 6 months, or up to 16 September 1988. Thereafter, the NTC further extended the provisional authority ofPHILCOMSAT for another 6 months, counted from 16 September 1988, but it directed PHILCOMSAT to charge modifiedreduced rates through a reduction of 15% on the present authorized rates. PHILCOMSAT assailed said order.

ISSUEW/N the NTC is required to provide notice and hearing to PHILCOMSAT in its rate-fixing order, which fixed a temporary ratepending final determination of PHILCOMSATs application.

HELD

YES. The NTC, in the exercise of its rate-fixing power, is limited by the requirements of public safety, public interest,reasonable feasibility and reasonable rates, which conjointly more than satisfy the requirements of a valid delegation oflegislative power. The NTC order violates procedural due process because it was issued motu proprio, without notice toPHILCOMSAT and without the benefit of a hearing. Said order was based merely on an initial evaluation, which is aunilateral evaluation, but had PHILCOMSAT been given an opportunity to present its side before the order in question wasissued, the confiscatory nature of the rate reduction and the consequent deterioration of the public service could have beenshown and demonstrated to NTC. The order pertains exclusively to PHILCOMSAT and to no other. Reduction of rates was

made without affording PHILCOMSAT the benefit of an explanation as to what particular aspect or aspects of the financialstatements warranted a corresponding rate reduction. PHILCOMSAT was not even afforded the opportunity to cross-examine the inspector who issued the report on which NTC based its questioned order. While the NTC may fix a temporaryrate pending final determination of the application of PHILCOMSAT, such rate-fixing order, temporary though it may be, isnot exempt from the statutory procedural requirements of notice and hearing, as well as the requirement of reasonableness.Assuming that such power is vested in NTC, it may not exercise the same in an arbitrary and confiscatory manner.Categorizing such an order as temporary in nature does not perforce entail the applicability of a different rule of statutoryprocedure than would otherwise be applied to any other order on the same matter unless otherwise provided by the

applicable law. NTC has no authority to make such order without first giving PHILCOMSAT a hearing, whether the order betemporary or permanent, and it is immaterial whether the same is made upon a complaint, a summary investigation, or uponthe commissions own motion.

5. RCPI V NTC and PLDT

FACTSIn 1984, PLDT filed an application with NTC for the Approval of Rates for Digital Transmission Service Facilities, which was

provisionally approved and set the case for hearing within the prescribed 30-day period allowed by law. NTC issued a noticeof hearing, setting PLDT's application for hearing on Feb 22, 1984 at 9:30AM.

In this notice of hearing, petitioners, RCPI and Clavecilla Radio System were not included in the list of affected parties (onlyPhil. Telegraph & Telephone Corp. was included). At the hearing, PT&T Co. (along with other petitioners) appeared andmoved for some time within which to file an opposition or reply to said application. They alleged that neither NTC nor PLDTinformed them of the existence of this provisional authority and that the application filed by respondent PLDT is not for

approval of rates as its caption misleadingly indicates but for authority to engage in new services not covered by privaterespondent's franchise and certificate of public convenience and necessity. Petitioners further claimed that PLDT is limitedby its legislative franchise to render only "radiotelephonic services," exclusive of "radiotelegraphic or record services." Thus,the issuance of the provisional authority by NTC without notice and hearing constitutes grave abuse of discretion inasmuchas such power or prerogative exists only for rate cases under Section 16(c) of the Public Service Act.

ISSUEW/N NTC gravely abused its discretion amounting to excess or lack of jurisdiction in issuing a provisional authority in favor ofPLDT, without prior notice to RCPI, PT&T Corp. and Clavecilla Radio System

HELDNO. Section 16(c) of the Public Service Act provides for the fixing of rates, by the NTC, which shall be imposed and


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observed by any public service, as follows:

Sec. 16 (c). To fix and determine individual and joint rates, tolls, charges, classifications, or schedules thereof, as well as

commutation, mileage, kilometrage, and other special rates which shall be imposed, observed and followed thereafter by anypublic service: Provided, That the Commission may, in its discretion, approve rates proposed by public services provisionallyand without necessity of any hearing but it shall call a hearing thereon within thirty days, thereafter, upon publication and notice

to the concerns operating in the territory affected: Provided, furtherThat in case the public service equipment of an operator isused principally or secondarily for the promotion of a private business shall be considered in relation with the public service of

such operator for the purpose of fixing the rates.

The Public Service Commission found that the application involved in the present petition is actually an application forapproval of rates for digital transmission service facilities which it may approve provisionally and without the necessity of anynotice and hearing as provided in the above-quoted provision of law.

Well-settled is the rule that the Public Service Commission now is empowered to approve provisionally rates of utilitieswithout the necessity of a prior hearing. Under the Public Service Act, as amended, the NTC can fix a provisional amount forthe subscriber's investment to be effective immediately, without hearing. Further, the Public Service Act makes no distinction

between initial or revised rates. These rates are necessarily proposed merely, until the Commission approves them.Moreover, the Commission can hear and approve revised rates without published notices or hearing. The reason is easilydiscerned from the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with thedefinitive rates approved after final hearing and it was so stated in the case at bar, in the National TelecommunicationsCommission's order of January 25, 1984.

The Commission did not grant the PLDT any authority to engage in new communication service, but merely in any newproved provisionally PLDT's proposed revision of its then authorized schedule of rates for the lease on availment by

endusers of the digital full period leased lines or channels for data transmission which said company acquired, installed, andpresently maintain in serviceable condition, a relief well within its power to grant. Undoubtedly, a public utility is entitled to ajust compensation and a fair return upon the value of its property while it is being used in public service.

As to the required notice, it is impossible for the NTC to give personal notice to all parties affected, not all of them beingknown to it. More than that, there is no dispute that the notice of hearing was published and as admitted by petitioners, oneof them received the notice, which in turn informed the others. In fact, the petitioners have timely opposed the petition inquestion, so that lack of notice was deemed cured. Under the circumstances, the Commission may be deemed to havesubstantially complied with the requirements. In any event, the provisional nature of the authority and the fact that theprimary application shall be given a full hearing are the safeguards against its abuse.

Moreover, the maximum rate fixed in a franchise, which its holder is authorized to collect, is always subject to a revision andregulation by the NTC. For if such maximum rate is not subject to alteration, the power of the Commission to review would

be rendered nugatory, as it cannot be said that the power to revise may be exercised only where the franchise does notimpose a limitation. Therefore, the authority of the Commission to issue ex partea provisional permit to operate proposedpublic service is not absolute but is based on the superior and imperative necessity of meeting an urgent public need. It is

the duty of the NTC to see to the needs and interest of the public.

Finally, there is a legal presumption that the rates are reasonable and it must be conceded that the fixing of rates by thegovernment through its authorized agent, involves the exercise of reasonable discretion, and unless there is an abuse of thatdiscretion, the courts will not interfere. Likewise, as a rule, the court does not interfere with administrative action prior to itscompletion on finality.

A doctrine long recognized is that where the law confines in an administrative office the power to determine particular

questions or matters upon the facts presented, the jurisdiction of such office shall prevail over the courts. Hence, findings ofadministrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific mattersare generally accorded not only respect but at times even finality if such findings are supported by substantial evidence.

6. REPUBLIC V MEDINA

FACTSMeralco filed an application w/ Public Service Commission for the approval of the revised rate schedules with increasedcharges due to economic conditions. The Commission subsequently approved the proposed rates provisionally. Such

approved rates are subject to adjustment and applicant shall return sums collected if on the merits, application was not foundmeritorious.

Oppositors filed opposition on grounds that Meralco was in sound financial condition and is capable of maintaining efficientservice without the increased rates. The Commission then issued an order directing the Auditor General to conduct anexamination of Meralcos books of account within a deadline. Extension was given but it failed to verify the reasonablenessof the valuation due to lack of time. After the hearing, the proposed rate schedules were approved.


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ISSUES1. W/N the provisional rate proceedings were void due to lack of notice2. W/N the hearings were conducted in proper haste

HELD1. NO. It was valid. Public Service Act specifically authorizes the Commission at its discretion to approve proposed rates

provisionally without need for a hearing. Such rates are temporary in nature and are subject to adjustment in conformitywith the definitive rates approved after final hearing.

2. NO. Trials and hearings are continuous but there are intervals of several days or weeks. Outline of the case waslengthy. Hearings were held and only once did they proceed beyond 5 p.m. No undue restrictions were placed on the

oppositors and even individual consumers were allowed to cross examine applicants witnesses. These facts wouldshow that hearings were not conducted with undue haste. And the impending retirement of the Commissioner did notplay a role in his being strict in granting continuances.

E. REQUISITES FOR VALIDITY OF RULES

1. VDA. DE PINEDA V PENA

FACTSThe Ped Mining claim was located by Pedro Sibayan. After his death, his heirs executed a deed of extra-judicial settlement

wherein they waived their rights and interest over the Ped claim in favor of their co-heirs Feliza Sibayan. Feliza thentransferred said claims to Sofia Reyes. The Ullmann mining claim was located by Elvira Carmelo and was subsequentlytransferred to Joseph Palengaoan. Reyes, Palengaoan and others, formed the KM 21 Mining Association later converted toKM. 21 Exploration Corporation to which they conveyed their respective claims, including the Ped and Ulmann claims.Ultimately, the claims were assigned to the Baguio Gold Mining Company for operation.

Petitioners filed with the Bureau of Mines a letter-complaint against private respondents for alleged overlapping and

encroachment of the Ulmann claim over the Ped claim. The director of Mines held that there was no conflict between thePed and the Ulmann claims. This was based on the fact that the petitioners did not comply with the requirements of PD No.463, requiring the petitioners to file an application to avail of the Ped claim within a prescribed period. It held that the failureof petitioners to file such resulted to their loss of whatever rights they had over the mining claim. It held that such amountedto the abandonment by petitioners of the mining claim. The Minister of Natural Resources affirmed the decision of theDirector.

ISSUE

1. W/N the Minister and the Director had jurisdiction to pass upon the validity of the Ped claim, in as much as thepetitioners merely filed a protest case of overlapping of mining claims.

2. If they had such jurisdiction, W/N they committed GAD in declaring petitioners to have abandoned their miningclaim.

HELD1. YES. They had jurisdiction to do so. PD 463 vests the Bureau of Mines with jurisdiction over protests of mining claims.

Section 128 the Director, or the Secretary, in case of appeals, may motu proprio look into the validity of mining claims,

whether raised as an issue or not. Congress may validly delegate to administrative agencies the authority to promulgateRR to implement a given legislation and effectuate its policies. In order to be valid, the administrative regulation must begermane to the objects and purposes of the law, conform, to the standards that the law prescribes, and must relate solelyto carrying into effect the general provisions of the law.

2. YES, hence the decision was null and void. Respondent directors finding that the petitioners failed to file the availmentapplication was based solely on evidence submitted by the respondents, namely, a certification issued by the Mines

Regional Officer of Baguio City stating that petitioners failed to file the application within the period provided by law.

2. LUZON POLYMERS V CLAVE

FACTSThis case involves a question with respect to an administrative grant of an emergency allowance of P50.00 to the employeesof a corporation with a capital stock of P1M.

Let us trace back the history of the laws pertaining to such a grant:First, PD 390 granted said allowance then a LOI was issued by President Marcos to implement the policy in said decree.

The LOI provides: for enterprises capitalized at 1M 4M or more, P50 or higher shall be granted. For enterprisescapitalized at P100K 1M, P30 or higher. Second, the DOLE issued an interpretative Bulletin: P50 or higher where the


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capital stock or the total assets exceed P1M. P30 or higher where the capital stock or the total assets is P100k- P1M. Third,Presidential Decree no. 525 made mandatory the payment of emergency allowance under LOI 174 which is P50/month if the

capitalization is P1M, P30 of the capitalization is P100K P1M. Fourth, Rules and Regulations implementing PD No. 525

states P50 where the capital stock or total assets whichever is applicable and higher, is P1M or more. P30 where it is atleast P100K but less than P1M.

Petitioner is a corporation with an authorized capital stock of P1M and total assets of P2.6M. DOLE held that petitioner is

liable for P50 allowance, and, since it had only been giving P30, it was liable for a deficiency of P20 per month peremployees. It was of the opinion that the basis to be used with respect to petitioner was its total assets was P1M, then

petitioner should have been paying P50 as allowance.

ISSUEW/N the petitioner was indeed liable for P50 allowance instead of only P30 (W/N the rules and regulations issued, which wasthe basis for the decision of the DOLE, was valid)

HELDNO, the petitioner was only liable for P30 allowance. The rules and regulations were issued with GAD. To begin with, the

LOI 174 created a problem with respect to the category of an enterprise which has a capitalization of P1M as it fell underboth the P50 and P30 brackets of emergency allowance. This grey area however, was clarified by the Interpretative Bulletin

wherein the P50 allowance would apply to those whose capitalization was P1M. Clearly then the petitioner falls within the

P30 bracket. While the said administrative interpretation of LOI 174 is at best merely advisory for it is only the courts which

have the power to determine what the LOI really means, it is significant to note that said bulletin was adopted in PD 525.What seems to have confused the matter is the issuance of the RR implementing PD 525. It only injected a newdeterminative factor, i.e., the total assets of the employer, it also provided a choice for the determinative factor, whichever ishigher between the employers authorized c/s and its total assets. The said rule, therefore, introduced a matter which is notgermane to the provisions of PD 525, hence, it is null and void. AN administrative agency, like the DOLE, cannot amend thelaw it seeks to implement.

3. LINA V CARINO

FACTSThis is a petition for Mandamus filed by petitioner Senator Lina, Jr., who disputes the legal authority of respondent Cario to

issue DECS Order No. 30. It is entitled Guidelines on Tuition and/or other School Fees in Private Schools, Colleges andUniversities for SY 1991-1992. which allows private schools to increase tuition and other school fees, subject to certainguidelines set out in said order.

Respondent Secretary contends its validity by citing PD 451; conversely, petitioner Lina contends that Order No. 30 is invalidfor being contrary to BP 232 and RA 6782.

ISSUE

W/N respondent Secretary had authority to issue DECS Order No. 30. (Was it within the scope of the law?)

HELDYES. PD 451, promulgated on 1974, authorizes the Secretary of Education and Culture to fix the tuition and other schoolfees charged by private schools. BP 232, passed on 1982 states that each private school shall determine its rate of tuitionand other school fees, subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports. RA6782 deals with government assistance to students and teachers in private schools, not with the question of authority to fixtuition and school fees.

Hence, Order No. 30 in seeking to fix tuition and other school fees is valid pursuant to PD 451; it is not invalidated by BP 232

since the latter authorizes public schools to determine its tuition rate subject to rules promulgated by the Ministry ofEducation, Culture, and Sports; and it is not invalidated by RA 6782 since it confers authority to the State Assistance Council(SAC) to give government assistance to students, and not the authority to fix tuition and other school fees.

DECS Order No. 30 is valid.

4. LUPANGCO V CA

FACTSRespondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of its "Additional Instructions toExaminees," to all those applying for admission to take the licensure examinations in accountancy. Petitioners, all reviewerspreparing to take the licensure examinations in accountancy filed on their own behalf and all others similarly situated like


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them, with the Regional Trial Court of Manila a complaint for injunction with a prayer with the issuance of a writ of apreliminary injunction against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and todeclare the same unconstitutional.

Respondent PRC filed a motion to dismiss on the ground that the lower court had no jurisdiction to review and to enjoin theenforcement of its resolution. The lower court declared that it had jurisdiction to try the case and enjoined the respondentcommission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional.

CA granted the petition declaring RTC had no jurisdiction; hence this petition.

ISSUEW/N the RTC has jurisdiction to review and enjoin the PRC resolution. (sub-issue)

W/N PRC may lawfully (pursuant to the Constitution) prohibit the examinees from attending review classes, receivinghandout materials, tips, or the like three (3) days before the date of the examination. (pertinent to outline issue)

HELDNO. Sec 9, paragraph 3 of BP 129 states that CA shall have exclusive jurisdiction over all final judgments, decisions,resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies. To fall under this exclusive appellatejurisdiction, there has to be a final order or ruling of the administrative body involved exercised its quasi-judicial functions.Quasi-judicial function is a determination of rights, privileges and duties resulting in a decision or order which applies to a

specific situation and does not cover rules and regulations issued by the administrative body to implement its purelyadministrative policies and functions like Resolution No. 105. Hence, the power to review and enjoin the assailed PRC

resolution falls under the general jurisdiction of the RTC.

The questioned resolutions purpose is "to preserve the integrity and purity of the licensure examinations." Theunreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives willbe barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how theCommission can manage to have a watchful eye on each and every examinee during the three days before the examinationperiod. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in view. If shown to bear no

reasonable relation to the purposes for which they are authorized to be issued, then they must be held to be invalid. Hence,PRC resolution is unconstitutional for being unreasonable.

5. DECS V DIEGO

FACTSThe private respondent is a graduate of the University of the East with a degree of Bachelor of Science in Zoology. Thepetitioner claims that he took the NMAT three times and flunked it as many times. 1 When he applied to take it again, the

petitioner rejected his application on the basis of the aforesaid rule. He then went to the Regional Trial Court of Valenzuela,Metro Manila, to compel his admission to the test.

RTC found for Diego, and declared invalid the challenged order. CA

ISSUEW/N a person who has thrice failed the National Medical Admission Test (NMAT) is entitled to take it again. (reasonable?)

HELDNO. In Tablarin v. Gutierrez, 4 this Court upheld the constitutionality of the NMAT as a measure intended to limit theadmission to medical schools only to those who have initially proved their competence and preparation for a medicaleducation. We see no reason why the rationale in the Tablarin case cannot apply to the case at bar. The issue raised in bothcases is the academic preparation of the applicant. This may be gauged at least initially by the admission test and, indeedwith more reliability, by the three-flunk rule. The latter cannot be regarded any less valid than the former in the regulation ofthe medical profession. The three-flunk rule is a valid exercise of police power. Consequently it conforms to the requisites of

valid exercise police power: (a) the interests of the public generally, as distinguished from those of a particular class, requirethe interference of the State, and more importantly, (b) the means employed are reasonably necessary to the attainment ofthe object sought to be accomplished and not unduly oppressive upon individuals.

F. ADMINISTRATIVE RULES WITH PENAL SANCTIONS

1. PESIGAN V ANGELES

FACTSAnselmo and Marcelo Pesigan were carabao dealers and was able to obtain 3 things: a health certificate, a permit to

transport large cattle, and three certificates of inspection. While they were transporting 26 carabaos and a calf in an Isuzu10-wheeler truck, going from camarines sur to batangas, the carabaos were still seized by Lieutenant Zenarosa and Doctor


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Miranda despite the certificates. It was said that they were in violation of EO-626A, where carabaos are prohibited to betransported from one province to another, and failure to follow would lead to confiscation. The carabaos were given to smallfarmers. This lead The Pesigans to file an action for replevin. Judge Angeles dismissed the case for lack of cause of action.

ISSUEW/N EO-626A is enforceable even before publication

HELDNO, Although the date of signing of the law was October 25, 1980, the publication was done only on June 14, 1982, 2months before the supposed violation of the law, done on April 2, 1982. The word "laws" in article 2 includes circulars andregulations which prescribes penalties. This applies to EO-626A since forfeiture and confiscation makes it a penal statute.Comm Act 638 required all EOs to be published in the Official and Gazette, and would only take effect 15 days after

publication. The carabaos must be returned, however, there can be no recovery of damages since it was done in good faith.

2. PEOPLE V VERIDIANO II

FACTS

Benito Go Bio Jr. was charged with violation of BP22, dated April 9, 1979, when he issued a worthless check that did nothave sufficient funds with the intention to defraud the payee, and upon encashment, it was dishonored for lack of sufficientfunds. Go Bio Jr. filed a motion to quash, stating that on May 1979 when the check was issued, the law has not yet takeneffect. The prosecution contends that the law , assuming would take effect on June 29, 1979, the encashment was onSeptember 26, 1979, would be the date when the offense was committed. Judge Veridiano II dismissed the case, stating that

the making or issuing of the check would be the date of the reckoning for committing said violation and not at the time it wasdishonored.

ISSUES1. W/N the date stated in the law is the date of effectivity2. W/N the date of dishonor is the date the crime was committed

HELD1. NO, Even if the law was dated April 9, 1979, the official Gazette that contains the law was only released for circulation onJune 14, 1979, and would take effect 15 days after such publication. Since BP22 is a penal statute containing provisions forits penalties, the public must first be informed of its contents through publication before it would take effect. The accused

could not have committed a crime if it wasn't yet published for the purposes of informing him of such crime.

2. NO, The title of the law, as well as its provisions provide that it is the issuance of the check and not the dishonor thatwould be the date of committing the crime.

G. CONSTRUCTION OF ADMINISTRATIVE RULES AND REGULATIONS

1. DM CONSUNJI V COA

FACTSMWSS advertised an invitation for public bidding of the contract known as "Contract for Pump/Lift Stations andRehabilitation: Tondo Pump Station" or "Contract PS-1" where three companies attended. The lowest bidder, A. L.Sarmiento was found out that it did not comply with the conditions to bid and was disqualified. The second lowest bidder,Erectors Inc. withdrew, leaving the highest bidder, D. M. Consunji to offer with the contract. Negotiations was done to lowerthe expenses and the contract was modified to accommodate both parties. It was then officially awarded to petitioner, andwas given the presidential approval. The project was done 37 days ahead of the scheduled expiry of the contract, andpetitioner would be able to collect an incentive bonus for its early completion. MWSS paid the escalation price of P24.8MHowever, Stated Auditor Lucita Sanchez disallowed the payment of P3.9M of alleged overpayment, stating that thereckoning date of the price of escalation should have started from October 1982, when agreement was entered into and noton May 1981, when the bidding was made. The COA issued a decision, saying that the contract was not of a bidded contractbut a negotiated contract.

ISSUEWhether PS-1 is a bidded or negotiated contract

HELDIt is a Bidded Contract. Under PD 1594, the implementing rules and regulations show that infrastructure projects are to bedone first in a bidding. Failure of such bidding would lead to an advertisement of a second bidding. Failure of such biddingwould then lead to a negotiated contract. In this case, it is clear that petitioner was one of the bidders in the first bidding forsuch project. There was no indication of a failure of bidding, neither was there a second bidding held. It follows then that thesubject contract was a bidded contract. The negotiations done between MWSS and petitioner would not necessarily make it


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a negotiated contract. Negotiated contracts is only made when there is a failure of both bidding. MWSS itself evenacknowledged it as a bidded contract when it was offered to petitioner. It follows that the escalation price would start on May27, 1981, the date of the bidding, and not on October 1, 1982. There was no overpayment of P3.9M.

2. PHIL. PETROLEUM V MUNICIPALITY OF PILILIA

FACTSPetitioner, Philippine Petroleum Corp. (PPC), is engaged in the manufacture of lubricated oil basestock and conductsbusiness within Pililia Rizal. It also maintains an oil refinery including 49 storage tanks for its petroleum products.

It was provided in the National Internal Revenue Code(NIRC) Sec 142 that manufactured oils and other fuels would besubject to specific tax. On 28 June 1973, PD 231 or the Local Tax Code was enacted and Sec 19 and 19(a) provided that

municipalities may impose taxes on business except on fixed taxes provided on manufacturers,, importers, etc. of any articleof commerce of whatever kind.

On 27 December 1973, Finance Secretary issued Provincial Circular 26-73 which directed provincial, city and municipaltreasurer to refrain from collecting any local tax in old or new tax ordinances in the business of manufacturing, importing, etc.of petroleum products subject to specific tax under the NIRC.

Subsequently, on 9 January 1973, Finance Sec issued Provincial Circular 26 A-73 which instructed all City Treasurers to

refrain from collecting any local tax imposed in tax ordinances before or after the effectivity of the Local Tax Code on thebusiness of manufacturing, importing etc. of petroleum products subject to specific tax under NIRC.

On 14 June 1974, the Municipality of Rizal enacted a municipal resolution which imposed business taxes provided in theLocal Tax Code as well as mayor permits, sanitary inspection fees and storage permit fees for flammable, combustible orexplosive substances.

On 30 march 1974, PD 426 was issued which amended provisions of PD 231(local Tax Code) but retained Sec. 19 and 19(a)

On 13 April 1974, PD 436 was promulgated which increased the specific tax on lubricating oils and similar petroleumproducts and granted provinces, cities and municipalities certain shares in the specific tax on such products in line of Localtaxes imposed on petroleum products.

Due to the 2 provincial circulars, the municipal tax ordinance was not implemented and was deemed suspended.

On 13 March 1977, provincial circular 6-77 was issued which directed all city and municipal treasurers to refrain from

collecting storage fees on flammable materials under the local tax code ordinance because it partakes the nature of aservice charge.

On 3 June 1977, NIRC code of 1977 was enacted and sec 153 imposed specific tax on REFINED and MANUFACTUREDMOTOR FUELS.

On 4 April 1986, the Municipality of Rizal sued for collection PPC based on the local ordinance business tax (1979-1986),storage permit fees (1975-1986, mayors permit and sanitary inspection fees.

ISSUEW/N PPC whose oil products are subject to specific tax under NIRC is still liable to pay business tax and storage feesconsidering the provincial circulars refraining the municipalities to do so.

HELDYES, although the provincial circulars suspended the effectivity of local tax code which imposed business taxes, it must be

noted that with the issuance of PD 426 at a later date is deemed to have repealed the circulars when sec 19 and 19 (a) werecarried over and no exemptions were given to manufacturers, importers, etc. of petroleum products.

Well settled is the rule that administrative regulations must be in harmony with the provisions of the law. In case ofdiscrepancy between the basic law and an implementing rule, the former prevails. It is the intention of the framers of PD 426to terminate the effectivity of the circulars in as much as it is in contravention with sec 19 and 19(a) of PD 426.

Although PD 436 prohibits the imposition of local taxes on petroleum products, it did not amend sec. 19(a) of PD 231 asamended by PD 426 which granted the municipality the right to levy taxes on business manufacturers etc.

Also, to allow the continuous effectivity of the circulars would be tantamount to restricting the power of municipality to tax bymere administrative issuances.


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With regard to the storage permit fees, the petitioner is not liable to pay since the storage tanks are owned by PPC and notby the municipality. Hence there is no service rendered by the municipality which would be charged.

3. CEBU OXYGEN AND ACETYLENE CORP. V DRILON

FACTSPetitioner and its rank and file employees entered into a Collective Bargaining Agreement(CBA) which covered the years1986-1988. The agreement provided for the manner by which salary would be increased yearly. It was also stated that in theevent that a law was passed which provides higher rates of salary increase then petitioner will be paying for the difference.

On 14 December 1987, RA 6640 was passed which provided the rates of salary increase in the private sector pegged at

P10/day except to non-agricultural workers working outside Metro Manila where the rates would be P11/day. It also providedthat for those who were already receiving the min. wage of P100 the rate of increase would be P10/day.

The Sec. of Labor issued the implementing rules of RA 6640 which as contained in Sec 8 thereof prohibits the employer fromcrediting anniversary wage increases negotiated under a collective bargaining agreement against such wage increasesmandated by RA 6640.

For the first year of the CBA, the petitioner conformed and paid the difference and 13th

month pay.

On 22 February 1988, the Labor and Employment Officer commenced a routine inspection of petitioners establishment and

found that 208 employees to be underpaid. Hence the Assistant Regional Director issued an Order instructing petitioner topay the underpaid employees of P200 in monthly salary and P231 in 13th

month pay.

Petitioner protested on the ground that anniversary wage increase under the CBA should be credited against the wageincrease mandated by RA 6640. If the petitioners contention would be followed then it is only liable for P62 in monthly salaryand P31 in 13

thmonth pay. Such protest was not entertained. Hence, the case was brought immediately to the Supreme

Court since the case involves pure questions of law.

ISSUEW/N Sec. 8 of the Rules implementing the provision of RA 6640 which excludes anniversary wage increase provided frombeing credited to the wage increase provided by RA6640 is null and void on the ground that it duly expands the provision ofRA 6640.

HELDYES, It is a fundamental rule that the implementing rules cannot add or detract from the provisions of law it is designed to

implement. The provisions of RA 6640 do not prohibit the crediting of the CBA anniversary wage increases for purposes ofcomplying with RA 6640. The implementing rules cannot provide for such a prohibition not contemplated by the law.

H. REPEAL OF ADMINISTRATIVE RULES AND REGULATIONS

1. HILADO V CIR

FACTS

The Finance Secretary issued Gen. Circ. V-123 which interpreted and implemented SEC30 of NIRC which prescribes thatlosses sustained during WWII are allowable as tax deductions only within the corresponding taxable year. Gen. Circ. V-123thus allowed losses to be deducted in the year the last installment was received with notice that no further payment would bemade by the War Damage Commission under the Phil. Rehabilitation Act of 1946 until the US Congress makes furtherappropriation.

On March 1952, Emilio Hilado filed his income tax return for 1951 and claimed the amount of P12K as a deductible item from

his gross income pursuant to Gen. Circ. V-123. He declared the amount as a loss consisting in a portion of his war damageclaim which had been duly approved by the Phil. War Damage Commission under the Phil. Rehabilitation Act but was notpaid pursuant to a notice that part of his claim will not be paid unless there are further appropriation by the US Congress.

On the basis of such return, an assessment notice demanding payment of 9K was sent to Hilado, who paid the tax inmonthly installments, the last payment having been made in 1953.

Meanwhile, the Finance Sec. sought the opinion of the DOJ Sec. regarding the rule enunciated by Gen. Circ. V-123. TheDOJ Sec. opined that the circular was not sound because the proper rule should be that losses incurred be declared asdeductibles during the year they were sustained.


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Thus, in August 1952, the Finance Sec. issued Gen. Circ. V-139 which revoked and voided Gen. Circ. V-123 and providedthat losses of property which occurred during WWII from fires, storms, shipwrecks and other casualty are deductible in theyear of actual loss or destruction of said property.

As a result, the 12K was disallowed as a deduction from Hilados gross income for 1951 and the CIR demanded payment ofP3K as deficiency income for that year.

ISSUES1. W/N the repeal of Gen. Circ. V-123 through the issuance of Gen. Circ. V-139 by the Finance Secretary was valid.2. W/N Gen. Circ. V-139 be given retroactive effect.

HELD:

1. YES, although only courts may pass upon the validity of the circular pursuant to the separation of powers, the Financesec. is vested with authority to revoke, repeal or abrogate the acts or previous rulings of his predecessor because theconstruction of a statute by those administering it is not binding on their successors if thereafter the latter become satisfiedthat a different construction should be given.

2. YES, it would not obliterate any vested right acquired by petitioner under the previous circular because a vested rightcannot spring from a wrong construction of the law. An administrative officer cannot change a law enacted by congress. Anerroneous construction of the law does not preclude the government from collecting tax which is legally due.

Documents

Admin+Law+Part+III