VI.B.

Sources of Judicial Review

Question:

What are the sources of judicial review?

Suggested Answer:

In connection with action of an administrative agency, the term judicial review may embrace any
form of judicial scrutiny of a matter which arises when such action is brought into question before a
court. The following are the sources of judicial review:

1. Constitution

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess jurisdiction on
the part of any branch or instrumentality of the government (Section1 (2), Article VIII, 1987
Constitution).

It is generally understood that as to administrative agencies exercising quasijudicial or

legislative power, there is an underlying power in the courts to scrutinize the acts of such
agencies on questions of law and jurisdiction even though no right of review is given by
statute. Judicial review is proper in case of lack of jurisdiction, grave abuse of discretion,
error of law, fraud or collusion [San Miguel Corp. v. NLRC, G.R. No. L-39195 (1975), citing
Timbancaya v. Vicente, G.R. No. L-19100 (1963)].

2. Statutes

The legislative practice has ordinarily been to provide judicial review for administrative
adjudications, whether required by constitutional commands or not.

Judicial review may be granted or withheld as Congress chooses, except when the
Constitution requires or allows it. Thus, a law may provide that the decision of an
administrative agency shall be final and not reviewable and it would still not offend due
process.

However, Section 1, par. 2. Article VIII of the Constitution, provides that judicial review
cannot be denied the courts when there is allegation of grave abuse of discretion (Outliner /
Reviewer in Political Law by Antonio Eduardo B. Nachura, 2009 edition, p.438)

3. General Principles of Law

It is generally understood that as to administrative agencies exercising quasi-judicial or

legislative power there is an underlying power in the courts to scrutinize the acts of such
agencies on questions of law and jurisdiction even though no right of review is given by
statute (The San Miguel Corporation v. Secretary of Labor, G.R. No. L-39195, May 16,
1975).

A voluntary arbitrator by the nature of his/her functions acts in quasi-judicial capacity. There
is no reason his/her decisions involving interpretation of law should be beyond the Court's
review. Administrative officials are presumed to act in accordance with law and yet the
Supreme Court do hesitate to pass upon their work where a question of law is involved or
where a showing of abuse of authority or discretion in their official acts is properly raised in
petitions for certiorari. (Continental Marble v. NLRC, G.R. No. L-43825, May 9, 1988).

Question:

What is the purpose of judicial review in Administrative Law?

Suggested Answer:

The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect
the substantial rights of the parties.

It is that part of the checks and balances which restricts the separation of powers and forestalls
arbitrary and unjust adjudications [St. Martin’s Funeral Homes v. NLRC, G.R. No. 130866 (1998)].
Question:

What are the questions that may be subject of Judicial Review?

Suggested Answer:

The questions that may be subject of Judicial Review are the following:

1. Questions of Law
2. Questions of Fact
3. Mixed Questions of Law and Fact
4. Questions of Discretion

Question:

What is the extent of judicial review?

Suggested Answer:

The extent of judicial review on questions of law are:

 Constitutionality of the law creating the agency and granting it powers;

 Validity of agency action if these transcend limits established by law; and

 Correctness of interpretation or application of the law.

The extent of judicial review on questions of fact is on the basis of the record taken as a whole
The findings of fact of the agency when supported by substantial evidence shall be final except
when specifically provided otherwise by law [Sec. 25, Chapter 4, Book VII, Admin. Code].

The general rule is findings of fact by the agency are final when supported by substantial evidence
except for the following: (FLED)

1. Fraud, imposition, mistake, or other error of judgment in evaluating the evidence [Ortua v.
Singson Encarnacion, G.R. No. L-39919 (1934)];

2. Specifically allowed otherwise by Law;

3. Error in appreciation of pleadings and interpretation of the documentary evidence

presented by the parties [Tan Tiong Teck v. SEC, G.R. No. L-46471 (1940)]; or

4. Decision of the agency was rendered by an almost Divided agency and that the division
was precisely on the facts as borne out by the evidence [Gonzales v. Victory Labor Union,
G.R. No. L-2256 (1969)].

The extent of judicial review on mixed questions of fact and law is that a finding upon a question of
fact must involved and dependent upon a question of law as to be in substance and effect a
decision on the latter, the Court will, in order to decide the legal question, examine the entire record
including the evidene necessary.

The extent of judicial review on questions of discretion is that administrative and discretionary
functions may not be interfered with by the courts except for the following: (JAGEL)

1. Issued without Jurisdiction [Laguna Tayabas Bus Company v. Public Service Commission,
G.R. No. 10903 (1957)].

2. Where the power is exercised in an Arbitrary or despotic manner [Banco Filipino Savings
and Mortgage Bank v. Monetary Board, G.R. No. 70054 (1991)];

3. When there is a Grave abuse of discretion;

4. If without reasonable support in the Evidence; or

5. Rendered against Law.

VI.E Doctrine of Exhaustion of Administrative Remedies

Question:

What is the Doctrine of Exhaustion of Administrative Remedies?

Suggested Answer:

The doctrine of exhaustion of administrative remedies requires that where a remedy within an
administrative agency is provided or available against the action of administrative board, body or
officer, and can still be resorted to by giving the said agency every opportunity to decide correctly a
given matter that comes within its jurisdiction, relief must be first sought by availing this remedy
before bringing an action in or elevating it to the courts of justice for review.

Question:

Q is the legitimate owner of a race-horse which was duly and officially registered with the National
Stud Farm and for which he was issued a certificate of registration, thereby entitling it to participate
in horse races and sweeptakes draws in legally authorized racing clubs or tracks.

On the very day when Q’s race-horse was scheduled to participate in race no. 15, the Philippine
Racing Club, Inc. announced through the public address system the start of race no. 13 that Q’s
horse was being excluded from taking part in race no. 15. Q then filed with the Regional Trial Court
a complaint for damages alleging that such withdrawal or cancellation of the certificate of
registration of Q’s race horse was arbitrary and oppressive, due process being denied him in the
absence of a formal investigation or inquiry prior thereto.

Will the complaint prosper?

Suggested Answer:

No. The complaint will not prosper.

Under the doctrine of exhaustion of administrative remedies, where a remedy within an

administrative agency is provided or available against the action of administrative board, body or
officer, and can still be resorted to by giving the said agency every opportunity to decide correctly a
given matter that comes within its jurisdiction, relief must be first sought by availing this remedy
before bringing an action in or elevating it to the courts of justice for review

In this case, Q prematurely instituted a suit in court for damages. His administrative remedy is to
ask the Board of Trustees of National Stud Farm to reconsider its resolution cancelling the
certificate of registration of his horse and in case the reconsideration is denied, to appeal to the
Games and Amusements Board or to the Office of the President of the Philippines.

(Quintos v. National Stud Farm, G.R. No. L-37052, November 29, 1973)

Question:

What is the thrust of the said doctrine?

Suggested Answer:

The thrust of the doctrine is to allow first the administrative agency to carry out its functions and
discharge its responsibilities within areas of its competence before resort can be made to the
courts.

Question:

A Timber License Agreement (TLA) was granted to Sunville Timber Products, Inc. for a period of
ten (10) years expiring on September 31, 1992. On July 31,1987, Gilbolingo filed a petition with
DENR praying for cancellation of the said TLA on the ground of serious violations of its conditions,
and forestry laws and regulations. The same charges were later made in a complaint for injunction
with damages against Sunville in the Regional Trial Court of Pagadian City.

Sunville moved for the dismissal of the case because the plaintiff has not yet exhausted
administrative remedies. The plaintiff countered that their complaint comes under the exceptions
because forestry laws do not require observance of the doctrine as a condition precedent to judicial
action.
Decide on the motion to dismiss of Sunville.

Suggested Answer:

The motion to dismiss should be granted.

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate
administrative authorities in the resolution of a controversy falling under their jurisdiction before the
same may be elevated to the courts of justice for review. Non-observance of the doctrine results in
lack of a cause of action, which is one of the grounds allowed in the Rules of Court for the
dismissal of the complaint.

The theory is that the administrative authorities are in a better position to resolve questions
addressed to their particular expertise and that errors committed by subordinates in their resolution
may be rectified by their superiors if given a chance to do so. A no less important consideration is
that administrative decisions are usually questioned in the special civil actions of certiorari,
prohibition and mandamus, which are allowed only when there is no other plain, speedy and
adequate remedy available to the petitioner. It may be added that strict enforcement of the rule
could also relieve the courts of a considerable number of avoidable cases which otherwise would
burden their heavily loaded dockets.

Even if it be assumed that the forestry laws do not expressly require prior resort to administrative
remedies, the reasons for the doctrine above given would suffice to still require its observance.

In this case, the charge involves factual issues calling for the presentation of supporting evidence.
Such evidence is best evaluated first by the administrative authorities, employing their specialized
knowledge of the agreement and the rules allegedly violated, before the courts may step in to
exercise their powers of review.

Therefore the motion to dismiss should be granted.

(Sunville Timber Products, Inc. v. Abad, G.R. No. 85502, February 24, 1991)

Question:

What is the effect of non-observance of the said doctrine?

Suggested Answer:

The failure to observe the doctrine of exhaustion of administrative remedies does not affect the
jurisdiction of the Court. The only effect of noncompliance with this rule is that it will deprive the
complainant of 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.
(Republic v. Sandiganbayan, G.R. Nos. 112708-09, March 29, 1996)

Question:

Alicia Water District (ALWAD), a GOCC that operates water utility services conducted public
hearing for the purpose of increasing the water rate. They subsequently received a letter from the
Local Water Utilities Administration (LWUA) confirming the proposed water rates. ALWAD issued a
resolution implementing the water rate increase of P90 for the first ten cubic meters of water
consumption. Because of this, consumers filed a Petition for Injunction against the petitioner
before the RTC alleging that ALWAD violated LOI 700 by implementing a rate increase greater
than 60% of current rate and failing to conduct public hearing for the imposed rate of ₱90. ALWAD
filed a Motion to Dismiss for failure to exhaust administrative remedy under PD 198 as amended.
One of the respondents then questioned the legality of the water rate increase before the National
Water Resources Board (NWRB). RTC denied ALWAD’s Motion to Dismiss. On appeal, CA
affirmed the RTC. Does RTC have jurisdiction over the matter?

Suggested Answer:

Yes. The Regional Trial Court does have jurisdiction over the matter.

The failure to exhaust administrative remedy does not affect the Regional Trial Court’s jurisdiction.
Non-exhaustion of administrative remedies only renders the action premature, that the cause of
action is not ripe for judicial determination. It is incumbent upon the party who has an administrative
remedy to pursue the same to its appropriate conclusion before seeking judicial intervention.
Although the doctrine of exhaustion does not preclude in all cases a party from seeking judicial
relief, cases where its observance has been disregarded require a strong showing of the
inadequacy of the prescribed procedure and of impending harm.

(Merida Water District v. Bacarro, G.R. No. 165993, September 30, 2008)

Question:

A, who is married to B, applied for a homestead patent. When the certificate of title was issued, it
was in favor of “A, widower”. A died, and soon thereafter, B filed a motion with the court praying
that A’s description as widower be changed to “married to B”.

The trial court originally granted the motion and ordered the change prayed for, but later it
reconsidered its decision and held itself without jurisdiction to act on the matter. Its reason was that
there was no observance of the doctrine of exhaustion of administrative remedies.

Does the court loses its jurisdiction over a case because of non-observance of the doctrine of
exhaustion of administrative remedies?

Suggested Answer:

No. The court does not loses its jurisdiction over a case because of non-observance of the doctrine
of exhaustion of administrative remedies.

Failure to observe the doctrine of exhaustion of administrative remedies does not affect the
jurisdiction of the court. The only effect of non-compliance with this rule is that it will deprive the
complainant of 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 then take cognizance of the case and
try it.

Moreover, the doctrine of exhaustion of administrative remedies is not applicable to private lands.
Once registered, the homestead granted to A ceased to have the character of public land and so
was removed from the operation of the said doctrine.

(IN RE: Motion To Correct Original Certificate Of Title No. P-672 Covering Lot No. 4569 Cauayan
Cad. Francisca Soto, G.R. No. L-38962. September 15, 1986)

Question:

What are the exceptions to the said doctrine?

Suggested Answer:

The doctrine which is based on sound policy and practical grounds is, however, flexible depending
on the peculiarity and uniqueness of the factual settings of a case.The following are exceptions to
the said doctrine: (MEAN-LIQUID-PUNA)

1. When the issue of non-exhaustion of administrative remedies has been rendered Moot

2. When there is Estoppel on the part of the administrative agency concerned;

3. 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;

4. When there is No plain, speedy, and adequate remedy provided by the rule;

5. When the issue involved is a purely Legal question;

6. When the administrative action is patently Illegal amounting to lack or excess of

jurisdiction;

7. Where the rule on Qualified political agency applies.

8. When it would be Unreasonable;

9. When there is Irreparable injury;

10. Violation of Due process;

 11. When the subject matter is a Private land case proceedings;

12. When there are circumstances indicating the Urgency of judicial intervention;

13. When it would amount to a Nullification of a claim; and

14. When no Administrative review is provided by law;

(Laguna CATV Network v. Maraan, G.R. No. 139492, November 19, 2002)

Question:

Lt. Tan Chiat Bee, a Chinese National, was a bona fide member of the first regiment, United
States-Chinese Volunteers in the Philippines, which is recognized by the United States. Having
died in line of duty in Ipo Dam, his widow, Maria Natividad Vda. De Tan filed a backpay application.
The same was processed but was disapproved by the Veterans Backpay Commission on the
ground that aliens are not qualified not being within the purview of the law. This disapproval is
contrary to the opinion of the Secretary of Justice that aliens are covered by the law. The said
Commission also ruled that the opinion of the Secretary of Justice is advisory in nature which may
either be accepted or ignored by the office seeking the opinion and the aggrieved party has the
court for recourse. Petitioner therefore filed this action in court but the Commission countered that
the petition has not exhausted administrative remedies.

Is the contention of the Veterans Backpay Commission correct?

Suggested Answer:

No. The said Commission is in estoppel to raise the said contention. In fact, it refused to follow the
opinion of the Secretary of Justice and even pointed out that “an aggrieved party has the court for
recourse.” The petitioner is therefore correct in seeking court relief without exhausting
administrative remedies, that of appealing to the President of the Philippines.

(De Tan vs. Veterans Backpay Commission, 105 Phil. 377)

Question:

A, B & C were duly appointed detectives of the Public Department of Cebu City, are civil service
eligibles, but their services were terminated by the City Mayor. The latter alleged that they were
holding confidential positions and could therefor be removed at anytime, for lack of trust and
confidence.

A, B & C questioned the illegal termination of their services. The City Mayor prayed for dismissal of
the petitions on the ground that the A, B & C filed the same directly to the court without exhausting
administrative remedies.

Can A, B & C seek court protection outright without exhausting administrative remedies, that of
filing an appeal to the Department Head in accordance with the Charter of Cebu City?

Suggested Answer:

Yes. The action of the City Mayor is patently illegal. He acted without jurisdiction, or has exceeded
his jurisdiction, or has committed grave abuse of discretion amounting to lack of jurisdiction. For
this reason, the petitioners may go to court to seek relief, without the need of filing an appeal from
the order of dismissal to the department head.

(Mangubat vs. Osmeña, et al.. 105 Phil. 1308)

Question:

A and B security contracts were terminated in the midst of bidding preparation and their
replacements were hired barely five days after their termination. M, another respondent is a pre-
qualified bidder who submitted all requirements and was preparing for public bidding only to find
out that the security contracts had already been awarded by negotiation. Because of the urgency of
the situation, A, B and M were compelled to go to court to stop the implementation of said security
contracts.
NFA countered that A, B & M did not avail of, much less exhaust, available administrative
remedies, thereby rendering their complaint premature and legally deficient to merit the grant of
judicial relief.

Should there still be an exhaustion of administrative remedies before going to court to stop
implementation of the negotiated security contracts?

Suggested Answer:

No. The principle of exhaustion of administrative remedies is not a hard and fast rule. It is subject to
some limitations and exceptions.

In this case, private respondents' contracts were terminated in the midst of bidding preparations
and their replacements hired barely five days after their termination. In fact, respondent Masada, a
prequalified bidder, submitted all requirements and was preparing for the public bidding only to find
out that contracts had already been awarded by negotiation.

An appeal to the NFA Board of Council of Trustees and to the Secretary of Agriculture pursuant to
the provisions of the Administrative Code of 1987 was not plain, speedy and adequate in the
ordinary course of law.

(NFA, et al. vs. CA, et al., G.R. No. 115121-25, 68 SCAD 246, February 9, 1996)

Question:

Distinguish Doctrine of Exhaustion of Administrative Remedies from Doctrine of Primary

Jurisdiction.

Suggested Answer:

Doctrine of Exhaustion of Administrative Doctrine of Primary Jurisdiction

Remedies
As to issues that can be passed upon
The administrative agency has authority Both the court and administrative agency
to pass on every question raised by a have jurisdiction to pass on a question
person who had resort to judicial relief, when a particular case is presented to
therefore enabling the court to withhold its court, as an original matter, rather than a
aid entirely until the administrative matter of review.
remedies had been exhausted.
As to jurisdiction to take cognizance of a case
The claim or matter is cognizable in the The case is within the concurrent
first instance by an administrative agency jurisdiction of the court and an
alone. administrative agency but the
determination of the case requires the
technical expertise of the administrative
agency.
As to purpose of the doctrine
The purpose of the rule is to control the The rule is not concerned with judicial
timing of judicial relief from adjudicative review but determines in some instances
action of an agency. It is a defense whether initial action should be taken by a
against judicial review. court or administrative agency. It is a
defense against resort to the courts in the
first instance.
As to effect of failure to comply
Failure to exhaust administrative Failure to comply with the doctrine of
remedies result in the lack of cause of primary jurisidiction or doctrine of prior
action and is a ground for a motion to resort does not go to the jurisdiction of
dismiss (Sunville Timber Products, Inc. v. the court because the matter is within the
Abad, G.R. No. 85502, February 24, court’s original jurisdiction. The court
1991) may, motu propio, or upon motion,
suspend the judicial process pending
referral of such issues to the
administrative body for its view.
(Industrial Enterprises v. Court of
Appeals, G.R. No. 88550, April 18, 1990)
Question:

When it is not required to appeal to the Office of the President decision or order issued by a
department agency?

Suggested Answer:

A decision or order issued by a department or agency need not be appealed to the Office of the
President when there is a special law that provides for a different mode of appeal..

Question:

M filed a verified complaint with the Consumer Arbitration Office (CAO) of DTI against PGA Cars,
Inc. pursuant to the relevant provisions of Republic Act No. 7394 (RA 7394). The complaint alleged
that the private respondent should be held liable for the product imperfections of a BMW car which
it sold to complainant.

CAO rendered a Decision in favor of M and ordered the PGA Cars, Inc. PGA Cars, Inc. sought
reconsideration of the Decision but the CAO denied the motion. Thus, PGA Cars, Inc. appealed to
the Secretary of the Department of Trade and Industry (DTI), the quasi-judicial agency designated
by the law to entertain appeals from the adverse decisions and orders of the CAO. However, in a
Resolution, the DTI Secretary dismissed the appeal of PGA Cars, Inc. who then filed an appeal
with the herein Office of the President (OP). The OP granted the appeal, reversed the DTI
Secretary’s Resolution, and dismissed the complaint.

Complainant filed a motion for reconsideration with the OP. In his motion for reconsideration from
the OP’s Decision M raised the issue of lack of jurisdiction of the OP, not being the proper court
referred to in Article 166 of R.A. 7394 which provides that the Secretary shall decide the appeal
within thirty (30) days from receipt thereof. The decision becomes final after fifteen (15) days from
receipt thereof unless a petition for certiorari is filed with the proper court.

The OP, however, denied his motion on the ground that the President’s power of control over the
executive department grants him the power to amend, modify, alter or repeal decisions of the
department secretaries.

Is the Office of the President correct in denying the motion to dismiss?

Suggested Answer:

No. The Office of the President is not correct in denying the motion to dismiss.

Jurisprudence provides that a decision or order issued by a department or agency need not be
appealed to the Office of the President when there is a special law that provides for a different
mode of appeal.

In this case, a special law, RA 7394, expressly provided for immediate judicial relief from decisions
of the DTI Secretary by filing a petition for certiorari with the "proper court.

Therefore, the Office of the President which lacks the jurisdiction to decide the case should not
have denied the motion to dismiss.

[Moran v. Office of the President, G.R. No. 192957 (2014)]