group 2 limitations to rule making power

8/17/2019 Group 2 Limitations to Rule Making Power

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SCERT INMENT OF F CT

LEGISLATIVE RULES v s à v s INTERPRETATIVE RULES

LEGISLATIVE INTERPRETATIVE

Subordinate legislation Product of interpreting previously

existing laws

Issued only under express delegation May be deemed as necessary incident

of administration

Have force and effect of law unless

ultra vires or unconstitutional

No statutory sanction

When valid have same force and effect

as valid statutes

Always subject to judicial

determination

No vested right upon wrong

construction

Gives no vested right upon wrong

interpretation


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CONSISTENCY WITH LAW AND THE CONSTITUTION

1. Must be within SCOPE and PURVIEW of the statutory authority granted

by the legislature to the administrative agency

2. Must be confined to details for regulating the mode of proceeding to

carry into effect the law as it has been enacted

Rule-making power cannot be extended to amending or expanding the

statutory requirements or to embrace matters not covered by the statute

or beyond its terms and provisions

In case of discrepancy between basic law and the implementing rule or

regulation, the former prevails

GR: Law > Rule


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QUESTIONS RELEVANT IN DETERMINING VALIDITY OF RULES

LEGISLATIVE RULE

1. Whether the rule relates to the subject matter on which power to legislate

has been delegated;

2. Whether the rule conforms to the standards prescribed in the delegatory

statute;

3. Whether the rule is invalid on constitutional grounds, such as due process

INTEPRETATIVE RULE

1. Whether the rule correctly interprets the statute;

2. Whether the rule amounts to an attempt to exercise legislative powers which

have not been delegated


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TESTS APPLIED IN DETERMINING VALIDITY OF RULES

1. A rule is INVALID if it EXCEEDS THE AUTHORITY CONFERRED TO

IT.

2. A rule is INVALID if it CONFLICTS WITH THE GOVERNING STATUTE.

3. A rule if VOID if it EXTENDS/MODIFIES the STATUTE.

4. A rule is VOID if it has NO REASONABLE RELATIONSHIP TO THE

STATUTORY PURPOSE.

5. Courts will set aside rules deemed to be ARBITRARY or

UNREASONABLE or UNCONSTITUTIONAL.


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INVALID IF IT EXCEEDS AUTHORITY CONFERRED

Where a power has been delegated to make legislative rules

within a plainly limited sphere and subject to defined standards,

and rule adopted EXCEEDS THIS SPHERE or is CONTRARY TO THE

STANDARDS;

Where there has been NO DELEGATION of LEGISLATIVE POWER,

and where rule issued as an administrative interpretation of the

statute is found to go beyond the sphere of interpretation and

into the FORBIDDEN REALM OF LEGISLATION


7/26

OLDEN V. ALDANESE

Aldanese refused to issue Certificates of Origin to Walter Olsen for importing the

latter’s tobacco the United States.

LAW: Act 2613 empowered the Collector of Internal Revenue to establish rules for the

classification for domestic sale or export

RULE: The CIR issued Administrative Order 35 which required the tobacco must come

from either Cagayan, Isabela, or Nueva Vizcaya.

COURT: Adminsitrative Order is VOID. Nothing in Act 2613 provides the tobacco must

come from any of these three specific provinces.


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INVALID IF IT CONFLICTS WITH GOVERNING STATUTE

Where, for example, a procedural rule attempt to limit a right of

appeal granted by statute. It is void because it conflicts with the

statute.

Where an interpretative rule is in conflict with the court’s

interpretation of the statute, the conclusion of invalidity is

premised on the agency’s interpretation as being in conflict with

the statute.


9/26

GMCR, INC. V. BELL TELECOM

BellTel applied for a Certificate of Public Convenience with the National

Telecommunications Commission. Upon the inaction of the NTC on its application

for a provisional authority, BellTel filed an Urgent Ex Parte Motion to Resolve

Application and for the Issuance of a Provisional Authority, which was green-

lighted by one NTC Chair Kintanar alone, without deciding with two other

commissioners.

LAW: EO 546 provided that the NTC, as a collegial body, must be composed of three

Commissioners.

RULE: The NTC Chairman’s Resolution provided that the decision of the Chairperson

will be binding.

COURT: Rule is INVALID. The law created NTC as a collegial body requiring the majority

vote of the three members.


10/26

MAXIMA REALTY V. PARKWAY REAL ESTATE

Maxima defaulted on payments to Parkway for the purchase of a condominium unit.

Parkway nullified the sale so Maxima filed a case with the HLURB, which affirmed

the nullification in a decision dated April 19, 2004. On May 10, 1994, Maxima

appealed the decision to the Office of the President.

LAW: PD 1344 and PD 957 provide that HLURB Decisions will be final and executory

15 days from the receipt of the party of the decision.

RULE: Sec. 27 of the HLURB Rules of Procedure provides for a 30-day appeal period

to the OP before they become final and executory.

COURT: The rule is INVALID. Special laws such as PD 1344 and PD 954 on appeals

from the HLURB to the OP) shall prevail over the HLURB Rules of Procedure.


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VOID IF IT EXTENDS/MODIFIES THE STATUTE

Cannot make a rule or regulation that alters, restricts,

or enlarges the terms of a legislative enactment or

engrafts additional requirements on the statute which

were not contemplated by the legislature


12/26

SYMAN V. JACINTO

The Collector of Customs for the Port of Manila seized cargo belonging to Sy Man,

the former penalizing the latter. Sy Man did not appeal. The Collector did not

return the cargo despite the finality of the decision because the Commissioner

had not yet decided on the case, despite Sy Man not having appealed

therefrom.

LAW: Sec. 1393 of the Administrative Code allows for the appeal of the assessment

cases to the Commissioner by the person aggrieved “may appeal”)

Rule: Bureau of Customs issued a Memorandum Order stating that seizure cases,

whether appealed or not, are subject to the review of the Commissioner.

COURT: The Memorandum Order is VOID and of no EFFECT because it is

INCONSISTENT WITH THE LAW.


13/26

CIR V. CA

The President issued EO 41 which granted a tax amnesty from 1981 to 1985. The

Commissioner of Internal Revenue issued Revenue Memorandum Order saying

only taxes assessed prior to August 22, 1986, the date EO 141 was issued.

LAW: EO 41, in Sec. 1 providing for scope, says a tax amnesty shall be granted from

the years 1981 to 1985.

RULE: Amnesty coverage extends only to assessments made after the EO was issued.

COURT: Revenue Memorandum Order is VOID for amending EO 141. The law was

clear as to the scope of amnesty.


14/26

APCD V. PHILCOA

By virtue of PD 232, the Philippine Coconut Authority came into being, for the purpose

of promoting the development and growth of the coconut trade, as well as for

regulatory purposes. The PCA subsequently issued a resolution deregulating the

establishment of new coconut plants. The Association of Phil. Coconut

Dessicators assailed the resolution for being an undue exercise of legislative

power by an administrative body.

LAW: PD 1468 gave the PCA the authority to adopt a general program for the

development of the coconut industry.

Rule: The PCA Resolution allowed the operation of new coconut plants even in

congested areas to promote free trade in the industry.

Court: Resolution was held to be void. The resolution virtually dismantled the

regulatory infrastructure and removed quality standards for coconuts.


15/26

PHIL. BANK OF COMMUNICATIONS V. CIR

Petitioner is claiming several tax refunds and credits for 1985. It filed a claim for

refund with the CTA on 1988, which the latter denied for being filed beyond the

two-year reglementary period provided in the NIRC. Petitioner appealed the CIR

decision on the ground that it still has a cause of action according to RMC 7-85.

LAW: Sec. 230 of the NIRC provides for a 2-year prescriptive period for the filing of

claims from erroneously collected taxes.

RULE: CIR issued RMC 7-85 which allows for a 10-year prescriptive period in filing tax

refund claims.

HELD: Rule is INVALID. The NIRC is clear as to the two-year prescriptive period for

refunds after payment of the tax or penalty regardless of any supervening cause.


16/26

CHINA BANKING V. MEMBERS, HDMF

The HDMF granted petitioner Certificates of Waiver due to their superior retirement

plans to that provided by PAG-IBIG. The HDMF Board issued an Amendment to the

Rules and Regulations Implementing RA 7742, providing instead that to be

granted a Certificate of Waiver, a company must have a provident retirement AND

housing plan superior to that provided by PAG-IBIG.

LAW: Sec. 19 of PD 1752, as amended, allows employers to avail of HDMF’s housing

and retirement program if the employer offers a superior housing AND/OR

retirement plan over that offered by PAG-IBIG.

Rule: HDMF Circular 124-B requires that for a waiver to be allowed, the employer

must have superior housing AND retirement plants.

HELD: Rule is INVALID. The administrative agency added another requirement as

provided by the law itself.


17/26

LOKIN, JR. V. COMELEC

CIBAC the partylist) submitted its lit of nominees to the COMELEC for the 2007

elections, which included Lokin, Jr as second nominee. CIBAC President Joel

Villanueva filed a certificate of amendment of its nominees to withdraw some

nominations, including Lokin’s. CIBAC won three seats without Lokin as nominee.

LAW: Sec. 8 of RA 7491 states that alteration of the order of nominees will only be

allowed if a) the nominee dies; b) becomes incapacitated; or c) he withdraws

his nomination.

RULE: Sec. 13 of COMELEC Resolution 7804 allows the partylist to withdraw the

nomination.

HELD: Rule is INVALID. The Rule added an exception not present in the law alteration

through withdrawal of the partylist, not the nominee).


18/26

BARTOLOME V. SSS

Petitioner is the biological mother of John Colcol J. Colcol) who died in a ship as an

electrician for Scanmar Maritime Services. She tried to claim death benefits from

the SSS but the latter denied her claim as J.Colcol’s great grandfather Cornelio

Colcol adopted J. Colcol, ultimately severing the filial ties between Bernardina

Bartolome and J. Colcol.

LAW: Art. 167 of the Labor Code provides that a secondary beneficiary may be a

“dependent parent”.

RULE: The Employees’ Compensation Commission Amended Rules provides that

“legitimate parent” shall be a secondary beneficiary.

COURT: Rule XV of the ECC’s Amended Rules is INVALID for equating dependency to

legitimacy.


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VOID IF NO REASONABLE RELATIONSHIP TO STATUTORY PURPOSE

Occurs when the general policy of the rule seems

unrelated to the policy of the statute

May lead to burdensome and inequitable results


20/26

LANDBANK V. CA

Landbank leased several parcels of land from the private respondents, which it then

offered to buy. Instead of paying for the land in cash and bonds as mandated by

RA 6557, Landbank opened trust accounts for private respondents pursuant to

DAR Administrative Order No. 9.

LAW: Sec. 16 of RA 6557 requires that just compensation be paid in cash or in bonds.

RULE: Allowed for payment to be earmarked and the use of trust accounts instead of

cash deposits instead of payment to the owners.

COURT: Rule is VOID as RA 6557 is clear as to payment through cash or bonds. Led

to inequitable results for private respondents.


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ARBITRARY, UNREASONABLE, OR UNCONSTITUTIONAL

The rule is invalid if it goes beyond what the

legislature could authorize e.g. a rule may be invalid f

it amounts to a taking of property without

compensation, or denies due process or equal

protection of the laws

Law may be set aside if the administrative agencyconcerned fails to follow due process requirements

i.e. notice and hearing


22/26

TOLEDO V. CSC

Toledo was appointed to the COMELEC at age 57 by a COMELEC Chairman. The

COMELEC belatedly found out there were no legal circumstances which would

have allowed him to work in his advanced age. Toledo appealed saying there was

nothing in the law that prohibited persons of his age from being appointed and

that the Rule was not published.

LAW: RA 2260, as amended by PD 807, authorized the CSC to prescribe or amend

rules and regulations governing the civil service.

RULE: Sec. 22 of Rule III of the CSC Rules on Personnel Action prohibits the

appointment of persons beyond 57 years old.

COURT: Rules is INVALID. The rule should be germane to the purpose of the law. RA

2260 did not contemplate an age limit.


23/26

OPLE V. TORRES

Then Pres. Fidel V. Ramos issued Administrative Order No. 308 for the Adoption of a

National Computerized Identification System, purportedly in furtherance of the

Revised Administrative Code of 1987. Senator Blas F. Ople petitioned the Court to

strike down the AO for having infringed the Constitution.

LAW: The Administrative Code of 1987 gives the President the power to enforce rules

for the efficient functioning of administrative agencies.

RULE: AO 308 adopts a national computerized ID system.

COURT: Rule is invalid. Aside from infringing the right to privacy, the Administrative

Code is a law so broad. The adoption of the ID system creates rights and imposes

duties on the people. It also raises issues on basic civil rights of the people which

can be better achieved through legislation by the Congress.


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REQUIREMENT OF REASONABLENESS

1. Bear reasonable relation to the purpose sought to be

accomplished

2. Supported by good reasons

3. Free from constitutional infirmities or charges of

arbitrariness.


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PENAL RULES AND REGULATIONS

REQUISITES FOR VALIDITY

Law which authorizes promulgation of rules and regulations must itself provide forthe imposition of a penalty for their violation

It must fix or define such penalty

Violation for which the rules and regulations impose a penalty must be

punishable or made a crime under the law itself

Rules and regulations must be published in the Official Gazette

NATURE OF POWER TO PRESCRIBE PENALTIES

The law making body cannot delegate to an administrative agency or official the

power to declare what acts shall constitute a criminal offense and how it shall be

punished


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PEOPLE V. MACEREN

Several accused were charged with violations of the Fisheries Law after they resorted

to electro fishing. Maceren acquitted the accused because electro fishing was not

penalized by the Fisheries Law. The Republic appealed arguing it was penalized

by Fisheries Admin Order 84-01.

LAW: Fisheries Law punishes the use of toxic or obnoxious substances in fishing.

RULE: Fisheries Admin Order 84-01, issued by the Secretary of the DENR, penalized

electro fishing.

COURT: Rule is INVALID. Defining a crime is legislative, and agencies are not allowed

to punish an act as a crime if not defined by law.

group 2 limitations to rule making power

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