Administrative agencies in exercising quasi-judicial powers

Administrative agencies determine facts as a necessary incident to their exercise of quasi-judicial powers or to assist them in discharging their executive functions. Quasi-judicial powers refer to the authority of administrative agencies to determine the rights of parties under its jurisdiction through adjudication.Registration, issuance of franchises, permits and licenses, and determination of administrative liabilities are instances that require an agency’s exercise of quasi-judicial power.[1] These acts require administrative determination of facts, based on which the parties’ rights shall be ascertained and official action shall be made.[2]

An administrative agency that exercises its quasi-judicial powers must adhere to the due process requirements as enumerated in Ang Tibay v. Court of Industrial Relations.[3] One of these requirements is that issuances must be based on substantial evidence:[4]

(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. . . .

(2) . . . the tribunal must consider the evidence presented. . . .

(3) . . . something to support its decision. . . .

(4) . . . the evidence must be “substantial.” “Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” . . .

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. . . .

(6) The [hearing officer] must act on its or his own independent consideration of the law and facts of the controversy. . . .

(7) The [administrative agency] should . . . render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered.[5] (Citations omitted)

The grant of adjudicative (and legislative) functions to administrative agencies results from “the growing complexity of modern society[.]”[6] The Supreme Court has recognized the competence, experience, and specialization of administrative agencies in their fields.[7] It has also recognized that these agencies’ expertise in their fields is essential in resolving issues that are technical in nature.[8] In Philippine International Trading Corporation v. Presiding Judge Angeles,[9] the Supreme Court said of quasi-legislative and quasi-judicial powers:

Similarly, the grant of quasi-legislative powers in administrative bodies is not unconstitutional. Thus, as a result of the growing complexity of modern society, it has become necessary to create more and more administrative bodies to help in the regulation of its ramified activities. Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice. This is the reason for the increasing vesture of quasi-legislative and quasi-judicial powers in what is now not unreasonably called the fourth department of the government. . . . One thrust of the multiplication of administrative agencies is that the interpretation of contracts and the determination of private rights thereunder is no longer uniquely judicial function, exercisable only by our regular courts.[10] (Citations omitted)

Because of the administrative agencies’ specialized knowledge in their fields, the High Court often defer to their findings of fact. Thus, in principle, findings of fact by administrative agencies are not disturbed by the Supreme Court when supported by substantial evidence,[11] “even if not overwhelming or preponderant.”[12] This Rule, however, admits a few exceptions:

First, when an administrative proceeding is attended by fraud, collusion, arbitrary action, mistake of law, or a denial of due process;

Second, when there are irregularities in the procedure that has led to factual findings;

Third, when there are palpable errors committed; and

Lastly, when there is manifest grave abuse of discretion, arbitrariness, or capriciousness.[13]

If the actions of an administrative agency are made under these circumstances, judicial review is justified even if the actions are supported by substantial evidence.[14]

The High Court summarized the principles of judicial review of administrative decisions in Atlas Consolidated Mining and Development Corporation v. Hon. Factoran, Jr.:[15]

[F]indings of fact in such decision should not be disturbed if supported by substantial evidence, but review is justified when there has been a denial of due process, or mistake of law or fraud, collusion or arbitrary action in the administrative proceeding, where the procedure which led to factual findings is irregular; when palpable errors are committed; or when a grave abuse of discretion, arbitrariness, or capriciousness is manifest.

. . . “[I]n reviewing administrative decisions, the reviewing Court cannot reexamine the sufficiency of the evidence as if originally instituted therein, and receive additional evidence, that was not submitted to the administrative agency concerned[.]”[16] (Citations omitted)

The above principles of judicial review have been applied in cases brought to the appropriate courts on appeal or by certiorari. Cases brought to the courts on appeal or by certiorari presuppose that there were cases or issues: (1) over which an administrative agency assumed jurisdiction; and for which (2) an administrative agency collected evidence, determined facts, and made an action. In these cases, the court either reviews the administrative action for errors in the application of law or determines whether there has been grave abuse of discretion in the exercise of quasi-judicial functions.

[1] See Sañado v. Court of Appeals, 408 Phil. 669, 681 (2001) [Per J. Melo, Third Division].
[2] Id. See Abella, Jr. v. Civil Service Commission, 485 Phil. 182, 207 (2004) [Per J. Panganiban, En Banc].
[3] 69 Phil. 635 (1940) [Per J. Laurel, En Banc].
[4] Id. at 642–643.
[5] Id. at 642–644.
[6] Philippine International Trading Corporation v. Presiding Judge Angeles, 331 Phil. 723, 748 (1996) [Per J. Torres, Jr., Second Division].
[7] See Philippine International Trading Corporation v. Presiding Judge Angeles, 331 Phil. 723, 748 (1996) [Per J. Torres, Jr., Second Division]. See also Antipolo Realty Corporation v. National Housing Authority, 237 Phil. 389, 395–396 (1987) [Per J. Feliciano, En Banc].
[8] See Philippine International Trading Corporation v. Presiding Judge Angeles, 331 Phil. 723, 748 (1996) [Per J. Torres, Jr., Second Division]. See also Antipolo Realty Corporation v. National Housing Authority, 237 Phil. 389, 395–396 (1987) [Per J. Feliciano, En Banc].
[9] Philippine International Trading Corporation v. Presiding Judge Angeles, 331 Phil. 723 (1996) [Per J. Torres, Jr., Second Division].
[10] Id. at 478.
[11] Atlas Consolidated Mining and Development Corporation v. Hon. Factoran, Jr., 238 Phil. 48, 54 (1987) [Per J. Paras, First Division].
[12] Id. at 57.
[13] Id.
[14] Id.
[15] 238 Phil. 48 (1987) [Per J. Paras, First Division].
[16] Id. at 57.