Bordallo vs. Professional Regulations Commission

Upon the effectivity of R.A. No. 8544, its Section 17 passing standard — a 70% weighted general average with no grade below 60% in any subject — governs the Marine Deck Officers examination; the repealed P.D. No. 97 75% passing rating cannot be applied even if the new syllabi and implementing rules have not yet been promulgated. Exhaustion of administrative remedies is not required where the question is purely legal.

Petitioners Juan Lorenzo B. Bordallo, Restituto G. De Castro, and Noel G. Olarte were applicants for marine deck officer licenses under the regime established by R.A. No. 8544, the Philippine Merchant Marine Officers Act of 1998, which was approved on February 24, 1998 and took effect on March 25, 1998. The law replaced P.D. No. 97, the Philippine Merchant Marine Officers Law, as the regulatory statute for the merchant marine profession and created the Board of Marine Deck Officers under the Professional Regulations Commission. It empowered the Board to prepare and issue syllabi and to promulgate implementing rules and regulations, and it prescribed in Section 17 a passing rating of 70% weighted general average with no grade below 60% in any subject, lower than P.D. No. 97's 75% passing rating.

R.A. No. 8544 was approved on February 24, 1998 and took effect on March 25, 1998, after publication in Malaya on March 9, 1998; publication in the Official Gazette followed on July 3, 1998. The law declared it State policy to institutionalize changes to ensure that only qualified, competent, and globally competitive Marine Deck/Engineer Officers are allowed entry into the merchant marine profession, and it governed the examination, registration, and issuance of Certificates of Competency. Section 17 prescribed that a candidate must obtain a weighted general average of 70%, with no grade lower than 60% in any given subject; an examinee with a 70% average but below 60% in any subject must retake the examination in that subject or subjects. P.D. No. 97, the prior law, had set a passing rating of 75% with no rating below 60%, and an examinee failing the 75% average was required to retake all subjects. R.A. No. 8544 created the Board of Marine Deck Officers, empowered it under Section 10(k) to prepare, adopt, and issue syllabi, under Section 10(l) to promulgate rules and regulations, and under Section 34 to adopt implementing rules and regulations subject to PRC approval. At the time of the April 1998 examination, the Board had not yet issued the syllabi and rules and regulations pursuant to R.A. No. 8544.

On April 25, 26, and 27, 1998, the Board of Marine Deck Officers conducted the examination for deck officers. Petitioner Juan Lorenzo Bordallo took the examination for Chief Mate, petitioner Restituto de Castro for Second Mate, and petitioner Noel Olarte for Third Mate. Petitioners subsequently received notices from the PRC that they failed in their respective examinations. Certifications from the PRC showed that none of the petitioners obtained a general weighted average of 75%, although all had general weighted averages of more than 70%, and none had a rating of less than 60% in any subject.

On May 21, 1998, petitioners filed a petition before the Board of Marine Deck Officers claiming that, in accordance with Section 17 of R.A. No. 8544, they should be considered as having passed the April 1998 Examination for Deck Officers. In the meantime, the PRC issued PRC Resolution No. 569, Series of 1998 in relation to the July 1998 examinations, stating that the syllabi had not yet been prepared, adopted, and issued under Section 10(k) in relation to Section 16 of R.A. No. 8544; that the Boards for Marine Deck and Engine Officers shall issue programs of examinations containing the subjects; that the weights of the subjects remained the same; and that the grading system adopted under P.D. No. 97 shall continue to be used. On June 9, 1998, the Board promulgated Board Resolution No. 1, Series of 1998, the Rules and Regulations Implementing Republic Act No. 8544.

On January 22, 1999, the Board of Marine Deck Officers issued an Order denying the petition. The Board reasoned that it was guided by PRC Resolution No. 569, Series of 1998; that although the Resolution was issued for the July 1998 examinations, it applied to the April 1998 examination; that R.A. No. 8544 allowed time for transition between P.D. No. 97 and the new law; that the present Boards were allowed to continue in the interim until new Boards were constituted under Section 33(2); and that the new rating system was implemented only in the October 1998 examinations because the implementing rules and regulations were not yet effective during the April and July 1998 examinations. Petitioners received a copy of the Board's Order on February 9, 1999. On February 25, 1999, petitioners filed before the Court of Appeals a petition for mandamus, naming the PRC and the Board of Marine Deck Officers as respondents. The Court of Appeals denied the petition, prompting petitioners to seek relief in the Supreme Court.

• Application of Section 17: Petitioners claimed that, in accordance with Section 17 of R.A. No. 8544, they should be considered as having passed the April 1998 Examination for Deck Officers because they had general weighted averages of more than 70% and no rating below 60% in any subject.

• Continued Use of P.D. No. 97 Rating: Respondent Board maintained that PRC Resolution No. 569, Series of 1998 directed continued use of the grading system under P.D. No. 97 because the syllabi under Section 10(k) and the implementing rules had not yet been prepared; the new rating was implemented only in the October 1998 examinations.
• Transitory Authority: The Board reasoned that R.A. No. 8544 allowed a transition and that Section 33(2) permitted the present Boards to continue in the interim, supporting application of the old passing rating.
• Non-Effective IRR: The Board also premised non-adoption of the new rating on the fact that the implementing rules and regulations were not yet effective during the April and July 1998 examinations.

• Exhaustion of Administrative Remedies: Whether petitioners' failure to appeal the Board's Order to the PRC within 15 days barred their petition for mandamus in the Court of Appeals.
• Effect of Repeal on Passing Rating: Whether the Board and the Court of Appeals erred in applying the 75% passing rating of P.D. No. 97 after P.D. No. 97 had been expressly repealed by Section 38 of R.A. No. 8544.
• Conditions Sine Qua Non: Whether the non-issuance of the syllabi and implementing rules and regulations prevented application of Section 17 of R.A. No. 8544 to the April 1998 examinations.

• Exhaustion of Administrative Remedies: No. The failure to appeal to the PRC was not fatal because the question presented was purely legal, which is an exception to the rule on exhaustion of administrative remedies.
• Effect of Repeal on Passing Rating: No. P.D. No. 97 had been expressly repealed by Section 38 of R.A. No. 8544; upon effectivity of the repealing statute, the repealed statute is considered as if it had never existed, so its 75% passing rating could not be applied.
• Conditions Sine Qua Non: No. The absence of syllabi and implementing rules did not justify applying the repealed P.D. No. 97; the proper course was to postpone the examination, and petitioners should not be prejudiced by the agencies' mistakes.

• Exhaustion of Administrative Remedies: The general rule is that where the law provides remedies against the action of an administrative board, body, or officer, relief in courts may be sought only after exhausting all remedies provided. The rule is not absolute; one exception is when the question is purely legal. Petitioners did not appeal the Board's adverse order to the PRC within 15 days under Section 10 of R.A. No. 8544, but the issue was purely legal: whether Section 17 of R.A. No. 8544 applied to the April 1998 examination despite the absence of syllabi and implementing rules. The Court cited Lopez vs. City of Manila and Salinas, Jr. vs. National Labor Relations Commission and Espina vs. Court of Appeals. Thus, resort to mandamus was not unwarranted and failure to appeal was not fatal.
• Effect of Repeal on Passing Rating: Section 38 of R.A. No. 8544 expressly repealed P.D. No. 97, as amended, and all inconsistent laws, decrees, executive orders, rules and regulations. Upon effectivity of the repealing statute, the repealed statute, in regard to its operative effect, is considered as if it had never existed. Courts and administrative agencies have no power to perpetuate a rule of law that the legislature has repealed. The Board applied the 75% passing rating under P.D. No. 97 even though it had lost effectivity. Section 33(2) of R.A. No. 8544 merely allowed the present Boards to continue in the interim until the new Board was constituted; it did not provide for continued application of Section 9 of P.D. No. 97. Thus, the Board's reliance on the old rating was flawed.
• Conditions Sine Qua Non: The Board justified applying the old 75% rating because the syllabi had not been prepared and the implementing rules and regulations had not been promulgated. The Court acknowledged the Board's predicament given the law's effectivity on March 25, 1998 and the examination on April 25-27, 1998, but held that the solution was to postpone the examination rather than apply a law already rendered non-existent. The Court of Appeals held that approval of the implementing rules and regulations and syllabi were conditions sine qua non for application of Section 17; the Supreme Court found the flaw in both rulings was that they applied the passing rating of P.D. No. 97 even after its repeal. Although R.A. No. 8544 may prescribe a different scope of examination and the syllabi and examination may not conform to the new law, the examinees had a right to assume that respondents had performed their functions in accordance with the applicable law and should not be prejudiced by the agencies' mistakes in implementation. Petitioners therefore qualified as having passed.

• Exhaustion of Administrative Remedies; Purely Legal Question Exception — Where the law provides remedies against the action of an administrative board, body, or officer, relief in courts may be sought only after exhausting all remedies provided. The rule is not absolute; one exception is when the question is purely legal. Applied: petitioners' failure to appeal the Board's order to the PRC did not bar mandamus because the issue was purely legal.
• Effect of Express Repeal — Upon the effectivity of a repealing statute, the repealed statute, in regard to its operative effect, is considered as if it had never existed; courts and administrative agencies have no power to perpetuate a rule of law that the legislature has repealed. Applied: P.D. No. 97 was expressly repealed by Section 38 of R.A. No. 8544, so its 75% passing rating could not be applied to the April 1998 examination.
• Transitory Provisions Do Not Preserve Repealed Substantive Rules — A transitory provision allowing existing boards to continue in the interim does not, by itself, authorize continued application of a repealed statute's substantive standard. Applied: Section 33(2) of R.A. No. 8544 allowed the present Boards to continue but did not provide for continued application of Section 9 of P.D. No. 97.
• Agency Mistake in Implementing a New Law — Examinees have a right to assume that administrative agencies performed their functions in accordance with the applicable law and should not be prejudiced by the agencies' mistakes in implementation. Applied: petitioners were not prejudiced by the Board's failure to issue syllabi and implementing rules; the Board should have postponed the examination rather than apply the repealed P.D. No. 97.
• Non-Issuance of Implementing Rules Does Not Revive Repealed Law — The absence of new syllabi and implementing rules does not justify applying a repealed statute. Applied: the Board could not use P.D. No. 97's 75% passing rating merely because the new implementing rules and syllabi were not yet effective.

• "The rule on exhaustion of administrative remedies is not absolute but admits of exceptions. One of these exceptions is when the question is purely legal, such as the one presented in the case at bar." — States the exception to exhaustion that allowed petitioners to proceed despite not appealing to the PRC.
• "Upon the effectivity of the repealing statute, R.A. No. 8544, the repealed statute, P .D. No. 97, in regard to its operative effect, is considered as if it had never existed. Courts, or administrative agencies for that matter, have no power to perpetuate a rule of law that the legislature has repealed." — States the ratio on repeal and the basis for rejecting the old 75% passing rating.
• "It would appear to us, however, that the solution was to postpone the examination rather than to apply a law that had already been rendered non-existent." — Rejects the Board's justification for using P.D. No. 97 due to missing syllabi and implementing rules.
• "The examinees, however, had a right to assume that respondents had performed their' functions in accordance with the applicable law and they should not be prejudiced by the agencies' mistakes in its implementation." — Holds petitioners not prejudiced by the agency's failure to implement the new law and supports the grant of the petition.

• Lopez vs. City of Manila, 303 SCRA 448 (1999) — Cited for the rule that where the law provides remedies against the action of an administrative board, body, or officer, relief in courts can be sought only after exhausting all remedies provided.
• Salinas, Jr. vs. National Labor Relations Commission, 319 SCRA 54 (1999) — Cited with Espina as authority for the exception to exhaustion when the question is purely legal.
• Espina vs. Court of Appeals, 294 SCRA 525 (1998) — Cited for the same purely legal question exception to exhaustion.

• Section 17, R.A. No. 8544 — Prescribes the passing rating: a weighted general average of 70%, with no grade lower than 60% in any given subject; an examinee with a 70% average but below 60% in a subject must retake that subject. Applied: petitioners met this standard, so they were held qualified.
• Section 38, R.A. No. 8544 — Repealing clause expressly repealed P.D. No. 97, as amended, and inconsistent laws, decrees, executive orders, rules and regulations. Applied: P.D. No. 97's 75% passing rating could not be applied after effectivity.
• Section 33(2), R.A. No. 8544 — Transitory provision: present Boards shall continue to function in the interim until the new Board is duly constituted. Applied: it did not authorize continued application of Section 9 of P.D. No. 97.
• Section 10, R.A. No. 8544 — Board powers and duties; Section 10(k) empowers the Board to prepare, adopt, and issue syllabi; Section 10(l) empowers it to promulgate rules and regulations; decisions, resolutions, or orders of the Board are final unless appealed to the Commission within 15 days. Applied: the Court of Appeals invoked the failure to appeal; the Supreme Court excused it because the question was purely legal.
• Section 34, R.A. No. 8544 — Implementing rules and regulations to be adopted by the Board subject to approval of the Commission, effective after 30 days following publication. Applied: the implementing rules were not yet effective during the April and July 1998 examinations.
• Section 9, P.D. No. 97 — Old passing rating: general weighted average of 75% or above with no rating below 60%; an examinee failing the 75% average must retake all subjects. Applied: the Board and the Court of Appeals erroneously applied this repealed standard.
• Section 39, R.A. No. 8544 — Effectivity after 15 days following publication in the Official Gazette or in a major newspaper of general circulation, whichever is earlier. Applied: the law took effect on March 25, 1998.

Chief Justice Davide, Jr., and Justices Puno, Pardo, and Ynares-Santiago concurred.