QUASI-LEGISLATIVE

F. In General
1. People v Maceren, October 18, 1977
AQUINO, J.:
This is a case involving the validity of a 1967 regulation, penalizing
electro fishing in fresh water fisheries, promulgated by the Secretary
of Agriculture and Natural Resources and the Commissioner of
Fisheries under the old Fisheries Law and the law creating the
Fisheries Commission.
On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin
Reyes, Nazario Aquino and Carlito del Rosario were charged by a
Constabulary investigator in the municipal court of Sta. Cruz, Laguna
with having violated Fisheries Administrative Order No. 84-1.
It was alleged in the complaint that the five accused in the morning of
March 1, 1969 resorted to electro fishing in the waters of Barrio San
Pablo Norte, Sta. Cruz by "using their own motor banca, equipped
with motor; with a generator colored green with attached dynamo
colored gray or somewhat white; and electrocuting device locally
known as sensored with a somewhat webbed copper wire on the tip
or other end of a bamboo pole with electric wire attachment which
was attached to the dynamo direct and with the use of these devices
or equipments catches fish thru electric current, which destroy any
aquatic animals within its cuffed reach, to the detriment and prejudice
of the populace" (Criminal Case No. 5429).
Upon motion of the accused, the municipal court quashed the
complaint. The prosecution appealed. The Court of First Instance of
Laguna affirmed the order of dismissal (Civil Case No. SC-36). The
case is now before this Court on appeal by the prosecution under
Republic Act No. 5440.

The lower court held that electro fishing cannot be penalize because
electric current is not an obnoxious or poisonous substance as
contemplated in section I I of the Fisheries Law and that it is not a
substance at all but a form of energy conducted or transmitted by
substances. The lower court further held that, since the law does not
clearly prohibit electro fishing, the executive and judicial departments
cannot consider it unlawful.
As legal background, it should be stated that section 11 of the
Fisheries Law prohibits "the use of any obnoxious or poisonous
substance" in fishing.
Section 76 of the same law punishes any person who uses an
obnoxious or poisonous substance in fishing with a fine of not more
than five hundred pesos nor more than five thousand, and by
imprisonment for not less than six months nor more than five years.
It is noteworthy that the Fisheries Law does not expressly punish
.electro fishing." Notwithstanding the silence of the law, the Secretary
of Agriculture and Natural Resources, upon the recommendation of
the Commissioner of Fisheries, promulgated Fisheries Administrative
Order No. 84 (62 O.G. 1224), prohibiting electro fishing in all
Philippine waters. The order is quoted below:
SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS OF
THE PHILIPPINES.
Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of
R.A. No. 3512, the following rules and regulations regarding the
prohibition of electro fishing in all waters of the Philippines are
promulgated for the information and guidance of all concerned.
SECTION 1. - Definition. - Words and terms used in this Order 11
construed as follows:

(a)
Philippine waters or territorial waters of the Philippines'
includes all waters of the Philippine Archipelago, as defined in the t
between the United States and Spain, dated respectively the tenth of
December, eighteen hundred ninety eight and the seventh of
November, nineteen hundred. For the purpose of this order, rivers,
lakes and other bodies of fresh waters are included.
(b)
Electro Fishing. - Electro fishing is the catching of fish with
the use of electric current. The equipment used are of many
electrical devices which may be battery or generator-operated and
from and available source of electric current.
(c)
'Persons' includes firm, corporation, association, agent or
employee.
(d)

'Fish' includes other aquatic products.

SEC. 2. - Prohibition. - It shall be unlawful for any person to engage

in electro fishing or to catch fish by the use of electric current in any
portion of the Philippine waters except for research, educational and
scientific purposes which must be covered by a permit issued by the
Secretary of Agriculture and Natural Resources which shall be
carried at all times.
SEC. 3. - Penalty. - Any violation of the provisions of this
Administrative Order shall subject the offender to a fine of not
exceeding five hundred pesos (P500.00) or imprisonment of not
extending six (6) months or both at the discretion of the Court.
SEC. 4. - Repealing Provisions. - All administrative orders or parts
thereof inconsistent with the provisions of this Administrative Order
are hereby revoked.
SEC. 5. - Effectivity. - This Administrative Order shall take effect six
(60) days after its publication in the Office Gazette.

On June 28, 1967 the Secretary of Agriculture and Natural

Resources, upon the recommendation of the Fisheries Commission,
issued Fisheries Administrative Order No. 84-1, amending section 2
of Administrative Order No. 84, by restricting the ban against electro
fishing to fresh water fisheries (63 O.G. 9963).
Thus, the phrase "in any portion of the Philippine waters" found in
section 2, was changed by the amendatory order to read as follows:
"in fresh water fisheries in the Philippines, such as rivers, lakes,
swamps, dams, irrigation canals and other bodies of fresh water."
The Court of First Instance and the prosecution (p. 11 of brief)
assumed that electro fishing is punishable under section 83 of the
Fisheries Law (not under section 76 thereof), which provides that any
other violation of that law "or of any rules and regulations
promulgated thereunder shall subject the offender to a fine of not
more than two hundred pesos (P200), or in t for not more than six
months, or both, in the discretion of the court."
That assumption is incorrect because 3 of the aforequoted
Administrative Order No. 84 imposes a fm of not exceeding P500 on
a person engaged in electro fishing, which amount the 83. It seems
that the Department of Fisheries prescribed their own penalty for
swift fishing which penalty is less than the severe penalty imposed in
section 76 and which is not Identified to the at penalty imposed in
section 83.
Had Administrative Order No. 84 adopted the fighter penalty
prescribed in on 83, then the crime of electro fishing would be within
the exclusive original jurisdiction of the inferior court (Sec. 44 [f],
Judiciary Law; People vs. Ragasi, L-28663, September 22,
We have discussed this pre point, not raised in the briefs, because it
is obvious that the crime of electro fishing which is punishable with a
sum up to P500, falls within the concurrent original jurisdiction of the

inferior courts and the Court of First instance (People vs. Nazareno,
L-40037, April 30, 1976, 70 SCRA 531 and the cases cited therein).
And since the instant case was filed in the municipal court of Sta.
Cruz, Laguna, a provincial capital, the order of d rendered by that
municipal court was directly appealable to the Court, not to the Court
of First Instance of Laguna (Sec. 45 and last par. of section 87 of the
Judiciary Law; Esperat vs. Avila, L-25992, June 30, 1967, 20 SCRA
596).

violation of" the Fisheries Law or of any rules and regulations

promulgated thereunder "shall subject the offender to a fine of not
more than two hundred pesos, or imprisonment for not more than six
months, or both, in the discretion of the court.
As already pointed out above, the prosecution's reference to section
83 is out of place because the penalty for electro fishing under
Administrative order No. 84 is not the same as the penalty fixed in
section 83.

It results that the Court of First Instance of Laguna had no appellate

jurisdiction over the case. Its order affirming the municipal court's
order of dismissal is void for lack of motion. This appeal shall be
treated as a direct appeal from the municipal court to this Court. (See
People vs. Del Rosario, 97 Phil. 67).

We are of the opinion that the Secretary of Agriculture and Natural

Resources and the Commissioner of Fisheries exceeded their
authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1
and that those orders are not warranted under the Fisheries
Commission, Republic Act No. 3512.

In this appeal, the prosecution argues that Administrative Orders

Nos. 84 and 84-1 were not issued under section 11 of the Fisheries
Law which, as indicated above, punishes fishing by means of an
obnoxious or poisonous substance. This contention is not well-taken
because, as already stated, the Penal provision of Administrative
Order No. 84 implies that electro fishing is penalized as a form of
fishing by means of an obnoxious or poisonous substance under
section 11.

The reason is that the Fisheries Law does not expressly prohibit
electro fishing. As electro fishing is not banned under that law, the
Secretary of Agriculture and Natural Resources and the
Commissioner of Fisheries are powerless to penalize it. In other
words, Administrative Orders Nos. 84 and 84-1, in penalizing electro
fishing, are devoid of any legal basis.

The prosecution cites as the legal sanctions for the prohibition

against electro fishing in fresh water fisheries (1) the rule-making
power of the Department Secretary under section 4 of the Fisheries
Law; (2) the function of the Commissioner of Fisheries to enforce the
provisions of the Fisheries Law and the regulations Promulgated
thereunder and to execute the rules and regulations consistent with
the purpose for the creation of the Fisheries Commission and for the
development of fisheries (Sec. 4[c] and [h] Republic Act No. 3512;
(3) the declared national policy to encourage, Promote and conserve
our fishing resources (Sec. 1, Republic Act No. 3512), and (4)
section 83 of the Fisheries Law which provides that "any other

Had the lawmaking body intended to punish electro fishing, a penal

provision to that effect could have been easily embodied in the old
Fisheries Law.
That law punishes (1) the use of obnoxious or poisonous substance,
or explosive in fishing; (2) unlawful fishing in deepsea fisheries; (3)
unlawful taking of marine molusca, (4) illegal taking of sponges; (5)
failure of licensed fishermen to report the kind and quantity of fish
caught, and (6) other violations.
Nowhere in that law is electro fishing specifically punished.
Administrative Order No. 84, in punishing electro fishing, does not
contemplate that such an offense fails within the category of "other
violations" because, as already shown, the penalty for electro fishing

is the penalty next lower to the penalty for fishing with the use of
obnoxious or poisonous substances, fixed in section 76, and is not
the same as the penalty for "other violations" of the law and
regulations fixed in section 83 of the Fisheries Law.

The decree Act No. 4003, as amended, Republic Acts Nos. 428,
3048, 3512 and 3586, Presidential Decrees Nos. 43, 534 and 553,
and all , Acts, Executive Orders, rules and regulations or parts
thereof inconsistent with it (Sec. 49, P. D. No. 704).

The lawmaking body cannot delegate to an executive official the

power to declare what acts should constitute an offense. It can
authorize the issuance of regulations and the imposition of the
penalty provided for in the law itself. (People vs. Exconde 101 Phil.
11 25, citing 11 Am. Jur. 965 on p. 11 32).

The inclusion in that decree of provisions defining and penalizing

electro fishing is a clear recognition of the deficiency or silence on
that point of the old Fisheries Law. It is an admission that a mere
executive regulation is not legally adequate to penalize electro
fishing.

Originally, Administrative Order No. 84 punished electro fishing in all

waters. Later, the ban against electro fishing was confined to fresh
water fisheries. The amendment created the impression that electro
fishing is not condemnable per se. It could be tolerated in marine
waters. That circumstances strengthens the view that the old law
does not eschew all forms of electro fishing.

Note that the definition of electro fishing, which is found in section 1

(c) of Fisheries Administrative Order No. 84 and which is not
provided for the old Fisheries Law, is now found in section 3(d) of the
decree. Note further that the decree penalty electro fishing by
"imprisonment from two (2) to four (4) years", a punishment which is
more severe than the penalty of a time of not excluding P500 or
imprisonment of not more than six months or both fixed in section 3
of Fisheries Administrative Order No. 84.

However, at present, there is no more doubt that electro fishing is

punishable under the Fisheries Law and that it cannot be penalized
merely by executive revolution because Presidential Decree No. 704,
which is a revision and consolidation of all laws and decrees
affecting fishing and fisheries and which was promulgated on May
16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh
water and salt water areas.
That decree provides:
SEC. 33. - Illegal fishing, dealing in illegally caught fish or
fishery/aquatic products. - It shall he unlawful for any person to
catch, take or gather or cause to be caught, taken or gathered fish or
fishery/aquatic products in Philippine waters with the use of
explosives, obnoxious or poisonous substance, or by the use of
electricity as defined in paragraphs (1), (m) and (d), respectively, of
Section 3 hereof: ...

An examination of the rule-making power of executive officials and

administrative agencies and, in particular, of the Secretary of
Agriculture and Natural Resources (now Secretary of Natural
Resources) under the Fisheries Law sustains the view that he ex his
authority in penalizing electro fishing by means of an administrative
order.
Administrative agent are clothed with rule-making powers because
the lawmaking body finds it impracticable, if not impossible, to
anticipate and provide for the multifarious and complex situations
that may be encountered in enforcing the law. All that is required is
that the regulation should be germane to the defects and purposes of
the law and that it should conform to the standards that the law
prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry
vs. Mu;oz, L-24796, June 28, 1968, 23 SCRA 1183, 1198;
Geukeko vs. Araneta, 102 Phil. 706, 712).

The lawmaking body cannot possibly provide for all the details in the
enforcement of a particular statute (U.S. vs. Tupasi Molina, 29 Phil.
119, 125, citing U.S. vs. Grimaud 220 U.S. 506; Interprovincial
Autobus Co., Inc. vs. Coll. of Internal Revenue, 98 Phil. 290, 295-6).
The grant of the rule-making power to administrative agencies is a
relaxation of the principle of separation of powers and is an
exception to the nondeleption of legislative, powers. Administrative
regulations or "subordinate legislation calculated to promote the
public interest are necessary because of "the growing complexity of
modem life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the law"
Calalang vs. Williams, 70 Phil. 726; People vs. Rosenthal and
Osme;a, 68 Phil. 328).
Administrative regulations adopted under legislative authority by a
particular department must be in harmony with the provisions of the
law, and should be for the sole purpose of carrying into effect its
general provisions. By such regulations, of course, the law itself
cannot be extended. (U.S. vs. Tupasi Molina, supra). An
administrative agency cannot amend an act of Congress (Santos vs.
Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of
Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs.
General Auditing Office, L-28952, December 29, 1971, 42 SCRA
660; Deluao vs. Casteel, L-21906, August 29, 1969, 29 SCRA 350).
The rule-making power must be confined to details for regulating the
mode or proceeding to carry into effect the law as it his been
enacted. The power cannot be extended to amending or expanding
the statutory requirements or to embrace matters not covered by the
statute. Rules that subvert the statute cannot be sanctioned.
(University of Santo Tomas vs. Board of Tax A 93 Phil. 376, 382,
citing 12 C.J. 845-46. As to invalid regulations, see of Internal
Revenue vs. Villaflor 69 Phil. 319, Wise & Co. vs. Meer, 78 Phil. 655,
676; Del March vs. Phil. Veterans Administrative, L-27299, June 27,
1973, 51 SCRA 340, 349).

There is no question that the Secretary of Agriculture and Natural

Resources has rule-making powers. Section 4 of the Fisheries law
provides that the Secretary "shall from time to time issue instructions,
orders, and regulations consistent" with that law, "as may be and
proper to carry into effect the provisions thereof." That power is now
vested in the Secretary of Natural Resources by on 7 of the Revised
Fisheries law, Presidential December No. 704.
Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries
"to prepare and execute upon the approval of the Secretary of
Agriculture and Natural Resources, forms instructions, rules and
regulations consistent with the purpose" of that enactment "and for
the development of fisheries."
Section 79(B) of the Revised Administrative Code provides that "the
Department Head shall have the power to promulgate, whenever he
may see fit do so, all rules, regulates, orders, memorandums, and
other instructions, not contrary to law, to regulate the proper working
and harmonious and efficient administration of each and all of the
offices and dependencies of his Department, and for the strict
enforcement and proper execution of the laws relative to matters
under the jurisdiction of said Department; but none of said rules or
orders shall prescribe penalties for the violation thereof, except as
expressly authorized by law."
Administrative regulations issued by a Department Head in
conformity with law have the force of law (Valerie vs. Secretary of
culture and Natural Resources, 117 Phil. 729, 733; Antique Sawmills,
Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA 316). As he
exercises the rule-making power by delegation of the lawmaking
body, it is a requisite that he should not transcend the bound
demarcated by the statute for the exercise of that power; otherwise,
he would be improperly exercising legislative power in his own right
and not as a surrogate of the lawmaking body.

Article 7 of the Civil Code embodies the basic principle that

administrative or executive acts, orders and regulations shall be valid
only when they are not contrary to the laws or the Constitution."

necessity of closely following the legal provisions which they intend

to implement so as to avoid any possible misunderstanding or
confusion.

As noted by Justice Fernando, "except for constitutional officials who

can trace their competence to act to the fundamental law itself, a
public office must be in the statute relied upon a grant of power
before he can exercise it." "department zeal may not be permitted to
outrun the authority conferred by statute." (Radio Communications of
the Philippines, Inc. vs. Santiago, L-29236, August 21, 1974, 58
SCRA 493, 496-8).

The rule is that the violation of a regulation prescribed by an

executive officer of the government in conformity with and based
upon a statute authorizing such regulation constitutes an offense and
renders the offender liable to punishment in accordance with the
provisions of the law (U.S. vs. Tupasi Molina, 29 Phil. 119, 124).

"Rules and regulations when promulgated in pursuance of the

procedure or authority conferred upon the administrative agency by
law, partake of the nature of a statute, and compliance therewith may
be enforced by a penal sanction 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 law are oftentimes 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 rule or
regulation should be within the scope of the statutory authority
granted by the legislature to the administrative agency. (Davis,
Administrative Law, p. 194, 197, cited in Victories Milling Co., Inc. vs.
Social Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or
regulation issued to implement said law, the basic law prevails
because said rule or regulation cannot go beyond the terms and
provisions of the basic law (People vs. Lim, 108 Phil. 1091).
This Court in its decision in the Lim case, supra, promulgated on July
26, 1960, called the attention of technical men in the executive
departments, who draft rules and regulations, to the importance and

In other words, a violation or infringement of a rule or regulation

validly issued can constitute a crime punishable as provided in the
authorizing statute and by virtue of the latter (People vs. Exconde
101 Phil. 1125, 1132).
It has been held that "to declare what shall constitute a crime and
how it shall be punished is a power vested exclusively in the
legislature, and it may not be delegated to any other body or agency"
(1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs. Montgomery, 73 F.
Supp. 527).
In the instant case the regulation penalizing electro fishing is not
strictly in accordance with the Fisheries Law, under which the
regulation was issued, because the law itself does not expressly
punish electro fishing.
The instant case is similar to People vs. Santos, 63 Phil. 300. The
Santos case involves section 28 of Fish and Game Administrative
Order No. 2 issued by the Secretary of Agriculture and Natural
Resources pursuant to the aforementioned section 4 of the Fisheries
Law.
Section 28 contains the proviso that a fishing boat not licensed under
the Fisheries Law and under the said administrative order may fish
within three kilometers of the shoreline of islands and reservations
over which jurisdiction is exercised by naval and military reservations
authorities of the United States only upon receiving written

permission therefor, which permission may be granted by the

Secretary upon recommendation of the military or naval authorities
concerned. A violation of the proviso may be proceeded against
under section 45 of the Federal Penal Code.
Augusto A. Santos was prosecuted under that provision in the Court
of First Instance of Cavite for having caused his two fishing boats to
fish, loiter and anchor without permission from the Secretary within
three kilometers from the shoreline of Corrigidor Island.
This Court held that the Fisheries Law does not prohibit boats not
subject to license from fishing within three kilometers of the shoreline
of islands and reservations over which jurisdiction is exercised by
naval and military authorities of the United States, without permission
from the Secretary of Agriculture and Natural Resources upon
recommendation of the military and naval authorities concerned.
As the said law does not penalize the act mentioned in section 28 of
the administrative order, the promulgation of that provision by the
Secretary "is equivalent to legislating on the matter, a power which
has not been and cannot be delegated to him, it being expressly
reserved" to the lawmaking body. "Such an act constitutes not only
an excess of the regulatory power conferred upon the Secretary but
also an exercise of a legislative power which he does not have, and
therefore" the said provision "is null and void and without effect".
Hence, the charge against Santos was dismiss.
A penal statute is strictly construed. While an administrative agency
has the right to make ranks and regulations to carry into effect a law
already enacted, that power should not be confused with the power
to enact a criminal statute. An administrative agency can have only
the administrative or policing powers expressly or by necessary
implication conferred upon it. (Glustrom vs. State, 206 Ga. 734, 58
Second 2d 534; See 2 Am. Jr. 2nd 129-130).

Where the legislature has delegated to executive or administrative

officers and boards authority to promulgate rules to carry out an
express legislative purpose, the rules of administrative officers and
boards, which have the effect of extending, or which conflict with the
authority granting statute, do not represent a valid precise of the rulemaking power but constitute an attempt by an administrative body to
legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51).
In a prosecution for a violation of an administrative order, it must
clearly appear that the order is one which falls within the scope of the
authority conferred upon the administrative body, and the order will
be scrutinized with special care. (State vs. Miles supra).
The Miles case involved a statute which authorized the State Game
Commission "to adopt, promulgate, amend and/or repeal, and
enforce reasonable rules and regulations governing and/or
prohibiting the taking of the various classes of game.
Under that statute, the Game Commission promulgated a rule that "it
shall be unlawful to offer, pay or receive any reward, prize or
compensation for the hunting, pursuing, taking, killing or displaying of
any game animal, game bird or game fish or any part thereof."
Beryl S. Miles, the owner of a sporting goods store, regularly offered
a ten-down cash prize to the person displaying the largest deer in his
store during the open for hunting such game animals. For that act,
he was charged with a violation of the rule Promulgated by the State
Game Commission.
It was held that there was no statute penalizing the display of game.
What the statute penalized was the taking of game. If the lawmaking
body desired to prohibit the display of game, it could have readily
said so. It was not lawful for the administrative board to extend or
modify the statute. Hence, the indictment against Miles was
quashed. The Miles case is similar to this case.

WHEREFORE, the lower court's decision of June 9, 1970 is set

aside for lack of appellate jurisdiction and the order of dismissal
rendered by the municipal court of Sta. Cruz, Laguna in Criminal
Case No. 5429 is affirmed. Costs de oficio.
SO ORDERED.
Barredo, Concepcion, Jr., Santos and Guerrero, JJ., concur.
Fernando and Antonio, JJ., took no part.
Guerrero, J., was designated to sit in the Second Division.
2. Smart Communications, Inc v NTC, August 12, 2003
YNARES-SANTIAGO, J.:
Pursuant to its rule-making and regulatory powers, the National
Telecommunications Commission (NTC) issued on June 16, 2000
Memorandum Circular No. 13-6-2000, promulgating rules and
regulations on the billing of telecommunications services. Among its
pertinent provisions are the following:
(1) The billing statements shall be received by the subscriber of the
telephone service not later than 30 days from the end of each billing
cycle. In case the statement is received beyond this period, the
subscriber shall have a specified grace period within which to pay
the bill and the public telecommunications entity (PTEs) shall not be
allowed to disconnect the service within the grace period.

fully consumed but not beyond 2 years and 45 days from date of first
use to replenish the SIM card, otherwise the SIM card shall be
rendered invalid. The validity of an invalid SIM card, however, shall
be installed upon request of the customer at no additional charge
except the presentation of a valid prepaid call card.
(4) Subscribers shall be updated of the remaining value of their cards
before the start of every call using the cards.
(5) The unit of billing for the cellular mobile telephone service
whether postpaid or prepaid shall be reduced from 1 minute per
pulse to 6 seconds per pulse. The authorized rates per minute shall
thus be divided by 10.1
The Memorandum Circular provided that it shall take effect 15 days
after its publication in a newspaper of general circulation and three
certified true copies thereof furnished the UP Law Center. It was
published in the newspaper, The Philippine Star, on June 22, 2000.2
Meanwhile, the provisions of the Memorandum Circular pertaining to
the sale and use of prepaid cards and the unit of billing for cellular
mobile telephone service took effect 90 days from the effectivity of
the Memorandum Circular.
On August 30, 2000, the NTC issued a Memorandum to all cellular
mobile telephone service (CMTS) operators which contained
measures to minimize if not totally eliminate the incidence of stealing
of cellular phone units. The Memorandum directed CMTS operators
to:

(2) There shall be no charge for calls that are diverted to a voice
mailbox, voice prompt, recorded message or similar facility excluding
the customer's own equipment.

a. strictly comply with Section B(1) of MC 13-6-2000 requiring the

presentation and verification of the identity and addresses of prepaid
SIM card customers;

(3) PTEs shall verify the identification and address of each purchaser
of prepaid SIM cards. Prepaid call cards and SIM cards shall be valid
for at least 2 years from the date of first use. Holders of prepaid SIM
cards shall be given 45 days from the date the prepaid SIM card is

b. require all your respective prepaid SIM cards dealers to comply

with Section B(1) of MC 13-6-2000;

c. deny acceptance to your respective networks prepaid and/or

postpaid customers using stolen cellphone units or cellphone units
registered to somebody other than the applicant when properly
informed of all information relative to the stolen cellphone units;

d. share all necessary information of stolen cellphone units to all

other CMTS operators in order to prevent the use of stolen cellphone
units; and

On October 20, 2000, petitioners Isla Communications Co., Inc. and

Pilipino Telephone Corporation filed against the National
Telecommunications Commission, Commissioner Joseph A.
Santiago, Deputy Commissioner Aurelio M. Umali and Deputy
Commissioner Nestor C. Dacanay, an action for declaration of nullity
of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular)
and the NTC Memorandum dated October 6, 2000, with prayer for
the issuance of a writ of preliminary injunction and temporary
restraining order. The complaint was docketed as Civil Case No. Q00-42221 at the Regional Trial Court of Quezon City, Branch 77.5

e. require all your existing prepaid SIM card customers to register

and present valid identification cards.3

This was followed by another Memorandum dated October 6, 2000

addressed to all public telecommunications entities, which reads:

This is to remind you that the validity of all prepaid cards sold on 07
October 2000 and beyond shall be valid for at least two (2) years
from date of first use pursuant to MC 13-6-2000.

In addition, all CMTS operators are reminded that all SIM packs used
by subscribers of prepaid cards sold on 07 October 2000 and
beyond shall be valid for at least two (2) years from date of first use.
Also, the billing unit shall be on a six (6) seconds pulse effective 07
October 2000.

For strict compliance.4

Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no
jurisdiction to regulate the sale of consumer goods such as the
prepaid call cards since such jurisdiction belongs to the Department
of Trade and Industry under the Consumer Act of the Philippines;
that the Billing Circular is oppressive, confiscatory and violative of
the constitutional prohibition against deprivation of property without
due process of law; that the Circular will result in the impairment of
the viability of the prepaid cellular service by unduly prolonging the
validity and expiration of the prepaid SIM and call cards; and that the
requirements of identification of prepaid card buyers and call balance
announcement are unreasonable. Hence, they prayed that the Billing
Circular be declared null and void ab initio.

Soon thereafter, petitioners Globe Telecom, Inc and Smart

Communications, Inc. filed a joint Motion for Leave to Intervene and
to Admit Complaint-in-Intervention.6 This was granted by the trial
court.

On October 27, 2000, the trial court issued a temporary restraining

order enjoining the NTC from implementing Memorandum Circular
No. 13-6-2000 and the Memorandum dated October 6, 2000.7

In the meantime, respondent NTC and its co-defendants filed a

motion to dismiss the case on the ground of petitioners' failure to
exhaust administrative remedies.

Subsequently, after hearing petitioners' application for preliminary

injunction as well as respondent's motion to dismiss, the trial court
issued on November 20, 2000 an Order, the dispositive portion of
which reads:

WHEREFORE, premises considered, the defendants' motion to

dismiss is hereby denied for lack of merit. The plaintiffs' application
for the issuance of a writ of preliminary injunction is hereby granted.
Accordingly, the defendants are hereby enjoined from implementing
NTC Memorandum Circular 13-6-2000 and the NTC Memorandum,
dated October 6, 2000, pending the issuance and finality of the
decision in this case. The plaintiffs and intervenors are, however,
required to file a bond in the sum of FIVE HUNDRED THOUSAND
PESOS (P500,000.00), Philippine currency.

SO ORDERED.8

Defendants filed a motion for reconsideration, which was denied in

an Order dated February 1, 2001.9

Respondent NTC thus filed a special civil action for certiorari and
prohibition with the Court of Appeals, which was docketed as CAG.R. SP. No. 64274. On October 9, 2001, a decision was rendered,
the decretal portion of which reads:

WHEREFORE, premises considered, the instant petition for certiorari

and prohibition is GRANTED, in that, the order of the court a quo
denying the petitioner's motion to dismiss as well as the order of the
court a quo granting the private respondents' prayer for a writ of
preliminary injunction, and the writ of preliminary injunction issued
thereby, are hereby ANNULLED and SET ASIDE. The private
respondents' complaint and complaint-in-intervention below are
hereby DISMISSED, without prejudice to the referral of the private
respondents' grievances and disputes on the assailed issuances of
the NTC with the said agency.

SO ORDERED.10

Petitioners' motions for reconsideration were denied in a Resolution

dated January 10, 2002 for lack of merit.11

Hence, the instant petition for review filed by Smart and Piltel, which
was docketed as G.R. No. 151908, anchored on the following
grounds:

A.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

HOLDING THAT THE NATIONAL TELECOMMUNICATIONS
COMMISSION (NTC) AND NOT THE REGULAR COURTS HAS
JURISDICTION OVER THE CASE.

B.

THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED

IN HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO
EXHAUST AN AVAILABLE ADMINISTRATIVE REMEDY.

C.

THE HONORABLE COURT OF APPEALS ERRED IN NOT

HOLDING THAT THE BILLING CIRCULAR ISSUED BY THE
RESPONDENT NTC IS UNCONSTITUTIONAL AND CONTRARY
TO LAW AND PUBLIC POLICY.

D.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING

THAT THE PRIVATE RESPONDENTS FAILED TO SHOW THEIR
CLEAR POSITIVE RIGHT TO WARRANT THE ISSUANCE OF A
WRIT OF PRELIMINARY INJUNCTION.12

Likewise, Globe and Islacom filed a petition for review, docketed as

G.R. No. 152063, assigning the following errors:

1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED

BECAUSE THE DOCTRINES OF PRIMARY JURISDICTION AND
EXHAUSTION OF ADMINISTRATIVE REMEDIES DO NOT APPLY
SINCE THE INSTANT CASE IS FOR LEGAL NULLIFICATION
(BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW)
OF A PURELY ADMINISTRATIVE REGULATION PROMULGATED
BY AN AGENCY IN THE EXERCISE OF ITS RULE MAKING
POWERS AND INVOLVES ONLY QUESTIONS OF LAW.

2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED

BECAUSE THE DOCTRINE ON EXHAUSTION OF
ADMINISTRATIVE REMEDIES DOES NOT APPLY WHEN THE
QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.

3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED

BECAUSE THE DOCTRINE OF EXHAUSTION OF
ADMINISTRATIVE REMEDIES DOES NOT APPLY WHERE THE
ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE,
WHEN THERE IS NO OTHER REMEDY, AND THE PETITIONER
STANDS TO SUFFER GRAVE AND IRREPARABLE INJURY.

4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED

BECAUSE PETITIONERS IN FACT EXHAUSTED ALL
ADMINISTRATIVE REMEDIES AVAILABLE TO THEM.

5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED

IN ISSUING ITS QUESTIONED RULINGS IN THIS CASE
BECAUSE GLOBE AND ISLA HAVE A CLEAR RIGHT TO AN
INJUNCTION.13

The two petitions were consolidated in a Resolution dated February

17, 2003.14

On March 24, 2003, the petitions were given due course and the
parties were required to submit their respective memoranda.15

We find merit in the petitions.

Administrative agencies possess quasi-legislative or rule-making

powers and quasi-judicial or administrative adjudicatory powers.
Quasi-legislative or rule-making power is the power to make rules
and regulations which results in delegated legislation that is within
the confines of the granting statute and the doctrine of nondelegability and separability of powers.16

The rules and regulations that administrative agencies promulgate,

which are the product of a delegated legislative power to create new
and additional legal provisions that have the effect of law, should be
within the scope of the statutory authority granted by the legislature
to the administrative agency. It is required that the regulation be
germane to the objects and purposes of the law, and be not in

contradiction to, but in conformity with, the standards prescribed by

law.17 They must conform to and be consistent with the provisions of
the enabling statute in order for such rule or regulation to be valid.
Constitutional and statutory provisions control with respect to what
rules and regulations may be promulgated by an administrative body,
as well as with respect to what fields are subject to regulation by it. It
may not make rules and regulations which are inconsistent with the
provisions of the Constitution or a statute, particularly the statute it is
administering or which created it, or which are in derogation of, or
defeat, the purpose of a statute. In case of conflict between a statute
and an administrative order, the former must prevail.18

Not to be confused with the quasi-legislative or rule-making power of

an administrative agency is its quasi-judicial or administrative
adjudicatory power. This is the power to hear and determine
questions of fact to which the legislative policy is to apply and to
decide in accordance with the standards laid down by the law itself in
enforcing and administering the same law. The administrative body
exercises its quasi-judicial power when it performs in a judicial
manner an act which is essentially of an executive or administrative
nature, where the power to act in such manner is incidental to or
reasonably necessary for the performance of the executive or
administrative duty entrusted to it. In carrying out their quasi-judicial
functions, the administrative officers or bodies are required to
investigate facts or ascertain the existence of facts, hold hearings,
weigh evidence, and draw conclusions from them as basis for their
official action and exercise of discretion in a judicial nature.19

In questioning the validity or constitutionality of a rule or regulation

issued by an administrative agency, a party need not exhaust
administrative remedies before going to court. This principle applies
only where the act of the administrative agency concerned was

performed pursuant to its quasi-judicial function, and not when the

assailed act pertained to its rule-making or quasi-legislative power. In
Association of Philippine Coconut Dessicators v. Philippine Coconut
Authority,20 it was held:

The rule of requiring exhaustion of administrative remedies before a

party may seek judicial review, so strenuously urged by the Solicitor
General on behalf of respondent, has obviously no application here.
The resolution in question was issued by the PCA in the exercise of
its rule- making or legislative power. However, only judicial review of
decisions of administrative agencies made in the exercise of their
quasi-judicial function is subject to the exhaustion doctrine.

Even assuming arguendo that the principle of exhaustion of

administrative remedies apply in this case, the records reveal that
petitioners sufficiently complied with this requirement. Even during
the drafting and deliberation stages leading to the issuance of
Memorandum Circular No. 13-6-2000, petitioners were able to
register their protests to the proposed billing guidelines. They
submitted their respective position papers setting forth their
objections and submitting proposed schemes for the billing
circular.21 After the same was issued, petitioners wrote successive
letters dated July 3, 200022 and July 5, 2000,23 asking for the
suspension and reconsideration of the so-called Billing Circular.
These letters were not acted upon until October 6, 2000, when
respondent NTC issued the second assailed Memorandum
implementing certain provisions of the Billing Circular. This was taken
by petitioners as a clear denial of the requests contained in their
previous letters, thus prompting them to seek judicial relief.

In like manner, the doctrine of primary jurisdiction applies only where

the administrative agency exercises its quasi-judicial or adjudicatory
function. Thus, in cases involving specialized disputes, the practice
has been to refer the same to an administrative agency of special
competence pursuant to the doctrine of primary jurisdiction. The
courts will not determine a controversy involving a question which is
within the jurisdiction of the administrative tribunal prior to the
resolution of that question by the administrative tribunal, where the
question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the
administrative tribunal to determine technical and intricate matters of
fact, and a uniformity of ruling is essential to comply with the
premises of the regulatory statute administered. The objective of the
doctrine of primary jurisdiction is to guide a court in determining
whether it should refrain from exercising its jurisdiction until after an
administrative agency has determined some question or some
aspect of some question arising in the proceeding before the court. It
applies where the claim is originally cognizable in the courts and
comes into play whenever enforcement of the claim requires the
resolution of issues which, under a regulatory scheme, has been
placed within the special competence of an administrative body; in
such case, the judicial process is suspended pending referral of such
issues to the administrative body for its view.24

However, where what is assailed is the validity or constitutionality of

a rule or regulation issued by the administrative agency in the
performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a
specific rule or set of rules issued by an administrative agency
contravenes the law or the constitution is within the jurisdiction of the
regular courts. Indeed, the Constitution vests the power of judicial
review or the power to declare a law, treaty, international or executive
agreement, presidential decree, order, instruction, ordinance, or
regulation in the courts, including the regional trial courts.25 This is

within the scope of judicial power, which includes the authority of the
courts to determine in an appropriate action the validity of the acts of
the political departments.26 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 of jurisdiction on the part of any branch or instrumentality
of the Government.27

In the case at bar, the issuance by the NTC of Memorandum Circular

No. 13-6-2000 and its Memorandum dated October 6, 2000 was
pursuant to its quasi-legislative or rule-making power. As such,
petitioners were justified in invoking the judicial power of the
Regional Trial Court to assail the constitutionality and validity of the
said issuances. In Drilon v. Lim,28 it was held:

We stress at the outset that the lower court had jurisdiction to

consider the constitutionality of Section 187, this authority being
embraced in the general definition of the judicial power to determine
what are the valid and binding laws by the criterion of their
conformity to the fundamental law. Specifically, B.P. 129 vests in the
regional trial courts jurisdiction over all civil cases in which the
subject of the litigation is incapable of pecuniary estimation, even as
the accused in a criminal action has the right to question in his
defense the constitutionality of a law he is charged with violating and
of the proceedings taken against him, particularly as they contravene
the Bill of Rights. Moreover, Article X, Section 5(2), of the
Constitution vests in the Supreme Court appellate jurisdiction over
final judgments and orders of lower courts in all cases in which the
constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.29

In their complaint before the Regional Trial Court, petitioners averred

that the Circular contravened Civil Code provisions on sales and
violated the constitutional prohibition against the deprivation of
property without due process of law. These are within the
competence of the trial judge. Contrary to the finding of the Court of
Appeals, the issues raised in the complaint do not entail highly
technical matters. Rather, what is required of the judge who will
resolve this issue is a basic familiarity with the workings of the
cellular telephone service, including prepaid SIM and call cards and
this is judicially known to be within the knowledge of a good
percentage of our population and expertise in fundamental principles
of civil law and the Constitution.

Hence, the Regional Trial Court has jurisdiction to hear and decide
Civil Case No. Q-00-42221. The Court of Appeals erred in setting
aside the orders of the trial court and in dismissing the case.

WHEREFORE, in view of the foregoing, the consolidated petitions

are GRANTED. The decision of the Court of Appeals in CA-G.R. SP
No. 64274 dated October 9, 2001 and its Resolution dated January
10, 2002 are REVERSED and SET ASIDE. The Order dated
November 20, 2000 of the Regional Trial Court of Quezon City,
Branch 77, in Civil Case No. Q-00-42221 is REINSTATED. This case
is REMANDED to the court a quo for continuation of the
proceedings.

SO ORDERED.

Davide, Jr., C.J., Vitug, and Carpio, JJ., concur.

Azcuna, J., took no part.