Professional Documents
Culture Documents
PANAMA v RYAN
Facts: Section:9(c) of the National Industrial Recovery Act of June 16, 1933 authorized the
President of the United States to prohibit the transportation in interstate and foreign
commerce of petroleum and the products thereof produced to withdrawn from storage in
excess of the amount permitted to be produced or withdrawn from storage by any state
law or valid regulation or order prescribed thereunder, by any board, commission, officer,
or other duly authorized agency of a State.
Any violation of an order of the President issued under the provisions of this subsection
shall be punishable by a fine, not to exceed $1,000, or imprisonment not to exceed six
months, or both.
The President issued the foregoing prohibition by Executive Order, and then authorized the
Secretary of Interior to exercise all of the powers vested in the President under
Section:9(c). The Secretary of Interior then issued regulations to carry out the Presidents
orders, which required all petroleum producers to file monthly statements, under oath,
with the Division of Investigations of the Department of the Interior. Further, the President
approved a Code of Fair Competition for the Petroleum Industry, and designated the
Secretary of Interior with all of the powers vested in him under the Act and the Code.
Section:9(c) was challenged on the ground that it was an unconstitutional delegation of
legislative power by Congress.
Issue: Was the delegation of power to the President under Section:9(c) of the National
Industrial Recovery Act an unconstitutional delegation of legislative power?
Held: Yes. The attempted delegation was plainly void because the power sought to be
delegated was legislative power, but nowhere in the statute did Congress declare or
indicate any policy or standard to guide or limit the President when acting under the
delegation.
'The decision of the Court of Appeals under section 9 of the act of 1905 2 is not a judicial
judgment. It is a mere administrative decision. It is merely an instruction to the
Commissioner of Patents by a court which is made part of the machinery of the Patent
Office for administrative purposes.'
In the cases just cited, as also in others, it is recognized that the courts of the District of
Columbia are not created under the judiciary article of the Constitution but are legislative
courts, and therefore that Congress may invest them with jurisdiction of appeals and
proceedings such as have been just described.
It was brought into being by the judiciary article of the Constitution, is invested with
judicial power only, and can have no jurisdiction other than of cases and controversies
falling within the classes enumerated in that article. It cannot give decisions which are
merely advisory; nor can it exercise or participate in the exercise of functions which are
essentially legislative or administrative.
MERALCO v PASAY TRANSPORTATION
Act No. 1446 above referred to is entitled. "An Act granting a franchise to Charles M. Swift
to construct, maintain, and operate an electric railway, and to construct, maintain, and
operate an electric light, heat, and power system from a point in the City of Manila in an
easterly direction to the town of Pasig, in the Province of Rizal." Section 11 of the Act
provides: "Whenever any franchise or right of way is granted to any other person or
corporation, now or hereafter in existence, over portions of the lines and tracks of the
grantee herein, the terms on which said other person or corporation shall use such right of
way, and the compensation to be paid to the grantee herein by such other person or
corporation for said use, shall be fixed by the members of the Supreme Court, sitting as a
board of arbitrators, the decision of a majority of whom shall be final."
Pursuant to said Act, MERALCO filed a petition before the court requesting the members of
the SC sitting as board of arbitrators to fix the terms upon which certain transportation
companies shall be permitted to use the Pasig bridge of the Meralco.
Copies were sent to affected transportation companies including Pasay Tanspo
Examining the statutory provision which is here invoked, it is first noted that power is
attempted to be granted to the members of the Supreme Court sitting as a board of
arbitrators and to the Supreme Court as an entity. It is next seen that the decision of a
majority of the members of the Supreme Court is made final.
The law calls for arbitration which represents a method of the parties' own choice. A
submission to arbitration is a contract. The parties to an arbitration agreement may not
oust the courts of jurisdiction of the matters submitted to arbitration. These are familiar
rules which find support in articles 1820 and 1821 of the Civil Code.
ISSUE: Whether or not the members of the Supreme Court, sitting as a board of arbitrators
the decision of a majority of whom shall be final, can act in that capacity.
Held: The Supreme Court of the Philippine Islands represents one of the three divisions of
power in our government. It is judicial power and judicial power only which is exercised by
the Supreme Court.
The Supreme Court and its members should not and cannot be required to exercise any
power or to perform any trust or to assume any duty not pertaining to or connected with
the administering of judicial functions.
The power conferred on this court is exclusively judicial, and it cannot be required or
authorized to exercise any other. . . . Its jurisdiction and powers and duties being defined in
the organic law of the government, and being all strictly judicial, Congress cannot require
or authorize the court to exercise any other jurisdiction or power, or perform any other
duty.
Confirming the decision to the basic question at issue, the Supreme Court holds that section
11 of Act No. 1446 contravenes the maxims which guide the operation of a democratic
government constitutionally established, and that it would be improper and illegal for the
members of the Supreme Court, sitting as a board of arbitrators, the decision of a majority
of whom shall be final, to act on the petition of the Manila Electric Company. As a result, the
members of the Supreme Court decline to proceed further in the matter.
DELEGATION TO ADMINISTRATIVE AGENCIES
Pelaez vs. The Auditor General
Facts: From September 4, 1964 to October 29, 1964 the President Ferdinand
Marcos issued executive orders to create thirty-three municipalities pursuant to Section 69
of the Revised Administrative Code. Public funds thereby stood to be disbursed in the
implementation of said executive orders.
Section 68 of the Revised Administrative Code which provides in part:
The President may by executive order define the boundary of any municipality and
may change the seat of government within any subdivision to such place therein as the
public welfare may require
The then Vice President, Emmanuel Pelaez, as a taxpayer, filed a special civil action to
prohibit the auditor general from disbursing funds to be appropriated for the said
municipalities. Pelaez claims that the EOs were unconstitutional. He said that Section 68 of
the RAC had been impliedly repealed by Section 3 of RA 2370 which provides that barrios
may not be created or their boundaries altered nor their names changed except by Act of
Congress.
If the President, under this new law, cannot even create a barrio, how can he create a
municipality which is composed of several barrios, since barrios are units of
municipalities?
The Auditor General countered that there was no repeal and that only barrios were barred
from being created by the President.
He further maintains that through Sec. 68 of the RAC, Congress has delegated such power
to create municipalities to the President.
ISSUE: Whether or not Congress has delegated the power to create barrios to the President
by virtue of Sec. 68 of the RAC.
HELD: No. There was no delegation here. Although Congress may delegate to another
branch of the government
that said law: (a) be complete in itself it must set forth therein the policy to be executed,
carried out or implemented by the delegate and (b) fix a standard the limits of which
are sufficiently determinate or determinable to which the delegate must conform in the
performance of his functions.
In this case, Sec. 68 lacked any such standard. Indeed, without a statutory declaration of
policy, the delegate would, in effect, make or formulate such policy, which is the essence of
every law; and, without the aforementioned standard, there would be no means to
determine, with reasonable certainty, whether the delegate has acted within or beyond the
scope of his authority.
Such control does not include the authority to either abolish an executive department or
bureau, or to create a new one. Section 68 of the Revised Administrative Code does not
merely fail to comply with the constitutional mandate above quoted, it also gives the
President more power than what was vested in him by the Constitution.
The Executive Orders in question are hereby declared null and void ab initio and the
respondent permanently restrained from passing in audit any expenditure of public funds
in implementation of said Executive Orders or any disbursement by the municipalities
referred to.
SUFFICINECY OF STANDARDS
People v. Rosenthal & Osmena
Facts: Jacob Rosenthal and Nicasio Osmea were founders and shareholders of the O.R.O.
Oil Company. The main objects and purposes of the company are to mine, refine, market,
buy and sell petroleum, natural gas and other oil products.
Rosenthal and Osmea were found guilty by the RTC in two cases of selling their shares to
individuals without first obtaining the corresponding written permit or license from the
Insular Treasurer of the Commonwealth of the Philippines.
This is in violation of Sections 2 & 5 of Act No. 2581, commonly known as the Blue Sky Law.
Section 2 of said law provides that every person, partnership, association, or corporation
attempting to offer to sell in the Philippines speculative securities of any kind or character
whatsoever, is under obligation to file previously with the Insular Treasurer the various
documents and papers enumerated therein and to pay the required tax of twenty-pesos.
On appeal, Rosenthal & Osmena argued that Act 2581 is unconstitutional on three grounds
one of which is:
1) That it constitutes undue delegation of legislative authority to the Insular treasurer
Issue: WON the law is unconstitutional in any of the three grounds
Held: The law is CONSTITUTIONAL on all grounds alleged by the appellants.
The Act furnishes a sufficient standard for the Treasurer to follow in reaching a decision
regarding the issuance or cancellation of a certificate or permit
The certificate or permit to be issued under the Act must recite that the person
,partnership, association or corporation applying therefor has complied with the
provisions of this Act, and this requirement, construed in relation to the other provisions
of the law, means that a certificate or permit shall be issued by the Insular Treasurer when
the provisions of Act 2581 have been complied with.
Upon the other hand, the authority of the Insular Treasurer to cancel a certificate or permit
is expressly conditioned upon a finding that such cancellation is in the public interest. In
view of the intention and purpose of Act 2581 to protect the public against speculative
schemes which have no more basis than so many feet of blue sky and against the sale of
stock infly-by-night concerns, visionary oil wells, distant gold mines, and other like
fraudulent exploitations, we hold that public interest in this case is a sufficient standard
to guide the Insular Treasurer in reaching a decision on a matter pertaining to the issuance
or cancellation of certificates or permits.
The maxim delegatus non potest delegare or delegata potestas non potest delegare has
beenmade to adapt itself to the complexities of modern governments, giving rise to the
adoption, within certain limits, of the principle of subordinate legislation, in practically all
modern governments.
CERVANTES v. AUDITOR GENERAL
Facts: Petitioner was general manager in 1949 of National Abaca and Other Fibers
Corporation (NAFCO) with annual salary of P15,000.00. The NAFCO Board of Directors
granted P400/mo. Quarters allowance to petitioner amounting to P1,650 for 1949.
On October 4, 1946, Republic Act No. 51 was approved authorizing the President of the
Philippines, among other things, to effect such reforms and changes in government owned
and controlled corporations for the purpose of promoting simplicity, economy and
efficiency in their operation Pursuant to this authority, the President on October 4, 1947,
promulgated Executive Order No. 93
This allowance was disapproved by the Central Committee of the government enterprise
council under Executive Order No. 93 upon recommendation by NAFCO auditor and
concurred in by the Auditor general on two grounds:
a) It violates the charter of NAFCO limiting managers salary to P15,000/year.
b) NAFCO is in precarious financial condition.
It is argued, however, that Executive Order No. 93 is null and voidbecause it is as an illegal
delegation of legislature power to executive, and was promulgated beyond the period of
one year limited in said law.
ISSUE: Whether or not Executive Order No. 93 exercising control over Government Owned
and Controlled Corporations (GOCC) implemented under R.A. No. 51 is valid or null and
void. And R.A. No. 51 authorizing presidential control over GOCCs is Constitutional.
HELD: The rule is that so long as the Legislature "lays down a policy and a standard is
established by the statute" there is no undue delegation.
Republic Act No. 51 in authorizing the President of the Philippines, among others, to make
reforms and changes in government-controlled corporations, lays down a standard and
policy that the purpose shall be to meet the exigencies attendant upon the establishment of
the free and independent government of the Philippines and to promote simplicity,
economy and efficiency in their operations. The standard was set and the policy fixed. The
President had to carry the mandate. This he did by promulgating the executive order in
question which, tested by the rule above cited, does not constitute an undue delegation of
legislative power.